Srebrenica, June 9: A job to do and a roof over one’s head – these are what will draw the refugees back to Srebrenica, as Pia and I learned in the Mihatovici refugee center in Tuzla.

As a result, one of our first visits in Srebrenica is to the office of the UN Development Programme, which is coordinating an international economic recovery program for donors.

Srebrenica and its outlying villages – particularly Potocari – used to be an important center of light industry. The region produced silver, bauxite, and lumber, and was one of the richest areas of Bosnia. Following the massacre, it was shunned by the international community, partly in order not to reward the authors of the massacre and partly because the Serbs who ran the town resisted any return by Muslims.

The result was a vicious circle, because without aid or investment there was nothing to encourage Muslims to return anyway. This suited the Serbs just fine, because it allowed them to plunder what remained of Srebrenica’s former riches. Today, they have a lock on the once-profitable lumber industry.

Srebrenica remains a deeply unattractive place for private investors. Since my last visit, the only sign of new activity is a Slovenian meat factory. Which leaves international aid. Instead of rebuilding the industrial sector, the aid agencies are concentrating on infrastructure, small agricultural enterprises, and the repair of houses. The money, however, is slowing: the UNDP has appealed for $12.3 million, but only $6.2 has been raised and about $4 million so far disbursed.

Of this, about a million has gone on infrastructure (roads, water etc) and another $700,000 has been spent on creating about 170 small businesses, mostly agricultural. Alexandre Prieto, program manager for the UNDP, tells us that it will take at least $35 million to make a visible difference in Srebrenica. This is a depressing prediction.

In an effort to encourage private enterprise, UNDP is planning to give out one-off grants of up to $10,000, on condition that the would-be entrepreneurs delegate one of their members to receive training in advance, register as a company, find a space, and come up with a business plan. One company that is helping is the American butter company Land O Lakes, which is supporting a dairy cooperative. (Land O Lakes was one logo we did not expect to see in Srebrenica!).

UNDP wants to keep these grants strictly separate from its support for civil society. Later, in Tuzla, I ask Beba if Bosfam might consider applying for a UNDP grant and set up an autonomous for-profit branch of Bosfam for the carpet weavers like Magbula who have returned to Srebrenica. An injection of $10,000 might buy them looms and set up a training center in Beba’s apartment. The Srebrenica branch could then send its carpets to Bosfam in Tuzla, to be sold.

Several houses were rebuilt for returning refugees
and burned down by locals in 2000.This is Beba’s ultimate strategy, but she would like it done by Bosfam, not a new business. That, she says, would mean paying taxes, finding lawyers, nominating a board – and, of course, splitting Bosfam. Beba also finds it strange that UNDP is drawing such a clear distinction between NGOs and business. It is true that NGOs like Bosfam do social work, but Beba herself realizes that Bosfam will only survive if it can sell its products on a sustainable basis. In fact, all of Srebrenica’s NGOs will have to become entrepreneurs if they are to stay alive. This makes me feel that agencies like UNDP should be doing more, not less, to encourage NGOs to adopt business practices.

But UNDP’s basic strategy – sprinkling venture capital around, in the hope of planting the seeds of private enterprise – is surely laudable. The real question is whether one year is sufficient, given the barren economic climate. Private enterprise, like democracy, needs time to grow, and we are told that as many as 15% of the 170 small businesses funded by the UNDP in Srebrenica have already failed. It may take a more sustained investment than one-off grants of $10,000 to rebuild the economy – even from the bottom up.

One thing everyone seems to agree on: UNDP has to do a better job of explaining what it is up to in Srebrenica. UNDP needs to overhaul its public relations. At the same time, local civil society should get its act together and start asking some tough questions, before the donors pull out altogether.