Bosnia and Herzegovina's (BiH) post-war status quo has ended but the international community risks muddling the transition by delaying decisions on a new kind of engagement, reads a report by the International Crisis Group (ICG).

Republika Srpska (RS), one of the state's two entities, has defied the High Representative, Bosnia's international governor, and the international community has not backed him up. Instead, the U.S. and the European Union (EU) launched in October 2009 on the Butmir military base outside Sarajevo a high-level effort to persuade the country's leaders to adopt far-reaching constitutional reforms and allow the mandate of the High Representative and his office (OHR) to end. Disagreements over the scope and content of reform make agreement uncertain. But Bosnia's leaders should adopt as much of the EU-U.S. proposal as possible, and the international community should end its protectorate in favour of a new, EU- and NATO-led approach including strong security guarantees.

After fifteen years as an international protectorate, BiH still has to make significant and most likely gradual reforms to provide better governance and services to its citizens. But it is no longer on the verge of armed conflict. RS has no chance of successfully seceding. Indeed, a failed breakaway is now the only way RS could lose the extensive autonomy it has within BiH. Bosniaks, Serbs and Croats still need to develop consensus on the balance between centralisation and de-centralisation they want and on other power-sharing arrangements. But Bosnia must complete its transition to mature statehood now or risk regression.

The Peace Implementation Council (PIC), the inter­national body that oversees the Dayton Peace Agreement (DPA), will meet on 18 November, and two days later the UN Security Council will deliberate. Until then, the EU-U.S. "Butmir talks" are likely to continue. If they succeed, the OHR will close, and Bosnia will accelerate toward EU and NATO integration. If they fail, the international community will have a stark choice: reinforce the OHR for a lengthy political conflict with RS, or devise alternative means led by the EU Special Representative (EUSR). If the Butmir talks are still ongoing, the PIC may delay a decision on the OHR until early 2010, but a decision on transition should be taken before the country is preoccupied by a tense campaign for the October 2010 general election.

This is a sensitive and potentially dangerous moment, and much could go wrong. A minimalist agreement at Butmir and a decision on OHR closure at the next PIC meeting is still possible. More delay and indecision could be dangerous. Its important past achievements notwithstanding, the OHR has become more a part of Bosnia's political disputes than a facilitator of solutions, and the High Representative's executive (Bonn) powers are no longer effective. The OHR is now a non-democratic dispute resolution mechanism, and that dispute resolution role should now pass to Bosnia’s domestic institutions with the temporary and non-executive assistance of the EUSR. Careful, coordinated and determined action between the EU, UN, U.S., Russia and Bosnia's neighbors is necessary to accomplish this.

Bosniak, Serb and Croat leaders agree in principle on some important reforms, though the Serbs want them to be minimal, Bosniaks want them to be extensive and Croats want them to protect their communal prerogatives. Ideally, Bosnia's leaders should adopt the EU-U.S. proposal in its entirety: it is a good compromise – the most one can hope for under these conditions. If they cannot agree on all of it, however, the first priority should be reaching a deal to equip the state for EU integration, put it in compliance with the European Convention of Human Rights (ECHR), make it more functional and resolve the issue of state property. In later stages of the EU (and NATO) accession process, BiH will need greater administrative capacity, to implement and enforce EU legislation; but this can be added gradually, as the need arises and as Bosnian political will matures, reads the report.