VZCZCXRO1422
RR RUEHAG RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN RUEHLZ
RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHVB #0168/01 0401339
ZNR UUUUU ZZH
R 091339Z FEB 06
FM AMEMBASSY ZAGREB
TO RUEHC/SECSTATE WASHDC 5670
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLAS SECTION 01 OF 02 ZAGREB 000168 
 
SIPDIS 
 
DEPT FOR PRM: ROLSON 
DEPT FOR EUR/SCE: BBELL, JMITCHELL 
BELGRADE FOR SCHEEVER 
SARAJEVO FOR RMEYERS 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: PREF PGOV HR
 
SUBJECT: Croatia's Refugee Programs Proceeding, Slowly 
 
Ref: USNATO 0053 
 
Sensitive but Unclassified, Please Handle Accordingly. 
 
¶1. (SBU) Summary and Comment.  Continuing their monthly meetings on 
refugee return issues, the Ambassador and other principals from the 
international community (OSCE, UNHCR and EU) met with Minister for 
Trade, Transport and Development Bozidar Kalmeta February 6 to review 
progress.  Perhaps the greatest progress is the forum itself: the mon 
meetings hosted by Kalmeta allow for concrete discussions on return-r 
programs.  The International Community (IC) is eager to see the GOC f 
its commitment to additional tangible results this year, particularly 
complex program to allocate apartments to individuals who previously 
received subsidized housing.  GOC progress in other areas is signific 
GOC has essentially completed the process of returning about 19,000 
homes; reconstruction is proceeding steadily with 9,500 houses rebuil 
2005; electrical grids and other infrastructure projects are undergoi 
significant investment; and the GOC has initiated procedures to deal 
some outstanding administrative barriers. 
 
¶2. (SBU) At the meeting the Minister indicated that 2006 presents a k 
opportunity for the GOC to move forward on its housing program, re- 
electrification, and other returnee programs, and was optimistic it w 
complete its commitments on time.  In light of EU accession talks and 
impending closure of the OSCE mission, all sides are eager to demonst 
progress in return programs this year.  The EC is growing impatient w 
pace of reforms and emphasized the need to present progress to Brusse 
upcoming accession discussions; while Heads of Mission from OSCE and 
UNHCR see improvements and say they need to convince their home offic 
that the GOC is earnest in helping returnees.  Trying to be proactive 
return programs, the Minister has the political backing of PM Sanader 
faces bureaucratic resistance within the GOC; Kalmeta is committed to 
results and his efforts have been bolstered by the October 2005 appoi 
of Damir Spancic (former Mayor of Pakrac, with whom Post has a strong 
relationship) to the returnee portfolio.  Due in part to internal dis 
within the OSCE, EC, and UNHCR, progress on the Sarajevo Declaration 
(through which the governments of Croatia, Serbia and Bosnia agreed t 
cooperate with the IC and each other on setting concrete benchmarks f 
refugee returns) appears stalled.  Post will continue its engagement 
IC and GOC to encourage even greater concrete results. 
 
¶3. (SBU) In addition to policy-level involvement by the Ambassador, a 
regular and intensive consultation on these issues among Embassy, IC 
GOC staff at the working levels, nearly all USG programs in Croatia a 
the GOC in creating a welcoming environment for returnees.  These inc 
programs to improve economic opportunity in returnee areas, selection 
humanitarian demining sites, supporting domestic prosecution of war c 
through training and equipment, bilateral military exercises which in 
civic action component, and so on.  End Summary and Comment. 
 
Progress, Slowly but Surely 
 
¶4. (SBU) The GOC has made tangible progress in several key areas.  Th 
process of repossession of ethnic Serb homes is essentially completed 
GOC has facilitated the return of 19,000 homes and only about 50 case 
remain.  Home reconstruction is progressing steadily: about 9,000 hom 
were reconstructed in 2005 alone, and about 4,900 claims remain pendi 
The state-owned electricity company (HEP) reports that it invested 34 
million kuna ($5.6 million) last year to reconnect about 50 returnee 
and envisions nearly doubling that expenditure in 2006 to connect 340 
users.  In addition, the GOC recently intervened in an egregious case 
unsolicited investment of a refugee's home by a temporary user.  The 
Minister has drafted a standardized procedure for resolution of the 2 
such cases that he plans to submit for approval shortly. 
 
¶5. (SBU) Perhaps more importantly, the forum for discussing these iss 
has been institutionalized: the IC meets monthly with the Minister to 
both successes and problem areas.  In contrast to prior administratio 
meetings are constructive, collegial and open.  Kalmeta and Spancic 
(Kalmeta's new deputy minister, who replaced Assistant Minister Lovre 
Pejkovic as the point-person on refugee returns) are proactive and re 
oriented and working in good faith to make progress.  Both admitted t 
they face obstruction from other parts of the bureaucracy but that th 
to achieve success.  And progress has been recognized: in a recent in 
in Serbia, Croatian ethnic Serb MP Milorad Pupovac praised the GOC fo 
refugee return programs in recent years, citing resolution of home 
reconstruction and repossession, and recent movement on tenancy right 
 
The Way Towards Reconciliation 
 
¶6. (SBU) Reconciliation is a long-term goal.  Towards that goal, the 
international community is focused on encouraging tangible results fo 
returnees.  Most problematic is housing for former tenancy rights hol 
program initiated several years ago.  The GOC needs to review about 7 
claims and is just now allocating the first apartments.  With urging 
OSCE, the GOC provided apartments to forty-two vulnerable cases in la 
 
ZAGREB 00000168  002 OF 002 
 
 
¶2005.  Two weeks ago the GOC began the procedure for providing 
apartments to another 27 tenancy rights holders.  In its meeting with 
Minister, the IC emphasized that that the pace of allocation will nee 
increase dramatically in 2006 in order to consider the portfolio clos 
anytime soon. 
 
¶7. (SBU) The Minister assured the IC that the process of adjudicating 
applications and procuring housing has begun in earnest and was confi 
that the GOC will be able to fulfill its commitments for this year. 
month's meeting with the IC, he will provide a concrete timeline for 
constructing and allocating apartments.  Kalmeta noted that the GOC h 
immediately available 52 million kuna  ($8.6 million) for purchasing 
apartments, which includes unused prior-year funding.  For 2006, the 
plans to spend over 2 billion kuna ($333 million) for reconstruction 
refugee issues including re-electrification and infrastructure develo 
FRANK