Washington, DC, August 4, 1999

Mr. Chairman, I am grateful for the opportunity to provide the committee an update on Dayton and Kosovo implementation.

Over the past decade, the former Yugoslavia disintegrated into the madness of ethnic warfare against civilian populations. These conflicts produced an estimated 3.5 million refugees and displaced persons, and more than 250,000 killed -- most recently, more than 1 million displaced persons and refugees and an estimated 10,000 murdered in Kosovo alone.

Throughout this century, the stability of Europe has been a vital interest of the United States. Ethnic conflict in southeastern Europe clearly is a direct threat to European stability and therefore it is a threat to U.S. national interests. President Clinton and Secretary Albright have repeatedly emphasized that our overall objective is to see the whole of southeastern Europe as an integral part of an undivided, democratic, peaceful Europe.

That is why we have invested so much time, energy and resources in the former Yugoslavia over the past 10 years. That is also why American troops have been in Macedonia since 1993; in Bosnia as part of a NATO-led force implementing the Dayton Agreement since 1995; and now in Kosovo as part of the NATO-led force implementing the peace agreement that followed the successful air campaign.

These military deployments are not a permanent solution, however. Long-term regional stability requires an active and robust political and economic development program. The effort to move Serbia toward democracy is a particularly important component of the stability program for the former Yugoslavia and the region as a whole.

Mr. Wayne has told you about the overall concept for the region. I will focus more precisely on programs designed for civilian implementation in Kosovo and Bosnia and for promoting democracy in Serbia.

In Kosovo, civil society must be rebuilt on the ruins of a savage campaign of destruction and murder waged by the forces of Slobodan Milosevic. Our immediate steps in creating the conditions for an autonomous and democratic Kosovo have been achieved.

First, the Serb forces responsible for carrying out a systematic campaign of atrocities and ethnic cleansing in Kosovo have been driven from the province by NATO's successful air campaign.

Second, more than 700,000 out of the approximately 800,000 refugees expelled from Kosovo by Milosevic have been able to return more rapidly than anyone projected, and have begun to rebuild their lives.

Third, the international security force and civil administration called for in UNSC resolution 1244, under NATO and the UN, are being established.

KFOR currently has in Kosovo more than 35,000 troops from 21 nations, including 5,596 U.S. forces. KFOR is rapidly establishing the secure environment necessary for political and economic development in the province.

The UN Interim Administration Mission in Kosovo (UNMIK) is making steady progress in deploying civil administrators, civilian police, and judicial authorities to the field under extremely daunting circumstances. UNMIK has a powerful mandate, one sufficient to create the foundation for a democratic society. Nevertheless, there is still a long way to go, and we are urging the UN and contributing countries to deploy their resources and personnel to Kosovo as quickly as possible. It is essential that we provide the personnel and resources necessary for UNMIK to fulfill its civil implementation tasks.

The European Commission's just-completed damage assessment reveals that the humanitarian needs in Kosovo are as vast as they are urgent. Last Wednesday's immediate needs conference in Brussels focused on these humanitarian requirements, and donors pledged to provide nearly $2.1 billion in humanitarian assistance. The United States pledged more than $500 million in assistance for urgent humanitarian needs. This money comes from the budget supplemental passed by Congress and signed by the President on May 21 of this year. A follow-on donors conference in the fall will concentrate on assistance for reconstruction, for which the Europeans will bear the bulk of the burden.

Another urgent item on UNMIK's agenda is the establishment of a civilian police force that will assume responsibility for law and order. The UN plans to deploy 3,100 international civilian police in Kosovo. UNMIK civilian police will be armed and will have arrest authority. The U.S. intends to provide 450 of those police.

As these police deploy, the OSCE will begin training the Kosovar police force of 3,000 which will eventually take over responsibility for civilian policing. The U.S. is playing a leading role in this effort as well, with an American appointed to head the police training academy.

The U.S. has nominated more than 20 qualified human rights monitors as part of the OSCE's contingent of more than 100 who will monitor and protect the human rights of all Kosovars, whatever their ethnicity or religion. In addition, we have pledged $9 million to date for the ICTY to ensure that the work of the War Crimes Tribunal in Kosovo can be carried forward. We are working with the OSCE and the Council of Europe to provide further political and resource support to promote respect for human rights, establish institutions such as a human rights ombudsperson, and build the rule of law.

Further down the road, democratization in Kosovo will require an active, pluralistic political life, free and fair elections, and self-government. We have no intention of seeing one single-party system replace another. We are working with the UN, the OSCE, and other international organizations to foster political party development, promote the participation of Kosovars in the political process, and promote the growth of responsible independent media -- an indispensable part of democracy and civil society in Kosovo. Our goal is to hold local and Kosovo-wide elections as soon as is feasible.

In the final analysis the future of Kosovo will depend upon the people who live there. As Secretary Albright said to a crowd of Kosovars in Pristina last Friday, "If there is to be a true victory in Kosovo, it cannot be a victory of Albanians over Serbs, or NATO over Serbs. It must be a victory of those who believe in the rights of the individual over those who do not."

Let me turn to Bosnia and Herzegovina, where in the implementation of the Dayton agreement we have achieved a number of successes, but much still remains to be done. We can be justifiably proud of NATO's success in establishing the secure environment necessary for normal political, economic and social life in Bosnia.

Progress on refugee returns has been mixed, but the signs over the last year are encouraging. Since Dayton, almost 600,000 Bosnians have returned to the country. Of those, more than 80,000 have gone to areas where their ethnic groups are in the minority. While the rate of minority returns has been unacceptably slow, the pace is accelerating. Almost as many minorities returned in 1998 as in the 2 preceding years combined, and minority returns this year are outpacing those of 1998.

Although this progress is small, it is a significant step toward our goal of a self-sustaining return process. We will continue to make clear to Bosnian officials that closer ties with the U.S. and western institutions depend upon improved performance on minority returns. This is our greatest leverage with Bosnian leaders, and it is the key to the progress we have achieved to date.

Most Dayton-mandated national institutions and symbols are now in place, though state organizations are limited in their functions so far. The work of the three-member joint Presidency is showing promise, as demonstrated last week at the Stability Pact summit in Sarajevo. With little more than 2 weeks lead time and with nightmarish security and logistical obstacles to overcome, the three worked together to ensure that this summit of more than 40 world leaders went smoothly.

We see real progress in policing in Bosnia as a result of efforts by the International Police Task Force (IPTF) and bilateral donors, including the U.S. Police cooperation between the two entities is growing. With IPTF coordination, local police are undertaking increasingly professional criminal investigations, and police academies are now up and running in both entities to bring new trainees into the police force - a real milestone in police restructuring.

Economic reform is an area where progress has been slow. There have been some successes, such as the new "convertible mark" currency and the new customs law, which have bound Bosnia together as a single economic entity. But progress toward a functioning, market-based economy is inadequate. This is above all the fault of political leaders who remain committed to political control over economic activity, in order to guarantee their political party's continued dominance. They continue to block privatization and other reforms, and to maintain an economic and regulatory climate that discourages private investment, foreign or domestic. Accordingly, our efforts now will focus on pressing Bosnia's leaders to act decisively in the areas of economic restructuring, privatization and judicial reform in order to secure Bosnia's economic future. Finally, let me turn to our efforts to promote democratization in Serbia. Long-term stability in the region requires replacement of Milosevic and movement toward democratic government in Serbia. President Clinton has made clear that as long as the Milosevic regime is in place, the United States will provide no reconstruction assistance to Serbia, although we do not rule out continued humanitarian assistance through international organizations.

Over the past several weeks, Serbia's citizens have shown their disgust for Milosevic and their hunger for democratic government through spontaneous demonstrations in the streets of cities throughout the country. Opposition parties, taking advantage of the popular sentiment against Milosevic, have organized their own rallies and are beginning to mobilize for a larger effort in the fall.

These are all positive developments and we want to nurture them. At the same time, I do not want to give rise to exaggerated expectations that the Milosevic regime will fall anytime soon. Milosevic continues to hold the main levers of power in his hands, most importantly the army, the police, and most of the government-owned media. Nevertheless, regardless of whether Milosevic stays or goes in the short term, our support for democratic forces is an investment in Serbia's future.

Over the past 2 years, the U.S. Government and NGOs such as NDI, IRI, and the NED have spent $16.5 million on projects aimed at promoting democratic governance and civil society in the F.R.Y. In Sarajevo last Friday, the President announced that he will work with the Congress to provide $10 million this year and more over the next 2 years to strengthen independent media, NGOs, independent trade unions, and the democratic opposition in Serbia.

Our democratization programs in Serbia focus on three areas. First is assistance to oppostion parties. Here we intend to provide them with technical assistance and first-class political advice, the kind that may seem commonplace to us but represents a whole different way of thinking to them.

Second, we are promoting independent media and the free flow of information in Serbia in two ways. In order to increase the amount of objective news reaching the population, we are nearing completion of the "Ring Around Serbia," a network of transmitters that will permit us to broadcast VOA, RFE, and other international news programs throughout the country. Perhaps even more important, however, we want to strengthen Serbia's own independent media, since Serbs, like Americans, prefer to get their news from their own sources, in their own context.

Finally, we give special importance to support for Montenegro. President Djukanovic and the multi-ethnic, democratic government of Montenegro have demonstrated courage and determination in implementing reforms and resisting Belgrade's attempts to strip Montenegro of its constitutional powers. Montenegro is too small to change Serbia directly, but we believe it can serve as a model for the Serbian opposition, providing advice on election strategy and the implementation of painful but necessary reforms. We have steadily increased our support for Montenegro, providing financial and technical assistance worth $25 million in 1999 as well as humanitarian assistance worth millions through UNHCR.

Our efforts now can do two things. In the short term, we can help the indigenous Serbian opposition focus its energies and more effectively articulate the anger and frustration of the Serbian public. In the longer term, we can cultivate and strengthen those forces that will carry the democracy banner as long as Milosevic remains in power. Both of these are important goals. U.S. leadership in this endeavor will be critical, and your support will be essential. We look forward to working together with Congress to bring democracy to Serbia -- an indispenable element of stability for the entire region.