    [Senate Hearing 117-279]
    [From the U.S. Government Publishing Office]

                                                          S. Hrg. 117-279

                            WESTERN BALKANS: SUPPORTING
                              PEACE AND PROSPERITY

    =======================================================================

                                    HEARING

                                   BEFORE THE

                           SUBCOMMITTEE ON EUROPE AND
                         REGIONAL SECURITY COOPERATION

                                     OF THE

                         COMMITTEE ON FOREIGN RELATIONS
                              UNITED STATES SENATE

                        ONE HUNDRED SEVENTEENTH CONGRESS

                                 SECOND SESSION
                                   __________

                                FEBRUARY 16, 2022

                                   __________

           Printed for the use of the Committee on Foreign Relations

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

                      Available via http://www.govinfo.gov

                                   __________

                        U.S. GOVERNMENT PUBLISHING OFFICE
    47-757 PDF                 WASHINGTON : 2022

    -----------------------------------------------------------------------------------

                     COMMITTEE ON FOREIGN RELATIONS

                 ROBERT MENENDEZ, New Jersey, Chairman
    BENJAMIN L. CARDIN, Maryland         JAMES E. RISCH, Idaho
    JEANNE SHAHEEN, New Hampshire        MARCO RUBIO, Florida
    CHRISTOPHER A. COONS, Delaware       RON JOHNSON, Wisconsin
    CHRISTOPHER MURPHY, Connecticut      MITT ROMNEY, Utah
    TIM KAINE, Virginia                  ROB PORTMAN, Ohio
    EDWARD J. MARKEY, Massachusetts      RAND PAUL, Kentucky
    JEFF MERKLEY, Oregon                 TODD YOUNG, Indiana
    CORY A. BOOKER, New Jersey           JOHN BARRASSO, Wyoming
    BRIAN SCHATZ, Hawaii                 TED CRUZ, Texas
    CHRIS VAN HOLLEN, Maryland           MIKE ROUNDS, South Dakota
                                         BILL HAGERTY, Tennessee
                     Damian Murphy, Staff Director
            Christopher M. Socha, Republican Staff Director
                        John Dutton, Chief Clerk

                       SUBCOMMITTEE ON EUROPE AND
                     REGIONAL SECURITY COOPERATION

                JEANNE SHAHEEN, New Hampshire, Chairman
    BENJAMIN L. CARDIN, Maryland         RON JOHNSON, Wisconsin
    CHRISTOPHER MURPHY, Connecticut      JOHN BARRASSO, Wyoming
    CHRIS VAN HOLLEN, Maryland           MITT ROMNEY, Utah
    CHRISTOPHER A. COONS, Delaware       ROB PORTMAN, Ohio
                                         TODD YOUNG, Indiana

                                  (ii)

                          C  O  N  T  E  N  T  S

                                  ----------
                                                                       Page

    Shaheen, Hon. Jeanne, U.S. Senator From New Hampshire............     1

    Johnson, Hon. Ron, U.S. Senator From Wisconsin...................     3

        Prepared Statement...........................................     4

    Escobar, Gabriel, Special Representative for the Western Balkans,
      Deputy Assistant Secretary of State for Europe and Eurasian
      Affairs, U.S. Department of State, Washington, DC..............     4
        Prepared Statement...........................................     6

    Lisa Magno, Deputy Assistant Administrator for the Bureau for
      Europe and Eurasia, U.S. Agency for International Development,
      Washington, DC.................................................     8
        Prepared Statement...........................................     9

                  Additional Material Submitted for the Record

    Responses of Mr. Gabriel Escobar to Questions Submitted by
      Senator Robert Menendez........................................    25

    Letters From the Embassies of Albania, Bosnia and Herzegovina,
      Kosovo, Montenegro, North Macedonia, and Serbia Concerning the
      Western
      Balkans........................................................    27

                                     (iii)

                          WESTERN BALKANS: SUPPORTING
                              PEACE AND PROSPERITY

                                  ----------

                          WEDNESDAY, FEBRUARY 16, 2022

                               U.S. Senate,
            Subcommittee on Europe and Regional
                                  Security Cooperation,
                                Committee on Foreign Relations,
                                                        Washington, DC.
        The subcommittee met, pursuant to notice, at 10:00 a.m., in
    room SD-G50, Dirksen Senate Office Building, and via Webex,
    Hon. Jeanne Shaheen, chairman of the subcommittee, presiding.
        Present: Senators Shaheen [presiding], Menendez, Cardin,
    Murphy, Van Hollen, Johnson, Romney, and Young.

               OPENING STATEMENT OF HON. JEANNE SHAHEEN,
                    U.S. SENATOR FROM NEW HAMPSHIRE

        Senator Shaheen. Good morning. This meeting of the Senate
    Foreign Relations Europe Subcommittee will come to order. I am
    pleased to be joined by Ranking Member Senator Johnson from
    Wisconsin, as well as Senator Murphy, from Connecticut.
        Supporting peace in the Western Balkans remains an
    important U.S. priority, and I hope that our discussion today
    will address how Congress can best support the efforts that are
    already underway.
        There should be no question as to why this region matters
    for U.S. security. It was not that long ago that we witnessed
    the breakup of the former Yugoslav Republic and saw the
    horrible and unrepeatable tragedy of war in the region. It has
    been a priority in the ensuing decades to repair the damage
    from that conflict and build a prosperous and peaceful region
    in the heart of Europe.
        I had the privilege of visiting the Western Balkans in
    2010, and I returned several times, most recently to
    commemorate the 20th anniversary of the Srebrenica massacre.
    Together, we have witnessed remarkable progress for peace,
    democracy, and equality in the region. Montenegro and Serbia
    have opened accession negotiations with the EU. Similarly,
    Albania and North Macedonia are awaiting the official opening
    of EU accession talks. Albania, Montenegro, and North Macedonia
    are now members of NATO. We have deep engagement through
    diplomatic and defense relations, including a recently
    announced forward-based Special Operations Forces headquarters
    in Albania.
        There are also concerning developments in areas where we
    still need to improve the pace of progress. That is why we have
    convened this hearing today and very much appreciate our
    witnesses joining us.
        Bosnia faces an uncertain future, as Bosnian Serb leader
    Milorad Dodik wants to undermine the unifying government by
    pushing for the secession of the Republika Srpska. His efforts
    to withdraw key institutions from the unified state risk the
    unity at the heart of the Bosnian state. At the same time,
    political power struggles prevent the government from
    functioning and corruption stalls economic development, driving
    young people to flee the country.
        Across the Balkans, improving economic development and
    prosperity is a key concern for ensuring a stable and
    democratic future. To address a lack of employment and prevent
    young people from seeking prosperity elsewhere, we must look
    toward better regional economic integration, like that of the
    Open Balkans Initiative, which shows promise for building
    connections among neighboring economies.
        Another sign of a robust democracy is a government that is
    transparent and accountable to its people. Here, too, we are
    seeing positive developments, as we have seen major reforms,
    particularly in the judicial sector take hold in some countries
    in the region.
        I also want to express, at the outset, my appreciation for
    those Balkan states who stepped up to host Afghan refugees who
    are awaiting resettlement in the United States and other
    countries. It is especially poignant that in a region which has
    long known conflict, many are opening their arms to people
    fleeing conflict on their own, and here in the United States we
    very much appreciate that.
        Finally, we have seen years of hard-won peace in the
    Western Balkans, but as is often the case, this is a fragile
    peace that requires constant attention to maintain. With the
    events in Ukraine and with Russia's continued threats to
    democratic values there and around the world, it is all the
    more important that we stay the course in the Western Balkans.
    That is why I have been pleased with the high level of
    engagement from this Administration in the past few months, and
    I want to acknowledge the efforts of the State Department and
    USAID, including Administrator Power's recent visit to the
    region.
        I also want to recognize the embassies who have submitted
    letters for this hearing: Albania, Bosnia and Herzegovina,
    Kosovo, Montenegro, North Macedonia, and Serbia. Without
    objection, these statements will be entered into the record.

    [Editor's note.--The information referred to above can be found
    in the ``Additional Material Submitted for the Record'' section
    at the end of this hearing.]

        Senator Shaheen. Once again, before I introduce the people
    testifying today, I just want to take a minute to reiterate the
    need for us to act to get U.S. ambassadors in place. Currently,
    we are awaiting a vote on nominee Christopher Hill to be
    Ambassador to Serbia. Ambassador Hill is a career diplomat, one
    with extensive experience in the region, and his expertise is
    needed to advance our national security priorities there. So I
    am hopeful that we will see Congress move on his appointment as
    soon as possible.
        We must not underestimate the importance of keeping a
    critical eye on issues of concern in the Western Balkans while
    working at the same time to build a positive and prosperous
    future that is grounded in European integration. I hope this
    hearing will help us in that.
        Let me just introduce our witnesses who will begin after
    Senator Johnson's remarks.
        Our first witness today is Deputy Assistant Secretary of
    State for the Bureau of European and Eurasian Affairs at the
    Department of State, Gabriel Escobar. Mr. Escobar also holds
    the title of Special Representative to the Western Balkans,
    where he has been numerous times since his appointment last
    fall. Mr. Escobar is no stranger to the region, having most
    recently served overseas as the Deputy Chief of Mission in
    Embassy Belgrade.
        His Balkan expertise goes back even farther in his long
    career as a diplomat. From 1998 to 2001, Mr. Escobar completed
    four consecutive tours in the Balkans, in Banja Luka, Bosnia
    and Herzegovina, Podgorica, and Belgrade. We are fortunate to
    have someone with such deep and longstanding knowledge of the
    region in your position, Mr. Escobar, and we very much look
    forward to hearing your testimony.
        Ms. Lisa Magno is Deputy Assistant Administrator in the
    Bureau for Europe and Eurasia at the U.S. Agency for
    International Development. Ms. Magno also comes from a recent
    tour in the region. She was the USAID Mission Director in
    Kosovo for 3 years. Her experience with USAID over the last 30
    years has taken her all over East Asia and Latin America, where
    she has worked closely with civil society and local partners
    implementing USAID programs. We are grateful to have Ms. Magno
    here representing USAID and the work they do in the region,
    which we know is very important for Administrator Power.
        So with that I will turn to the Ranking Member, Senator
    Johnson, and when he is finished ask our witnesses to testify.
    Senator Johnson.

                    STATEMENT OF HON. RON JOHNSON,
                      U.S. SENATOR FROM WISCONSIN

        Senator Johnson. Well thank you, Madam Chair. I would also
    like to welcome our witnesses. I am looking forward to your
    testimony and our discussion regarding the Western Balkans.
        I think it was kind of noteworthy about this hearing. By
    the way, I would just ask my written opening statement be
    entered into the record, because I would be repeating an awful
    lot of things that you just stated, and I think that is what is
    noteworthy. I have been a member of this committee and
    subcommittee for a number of years, and we certainly have begun
    focusing more on the Western Balkans. I know the countries of
    the region want U.S. involvement. I think it is obviously
    interesting. It seems like they want our involvement in their
    disputes, and they want us to side with them, impose a
    solution. We are just not going to do that. We are not going to
    do it on a bipartisan basis.
        Whether it was this Administration or the previous
    Administration, or the Administration before that, we have been
    paying attention to the region because we realize stability in
    the Western Balkans is important. We want to be supportive of
    stability. We are concerned about China's initiative. We want
    them to embrace the rule of law, reduce corruption, so that
    foreign investment can flow in there, the right kind of foreign
    investment.
        So I think the fact that we are holding this hearing should
    send a very strong signal that we are paying attention, we want
    to be supportive, we are not going to impose solutions, and on
    a bipartisan basis. Regardless of Administration, regardless of
    Republican or Democrat, we want to see peace and stability in
    the region, and we are going to be supportive of it.
        So with that I will enter my remarks into the record and
    look forward to the testimony.
        [The prepared statement of Senator Ron Johnson follows:]

                   Prepared Statement of Senator Ron Johnson

        Thank you Senator Shaheen.
        Today's hearing will examine recent developments in Southeast
    Europe, specifically in the Western Balkans, and U.S. policy options
    for the region. Many Western Balkan countries are still seeking greater
    European and transatlantic integration, and U.S. interests would be
    well served by helping them achieve it.
        There has been significant progress in the Balkans over the last
    decade. Yes, considerable challenges remain, but solving them does not
    require any great U.S. expenditure; it requires U.S. patience and
    leadership. Again and again, we have seen consistent U.S. diplomatic
    engagement help overcome intractable disputes in the Western Balkans.
    Our goal here today is to examine the Administration's plans for
    furthering that record.
        NATO and EU integration remain critical incentives for Western
    Balkan countries to make the difficult reforms needed to combat
    corruption and strengthen the rule of law. Building transparent and
    impartial legal systems is essential for attracting the foreign
    investment needed for growth and to offer young people enough economic
    opportunity to stay in their home countries. And there is real progress
    on many fronts. In Albania, North Macedonia, and last month in Serbia,
    major judicial reforms have brought these countries closer to EU
    standards and boosted their EU aspirations.
        In 2017 and 2019, I had the honor of presiding over the Senate as
    we voted overwhelmingly to welcome Montenegro and North Macedonia into
    NATO. Four of the seven Western Balkan nations are now in the alliance,
    Albania and Croatia having joined in 2009. Last year, I was at the
    White House for the signing of the Washington Agreement between Kosovo
    and Serbia. Albania and North Macedonia are well on their way to being
    welcomed as the next EU members. While Serbia, Kosovo, and Bosnia and
    Herzegovina still have a ways to go, their transatlantic trajectory is
    clear. We must build on the progress made already, prioritize Serbia
    and Kosovo normalization, and continue to push Bosnia and Herzegovina
    to enact needed electoral and constitutional reforms.
        We have only to look to the crisis unfolding on Ukraine's borders
    to grasp the importance of European and transatlantic integration for
    all of the Western Balkan nations. The United States wants peace,
    prosperity, security, and freedom for the people of the region. There
    should be a sense of urgency to ensure that progress on European
    integration in the Western Balkans continues, and U.S. leadership will
    continue to be vital.
        I look forward to hearing from our witnesses today about the Biden
    administration's strategy for promoting progress and prosperity in the
    region.

        Senator Shaheen. Thank you very much, Senator Johnson. DAS
    Escobar, we will ask you to begin.

     STATEMENT OF GABRIEL ESCOBAR, SPECIAL REPRESENTATIVE FOR THE
    WESTERN BALKANS, DEPUTY ASSISTANT SECRETARY OF STATE FOR EUROPE
     AND EURASIAN AFFAIRS, U.S. DEPARTMENT OF STATE, WASHINGTON, DC

        Mr. Escobar. Chairwoman Shaheen, Ranking Member Johnson,
    distinguished members of the subcommittee, thank you for
    inviting me to discuss engagement in the Western Balkans. A
    Europe free, whole, and at peace remains in the United States'
    vital interest and at the core of our policy. The Western
    Balkans is central to this vision, although its potential
    remains unfulfilled. The Biden administration recognizes this
    challenge and remains committed to this region, which is an
    indivisible part of Europe. Our longstanding diplomatic
    engagement supports the Western Balkans' full integration into
    Euro-Atlantic structures. A stronger Balkans, integrated in a
    stronger Europe, means a stronger transatlantic community.
        The United States continues to deepen our partnerships in
    the region. In the past few months, we celebrated 140 years of
    diplomatic relations with Serbia and held our first bilateral
    defense consultations in 5 years. We announced a forward-based
    Special Operations Forces headquarters in Albania, welcomed
    Croatia into the visa waiver program, and relied heavily on our
    partners in Kosovo, Albania, and North Macedonia in an hour of
    need to temporarily host thousands of Afghan evacuees.
        We continue to build America's economic ties to the region.
    In the past year, we launched the inaugural U.S.-Montenegro
    economic dialogue, bolstered European energy security through
    projects in Albania and Croatia, and celebrated significant
    investments by U.S. firms in Serbia.
        Our partners are set on integrating with the European
    Union. Single market and regional initiatives such as the EU
    Common Regional Market, Open Balkan, and Green Agenda show that
    deeper economic cooperation is indispensable for growth and EU
    membership. There are vast opportunities for U.S. businesses,
    and we encourage countries to strengthen the rule of law, fight
    corruption, and increase transparency to expand investment
    opportunities. These reforms will increase prosperity,
    prioritize clean energy, and stem the brain drain.
        Indicators of progress toward EU integration include deeper
    regional cooperation and growing democratic and economic
    development. We have seen earnest efforts to strengthen
    democratic institutions and counter corruption in the region,
    but there have also been setbacks. In Bosnia and Herzegovina,
    the ongoing political crisis and endemic corruption hurts its
    citizens and jeopardizes regional stability, Euro-Atlantic
    integration, and progress achieved since the Dayton Peace
    Accords.
        We continue to make clear to all leaders that de-escalation
    of rhetoric and resolution of differences through
    constitutional processes are the only paths in democracy. Along
    with our European partners, we are vigorously engaged with
    local actors to find ways forward on the path from Dayton to
    Brussels, including through step-by-step reforms that will
    benefit all of the citizens.
        The need for dialogue, compromise, and reform applies
    across the region. We strongly back the EU-facilitated dialogue
    to normalize relationships between Kosovo and Serbia. The
    dialogue is the forum in which both sides, as equals, must work
    together to resolve their differences and find a comprehensive
    agreement, which both countries need for the European futures.
    We believe this effort should be centered on mutual
    recognition.
        We continue to work with our EU partners to advance EU
    integration in the region and reinforce the importance of
    keeping Europe's doors open as the most important incentive for
    reforms. North Macedonia and Albania have made significant
    reforms and sacrifice, and deserve to advance in the accession
    process. Forward momentum would be important proof for the
    entire region that difficult compromises enable a better
    future.
        Conversely, our warning to actors who engage in corrupt,
    destabilizing, or anti-democratic behavior is clear: there will
    be consequences. In December, we utilized Global Magnitsky
    authorities against an organized criminal group operating in
    the region. In January, the Treasury Department designated
    Milorad Dodik and a television station under his control using
    new Western Balkans sanctions authority. The State Department
    also imposed visa restrictions under our Section 7031(c)
    authorities against corrupt officials. We will use all
    available tools to hold accountable those who block the
    region's progress for their own financial and political gain.
        Regional progress is also threatened by foreign political
    and economic influences from Russia and China. Russia
    weaponizes its energy supply to coerce politicians, foster
    corruption, and stunt growth potential. It also fans ethno-
    nationalism and divides and distracts from a brighter future.
    The People's Republic of China is expanding its presence by
    building critical infrastructure through opaque and predatory
    loans and so-called investments. Promoting transparent
    governance, human rights, and a rules-based international order
    will remain the core of our engagement against these
    destabilizing activities.
        In closing, the Western Balkans have been the focus of
    sustained U.S. engagement, investment, and bipartisan support
    for three decades. The results are clear: the countries of the
    former Yugoslavia now include four NATO allies and two EU
    member states. Among the countries of the Western Balkans, four
    are NATO allies and all are either EU aspirants or EU member
    states.
        Our job is not over. Our continued leadership, including
    here in the Senate, remains essential to completing the
    transformation of the Western Balkans into stronger partners,
    able to contribute to global peace and prosperity. We continue
    to stress the need for a fully confirmed slate of ambassadors
    in the Western Balkans, most notably our nominee to Serbia, who
    is awaiting confirmation by the full Senate. I will continue to
    work with Congress on this effort and welcome your questions.
    Thank you.
        [The prepared statement of Mr. Escobar follows:]

                   Prepared Statement of Mr. Gabriel Escobar

        Chairwoman Shaheen, Ranking Member Johnson, distinguished Members
    of the Subcommittee, thank you for inviting me to discuss engagement in
    the Western Balkans. A Europe free, whole, prosperous, and at peace
    remains in the United States' vital interest and at the core of our
    policy. The Western Balkans is central to this vision, although its
    potential remains unfulfilled. The Biden administration recognizes this
    challenge and remains committed to this region, which is historically,
    politically, culturally, and geographically an indivisible part of
    Europe. Our longstanding diplomatic engagement supports the Western
    Balkans' full integration into Euro-Atlantic structures. A stronger
    Balkans, integrated in a stronger Europe, makes a stronger
    Transatlantic Partnership.
        To these ends, the United States continues to deepen our
    longstanding partnerships in the region. In the past few months alone,
    we: celebrated 140 years of diplomatic relations with Serbia and held
    our first bilateral defense consultations in 5 years; announced a
    forward-based special operations forces headquarters in Albania;
    welcomed Croatia into the visa waiver program to expand bilateral
    travel and commerce; and relied heavily on our partners in Kosovo,
    Albania, and North Macedonia in an hour of need to temporarily host
    thousands of Afghan evacuees.
        We also continue to build America's economic ties to the region. In
    the past year, we launched the inaugural U.S.-Montenegro economic
    dialogue, bolstered European energy security through projects in
    Albania and Croatia, and celebrated significant investments by U.S.
    firms in Serbia. Our partners in the Western Balkans are set on
    integrating more closely with the EU single market, and we continue to
    support them. Regional initiatives such as the EU Common Regional
    Market, Open Balkan, and Green Agenda show that deeper economic
    integration and cooperation are indispensable for sustainable growth
    and EU membership. There are vast opportunities for U.S. businesses,
    and we continue to encourage countries to strengthen rule of law, fight
    corruption, and increase transparency to expand investment
    opportunities. The necessary reforms will increase prosperity,
    prioritize sustainable investments and clean energy, and stem brain
    drain. They will also reduce politically driven investment from outside
    actors and build the foundations for good neighborly relations and
    stable governance.
        Indicators of progress toward EU integration of the Western Balkans
    include deeper regional cooperation and growing democratic and economic
    development. In some countries of the region, we have seen earnest
    efforts to strengthen democratic institutions and counter corruption.
    This is not the case in all countries of the Western Balkans, and there
    have been setbacks. In Bosnia and Herzegovina, the ongoing political
    crisis and endemic corruption hurts its citizens, and jeopardizes
    regional stability, its Euro-Atlantic trajectory, and the progress
    achieved since the Dayton Peace Accords. We continue to make clear to
    all leaders that de-escalation of rhetoric and the resolution of
    differences through established constitutional processes are the only
    viable paths to a democratic, European future. Along with our European
    partners, we are vigorously engaged with local actors to find ways
    forward and advance along the path from Dayton to Brussels, including
    through step-by-step reforms that will benefit all citizens.
        The need for dialogue, compromise, and reform applies across the
    region. We strongly back the EU-facilitated Dialogue to normalize
    relations between Kosovo and Serbia. The Dialogue is the forum in which
    both sides, as equals, must work to resolve their differences and find
    a comprehensive agreement, which both countries need for their European
    futures. We believe this effort should be centered on mutual
    recognition.
        The United States continues to work with our EU partners to advance
    EU integration for all countries in the region and to reinforce that
    the reforms that are part of the accession process bring their own
    benefits. At the same time, we stress to our EU partners the importance
    of keeping Europe's doors open, as this is the most important incentive
    generating political will for critical but sometimes-difficult reforms.
    North Macedonia and Albania have made significant reforms and
    sacrifices, and both countries deserve to advance in the accession
    process. Forward momentum would be important proof for the entire
    region that difficult compromises enable a better future.
        Conversely, our warning to actors in the region who engage in
    corrupt, destabilizing, or anti-democratic behavior is clear: there
    will be consequences. In December, we utilized Global Magnitsky
    authorities against an organized criminal group operating in the
    region. In January, the Treasury Department designated Milorad Dodik
    for his corrupt and destabilizing behavior and a television station
    under his control using the new Western Balkans sanctions authority.
    The State Department also imposed visa restrictions under our Section
    7031(c) authorities against corrupt officials in Bosnia and
    Herzegovina. The United States will continue to use all available tools
    to hold accountable those who block the region's progress for their own
    financial or political gain.
        Regional progress is also threatened by the harmful foreign
    political and economic influences of Russia and China. Russia
    weaponizes its energy supply to coerce politicians, foster corruption,
    and stunt growth potential. It also fans ethno-nationalism that divides
    and distracts from a brighter future. The People's Republic of China
    (PRC) is expanding its presence by building critical infrastructure
    through opaque and predatory loans and ``investments.'' Promoting
    transparent governance, human rights, and a rules-based international
    order will remain the core tenet of our engagement against these
    destabilizing activities in the Western Balkans.
        In closing, for the past three decades, the Western Balkans have
    been the focus of sustained U.S. engagement, investment, and bipartisan
    support. The results are clear: the countries of the former Yugoslavia
    now include four NATO Allies and two EU member states. Among the
    countries of the Western Balkans, four are NATO allies and all either
    share the strategic goal of deeper Western integration as EU aspirants
    or are EU members. Our job is not over. Continued leadership from the
    United States, including here in the Senate, remains essential to
    completing the transformation of the Western Balkans into stronger
    allies, Transatlantic partners and contributors to global peace and
    prosperity. We continue to stress the need for a fully confirmed Slate
    of Ambassadors in the Western Balkans, most notably our nominee to
    Serbia, who is still awaiting confirmation by the full Senate. I will
    continue to work with Congress on this effort and welcome your
    questions.

        Senator Shaheen. Thank you very much. Ms. Magno.

    STATEMENT OF LISA MAGNO, DEPUTY ASSISTANT ADMINISTRATOR FOR THE
     BUREAU FOR EUROPE AND EURASIA, U.S. AGENCY FOR INTERNATIONAL
                      DEVELOPMENT, WASHINGTON, DC

        Ms. Magno. Thank you. Chairperson Shaheen, Ranking Member
    Johnson, distinguished members of the subcommittee, thank you
    for inviting me to discuss the U.S. Agency for International
    Development's work in the Western Balkans. Thanks to generous
    bipartisan support from Congress, USAID has partnered with
    citizens and governments of the region to support their
    aspirations for a democratic and economically prosperous
    future. Starting with Bosnia and Herzegovina, during USAID
    Administrator Samantha Power's recent trip, she made clear that
    the peaceful and prosperous future for BiH depends on all
    political leaders and citizens working together to advance the
    reforms necessary to achieve BiH's democratic and economic
    aspirations.
        In Serbia and Kosovo, USAID continues to support the
    European Union-led dialogue and its goal of comprehensive
    normalization of relations, including initiatives to promote
    regional economic operation. In Kosovo, where I recently serve
    as USAID's Mission Director, USAID is increasing citizen demand
    for accountable institutions and promoting democratic and
    economic opportunities for all of Kosovo's citizens. USAID will
    also continue to assess the Serbian people and the Serbian
    Government to advance democratic and economic reforms.
        In Albania, USAID assistance is addressing corruption, one
    of its toughest remaining development challenges. Similarly, in
    North Macedonia, USAID assistance is countering corruption,
    enhancing business competitiveness, and increasing
    opportunities for young people to contribute to the economy and
    their communities.
        From the pandemic to youth brain drain, USAID recognizes
    that many of the barriers to further economic and democratic
    progress are regional in nature and therefore require a
    regional response. USAID assists countries in confronting
    common challenges such as support the independent media and
    cross-border economic linkages.
        Beyond corruption, the pandemic is one of the most urgent
    regional challenges which has wrought damage on the health and
    economies of the Western Balkans. USAID is part of the overall
    U.S. Government response to COVID-19 in the region. In
    addition, USAID is also assisting enterprises to survive the
    pandemic and prepare for an increasingly digital economy.
        Whether it is the Kremlin's efforts to subvert the region's
    fledgling democracies or the People's Republic of China's
    intention to capture partner economies, foreign malign
    influence is capable of reversing progress. USAID's Countering
    Malign Kremlin Influence Development Framework informs our
    programming, which supports democracy and political processes,
    enables the media environment to resist disinformation, and
    diversifies economic relationships to minimize reliance on
    Moscow.
        A key tenet to countering the PRC's efforts to gain
    political and economic leverage in the region is ensuring
    partner countries are able to make informed choices and
    identify viable investment alternatives that do not require
    them to sacrifice their long-term interests in favor of short-
    term gains.
        USAID, in coordination with interagency partners, is
    developing a program to help partner governments understand
    investment flows, identify beneficial ownership, assess risk
    and opportunities, and analyze transaction terms to ensure
    transparent, beneficial investments consistent with national
    interests.
        This winter's acute energy crisis across the European
    continent has underscored the importance of USAID's energy
    programming. USAID is enabling partner countries to build and
    expand regional energy markets, diversify energy supplies, and
    build resilience in the system. This foundational work will
    strengthen the region's energy security and advance a
    sustainable and just clean energy transition.
        As we discuss the remaining significant challenges it is
    equally important to highlight the strength of our partnership
    with countries in the region. This year, our partners stepped
    up to support at-risk Afghans who were evacuated or fled from
    Afghanistan in August 2021. North Macedonia, Kosovo, and
    Albania provided refuge to approximately 4,500 at-risk
    individuals. We are tremendously grateful for the refuge our
    partners continue to provide.
        In closing, I want to underscore that the Western Balkans
    region holds tremendous potential to demonstrate that democracy
    delivers. Ensuring that the region continues on this path will
    require a united front with partner governments committed to
    reform, citizens who continue to advocate for democracy,
    transparency, and rule of law, and coordinated assistance
    between the European Union and USAID. Assistance must also
    continue to be responsive to external threats to the region's
    Euro-Atlantic future.
        I look forward to continuing to work with Congress and
    welcome your questions. Thank you.
        [The prepared statement of Ms. Magno follows:]

                      Prepared Statement of Ms. Lisa Magno

        Chairperson Shaheen, Ranking Member Johnson, distinguished Members
    of the Subcommittee, thank you for inviting me to discuss the U.S.
    Agency for International Development's (USAID) work in the Western
    Balkans.
        For over three decades, USAID has partnered with the citizens and
    governments of the region to support their aspirations for a
    democratic, economically prosperous future firmly grounded in European
    institutions. Thanks to generous bipartisan support from Congress,
    USAID assistance is helping our partners to tackle both the internal
    and external challenges slowing their path towards Euro-Atlantic
    integration. Your support also allows the agency to remain agile and to
    adjust to the shifting political dynamics of the region, including
    responding to foreign malign actors who seek to disrupt democratic
    progress, undermine institutions, exercise economic and political
    leverage, and ultimately reverse the hard won democratic and economic
    gains of the past 30 years.
        During USAID Administrator Samantha Power's recent trip to Bosnia
    and Herzegovina (BiH) she made clear that a peaceful and prosperous
    future for BiH depends on all political leaders and citizens working
    together to advance the reforms necessary to achieve BiH's democratic
    and economic aspirations. She further underscored throughout her visit
    that USAID will continue to support all those working to build a more
    stable, inclusive, democratic future for BiH. USAID's focus is on
    fighting corruption, strengthening rule of law, fostering
    entrepreneurship, promoting reconciliation, and creating a transparent
    business environment which attracts investment and ensures young people
    have a reason to stay and build their lives in BiH.
        In Serbia and Kosovo, USAID continues to support the European Union
    (EU)-led Dialogue and its goal of comprehensive normalization of
    relations, which the United States believes must be based on mutual
    recognition. We also support any initiatives to promote regional
    economic cooperation that will help prepare the countries of the region
    to meet their requirements for EU accession, and we believe these
    initiatives should be broadly open to all countries of the region. In
    addition, USAID is launching a regional reconciliation program that
    will focus on cross-border people-to-people activities between Serbia,
    BiH, and Kosovo. Bilaterally, USAID's strategy in Kosovo seeks to
    strengthen and increase citizen demand for accountable institutions and
    promote democratic and economic opportunities for all of Kosovo's
    citizens. USAID will also continue to assist the Serbian people and the
    Serbian government to advance democratic and economic reforms and meet
    the challenge of malign influence. In both countries, USAID is working
    with our partners to enhance the accountability of government
    institutions and build a business enabling environment which attracts
    investment and fosters small and medium sized enterprises (SME) growth
    and innovation.
        USAID assistance in Albania takes a targeted approach to address
    one of Albania's toughest remaining development challenges, countering
    corruption. USAID has also been a ready partner with Albania in times
    of crisis, from providing firefighting expertise during the 2021
    wildfires to responding to COVID-19. Similarly in North Macedonia,
    USAID assistance is countering corruption, enhancing the
    competitiveness of SMEs, supporting North Macedonia's response to the
    pandemic, and increasing opportunities for young people to contribute
    to the economy and their communities.
        From the pandemic to youth brain drain, USAID recognizes that many
    of the barriers to further economic and democratic progress are
    regional in nature and therefore require a regional response. USAID
    funds a range of regional initiatives that reinforce and coordinate
    with bilateral programs and engage on issues that are inherently
    regional in nature, such as programs that promote trade facilitation
    and regional energy security. USAID also invests in areas where there
    is the opportunity to achieve economies of scale to assist countries
    confronting common challenges, such as support to independent media and
    cross-border economic linkages. For example, through our regional media
    programs, we are helping journalists to produce high quality content,
    enhance their digital security, and build sustainable financial models
    so that they can continue to produce independent, fact-based journalism
    and keep communities informed. This work includes support for
    investigative journalists committed to uncovering systemic corruption
    in the region. USAID's regional civil society program increases the
    capacity of civil society to promote local, national and regional
    reforms in the Balkans. Our flagship regional economic growth
    activities are working across borders, and in concert with our
    bilateral activities, to improve the region's business enabling
    environment, reduce barriers to trade, enhance the competitiveness of
    businesses in the region, and increase access to finance.
        Beyond corruption, one of the most urgent regional challenges in
    the past 2 years to furthering prosperity in the region is the damage
    wrought by the pandemic on the health and economies of the Western
    Balkans. USAID has supported the response to COVID-19 in all of our
    partner countries in the Western Balkans. Through USAID, the U.S.
    Government has provided vaccines and medical, testing and laboratory
    equipment, helped schools adapt to online and hybrid learning,
    supported social entrepreneurship, upgraded sanitation and hygiene in
    medical facilities, provided critical hygiene supplies, helped to
    combat vaccine mis- and dis-information, and put shots into arms.
    Further, USAID is assisting enterprises to pivot to domestic tourism,
    engage in e-commerce, and enable access to capital through the creation
    of alternative financing mechanisms and by assisting businesses to
    negotiate bank loans. All of this work will not only help SMEs to
    survive the pandemic but will prepare them to engage in an increasingly
    digital economy as the pandemic subsides.
        Whether it is the Kremlin's efforts to subvert the region's
    fledgling democracies and shape political decisions abroad, or the
    People's Republic of China's (PRC) intention to capture partner
    economies and undermine sovereign decision-making, foreign malign
    influence is capable of reversing the tremendous progress that has been
    made in over 30 years. USAID targets its efforts to address these
    external challenges to regional stability. USAID's Countering Malign
    Kremlin Influence (CMKI) Development Framework in the Western Balkans
    informs programming that is strengthening vulnerable sectors in each
    country, including support for democracy and political processes,
    enabling the media environment to resist disinformation, and
    diversifying economic relationships to minimize reliance on Moscow. To
    address the PRC's efforts in the region, our programs seek to limit the
    PRC's economic and political influence gained through debt dependency,
    opportunistic economic engagements and trade imbalances; to counter its
    export of corruption, disinformation and pro-authoritarian narratives;
    and to reduce partner countries' technological and energy
    vulnerabilities to PRC influence. A key tenet to countering the PRC's
    efforts to gain political and economic leverage in the region is
    ensuring partner countries are able to make informed choices and
    identifying viable investment alternatives that do not require them to
    sacrifice their long-term interests in favor of short-term gains. In
    addition to new programming on cyber security and investigative
    journalism, USAID, in coordination with interagency partners, is
    developing a program to help partner governments understand investment
    flows, identify beneficial ownership, assess risks and opportunities,
    and analyze transaction terms to ensure transparent, beneficial
    investments consistent with national interests.
        This winter's acute energy crisis across the European continent,
    leading multiple countries in the Western Balkans to declare national
    emergencies, has underscored the importance of USAID's efforts to
    enable partner countries to build and expand regional energy markets,
    diversify energy supplies, and build resilience in the system. This
    foundational work will strengthen the region's energy security and
    advance a sustainable and just energy transition to a clean energy
    future. USAID's support for long-term planning, policy reforms, and
    market integration has enabled Southeast Europe to invest more than $10
    billion in the electricity network and new generation, expand solar and
    wind generation, and lay the groundwork for stronger, more diversified
    markets connected with the EU.
        As we discuss the significant challenges that remain, it is equally
    important to highlight the strength of our partnership with countries
    in the region. This year, our partners in the Western Balkans stepped
    up to support at risk Afghans who were evacuated or fled from
    Afghanistan in August 2021. North Macedonia, Kosovo, and Albania
    provided refuge to approximately 4,500 at risk Afghans. In Albania,
    USAID is providing support to the government of Albania to strengthen
    the resilience of national systems and improve quality and access to
    needed services by vulnerable populations, including those relocated
    from Afghanistan, during times of disruption or shock. In North
    Macedonia, USAID is planning new programming which will ensure Afghan
    children have access to education and that evacuees have access to
    legal support and essential health services. We are tremendously
    grateful for the refuge our partners continue to provide for the
    evacuees.
        In closing, I want to underscore that the Western Balkans region
    holds tremendous potential to illustrate to the world that democracy
    delivers. Ensuring that the region continues on this path will require
    a united front with partner governments committed to reform, citizens
    who continue to advocate for democracy, transparency, and rule of law,
    and coordinated assistance between the EU and USAID which targets the
    fundamental challenges which are holding these nations back. Assistance
    must also continue to be responsive to external threats to the region's
    Euro-Atlantic future. USAID will continue to support our partners who
    have been working for over 30 years to build a democratic and
    economically prosperous future for their countries and for the region.
        I look forward to continuing to work with Congress in this effort
    and welcome your questions.

        Senator Shaheen. Thank you very much. As you all can
    probably tell there is a little bit of an echo. I think it is
    because we also have some people coming virtually, so I
    apologize for that and hope that people will just try and get
    close to the microphone as they are asking questions.
        I would like to begin with you, Mr. Escobar, because I
    think it is important for us to have a sense of what the
    strategy is for the Balkans region. So maybe you could begin
    with talking in more detail than your statement about what the
    vision is for the region, what are the key elements of our
    strategy there, and how we are expecting to accomplish that.
        Mr. Escobar. Thank you very much for that question. Our
    policy rests on three pillars: Europe, NATO, and regional
    integration. So beginning with the first, it is our belief that
    these countries should be part of the European Union. They are
    culturally, historically, and increasingly economically part of
    Europe, and we believe that they should be members. Our history
    of European integration for our partners has been one of
    unqualified success. Every country that has entered the
    European Union is more democratic, more stable, and more
    prosperous at almost no cost to the rest. So that is the
    central feature of our policy in the Balkans.
        Our second is NATO for those who qualify, and those who are
    not interested yet in NATO, more NATO engagement, and nowhere
    is this more visible than in Serbia, which is politically
    neutral, but has increased its engagement with the United
    States and with NATO dramatically over the last 2 years.
        Finally, regional political and economic integration. That
    is why we support Open Balkans, the Common Regional Market, and
    every other element and every other program that creates strong
    institutions and greater interoperability with the European
    Common Market as a way of creating opportunities for multi-
    ethnic reconciliation and inter-party dialogue, inter-country
    dialogue.
        So those are the three policies, and we are pursuing all
    three very aggressively.
        Senator Shaheen. Thank you. Obviously, one of the countries
    I have been following closely is Bosnia-Herzegovina and right
    now a continuing disruptive actor, Mr. Dodik, is attempting to
    secede the Republika Srpska from the larger country. I was
    pleased to see the Administration announce sanctions on Mr.
    Dodik and his activities, but what more can we do as we think
    about how to address his behavior and support more integration
    in Bosnia among the ethnic groups there?
        Mr. Escobar. Well, I do have to state that even though
    Milorad Dodik is a very difficult actor, he is not the only
    one. Our actions against Milorad Dodik are directed at him as
    an individual and not against Serbs and not against Republika
    Srpska. That is very important.
        The fundamental problem in Bosnia is not ethno-nationalism.
    It is corruption. It is deep-seated corruption that prevents
    Bosnia from joining the success stories of the rest of the
    Western Balkans. It is the third-most corrupt country in
    Europe. It is the primary cause of youth brain drain, and it is
    the largest block to Euro-Atlantic aspirations.
        So our policy really is about creating a more functional
    state through step-by-step reforms--that my colleague, Matt
    Palmer, is undertaking, along with his European Union
    colleagues--to make the relationship between Croats and
    Bosniaks in the federation more effective, to implement
    election integrity measures, and to make the central state more
    functional.
        At the same time, our hope is that Serbs will return to the
    central institutions, but until they do, our goal is either
    political dialogue with opposition figures and other leaders to
    bring Serbs back to the table and to prevent Dodik, either
    through political engagement or through sanctions, from
    inflicting any more damage to the central institutions.
        Senator Shaheen. Well thank you. I appreciate that.
        Ms. Magno, how is USAID supporting those efforts?
        Ms. Magno. Through USAID assistance and close coordination
    with stakeholders in Bosnia-Herzegovina we are, for example,
    providing specialized training to prosecutors' offices to
    harmonize practices and processes for high-profile corruption
    cases. As an example, USAID has helped develop the checklist of
    quality indicators for investigative actions and criminal
    reports of law enforcement agencies. This checklist will help
    ensure the legality of evidence collected and improve the
    quality of criminal reports submitted to prosecutors' offices.
        We have also helped the Judicial and Prosecutorial Council
    adopt the guide to crisis communications for courts and
    prosecutors' offices.
        A third and also equally important approach that we have
    taken is to help independent media, particularly investigative
    journalists, and we have just supported a state-of-the-art
    digital newsroom which will allow local journalists to better
    cover and expose corruption.
        Senator Shaheen. Thank you. My time is up so I will turn to
    Senator Johnson, but I still have lots of questions and I am
    sure my colleagues do. Senator Johnson.
        Senator Johnson. Thank you, Madam Chair.
        Assistant Secretary Escobar, let us go back to Bosnia, that
    region. I think we are at 27 years after the signing of the
    Dayton Accords. I do not think anybody envisioned we would be
    kind of operating in that region. That is their basic
    constitution still. Can you just give me, from your
    perspective, the history, from the signing of the accords to
    the where we are today, why is that really the governing
    document still in place?
        Mr. Escobar. Well, Senator, the idea behind Dayton really
    was about European Union integration. It was about a promise of
    being a member of a larger organization that protects people's
    freedoms and civil and democratic rights. That is still our
    goal. Unfortunately, because of the dysfunction of the country
    and, in part, because of enlargement fatigue, that promise has
    not been met, but it is still our intention. It is still our
    policy that these countries should be integrated into the
    European Union.
        So Dayton has been very successful in keeping the peace for
    over 25 years, so it is an important document and it is the
    basis of our policy. We believe that we can help them improve
    their governing processes and help them meet some of the
    requirements for European Union membership through step-by-step
    constitutional reform and limited constitutional reform and
    electoral reform that would create the ability for the country
    to reach political consensus better. So it is still our goal to
    get them into the European Union. By the way, that sentiment is
    shared by our partners as well.
        In the meantime, our engagement is still absolutely
    critical. Our leadership is absolutely critical in the region,
    and this Administration will continue to show that leadership.
        Senator Johnson. I think the thrust of my question was what
    has gone wrong. I understand what you want to do to try to make
    it right, but why is the Dayton Accord still in place? Why have
    we not moved on? What have been the problems? What has
    prevented progress?
        Mr. Escobar. I would say that the primary problem is
    corruption. It is true that Dayton allows a tremendous amount
    of opportunity for obstruction and political delay, and those
    opportunities have been capitalized by some of the more
    powerful parties to further corruption and to capture the
    state. That has had a very, very detrimental effect on the
    country. It has a detrimental effect on the investment climate
    and on the capacity to behave as a state.
        Now that is not necessarily because of Dayton. That blame
    can be laid almost entirely at the feet of certain political
    actors, but we are confident that we can fix what is wrong with
    Bosnia through both American engagement, limited reform, and a
    clear path to Europe.
        Senator Johnson. So what would you say are the greatest
    threats or dangers to the basic three pillars of our approach
    toward the region?
        Mr. Escobar. Well, I would say that they are three-fold.
    One is the lack of a clear vision for European integration. The
    second is endemic corruption and the lack of rule of law, and
    that is something that we all agree on, and that is our
    European partners and United States. Third, there is an
    increasing amount of malign foreign influence, both from China
    and particularly from Russia. So we have to have a plan, and we
    do have a plan, for countering all of that.
        Senator Johnson. So you just transitioned to my next
    question. Can you describe China's involvement in the region?
        Mr. Escobar. China's involvement in the region is mostly
    economic for now, but it does have political costs. So China
    provides seemingly attractive infrastructure projects, loans,
    and so-called investments. Most of the time those investments
    are non-transparent. They rely on government-to-government
    agreements; not open tender. They rely on keeping the details
    of those deals as state secret and therefore not accessible to
    the taxpayers, or the voters. Third, it involves frequently not
    respecting the environmental and social standards of the
    countries. I should add it almost never involves hiring local
    people to work on these infrastructure projects.
        So what seemingly is an attractive investment frequently
    becomes a debt trap, and nowhere is that more visible than
    Montenegro.
        Senator Johnson. Just a real quick follow-up. So these are
    primarily infrastructure types of projects. Do we have a sense
    of the total dollar value of their--I will put quotation marks
    around it--``investments'' in the Western Balkans? Do we have
    some kind of sense, an estimate?
        Mr. Escobar. It is in the tens of billions, and in some
    cases it is a significant portion. The debt represents a
    significant portion of the countries' GDPs.
        Senator Johnson. Okay. Thank you.
        Senator Shaheen. Thank you, Senator Johnson. We now have
    Senator Cardin, who is coming to us on Webex.
        Senator Cardin. Thank you, Madam Chair, and let me thank
    both of our witnesses. I am going to follow up on Senator
    Johnson's questioning, because, Mr. Escobar, I think you are
    giving a much more rosy scenario as to the likelihood of
    progress. It has been since 1995 we have been following the
    same path in regard to the Dayton Accords, and the Dayton
    Accords was only supposed to be a transitional type of an
    arrangement. It was not supposed to be the final word in regard
    to the constitutional authority for Bosnia. Now you are
    mentioning that we have had systemic corruption there that is
    blocking integration into Europe. So the problems seem to be
    getting worse rather than better.
        So to my question to you, you say you have a game plan in
    regard to China. You have a game plan in regard to Russia. I
    assume you have a game plan in regard to constitutional reform.
    You have imposed sanctions against Mr. Dodik, and I agree with
    Chair Shaheen that that is the right thing to do.
        So how do we intend to engage the parties to really move
    forward to the type of constitutional change, to the type of
    dealing with corruption? It seems to me, how do you deal with
    the malign influence of Russia and China, and how do you engage
    Serbia more in regard to bringing about a more permanent reform
    in Bosnia that could lead to emigration to Europe?
        Mr. Escobar. Well, thank you for that question. Before I
    talk about Bosnia and Herzegovina, I have to tell you a little
    bit about the context the neighborhood in which Bosnia and
    Herzegovina lives. The story of the Western Balkans is
    overwhelmingly a positive story. Of the seven countries of the
    ex-Yugoslavia, two are members of the European Union and four
    are members of NATO.
        Senator Cardin. Let me just stop you for a second, because
    I agree with you on that. I agree with you that is a positive.
    So how are we engaging the other partners that have made a lot
    more progress in that region, whereas Bosnia, if you would have
    gone back a decade ago I think we would have thought Bosnia
    would be one of the first countries to emerge. It is now
    lagging behind.
        Mr. Escobar. I would say it is true that Bosnia is the most
    concerning country in the Western Balkans. So it does not share
    in the prosperity of the other five, it is not on a solid
    integration track, and the corruption is the worst anywhere
    else. By the way, that corruption is causing a brain drain and
    a net emigration that is ten times that of Serbia. So it is at
    the top of our priorities.
        Now it is true, also, that there is nothing inherent about
    Dayton that prevents Bosnia-Herzegovina from moving forward as
    a democratic and prosperous state. So it really is a lot of
    about the entrenched corruption, which we hope through
    engagement, through development, through capacity building, and
    through sanctions that we can address.
        Senator Cardin. That does not--I agree with you on the
    corruption issue. You are absolutely correct, and I hope we can
    do everything we possibly can. I remember the briefings we got
    during the Dayton Accords, and it was very clear that it was
    aimed at resolving the conflict that was occurring, the
    violence that was occurring in Bosnia, but it was never meant
    to be the final word in regard to governance that they knew
    that additional constitutional reform was going to be needed.
    It dealt with the practical problems of the ethnic communities,
    not so much as a final way of resolving the governance of
    Bosnia. It seems to me you are saying you think that could be
    the final solution.
        Mr. Escobar. I do not think so. I think the final solution
    is European Union membership, and that is why we need to
    encourage our European colleagues to show a clear path to
    Europe for Bosnia-Herzegovina. We have seen, alongside with
    this Administration, you have seen a new UN Special
    Representative, a more engaged European Union external action
    service, and a more invigorated, bilateral relationship between
    a lot of the countries and Bosnia-Herzegovina, because the
    crisis that has emerged with Milorad Dodik has brought into
    stark relief the problems of Bosnia-Herzegovina.
        I agree with you that Dayton was compromises laid upon
    compromises as a way of stopping the war, but in that regard it
    was very successful. There has not been any conflict in Bosnia
    in almost three decades, and there will not be.
        So we need to work closer with our European partners to
    give them a vision of what they need to do and how they need to
    function as a government to be able to be a successful member
    of the European Union.
        Senator Cardin. Just one last question. Would not that also
    include constitutional reform?
        Mr. Escobar. It does. Now we are starting with limited
    constitutional reform as a way of creating opportunities on the
    ground for greater interethnic reconciliation and greater
    institutional functionality. I do think that at least the core
    of that plan will be successful.
        Senator Cardin. Thank you, Madam Chair.
        Senator Shaheen. Thank you, Senator Cardin. Senator Murphy
        Senator Murphy. Thank you, Madam Chair. Thank you both for
    being here today. I thank the Chair and the Ranking Member for
    convening this hearing.
        Mr. Escobar, I wanted to ask you about the current role of
    the high representative in Bosnia. You served in the OHR office
    back in the 1990s. This is a position that does have the
    authority to impose binding decisions, although the use of that
    tool is relatively rare.
        I met with a group of Bosnian Americans in Connecticut
    earlier this week who were asking questions about why we do not
    press harder on the high representative to step in and be more
    forceful in some of these developments inside Bosnia as the
    country threatens disintegration. It does not seem like it
    makes much sense for the high representative to stand on the
    sidelines.
        What is our current position as to the role of the high
    representative? Do we think that the high representative can be
    more forceful than the position has been? I understand the
    Russians' position here that they want to the whole thing to go
    away, but what is the role here to try to solve the ongoing
    stalemate in Bosnia?
        Mr. Escobar. Well, I think, first of all, that it should be
    clear that the high representative is just one of the tools
    that the international community has to exert influence in
    Bosnia and Herzegovina. Now we strongly support the high
    representative and his role as a mediator.
        I understand the concern of people who would like to see
    imposed solutions, but imposed solutions are not a democratic
    answer to democratic challenges. So we hope to be able to
    partner with European-minded, democratically focused political
    parties and leaders to be able to resolve for themselves the
    problems of their own country.
        Now that does not mean that we do not support the bond
    powers of the high representative, but we think that is a last
    resort, a nuclear resort, and one which then puts the onus on
    the international community to implement. We think that the
    political system and the political leaders--most of the
    political leaders--of Bosnia-Herzegovina are mature enough and
    democratically focused enough to be able to resolve the
    difference through their own processes, and that is the way it
    should be.
        Senator Murphy. I do not mind referring to it as a last
    resort. I maybe wish we did not refer to it as a nuclear
    resort. This is a legitimate power of the high representative.
    I understand the difficulty in imposing it, but if the choice
    eventually becomes the disintegration of the country and the
    region into civil war versus a difficult decision made by the
    high representative, I think we will have to carefully weigh
    the equities on both sides.
        I wanted to turn to the----
        Mr. Escobar. Well if I can, Senator, on that issue.
        Senator Murphy. Sure.
        Mr. Escobar. --first of all, this situation is not
    analogous to 1991. We have a European peacekeeping force. We
    have a high representative. Neither Croatia nor Serbia are
    interested in seeing a war on their borders. We have a NATO
    presence. So there are a lot of checks and balances to prevent
    conflict.
        So the fundamental issue is that the high representative
    is, and always has been, on a path to being phased out after
    certain conditions are met. We want to make sure that those
    conditions are met. So we do not see the situation as
    destabilizing, as some of the most drastic commentators see it.
        Senator Murphy. Okay. I agree with you that so long as the
    impression remains that the path to the EU is difficult and
    rocky, it is really hard to press our friends in the region to
    continue reform, and it is not coincidental that you have seen
    the doors shutting to the EU at the same time that we have seen
    democratic backsliding in the region.
        So let me ask you about the news last month that there will
    be a renewed discussion between Bulgaria and North Macedonia.
    That was welcomed. It has been a year or more since Bulgaria
    vetoed the ability for talks between North Macedonia and Europe
    to continue. Do you see hope that those talks can bear fruit,
    and what leverage is there for the United States with Bulgaria?
    To me this is a disaster if we cannot show progress towards
    Europe, and why on earth would we let one country stand in the
    way. What more can the United States--what more can we be
    doing? What hopes do you have for these discussions with two
    new leaders?
        Mr. Escobar. Well, both Bulgaria and North Macedonia are
    valued NATO allies. So it has always been our hope that they
    could resolve their differences through constructive dialogue
    and good faith negotiation. Both of these new governments have
    given us assurances that that is happening. So we support that
    and we hope that that can come to a conclusion within a
    reasonable period.
        Senator Murphy. That is fine. That is a very diplomatic
    answer, but these discussions are not going to come to a
    conclusion unless the United States plays an active role and
    unless we make clear to the Bulgarians that it is in their
    interest, as a Balkan nation, to make sure that there is a path
    into the European Union. So I appreciate the answer, but I will
    still press for increased U.S. involvement at the highest
    level, to try to resolve this, given that we have an
    opportunity to do it with new leadership.
        Thank you, Madam Chair.
        Senator Shaheen. Thank you, Senator Murphy. We have Senator
    Van Hollen on Webex.
        Senator Van Hollen. Thank you, Madam Chair. Let me thank
    both of the witnesses here. Much of the ground I wanted to
    cover has been asked about, including a lot on Bosnia.
        I do want to ask both of you, starting with Deputy
    Assistant Administrator Magno, about the Russia and Chinese
    disinformation campaigns in the Western Balkans. There was a
    poll conducted I believe last July by the National Democratic
    Institute that found that these disinformation campaigns were
    having an impact. In fact, the majority of the respondents
    across the region agree with the statement that, ``Democracy is
    a failed governing system used by the West to impose on
    countries in transition certain values aimed to masquerade
    their geopolitical interests.''
        We have seen a rise in e-liberal thinking, in
    authoritarianism in the overall region. Can you talk a little
    bit about these disinformation campaigns and whether we have
    any strategy to try to counter them?
        Ms. Magno. Thank you, Senator. In terms of disinformation,
    a big component of what we are doing in our partner countries
    is to help independent media in several ways. One is to help
    them provide quality content, and second also to make sure that
    they are on the path to financial viability, because without
    needed resources it is much easier for media outlets to be
    either captured or essentially to go out of business.
        Another component of our efforts is also to raise media
    literacy among the public and making sure that there is
    discernment about the sources of information, whether it is
    through traditional outlets or through social media.
        Senator Van Hollen. Well, I appreciate that. I mean,
    clearly we need to bolster our strategy, because the ability of
    leaders in these countries to pursue policies of freedom, human
    rights, democracy obviously depend on their standing with the
    public and how the public perceives those ideas.
        Turning again to Bosnia, and Mr. Escobar, I know you
    testified quite a bit on this topic. As you indicated and as we
    know, we have imposed sanctions on the Bosnian Serb leader
    Dodik. Are we encouraging our European partners to do the same,
    and would that unity prove to be more effective in trying to
    accomplish our goals?
        Mr. Escobar. Absolutely, and yes, we are in constant
    discussions with our European partners on their ability to use
    sanctions, their ability to track money, and their ability to
    impose visa bans on some of the corrupt officials in Bosnia-
    Herzegovina.
        Additionally, we have had, in the last couple of days, here
    in Washington, some very productive discussions with our UK
    colleagues, who also are very interested in modeling their
    sanctions regime closely with ours and coordinating closely on
    targeting. That is a very important one because the UK is a
    very important financial hub for Europe, and a lot of money
    that comes out, a lot of the corrupt funds that come out of the
    Western Balkans transit through London or through New York. So
    the sanctions regimes are very, very important, and we hope to
    see more from our European partners as well.
        Senator Van Hollen. Thank you, and thank you, Madam Chair.
        Senator Shaheen. Thank you, Senator Van Hollen.
        Ms. Magno, I would like to pick up on his questions about
    the disinformation and what we are doing to respond to that. To
    what extent is USAID coordinating with the Global Engagement
    Center at the State Department and also with working with RFE
    and Radio Liberty on their efforts in the region? Or are there
    any efforts in the region?
        Ms. Magno. We are closely coordinating with both the Global
    Engagement Center as well as having regular conversations with
    colleagues at RFE, and we share information, analytics, trends
    that we see, especially those coming from our partners on the
    ground. We also ensure that our tactics or our approaches are
    consistent with each other.
        Senator Shaheen. Do you have any evidence that what we are
    doing is working?
        Ms. Magno. I have to admit the challenges are huge, and we
    are trying to get our story, our own narratives out there to
    the maximum extent possible. I will take your question into
    consideration and provide more information at a later time.
        Senator Shaheen. Thank you. I would appreciate that. Also,
    when I was in Bosnia back in 2010--so it has been a long time
    ago--but I was there with former Senator Voinovich, and we had
    a lunch with a number of young people. It was probably the most
    impactful session I had in our week in the region, because the
    young people that we talked to felt like there was no hope for
    a future in Bosnia-Herzegovina. So can you talk about some of
    the programs that you are working on in the region for young
    people, and are there examples of successful efforts that you
    can point to, that you think we should be modeling in other
    places?
        Ms. Magno. Thank you for your question, and I totally
    agree. That sense of desperation among the youth was also
    illustrated during the recent visit of our administrator to
    Bosnia-Herzegovina and as well as my almost 4 years in Kosovo,
    I have had many conversations with young people in the region.
        One of the things that we are doing, for example, in
    Bosnia, in several of these countries we are able to identify
    sectors in the private sector which have high potential, and in
    Bosnia it is tourism, in Kosovo it is agribusiness, as well as
    information, communications, and technology.
        Maybe just to elaborate, in Bosnia what we are doing right
    now is to provide support to young potential entrepreneurs who
    can start future enterprises in the tourism sector. We did a
    needs assessment and forecast and we estimated that the tourism
    industry in Bosnia will actually require something like 18,500
    jobs, if things go in the right direction. So we are working
    with both young potential entrepreneurs as well as institutions
    of higher education to make sure that they understand
    international standards, they have the skills and capacities
    that will meet the demands of international tourists.
        Senator Shaheen. Thank you. Senator Menendez.
        Senator Menendez. Thank you, Madam Chair, to you and the
    Ranking Member.
        Deputy Assistant Secretary Escobar, I understand that you
    and your EU counterparts have recently urged Kosovo to
    establish an association of Serb municipalities. While this
    concept has its basis in the 2013 Brussels Agreement, I am
    concerned that this would lead to a Republika Srpska within
    Kosovo. Moreover, Kosovo's Constitutional Court has found the
    association concept, ``not entirely in compliance with the
    spirit of the constitution.''
        Are you concerned that such an association could lead to
    the destabilization of Kosovo and take away powers reserved for
    a possible central government?
        Mr. Escobar. I do not. We support the formation of an
    association for many reasons. One is it is already agreed to.
    Even though the Constitutional Court ruled that some parts of
    the proposal were inconsistent with a constitution, it did not
    say that the association itself is unconstitutional. So in the
    dialogue, within the context of the dialogue, it is up to
    Kosovo and Serbia to decide how that would look. So it does not
    have to be, and we certainly do not want it to be similar to
    Republika Srpska, but we have urged, and my counterpart,
    Miroslav Lajcak, has urged the Kosovar Government to look at
    models that they believe would be compatible with them that
    would not undermine their sovereignty or their functionality as
    a way of allowing Serbs to continue to receive health care,
    certain benefits and education in Serbian language.
        Personally, I think that this effort, which would unwind
    Belgrade's engagement in Serbian communities and offshore it to
    a domestic, transparent institution under the control of the
    government of Kosovo, would actually enhance Kosovo
    sovereignty, not detract from it.
        Senator Menendez. Let me ask you, I am concerned that the
    state of talks, or lack thereof, is more due to Serbia's
    reticence to recognize Kosovo's sovereignty. What concessions
    are you seeking from Serbia to justify pressuring Kosovo in
    this way?
        Mr. Escobar. Well, first of all, the purpose of the
    dialogue is to move everything in Kosovo's direction, to be
    quite honest, with the end result of mutual recognition and
    normalized relations, something that they do not have already.
    So it is not about Kosovo's status, but about the recognition
    that they are a sovereign and independent country.
        So the dialogue is the mechanism, and it has proven itself
    to be an effective mechanism in resolving differences between
    the two countries, most recently in September, when the EU
    negotiated a successful resolution to the license plate dispute
    with our support.
        So with our backing--and our backing to Kosovo is
    resolute--we want to make sure that the dialogue helps them
    move through all the difficult challenges of unwinding the two
    countries' engagement, difficult engagement, to have a common
    European future together.
        Senator Menendez. Well, I hope that our commitment to
    Kosovo is resolute.
        Let me ask you, I have heard from many in the Serbian
    diaspora here in the United States about the elections that are
    underway there and the lack of legitimacy, the use of the
    government in extraordinary powers as it relates to the
    elections, the resources that they are using that are not just
    their private political resources. What are your insights into
    that?
        Mr. Escobar. That is something that we openly express our
    concern about and privately engage with the government about.
    There are three elements to this. One is the treatment of the
    opposition. So we believe the opposition should have free and
    fair conditions to participate in the elections. Second, the
    media environment. It is true that much of the government-
    controlled and private media in Serbia is very favorable to the
    current government. Thirdly, the treatment of civil society,
    those people who engage in democratic activities, to monitor
    elections, to monitor media freedom, and to support citizen
    engagement. Those organizations must be treated fairly by the
    Serbian Government. It is not just the United States who has
    made this clear, but also the European Union, the OSCE, and
    other international organizations that have been very clear
    about our expectations for the April elections in Serbia.
        Senator Menendez. As of now that is not the case?
        Mr. Escobar. As of now there are definitely concerns about
    all of that.
        Senator Menendez. One final question if I may, Madam Chair.
    You know, Vucic traveled to Moscow in December seeking cheap
    gas, which he got. In return, the Russians got some contracts
    inside of Serbia. He was also in Beijing not too long ago to
    discuss a free trade agreement that he is now touting in his
    re-election campaign.
        It seems to me that both Russia and China are making
    significant inroads in the Western Balkans. What are we doing
    to combat malign Russian and Chinese influences in this regard?
        Mr. Escobar. Well, first of all, it is true that the
    influence of Russia and China is maligned in the Western
    Balkans. In the case of Russia, Russia is not even in the top
    ten biggest trade partners for the Western Balkans. It is
    mostly about energy. So on the energy security front, we have
    encouraged Serbia to look at alternatives to Russian gas,
    including renewables and liquid natural gas, and we have made
    some progress there.
        With regard to the political influence, over the last year
    Serbia has become more aligned with European Union foreign
    policy, including not recognizing Crimea. So we are making
    inroads politically on that.
        In the case of China, we have encouraged reforms and
    greater transparency in the procurement process that gives
    Chinese firms and the Chinese Communist Party a leg up over
    American and European countries, but one of the reasons that we
    support a more integrated market for the Western Balkans is
    that if it is more integrated and more integrated with Europe,
    with institutional standards that match those of Europe, it
    will create opportunities for greater transparency, greater
    openness in procurement, and requirements for environmental and
    social impact easement that will give American and European
    firms the advantage over Chinese in the region.
        Senator Menendez. I look forward to following up with you
    on some of these issues.
        Thank you, Madam Chair.
        Senator Shaheen. Thank you, Senator Menendez. Senator
    Johnson.
        Senator Johnson. Thank you, Madam Chair.
        Assistant Secretary Escobar, I want to return to Serbia and
    Kosovo. I spent a fair amount of time traveling back and forth
    between Serbia and Kosovo during the previous Administration,
    trying to help facilitate agreements. I really thought
    Ambassador Grenell did a really good job, and I thought it was
    an excellent strategy to forge an agreement really based on
    economics. There are so many areas that they disagree on, but I
    think one thing they definitely agreed on was how can they
    improve the lot of life for their citizens.
        I always felt every additional agreement, success builds on
    success, the agreement between Kosovo and Montenegro in their
    border dispute, and the agreement between Greece and North
    Macedonia on the name, and then the economic agreement between
    Kosovo and Serbia, can you give me your perspective of what is
    the current status of that agreement? I know it has not been
    fully taken advantage of--let us put it that way.
        Mr. Escobar. Secretary Blinken said, in his confirmation
    hearings, that it is our intention to build upon the successes
    of the previous Administration, and the Washington commitments
    are part of that. I particularly like the idea of a moratorium
    on recognitions and de-recognitions to allow diplomatic space
    for the dialogue, to make progress.
        On economic issues I agree with you, Senator, that the
    greater the integration is in the region the more easily we can
    tackle the political problems. That integration is happening,
    and it is happening both organically, through European-led
    processes, and increasingly through the Open Balkans
    Initiative. All of these promote greater business ties between
    the regions, greater ease of movement and travel, the mutual
    recognition of diplomas and certificates.
        So it is one of the reasons why we believe that regional
    economic integration is a winner, and we will continue to
    pursue that.
        Senator Johnson. In my opening remarks I mentioned that it
    seems like these countries do want the U.S. fully engaged and
    involved in the region, but oftentimes to impose the U.S. will
    on the other side to reach agreement. It has always been my
    viewpoint, as well as, I think, my understanding of every
    Administration's viewpoint, that we are there to facilitate, to
    help the parties come to agreement between themselves. We are
    not going to impose anything on anybody, but at the same time
    every now and again we do need to apply some pressure.
        I have been concerned, in my dealing with both Serbia and
    Kosovo, that Kosovo has obviously recognized strong support for
    the U.S., and I think we all agree on that, but I am a little
    concerned that they rely on that so heavily that they do not
    really feel that they have to provide the give in the give-and-
    take. I do not know how many times, on both sides, they say
    negotiation is really give and take. I have oftentimes heard a
    lot of the take, not a whole lot of give. Can you just kind of
    comment on that?
        Mr. Escobar. Well, we have been very clear with the
    government of Kosovo that our expectation is that they engage
    fully in the EU-led dialogue, that they look at that as a true
    negotiation in achieving their ultimate goal, which is mutual
    recognition between Serbia and Kosovo, recognition by the five
    remaining European Union members who are currently not
    recognizing Kosovo, and membership in all of the international
    organizations that they would like to be members of.
        So that will require compromise, and we have been very
    clear. Our recently arrived ambassador, Jeff Hovenier, has made
    that very clear, beginning with his opening meetings with the
    Kurti Government, and he will continue to press that, and we
    will continue to support him as he moves in that direction.
        Senator Johnson. My concern is in Kosovo I often heard that
    they were more than willing to forgive if a proper apology was
    provided, and that was pretty much their give. I think they
    probably need to do a little bit more in terms of compromise
    and good faith. Would you agree?
        Mr. Escobar. Well, I would leave that to my European
    colleagues, because there is truly a plan to move forward in
    the dialogue in a way that ends up with normalizing
    relationships, and it is more complicated than--I can
    respectfully disagree--than just a simple apology. There are
    property issues. There are missing persons issues. There are
    energy issues and a host of other issues that we have to work
    through, in good faith, to achieve what we want to achieve,
    which is a European future for both Serbia and Kosovo.
        Senator Johnson. So just talk--this will be my last
    question--just talk in a little bit greater detail, Russia's
    influence, not just in Serbia or Kosovo, but within the Western
    Balkans in total. Can you just kind of speak in general, what
    they are doing, what they are trying to accomplish?
        Mr. Escobar. What Russia is trying to accomplish really is
    to create a vulnerability within the Euro-Atlantic space. That
    is fundamentally what it is. They have found partners within
    certain countries that are willing to help advance those goals,
    to keep us distracted from other issues, including Russia-
    Ukraine. Those parties are more likely than not to try to
    create ethnic division, and they use misinformation,
    corruption, and in some cases attempted assassination to
    achieve their goals.
        Senator Johnson. Okay. Thank you, Madam Chair.
        Senator Shaheen. Thank you, Senator Johnson. I want to
    pursue that a little bit, because Russia has a long history in
    the Balkans, and their attempts to court Serbia through
    military equipment, sales of military equipment, through energy
    obviously gives them really undue influence in the region.
        So can you talk about--and this is for Ms. Magno as well--
    talk about the energy connections between Russia and the
    Western Balkans. Senator Menendez, I think, referenced the trip
    to Russia where Putin pledged cheaper energy for Serbia, but
    what are we doing to counter some of those influences,
    particularly around energy?
        Mr. Escobar. Well, the question of dependence on Russian
    energy is not solely a problem for the Western Balkans.
        Senator Shaheen. Right.
        Mr. Escobar. It is a problem for a good portion of Europe,
    but the Balkans have an additional problem in that they are
    heavily dependent on coal energy. So we have a comprehensive
    energy security strategy that stresses renewables, liquid
    natural gas, and alternative suppliers and routes for energy
    supplies. We are close to unwinding some countries from full
    dependence on Russian gas.
        I would add that in that process there are tremendous
    opportunities for American companies to help these countries
    both free themselves from their dependence on Russian gas and
    to move forward to a cleaner, more renewable energy mixture.
        Senator Shaheen. Well, I would certainly agree with that.
    Are we getting any takers from the United States in terms of
    companies who are looking at the region as opportunities?
        Mr. Escobar. We are. We have several.
        Senator Shaheen. Ms. Magno, can you add to that in terms of
    what USAID is doing?
        Ms. Magno. What USAID is doing in the energy sector is
    really to help the governments make informed choices and
    decisions. So a lot of the work that we do is support for the
    government's long-term planning, market integration, as well as
    helping them with legal and regulatory forms. So for example,
    in Kosovo right now we are assisting the ministry in helping
    draft legislation that is around renewable energy.
        We are also providing technical advice to ensure that our
    partner countries--and many of them have made or set ambitious
    targets in relation to what the European Union requires with
    regard to clean energy. Through our analysis and technical
    counsel we are helping them meet those targets.
        Senator Shaheen. Thank you. That is good to hear.
        Mr. Escobar, what is going to be the impact in the Western
    Balkans if Russia does invade Ukraine?
        Mr. Escobar. Well, as you know, Senator, some of these
    countries are quite vulnerable, and they are quite vulnerable
    to Russian malign influence. It is our hope, however, that we
    can ensure that these countries remain stable and protected
    against any efforts by Russia to use the Western Balkans as a
    distraction for the Euro-Atlantic community from Russia and
    Ukraine. So we are watching very closely, and we do have the
    bandwidth to watch both regions at the same time and make sure
    that we try to insulate them.
        I would also say that in the region, the Western Balkans,
    three of the countries are NATO allies, so not only are they
    participating in the discussions that NATO is having on that,
    but they are also contributing, both to our efforts and to our
    messaging.
        Senator Shaheen. Have we heard from any of the other
    countries who are not NATO members about concerns about
    Russia's activities?
        Mr. Escobar. Every country in the region has expressed
    their desire to see a peaceful, diplomatic resolution to the
    crisis.
        Senator Shaheen. Good. I just have one other area that I
    would like to explore a little bit, and as we are thinking
    about the challenges in Bosnia-Herzegovina and looking at what
    is happening with Russia and Ukraine, EUFOR is increasingly
    important, I think, and yet its size has steadily decreased
    over the years.
        So can you talk, Mr. Escobar, about how we are preparing
    for the next round of the UN authorization of EUFOR and how
    concerned we are about Russia's efforts to undermine the
    mission there?
        Mr. Escobar. Well, Russia was not opposed to the renewal of
    the EUFOR mandate, and I believe they will not be. It is in
    everybody's interest that the region remains stable, at least
    free from conflict.
        Additionally, we are working with our European colleagues
    to enhance their capabilities, to enhance their capacity, to
    address various scenarios that could arise, and I should
    mention that they also have an over-the-horizon reserve
    capacity to surge, should they need it. So I am confident that
    EUFOR is capable of doing the job it was intended to do, which
    is keep the peace in Bosnia and Herzegovina.
        Senator Shaheen. So you are not advocating that the size of
    the forces should be increased?
        Mr. Escobar. We are advocating that the size of the force
    match the challenges and the requirements, and we are confident
    that it does.
        Senator Shaheen. Good. When is the UN authorization going
    to happen?
        Mr. Escobar. I believe it will happen again in the fall,
    late fall.
        Senator Shaheen. Do you know how long that will last?
        Mr. Escobar. They usually last a year.
        Senator Shaheen. Okay. Well, thank you both very much. I
    very much appreciate your responses to all of the questions and
    your continued commitment to the region, and I hope that you
    will engage with this subcommittee and also with the full
    committee in terms of how we might be more helpful as we are
    looking at the challenges ahead for the region.
        So with that, I will conclude the hearing, and again, thank
    you both.
        [Whereupon, at 11:22 a.m., the hearing was adjourned.]
                                  ----------

                  Additional Material Submitted for the Record

                 Responses of Mr. Gabriel Escobar to Questions
                      Submitted by Senator Robert Menendez

        Question. Much like in the 1990's, Bosnia and Herzegovina's
    neighbors are stepping up attacks on the country's legitimacy,
    sovereignty, and unity. Of particular concern are recent statements by
    Croatian President Zoran Milanovic regarding NATO expansion, and his
    persistent attacks on the legitimacy and viability of Bosnia and
    Herzegovina. Aleksander Vucic also continues to promote and reward
    secessionist rhetoric by Bosnian-Serb politicians. What is the
    Department's engagement strategy Bosnia and Herzegovina's neighbors,
    particularly Croatia, to reiterate that meddling in Bosnia and
    Herzegovina's internal affairs is unacceptable, given that it risks
    extreme instability and return to conflict?

        Answer. Bosnia and Herzegovina's (BiH) sovereignty and territorial
    integrity are unquestionable, and no third country can dictate its
    chosen Euro-Atlantic trajectory. Croatia and Serbia have enduring
    interests in BiH, and we engage both to advance regional stability and
    common goals for BiH, including its EU path. We look to Croatia to
    encourage reforms by BiH officials to advance democratic growth, the
    rule of law, human rights, and prosperity for all citizens. Croatia's
    constructive advocacy within the EU could lead the bloc towards
    meaningful action to advance BiH's EU perspective. In Serbia, President
    Vucic has reiterated, on multiple occasions, Serbia's support for the
    Dayton Peace Accords and BiH's sovereignty and territorial integrity.

        Question. While the Dayton Accords ended the war in Bosnia, they
    also installed a flawed ethno-nationalist political system rife with
    kleptocracy. Many citizens have lost faith in their leadership and are
    leaving the country, and ethno-nationalist parties have led to
    gerrymandered voting districts along ethnic lines. How is the
    Department seeking to re-think and reform the current flawed government
    design? What is the Department's plan to engage with civil society and
    opposition groups as part of such a process?

        Answer. The reforms necessary to move Bosnia and Herzegovina (BiH)
    from Dayton to Brussels are clear and achievable with political courage
    and building on the Dayton Peace Accords. We regularly engage all BiH's
    leaders--in civil society, government and from across the political
    spectrum--to focus on reform and advancement within the Dayton
    framework, such as the EU's Key Priorities and the 5+2 Agenda for the
    closure of the Office of the High Representative. Step-by-step reforms
    will increase prosperity for citizens, advance BiH's Euro-Atlantic
    trajectory, and permanently enhance the democratic integrity,
    stability, and functionality of the state.

        Question. Russia continues to meddle in the Balkans as part of its
    effort to expand its influence and reach. Kremlin officials have
    perpetuated unfounded narratives about the region, even claiming they
    have links to the conflict in the Donbas, indicating the Russians are
    laying the groundwork for future destabilizing actions in the Balkans.
    Is the Department planning to re-double efforts to counter Russian
    aggression in the Balkans, particularly given Russia's willingness to
    engage in such tactics?

        Answer. The United States and Russia have very different visions
    for the future of the Western Balkans. Moscow actively opposes the
    region's Euro-Atlantic integration and sows division, distrust, and
    inter-ethnic and inter-religious tension. U.S. interests align with
    those of the people of the Western Balkans and are best served by
    cementing democratic norms, rule of law, and deepening cooperation
    based on common values and a shared future. We engage our partners in
    BiH to advance our shared priorities. This includes pushing back
    against Russia's destabilizing narratives and behavior, including
    through our bilateral foreign assistance, which in FY 2021 totaled more
    than $145 million.

        Question. The Sejdic-Finci ruling demonstrates that the structure
    of the Bosnia and Herzegovina political system violates key rights of
    minority groups. Will the Department ensure that any future electoral
    reforms address the issue of minority and ``other'' rights as a key
    tenant of agreements?

        Answer. Electoral and limited constitutional reforms are required
    to improve election integrity and implement key European Court of Human
    Rights and Bosnian Constitutional Court rulings to ensure equal
    opportunities and representation for all citizens of Bosnia and
    Herzegovina (BiH). These measures will strengthen democracy, bring BiH
    in line with European standards, and further its European Union (EU)
    path. We encourage compromise and constructive dialogue by all sides to
    reach a deal that furthers these objectives as soon as possible in
    advance of the upcoming elections. The United States, along with our EU
    partners, meets regularly with key interlocutors from all political
    parties to inform solutions that work for all.
                                     ______

    Letters From the Embassies of Albania, Bosnia and Herzegovina, Kosovo,
     Montenegro, North Macedonia, and Serbia Concerning the Western Balkans
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

                                      [all]