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Reference ID	Created	Released	Classification	Origin
03ZAGREB376	2003-02-20 06:56	2011-08-30 01:44	CONFIDENTIAL	Embassy Zagreb

This record is a partial extract of the original cable. The full text of the original cable is not available.

C O N F I D E N T I A L SECTION 01 OF 04 ZAGREB 000376 
 
SIPDIS 
 
USAID FOR ACONVERY, EUR/SCE FOR MNARDI 
 
E.O. 12958: DECL: 02/18/2013 
TAGS: PHUM EAID PREF ECON PGOV EAID PREF ECON PGOV EAID PREF ECON PGOV EAID PREF ECON PGOV HR HRPHUM
SUBJECT: VOJNIC: OFFERING EQUAL MISERY FOR ALL 
 
REF: ZAGREB 337 
 
                       CONFIDENTIAL 
 
PAGE 02        ZAGREB  00376  01 OF 04  200658Z 
 
CLASSIFIED BY: POLOFF MITCH BENEDICT FOR REASONS 1.5 B AND D 
 
SUMMARY 
------- 
 
¶1. (C) ONLY 50 MILES FROM ZAGREB, THE MUNICIPALITY OF VOJNIC 
STANDS AS A STARK EXAMPLE OF THE ECONOMIC REALITIES FACED BY 
CROATS, SERBS, AND MUSLIMS ALIKE IN CROATIA'S WAR AFFECTED 
REGIONS -- RURAL COMMUNITIES LONG PLAGUED BY ECONOMIC DECLINE 
AND OUT MIGRATION.  THE EFFECTS OF THE 1991-1995 "HOMELAND" 
WAR, PARTICULARLY THE POPULATION SHIFTS AND DESTRUCTION OF 
PROPERTY, EXACERBATED AN ALREADY DIFFICULT SITUATION IN 
VOJNIC.  THE ARRIVAL OF NEARLY 2,000 BOSNIAN CROAT SETTLERS 
-- WHO BOOSTED THE CROAT PERCENTAGE OF THE POPULATION FROM 
ONE TO OVER 36 PERCENT -- HAS ADDED TO THE PROBLEMS. 
 
¶2. (C) FEW ECONOMIC PROSPECTS EXIST APART FROM SMALL SCALE 
AGRICULTURE.  THERE ARE CURRENTLY 370 WAGE PAYING JOBS IN A 
REGION WITH OVER 8,000 INHABITANTS, AND THE LARGEST EMPLOYER 
IS REPORTED TO BE NEARLY BANKRUPT.  MUSLIMS ARE THE HARDEST 
HIT, WITH NEARLY FULL UNEMPLOYMENT.  RETURN OF PROPERTY 
REMAINS THE BIGGEST ISSUES FOR SERBS; OVER 500 SERB-OWNED 
HOUSES REMAIN OCCUPIED, PRIMARILY BY BOSNIAN CROAT SETTLERS. 
NO EVICTIONS HAVE BEEN ENFORCED TO DATE.  EVEN IF THERE WERE 
A COORDINATED AND COMPREHENSIVE GOVERNMENT POLICY TO ADDRESS 
ECONOMIC DEVELOPMENT ISSUES -- AND THERE IS NONE -- IT IS 
DIFFICULT TO ENVISION THE REGION EVER BEING VIABLE 
ECONOMICALLY. 
 
BACKGROUND 
                       CONFIDENTIAL 
 
PAGE 03        ZAGREB  00376  01 OF 04  200658Z 
---------- 
 
¶3. (U) THE MUNICIPALITY OF VOJNIC IS JUST 50 MILES SOUTHEAST 
OF ZAGREB, BUT IS ANOTHER WORLD WHEN ONE COMPARES THE LIVING 
STANDARDS -- ONE ALMOST FIRST WORLD, THE OTHER VERY MUCH 
BACKWARD.  HILLY, ISOLATED, HUGGING THE BOSNIAN BORDER, 
VOJNIC REMINDS AN AMERICAN VISITOR QUICKLY OF THE HOLLOWS OF 
WEST VIRGINIA.  VOJNIC WAS A PART OF THE SERB CONTROLLED 
KRAJINA FROM 1991-1995, AND WAS RETAKEN BY CROATIAN 
AUTHORITIES IN AUGUST 1995 UNDER OPERATION "STORM." 
 
¶4. (U) THE PRE-WAR POPULATION WAS JUST OVER 8,000, DIVIDED 
AMONG 46 VILLAGES -- 89 PERCENT SERB, 10 PERCENT MUSLIM, AND 
ONLY ONE PERCENT CROAT.  INHABITANTS WERE FULLY "EMPLOYED" IN 
THE SOCIALIST SENSE; MOST RESIDENTS WERE ENGAGED IN 
AGRICULTURE, TIED IN WITH THE LARGE AGROKOMBINAT "AGROKOMERC" 
LOCATED JUST OVER THE BORDER IN WHAT IS NOW BOSNIA (AND OWNED 
BY FIKRET ABDIC, FORMER REGIONAL WARLORD, AND NOW A CONVICTED 
WAR CRIMINAL).  WHAT LITTLE INDUSTRY EXISTED -- A FACTORY FOR 
CLAY EXPLOITATION, CERAMICS, SAWMILL, IRON AND STEEL WORKS -- 
WAS OUTDATED AND UNDERCAPITALIZED EVEN BEFORE THE WAR. 
 
THE ECONOMY TODAY 
----------------- 
 
¶5. (C) AGRICULTURE REMAINS THE PREDOMINATE ECONOMIC ACTIVITY, 
ALTHOUGH ONLY 30 PERCENT OF ARABLE LAND IS BEING CULTIVATED 
COMPARED TO NEARLY 100 PERCENT IN 1990.  VOJNIC'S CATTLE 
POPULATION IS JUST ONE-FIFTH ITS PRE-WAR LEVEL.  LACK OF 
FINANCIAL RESOURCES HAS LIMITED THE RECONSTRUCTION OF FARM 
BUILDINGS, WHICH IS REQUIRED FOR PRODUCTION TO INCREASE. 
                       CONFIDENTIAL 
 
PAGE 04        ZAGREB  00376  01 OF 04  200658Z 
INTERNATIONAL ASSISTANCE AND GOVERNMENT FINANCING HAS BEEN 
USED TO RECONSTRUCT HOUSES, BUT ONCE THE HOUSE IS HABITABLE 
RESIDENTS HAVE LITTLE ACCESS TO CREDIT FOR OTHER PURPOSES. 
FOR EXAMPLE, THE MINISTRY OF SMALL AND MEDIUM ENTERPRISES AND 
CRAFTS, LOCAL AUTHORITIES, AND UNDP, HAVE CO-FINANCED A LOAN 
GUARANTEE FUND THAT NOW OPERATES IN EIGHT TOWNS.  BANKS ARE 
ENCOURAGED BY THE GUARANTEE FUND TO LEND TO INDIVIDUALS WHO 
WANT TO START THEIR OWN BUSINESS.  AS PART OF THE SERVICE 
PROVIDED, THE FUND WILL DEVELOP FEASIBILITY STUDIES AND ACT 
AS AN INTERMEDIARY BETWEEN THE BANKS AND THE BORROWER, 
PROVIDING ADVICE AND TECHNICAL ASSISTANCE. 
 
¶6.  (C) SOME CHARGE DISCRIMINATION AT THE FUND.  AN EMPLOYEE 
OF THE FUND TOLD US THAT, WHILE IT MAKES APPROXIMATELY TWO 
HUNDRED LOANS A YEAR, ONLY ONE HAS BEEN APPROVED FOR A SERB 
RETURNEE.  THE COLLATERAL THIS APPLICANT WAS REQUIRED TO 
SUBMIT INCLUDED -- BUT WAS NOT LIMITED TO -- HIS HOUSE, AND A 
PROMISSORY NOTE IN THE AMOUNT OF APPROXIMATELY $71,000.  HE 
HAD TO GET A PERSON EMPLOYED BY A GOVERNMENT ENTITY TO 
CO-SIGN THE LOAN AS A CO-GUARANTOR.  THE LATER REQUIREMENT, 
NOT UNCOMMON FOR BANKS IN CROATIA, EFFECTIVELY ELIMINATES THE 
POSSIBILITY OF A RETURNEE GETTING A LOAN.  WITHOUT THE 
LIMITED ASSISTANCE AVAILABLE FROM THE INTERNATIONAL COMMUNITY 
-- TO BUY A COW OR PIG, REPAIR THE SHELTER, AND BUY OTHER 
SMALL SCALE AGRICULTURAL INPUTS -- MOST RETURNEES SAY THEY 
WOULD NOT HAVE COME BACK. 
 
                       CONFIDENTIAL 
 
                           CONFIDENTIAL     PTQ9128 
 
PAGE 01        ZAGREB  00376  02 OF 04  200658Z 
ACTION EUR-00 
 
INFO  LOG-00   NP-00    AF-00    AGRE-00  AID-00   CEA-01   CIAE-00 
      COME-00  CTME-00  DODE-00  DOTE-00  SRPP-00  DS-00    EB-00 
      EXIM-01  E-00     FAAE-00  FBIE-00  VC-00    FRB-00   H-01 
      TEDE-00  INR-00   IO-00    ITC-01   JUSE-00  L-00     VCE-00 
      AC-01    NSAE-00  NSCE-00  OIC-02   OMB-01   OPIC-01  PA-00 
      PM-00    PRS-00   ACE-00   P-00     SCT-00   SP-00    SSO-00 
      STR-00   TRSE-00  USIE-00  EPAE-00  PMB-00   DSCC-00  PRM-00 
      DRL-01   G-00     NFAT-00  SAS-00   SWCI-00    /010W 
                  ------------------388B91  200658Z /38 
R 200656Z FEB 03 
FM AMEMBASSY ZAGREB 
TO SECSTATE WASHDC 9491 
INFO AMEMBASSY BELGRADE 
AMEMBASSY LJUBLJANA 
AMEMBASSY SARAJEVO 
USEU BRUSSELS 
USMISSION USOSCE 
 
C O N F I D E N T I A L SECTION 02 OF 04 ZAGREB 000376 
 
SIPDIS 
 
USAID FOR ACONVERY, EUR/SCE FOR MNARDI 
 
E.O. 12958: DECL: 02/18/2013 
TAGS: PHUM EAID PREF ECON PGOV EAID PREF ECON PGOV EAID PREF ECON PGOV EAID PREF ECON PGOV HR HRPHUM
SUBJECT: VOJNIC: OFFERING EQUAL MISERY FOR ALL 
 
                       CONFIDENTIAL 
 
PAGE 02        ZAGREB  00376  02 OF 04  200658Z 
¶6. (C) SALARIED EMPLOYMENT OPPORTUNITIES IN VOJNIC ARE FEW 
AND FAR BETWEEN.  IN THE ENTIRE MUNICIPALITY, ONLY 370 
RESIDENTS ARE FORMALLY EMPLOYED, WHILE AROUND 800 ARE 
REGISTERED AT THE UNEMPLOYMENT BUREAU.  AND ACCORDING TO THE 
MAYOR, THE VOJNIC FORESTRY FIRM, THE MUNICIPALITY'S LARGEST 
EMPLOYER WITH 70 EMPLOYEES, IS FACING BANKRUPTCY.  THE OTHER 
LEADING EMPLOYERS ARE A CERAMIC FACTORY (40 EMPLOYEES), A 
SAWMILL (20 EMPLOYEES), A CLOTHING ENTERPRISE (20 EMPLOYEES), 
AND A FACTORY FOR PLASTIC PRODUCTS (15 EMPLOYEES). 
 
MUSLIM COMMUNITY 
---------------- 
 
¶7. (C) THE MUSLIMS OF VOJNIC ARE STRONG CONTENDERS FOR THE 
MOST DISADVANTAGED OF THE REGION.  ACCORDING TO IMAM DJURMIC, 
THE LEADER OF THE LOCAL MUSLIM COMMUNITY, UNEMPLOYMENT VERGES 
ON 95 PERCENT, ILLITERACY IS 80 PERCENT, AND THERE ARE NO 
PROSPECTS FOR EMPLOYMENT.  IN OUR DISCUSSION, HIS COMMENTS 
WERE OFTEN HYPERBOLIC, AND HIS NUMBERS WERE OFTEN AT ODDS 
WITH OTHER KNOWN FACTS -- GIVING CREDENCE TO THE ADAGE THAT 
42.7 PERCENT OF ALL STATISTICS ARE MADE UP ON THE SPOT -- BUT 
DJURMIC PAINTED A GENERALLY ACCURATE PICTURE.  THE TWO 
BIGGEST EMPLOYERS IN THE REGION, THE SAWMILL AND CERAMIC 
WORKS, HE CLAIMED, EMPLOY NOT A SINGLE MUSLIM.  SEVERAL 
COMMUNITIES ARE WITHOUT ELECTRICITY.  IN THE FIGHT BETWEEN 
CROATS AND SERBS, MUSLIM HOMES WERE LARGELY LEFT INTACT, AND 
SO EMPLOYMENT, RATHER THAN PROPERTY, IS THE MAIN ISSUE 
CONFRONTING THE MUSLIM COMMUNITY. 
 
¶8. (C) DESPITE DJURMIC'S GRIM PICTURE, THE MUNICIPALITY'S 
MUSLIM POPULATION APPEARS TO BE INCREASING.  MUSLIM LEADERS 
                       CONFIDENTIAL 
 
PAGE 03        ZAGREB  00376  02 OF 04  200658Z 
CLAIM THERE ARE 1,600 MUSLIMS IN THE REGION, WHILE THE 2001 
CENSUS ACKNOWLEDGES ONLY 768, OR 14 PERCENT OF THE 
POPULATION.  ACCORDING TO LOCAL OFFICIALS, 1,350 MUSLIMS ARE 
REGISTERED IN THE MUNICIPALITY.  MANY HAVE BOTH BOSNIAN AND 
CROATIAN CITIZENSHIP, AND WORK IN BOSNIA.  THE PRE-WAR 
PATTERN OF LIVING IN CROATIA AND WORKING IN BOSNIA WAS 
UNREMARKABLE WHEN ALL WERE CITIZENS OF YUGOSLAVIA; BUT NOW, 
DUE IN PART TO MISSED DEADLINES, AND ALSO TO WAR AND 
OCCUPATION, SOME MUSLIMS WHO MAY NOT HAVE BEEN BORN IN 
CROATIA BUT HAVE LIVED HERE "FOREVER" ARE EXPERIENCING 
DIFFICULTIES IN OBTAINING CITIZENSHIP AND OTHER DOCUMENTS 
NECESSARY FOR RECEIVING RETIREMENT AND/OR SOCIAL BENEFITS. 
ONE SERB RETURNEE, POINTING OUT HIS WINDOW TO THE LARGE NEW 
HOUSE ACROSS THE STREET, TOLD US THAT MUSLIMS FROM BOSNIA ARE 
BUYING UP BOTH HOUSES AND PROPERTY IN THE REGION IN THE HOPE 
THAT IT WILL HELP THEM GET RESIDENCY DOCUMENTS. 
 
¶9. (C) POLITICALLY, THE MUSLIM COMMUNITY IS BEING COURTED BY 
BOTH THE CROATIAN DEMOCRATIC UNION (HDZ), ON THE RIGHT, AND 
THE SOCIAL DEMOCRATIC PARTY (SDP), ON THE LEFT.  IN A UNIQUE 
TURN OF EVENTS WHICH BEGAN LAST FALL WHEN THREE SDP 
REPRESENTATIVES RESIGNED FROM THE PARTY AND BECAME 
INDEPENDENT, THE VOJNIC MUNICIPAL COUNCIL WAS FORMALLY 
DISSOLVED IN JANUARY.  THE GOC APPOINTED A CARETAKER 
"COMMISSIONER," AN INDEPENDENT JUDGE FROM NEARBY KARLOVAC, TO 
RUN THE MUNICIPALITY UNTIL BY-ELECTIONS, WHICH MUST BE HELD 
BY MID-APRIL.  ONE RESULT OF THE ENSUING POLITICAL VACUUM WAS 
THAT USAID'S PARTNERSHIP AGREEMENT (MOU) WITH THE 
MUNICIPALITY LAPSED.  WITH SUCCESS HEAVILY DEPENDENT ON THE 
POLITICAL WILL AND COOPERATIVENESS OF THE MAYOR AND COUNCIL, 
USAID WAS RELUCTANT TO EXTEND THE MOU PRIOR TO A BY-ELECTION. 
                       CONFIDENTIAL 
 
PAGE 04        ZAGREB  00376  02 OF 04  200658Z 
 
SERB RETURNEES 
-------------- 
 
¶10. (C) REPOSSESSION OF PROPERTY REMAINS ONE OF THE MOST 
SIGNIFICANT BARRIERS TO RETURN.  ACCORDING TO USAID SOURCES, 
BY LATE 2002 OWNERS HAD SUBMITTED 385 REQUESTS FOR RETURN OF 
PROPERTY.  OVER 600 PRIVATELY OWNED HOUSES AND 66 APARTMENTS 
WERE DAMAGED IN THE WAR.  AT THE END OF 2002, APPROXIMATELY 
300 REQUESTS FOR RECONSTRUCTION ASSISTANCE WERE STILL 
PENDING.  AS A RESULT OF THE WAR AND ENSUING OBSTACLES TO 
RETURN, THE SERB POPULATION HAS BEEN REDUCED TO APPROXIMATELY 
ONE THIRD ITS PRE-WAR LEVEL -- FROM OVER 7,000 TO UNDER 3,000 
INHABITANTS. 
 
¶11. (C) DRAGAN VUCKOVIC, 57, REPRESENTS A TYPICAL SERB 
RETURNEE IN THE VOJNIC AREA.  THE HEAD OF AN EXTENDED FAMILY 
OF FOUR, WITH ONE CHILD, VUCKOVIC RETURNED TO HIS RESIDENCE 
"SPONTANEOUSLY" (THAT IS, WITHOUT GOVERNMENT OR NGO 
ASSISTANCE) IN 2001.  HIS HOUSE HAD NOT BEEN OCCUPIED, BUT 
WAS DAMAGED IN THE WAR.  ALL FARM-RELATED EQUIPMENT AND 
SUPPLIES WERE LOST.  PRIOR TO THE WAR HE WAS A RELATIVELY 
PROSPEROUS FARMER, MANAGING 18 HECTARES AND A HERD OF CATTLE. 
 OFF FARM EMPLOYMENT WAS AVAILABLE, PROVIDING A CUSHION TO 
SOFTEN THE VAGARIES OF AN AGRICULTURAL EXISTENCE.  NOW, 
 
                       CONFIDENTIAL 
 
                           CONFIDENTIAL     PTQ9134 
 
PAGE 01        ZAGREB  00376  03 OF 04  200659Z 
ACTION EUR-00 
 
INFO  LOG-00   NP-00    AF-00    AGRE-00  AID-00   CEA-01   CIAE-00 
      COME-00  CTME-00  DODE-00  DOTE-00  SRPP-00  DS-00    EB-00 
      EXIM-01  E-00     FAAE-00  FBIE-00  VC-00    FRB-00   H-01 
      TEDE-00  INR-00   IO-00    ITC-01   JUSE-00  L-00     VCE-00 
      AC-01    NSAE-00  NSCE-00  OIC-02   OMB-01   OPIC-01  PA-00 
      PM-00    PRS-00   ACE-00   P-00     SCT-00   SP-00    SSO-00 
      STR-00   TRSE-00  USIE-00  EPAE-00  PMB-00   DSCC-00  PRM-00 
      DRL-01   G-00     NFAT-00  SAS-00   SWCI-00    /010W 
                  ------------------388BA8  200659Z /38 
R 200656Z FEB 03 
FM AMEMBASSY ZAGREB 
TO SECSTATE WASHDC 9492 
INFO AMEMBASSY BELGRADE 
AMEMBASSY LJUBLJANA 
AMEMBASSY SARAJEVO 
USEU BRUSSELS 
USMISSION USOSCE 
 
C O N F I D E N T I A L SECTION 03 OF 04 ZAGREB 000376 
 
SIPDIS 
 
USAID FOR ACONVERY, EUR/SCE FOR MNARDI 
 
E.O. 12958: DECL: 02/18/2013 
TAGS: PHUM EAID PREF ECON PGOV EAID PREF ECON PGOV EAID PREF ECON PGOV EAID PREF ECON PGOV HR HRPHUM
SUBJECT: VOJNIC: OFFERING EQUAL MISERY FOR ALL 
 
HOWEVER, THERE ARE NO OFF FARM EMPLOYMENT OPPORTUNITIES, AND 
                       CONFIDENTIAL 
 
PAGE 02        ZAGREB  00376  03 OF 04  200659Z 
THE VUCKOVIC FAMILY RETURNED TO CROATIA WITH NO IMMEDIATE 
PROSPECT OUTSIDE THE PROMISE OF INTERNATIONAL ASSISTANCE AND 
A MONTHLY PENSION OF APPROXIMATELY $55. 
 
¶12. (C) THANKS TO PRM PROGRAMS, VUCKOVIC RECEIVED ASSISTANCE 
FOR SHELTER REPAIR AND FOR AGRICULTURAL EQUIPMENT.  USAID 
PROVIDED A SMALL AND MEDIUM ENTERPRISE LOAN, WHICH WAS USED 
TO BUY FOUR DAIRY COWS.  WITHOUT THIS ASSISTANCE VUCKOVIC 
WOULD NOT HAVE BEEN ABLE TO RETURN.  WITH HIS FEW COWS AND 
SMALL MILK COOLER AND THE ADVICE AND ASSISTANCE OF A 
USAID-FUNDED NGO AND THE VINDIJA AND KIM COMPANIES, WHICH 
HAVE ORGANIZED MILK COLLECTION FOR THE REGION, VUCKOVIC HAS 
INCREASED HIS INCOME TO NEARLY $300 PER MONTH.  HE IS 
INCREASING HIS HERD AND TRYING TO FIND WAYS TO REPAIR FARM 
BUILDINGS.  ALTHOUGH HE HAS A LONG WAY TO GO, HE IS GLAD TO 
BE BACK IN HIS HOUSE, REPORTS GOOD RELATIONS WITH LOCAL 
CROATS, AND IS PLANNING FOR A BETTER FUTURE. 
 
BOSNIAN CROAT SETTLERS 
---------------------- 
 
¶13. (C) OVER 500 BOSNIAN CROAT FAMILIES FROM NORTHWESTERN 
BOSNIA ARE ACCOMMODATED IN SERB-OWNED HOUSES IN THE 
MUNICIPALITY.  SOME WOULD LIKE TO RETURN TO BOSNIA, BUT 
EITHER CANNOT OR ARE UNWILLING, GIVEN HOUSING, EMPLOYMENT, OR 
SOCIAL PROBLEMS THEY WOULD ENCOUNTER IN BOSNIA.  EMPLOYMENT 
IS NOT THE PRIMARY ISSUE FOR SETTLERS -- THEY HAVE OBTAINED 
STATE AND STATE SUPPORTED JOBS, AND FACE ECONOMIC PROSPECTS 
LITTLE DIFFERENT THAN THOSE OF THE AVERAGE CROATIAN IN THE 
REGION.  HOUSING IS THE BIG ISSUE.  BOSNIAN CROATS RECOGNIZE 
THEY ARE VIEWED AS A PART OF THE PROBLEM, AND WHILE THE 
                       CONFIDENTIAL 
 
PAGE 03        ZAGREB  00376  03 OF 04  200659Z 
MAJORITY WANTS TO RESOLVE THE ISSUE RAPIDLY, THEY ARE NOT 
GOING TO VACATE HOUSES WHEN THEY HAVE NO OTHER PLACE TO GO. 
IN ADDITION, THEY ARE NOT INCLINED TO LET THIS GOVERNMENT OFF 
THE HOOK FOR PROMISES (HOUSING, JOBS, ETC.) MADE BY THE HDZ 
GOVERNMENT TO INDUCE THEM TO SETTLE IN CROATIA. 
 
¶14. (C) ONE BOSNIAN CROAT LEADER AFFILIATED WITH THE 
ASSOCIATION OF CROATIAN SETTLERS, WHICH CLAIMS TO SPEAK FOR 
APPROXIMATELY 60 PERCENT OF SETTLERS, HAS SAID THAT 
COMMUNICATION WITH THE GOVERNMENT CONSISTS OF BOSNIAN CROATS 
BEING TOLD "YOU MUST..." FOLLOWED BY "SOMETHING BAD." 
CONSERVATIVE POLITICALLY, THE VAST MAJORITY OF BOSNIAN CROATS 
REMAIN SUPPORTIVE OF THE NOW OPPOSITION CROATIAN DEMOCRATIC 
UNION (HDZ) PARTY OF FORMER PRESIDENT FRANJO TUDJMAN. IN A 
SENSE THEY REPRESENT AN UNWANTED CASTE -- ALL BUT ABANDONED 
BY THE GOVERNMENT OF THEIR ETHNIC "HOMELAND," SCORNED BY THE 
INTERNATIONAL COMMUNITY BECAUSE OF THE OBSTACLE THEY 
REPRESENT TO THE RETURN PROCESS, DIFFERENT FROM THEIR NEW 
CROATIAN CROAT NEIGHBORS BOTH CULTURALLY AND SOCIALLY, AND OF 
COURSE, DESPISED BY THE SERBS WHOSE HOMES THEY OCCUPY. 
 
COMMENT 
------- 
 
¶15. (C) VOJNIC IS NEITHER ALONE NOR SPECIAL IN ITS 
PREDICAMENT; IT IS ONE OF MANY MARGINAL RURAL AREAS THAT WERE 
IN DECLINE WELL BEFORE THE WAR, WHICH SERVED TO HASTEN AND 
COMPLICATE AN ALREADY CHALLENGING ENVIRONMENT FOR 
DEVELOPMENT.  THE BORDER AREAS OF THE KRAJINA, LIKE THOSE OF 
THE DALMATIAN HINTERLANDS, POSE A SERIOUS ECONOMIC CHALLENGE 
FOR CROATIA.  THE WAR ACCELERATED WHAT OTHERWISE WAS A LONG, 
                       CONFIDENTIAL 
 
PAGE 04        ZAGREB  00376  03 OF 04  200659Z 
SEEMINGLY INEVITABLE DECLINE.  SOME REGIONS, FOR EXAMPLE, BY 
1990 HAD DECLINED TO LESS THAN HALF THEIR PRE-WORLD WAR II 
POPULATIONS.  AND PART OF WHAT KEPT THE REGION VIABLE DURING 
TITO TIMES WAS THE FINANCIAL BOOST PROVIDED BY MILITARY BASES 
AND FACILITIES -- AN ECONOMIC STIMULUS NO LONGER PROVIDED. 
 
¶16. (C) THE CURRENT GOVERNMENT'S CHALLENGE IS DAUNTING. 
ACCORDING TO UNDP, THE GOVERNMENT HAS NEITHER A POLICY NOR 
ANY IDEA WHAT TO DO.  WE SEARCHED IN VAIN FOR A GOVERNMENT 
INTERLOCUTOR WHO IS TASKED EITHER TO WORK ON ECONOMIC 
DEVELOPMENT ISSUES GENERALLY, OR SPECIFICALLY ON WAR-AFFECTED 
AREAS.  THE JULY 2002 AMENDMENTS TO THE LAW ON AREAS OF 
SPECIAL STATE CONCERN (THE SO-CALLED WAR AFFECTED AREAS) 
IMPLICITLY RECOGNIZED THAT THERE IS LITTLE REASON TO KEEP 
BUILDING AND RECONSTRUCTING HOUSES WHEN THERE ARE NO 
EMPLOYMENT OPPORTUNITIES, AND A COMMISSION WAS SUPPOSED TO BE 
ESTABLISHED SPECIFICALLY TO ADDRESS ECONOMIC DEVELOPMENT 
ISSUES.  TO DATE, IN WHAT IS A PATTERN FOR THIS GOVERNMENT, 
THERE HAS BEEN NO ACTION TAKEN.  THE FACT REMAINS THAT NO 
MATTER HOW WELL THE RETURN PROCESS MAY SUCCEED, IN THE END 
NEITHER THE INTERNATIONAL COMMUNITY NOR THE GOVERNMENT ARE 
LIKELY TO HAVE SUFFICIENT SWAY OVER ECONOMIC INCENTIVES TO 
REVERSE THE DECADES OF DECLINE IN VOJNIC AND THE KRAJINA. 
 
¶17. (U) BELGRADE MINIMIZE CONSIDERED. 
 
                       CONFIDENTIAL 
 
                           CONFIDENTIAL     PTQ9136 
 
PAGE 01        ZAGREB  00376  04 OF 04  200659Z 
ACTION EUR-00 
 
INFO  LOG-00   NP-00    AF-00    AGRE-00  AID-00   CEA-01   CIAE-00 
      COME-00  CTME-00  DODE-00  DOTE-00  SRPP-00  DS-00    EB-00 
      EXIM-01  E-00     FAAE-00  FBIE-00  VC-00    FRB-00   H-01 
      TEDE-00  INR-00   IO-00    ITC-01   JUSE-00  L-00     VCE-00 
      AC-01    NSAE-00  NSCE-00  OIC-02   OMB-01   OPIC-01  PA-00 
      PM-00    PRS-00   ACE-00   P-00     SCT-00   SP-00    SSO-00 
      STR-00   TRSE-00  USIE-00  EPAE-00  PMB-00   DSCC-00  PRM-00 
      DRL-01   G-00     NFAT-00  SAS-00   SWCI-00    /010W 
                  ------------------388BAD  200659Z /38 
R 200656Z FEB 03 
FM AMEMBASSY ZAGREB 
TO SECSTATE WASHDC 9493 
INFO AMEMBASSY BELGRADE 
AMEMBASSY LJUBLJANA 
AMEMBASSY SARAJEVO 
USEU BRUSSELS 
USMISSION USOSCE 
 
C O N F I D E N T I A L SECTION 04 OF 04 ZAGREB 000376 
 
SIPDIS 
 
USAID FOR ACONVERY, EUR/SCE FOR MNARDI 
 
E.O. 12958: DECL: 02/18/2013 
TAGS: PHUM EAID PREF ECON PGOV EAID PREF ECON PGOV EAID PREF ECON PGOV EAID PREF ECON PGOV HR HRPHUM
SUBJECT: VOJNIC: OFFERING EQUAL MISERY FOR ALL 
 
ROSSIN 
                       CONFIDENTIAL 
 
PAGE 02        ZAGREB  00376  04 OF 04  200659Z 
 
                       CONFIDENTIAL

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