VZCZCXRO2531
RR RUEHAG RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN RUEHLZ
RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHVB #0173/01 0411023
ZNR UUUUU ZZH
R 101023Z FEB 06
FM AMEMBASSY ZAGREB
TO RUEHC/SECSTATE WASHDC 5676
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLAS SECTION 01 OF 02 ZAGREB 000173 
 
SIPDIS 
 
SIPDIS 
 
SENSITIVE 
 
DEPT FOR PRM: ROLSON 
DEPT FOR EUR/SCE: BBELL, JMITCHELL 
BELGRADE FOR SCHEEVER 
SARAJEVO FOR RMEYERS 
 
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 monthly meetings 
hosted by Kalmeta allow for concrete discussions on return- 
related programs.  The International Community (IC) is eager 
to see the GOC fulfill its commitment to additional tangible 
results this year, particularly in the complex program to 
allocate apartments to individuals who previously had 
received subsidized housing.  GOC progress in other areas is 
significant: the GOC has essentially completed the process 
of returning about 19,000 homes; reconstruction is 
proceeding steadily with 9,500 houses rebuilt in 2005; 
electrical grids and other infrastructure projects are 
undergoing significant investment; and the GOC has initiated 
procedures to deal with some outstanding administrative 
barriers. 
 
¶2. (SBU) At the meeting the Minister indicated that 2006 
presents a key opportunity for the GOC to move forward on 
its housing program, re-electrification, and other returnee 
programs, and was optimistic it would complete its 
commitments on time.  In light of EU accession talks and 
impending closure of the OSCE mission, all sides are eager 
to demonstrate progress in return programs this year.  The 
EC is growing impatient with the pace of reforms and 
emphasized the need to present progress to Brussels in 
upcoming accession discussions; while Heads of Mission from 
OSCE and UNHCR see improvements and say they need to 
convince their home offices that the GOC is earnest in 
helping returnees.  Trying to be proactive on return 
programs, the Minister has the political backing of PM 
Sanader but faces bureaucratic resistance within the GOC; 
Kalmeta is committed to results and his efforts have been 
bolstered by the October 2005 appointment of Damir Spancic 
(former Mayor of Pakrac, with whom Post has a strong 
relationship) to the returnee portfolio.  Due in part to 
internal disagreements within the OSCE, EC, and UNHCR, 
progress on the Sarajevo Declaration (through which the 
governments of Croatia, Serbia and Bosnia agreed to 
cooperate with the IC and each other on setting concrete 
benchmarks for refugee returns) appears stalled.  Post will 
continue its engagement with the IC and GOC to encourage 
even greater concrete results. 
 
¶3. (SBU) In addition to policy-level involvement by the 
Ambassador, and regular and intensive consultation on these 
issues among Embassy, IC and GOC staff at the working 
levels, nearly all USG programs in Croatia assist the GOC in 
creating a welcoming environment for returnees.  These 
include programs to improve economic opportunity in returnee 
areas, selection of humanitarian demining sites, supporting 
domestic prosecution of war crimes through training and 
equipment, bilateral military exercises which include a 
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.  The process of repossession of ethnic Serb homes is 
essentially completed: the GOC has facilitated the return of 
19,000 homes and only about 50 cases remain.  Home 
reconstruction is progressing steadily: about 9,000 homes 
were reconstructed in 2005 alone, and about 4,900 claims 
remain pending.  The state-owned electricity company (HEP) 
reports that it invested 34 million kuna ($5.6 million) last 
year to reconnect about 50 returnee villages and envisions 
nearly doubling that expenditure in 2006 to connect 3400 
users.  In addition, the GOC recently intervened in an 
egregious case of an unsolicited investment of a refugee's 
home by a temporary user.  The Minister has drafted a 
standardized procedure for resolution of the 24 other such 
cases that he plans to submit for approval shortly. 
 
¶5. (SBU) Perhaps more importantly, the forum for discussing 
these issues has been institutionalized: the IC meets 
monthly with the Minister to discuss both successes and 
problem areas.  In contrast to prior administrations, the 
meetings are constructive, collegial and open.  Kalmeta and 
 
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Spancic (Kalmeta's new deputy minister, who replaced 
Assistant Minister Lovre Pejkovic as the point-person on 
refugee returns) are proactive and results-oriented and 
working in good faith to make progress.  Both admitted that 
they face obstruction from other parts of the bureaucracy 
but that they want to achieve success.  And progress has 
been recognized: in a recent interview in Serbia, Croatian 
ethnic Serb MP Milorad Pupovac praised the GOC for its 
refugee return programs in recent years, citing resolution 
of home reconstruction and repossession, and recent movement 
on tenancy rights. 
 
The Way Towards Reconciliation 
 
¶6. (SBU) Reconciliation is a long-term goal.  Towards that 
goal, the international community is focused on encouraging 
tangible results for returnees.  Most problematic is housing 
for former tenancy rights holders, a program initiated 
several years ago.  The GOC needs to review about 7,900 
claims and is just now allocating the first apartments. 
With urging from the OSCE, the GOC provided apartments to 
forty-two vulnerable cases in late 2005.  Two weeks ago the 
GOC began the procedure for providing apartments to another 
27 tenancy rights holders.  In its meeting with the 
Minister, the IC emphasized that that the pace of allocation 
will need to increase dramatically in 2006 in order to 
consider the portfolio closed anytime soon. 
 
¶7. (SBU) The Minister assured the IC that the process of 
adjudicating applications and procuring housing has begun in 
earnest and was confident that the GOC will be able to 
fulfill its commitments for this year.  At next month's 
meeting with the IC, he will provide a concrete timeline for 
constructing and allocating apartments.  Kalmeta noted that 
the GOC has immediately available 52 million kuna  ($8.6 
million) for purchasing apartments, which includes unused 
prior-year funding.  For 2006, the GOC plans to spend over 2 
billion kuna ($333 million) for reconstruction and refugee 
issues including re-electrification and infrastructure 
development. 
FRANK