financial source for universities, has seen its production collapseas overall GDP is down 75%. It continues to be extremely difficultfor the central government to provide any support for higher education,which means that salaries are not being paid and facilities are continuingto deteriorate. Another problem for the universities is the lackof students and faculty members as many were mobilized for the warand were killed or seriously injured, and others fled the countryand are now living in refugee camps abroad.

The initial education projects will focus on primary education, becauseprimary education addresses the concerns of a large population, perunit costs are low, and there are few political problems. The $24million program, which will be carried out this summer, will providetextbooks and other educational materials. In addition, some reconstructionwork will be done. In the fall, projects on secondary education willbegin. Although similar to the primary education program, the secondaryeducation projects will also include curricula reform. Before thewar, secondary education was largely vocational, but the trend inEurope over the past few years has been towards general academicprograms as worker-training is undertaken after the completion ofsecondary school. Bosnian secondary education will be reorientedto these European norms since it is so difficult to predict the typesof vocational skills which will be needed in the future Bosnian economy.

Higher education will be addressed later. The entire university systemhas broken down, and there are a number of problems beyond physicalreconstruction which complicate revitalizing higher education. First,before the war the universities were geared almost exclusively towardsscience and engineering. In other countries in the region, demandfor programs in foreign language, business management, and computerscience has greatly increased in response to the needs of the privatesector. These new programs will have to be addressed when rebuildingthe universities. Second, under the Federation Act, education isthe responsibility of the cantons, but this is not appropriate forhigher education. It is simply not economically justifiable to havethree independent university systems in a country of 5 million people.At the recent conference on higher education in Barcelona, Spain,there was optimism that the university system would be reunifiedat least within the federation. Dr. Mertaugh also mentioned thatthere are opportunities for universities to collaborate on the manyreconstruction projects. Finally, Dr. Mertaugh noted that when highereducation is addressed by the World Bank, funding will be availablefor recurrent costs in the universities, such as salaries and journals.

The next speaker, James Holmes (U.S. Department of State), discussedhow the U.S. Government programs fit into the World Bank matrix.While the greatest share of U.S. Government money ($2 billion) willgo to support IFOR, there will be approximately $1.8 billion overthe next three years for reconstruction and humanitarian efforts.In designing its assistance effort, the U.S. Government has adoptedthe philosophy that aid should be dispersed quickly, should enhanceemployment opportunities, and should support the transition to democracy.In terms of the World Bank categories, the United States has selectedenergy, water and waste, telecommunications, and transportation asthe four sectors it will fund. Specifically, in FY 96, Congress hasallocated about $550 million in aid ($280 million for reconstructionprojects and $270 million for humanitarian assistance), and accordingto the Congressional mandate, almost all of this money must be spentin Sarajevo or the American zone. In addition to the four sectoralcategories, assistance will focus on demining, the internationalpolice task force, emergency shelter repair, reconstruction financing,and rebuilding municipalities. In FY 97, it is expected that theU.S. Government will allocate $450 million for reconstruction, $200million for economic recovery, and $700 million for IFOR. In summary,Mr. Holmes stressed two themes: 1) the



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