The Bad and Good News About Bosnia Corruption

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Talk about a peace dividend. A U.S.-led antifraud commission reports that corrupt officials in Bosnia’s trilateral Muslim, Croatian and Serbian government have bilked international aid agencies and donors to the tune of $1 billion. That’s nearly one-fifth of the $5.1 billion in international aid that has flowed into the country since the end of the war in 1995. For the world at large, this is a harsh blow to the image of the Bosnian success story that the Clinton administration maintains so fervently — and a dose of reality for anyone who imagined that a stable, honest democracy had at last taken root in the region. But TIME Central Europe reporter Dejan Anastasijevic says no one familiar with the region should be surprised –- and that this rude awakening might be therapeutic.

"This could be a positive development, that this should come out into the light," says Anastasijevic. "Here, everybody knows how widespread the fraud and corruption is, but it has been a public secret." There is plenty to uncover, certainly. The current 4,000-page report covers 220 cases of fraud and corruption, like the $20 million that disappeared from a Bosnian bank. In addition, it is apparent that aid organizations have tolerated corruption (and, says Anastasijevic, indulged in not a little themselves) for fear of scaring away further assistance. The most damaging aspect of such fraud, says Anastasijevic, is that it frightens away private-sector investment. "Until a concerted effort is made to crack down on this corruption, private money will stay away," he says. "Hopefully this disclosure will trigger that effort. As they say in Alcoholics Anonymous, admitting it is the first step."