Mr. Chairman, my thanks for the opportunity to testify before your Commission, where I first appeared in December 1998. Milosevic was then in power, Kosovo was in the throes of a violent Albanian insurgency and Serbian crackdown, and Bosnia was still a place where war seemed possible. No doubt things have improved since then.

That said, I would like to be brutally honest about the current situation in Bosnia, Serbia and Kosovo. While none of these places is going back to war, none of them has established peace on a firm foundation. It is time to name names as to why.

Bosnia: Missed Opportunity

In Bosnia, the path to Europe is blocked. Great strides have been made—the country now has a single Defense Ministry and unified, if not entirely united, armed forces. But Republika Srspka has failed to arrest Radovan Karadzic, too many Croat political leaders in Bosnia still dream of their own entity, and the constitution that the U.S. gave Bosnia at Dayton does not meet European standards.

The United States Institute of Peace has for the past year supported a Bosnian initiative to revise that constitution in accordance with Council of Europe guidelines. Remarkably, Bosnian politicians reached an agreement, with assistance from my colleague Don Hays—on loan to the Institute from the State Department—and the staff of the Public and International Law and Policy Group headed by Paul Williams. Disappointingly, the amendments failed by two votes in the Bosnian parliament.

Fault on this issue lies not so much with the one Croat and one Bosniak who defected from their parties in the vote, but with Haris Silajdzic, whose entire party voted against the constitutional amendments. Silajdzic was a wartime prime minister who merits the admiration of all those who sought to extract Bosnia from the maelstrom of 1992-95. But in peacetime he has preferred to campaign quixotically for abolition of the entities that make up Bosnia—the Federation and Republika Srpska—rather than support more realistic changes that can be approved in Parliament.

It is true that the entities, which froze in place Bosnia's warring parties, make governance difficult and costly. But there is no possibility of eliminating the entities in the foreseeable future, and Bosnia faces a challenging year because of developments in Montenegro and Kosovo. I hope the constitutional amendments will be brought back to Parliament and passed, with Silajdzic's party abstaining. This would solidify Bosnia's democratic institutions and take the country a giant step closer to European integration.

Serbia: Still Looking Backwards

Let me turn next to Serbia, where democratic institutions have unfortunately failed to complete the revolution that began on October 5, 2001 with the fall of Slobodan Milosevic. From that time forward, the question has been whether Serbia--the vital center of the Balkans--would hold on to past myths of Greater Serbia and all of Kosovo as the Serb Jerusalem, or look forward to a future inside the European Union.

Since Zoran Djindjic's assassination, Serbia has chosen the past over the future. This is why Ratko Mladic—I resist calling him general—is not in The Hague. Prime Minister Vojislav Kostunica governs with support from those who advocate Greater Serbia, want to protect Mladic from arrest and the Serbian security services from reform. He has refused to govern with support from Djindjic's more Europe-focused party.

I trust Europe—with more leverage than the U.S.—will succeed in twisting Kostunica's arm hard enough to make Mladic go to The Hague, but that is not enough. We need to see real reform of the security sector, including the police and secret services. The U.S. was correct to suspend assistance to Serbia. In order to send an even clearer signal, the Administration should give the $7 million remaining this fiscal year to those in Serbia's courageous civil society who are insisting that the country come to terms with the past through truth and justice, rather than by denying crimes or covering them up.

Belgrade's backward-looking attitude extends to Kosovo as well, where Serbia is determined to maintain governing authority over Serbs on clearly defined territory. This may not be partition, but it is too close for comfort. Ethno-territorial separation of this sort would set a precedent that Albanians would want to follow in southern Serbia as well as in Macedonia, and it would revive efforts at ethno-territorial separation in Bosnia.

To prevent it, the international community will have to do more than issue Contact Group statements saying that it will not allow partition: it will need to have a clear plan for international control of Serb-populated areas and eventual transition to Pristina's control. I see some signs of technical preparation for this, but little sign of the political will needed to prevent Serbia from achieving de facto and even de jure partition.

Kosovo: Clarity Counts

Turning to Kosovo, the failure of its Provisional Institutions of Self Government to get Serbs back to their homes safely and securely is the biggest single obstacle to determining final status, which should be done this year. Kosovo's elected leadership must take responsibility for this failure. Former President Ibrahim Rugova, who was the living symbol of Kosovo's struggle for independence until his death earlier this year, former speaker of the Kosovo Parliament Nexhat Daci, and several prime ministers have so far failed--despite some with good intentions--to do all that needs to be done.

It is late in the game, but not too late for recently elected President Sedjiu and Prime Minister Ceku to correct the mistakes of their predecessors. Otherwise, I fear that the final status decision will be far less clear and unequivocal than it should be. I hear rumblings of giving Kosovo independence, but keeping it out of the UN until it meets more standards. This, some Europeans think, would help "democrats" in Serbia fend off electoral gains by the Socialists and Radicals. Would that all UN members were subjected to such rigor, but since they are not, doing so with Kosovo would encourage extremists and likely lead to violence. And it would not prevent the Radicals from coming to power in Serbia, which is likely no matter what is done in Kosovo.

Conclusion: A Year of Decision

Mr. Chairman, this is a year of decision in the Balkans: the question is whether the decisions will bring peace or instability. We've started well: the unequivocal result of the Montenegrin referendum—slightly more than the 55 per cent the EU insisted upon—bodes well. If Sarajevo chooses constitutional amendments, Belgrade chooses to send Mladic to The Hague and reform the security sector, Pristina chooses to get Serbs back to their homes, and the Contact Group provides for international supervision for the Serbs of Kosovo, the year could end well, with a clear decision on Kosovo's status.

The views expressed in this testimony are those of the author, not the U.S. Institute of Peace, which does not take positions on policy issues.