Over the past decade, the United States has spent some $24 billion in peace efforts in the Balkans. The European Union and the United Nations have invested even more. Of the three missions in the Balkans that include Bosnia-Herzegovina, Kosovo and Macedonia, the most difficult one is Bosnia. It is still struggling to recover from three years of inter-ethnic war that resulted from the breakup of former Yugoslavia. About 250,000 people died in the conflict between Bosnian Muslims, Croats and Serbs and over a million people were displaced.

The 1995 Dayton peace agreements divided the country into two ethnically based entities, a Bosnia Muslim-Croat federation and a Bosnia Serb republic, Republika Srpska, each with its own president, government, parliament, military and police.

But power largely resides with the High Representative, who is appointed by a council of the combined United Nations and European union. He coordinates the various international agencies involved in Bosnia. He can veto laws passed by the local parliaments, and he can remove erring politicians if necessary.

The current High Representative, Paddy Ashdown, is a former member of the British Parliament, who faces a task of considerable complexity with no assured outcome. His aim is to bring Bosnia into the European community, and observers note there is a long way to go. Bosnia is still divided, struggling and insecure.

Daniel Serwer is the Balkan Initiative Director at the United States Institute for Peace. He says the international community underestimated the challenges in Bosnia, and has yet to devise effective ways to deal with them. In his opinion, the first lesson is: security is paramount. That required better planning ahead of time and better coordination between military and civilian authorities.

?In Bosnia you had a mission where the Americans tried to keep the military and civilian implementation quite separate and tried to complete both very rapidly,? he says. ?It turned out to be impossible to complete within a year the elections and the military tasks and to leave Bosnia. And, I think we know from that experience that separating the military and the civilian tasks is a mistake. In all of these post-conflict situations public security is job number one. Job number two is governance. And only after that comes the issue of physical reconstruction and economic revival.?

A NATO stabilization force, SFOR, remains in Bosnia to prevent the outbreak of another war, but it does not provide security for Bosnians. That is the responsibility of local authorities, who lack sufficient training or adequate courts and prisons. Occasional international assistance has not been much help.

Lax law enforcement, a recurring problem in the Balkans, has left intact wartime networks of extreme nationalists and security forces that are often involved in crime. A significant percentage of trafficking, in drugs, arms and human beings passes through Bosnia and the rest of the Balkans to Europe, enriching local and international Mafia. Until recently, Serbian and Bosnian Serb companies were supplying Iraq with weapons. Last year, Bosnian Muslim authorities turned over a group of Algerians, Al Qaida members, to the United States.

Progress in Bosnia is also hindered by Serbian dreams of recovering Republika Srpska in a greater Serbia. That if anything, intensifies the current ethnic division in Bosnia. Outside agitation adds to its problems.

Internally, the same divisive groups remain in charge. James O?Brien, former senior U.S. envoy to the Balkans, says despite almost annual elections since 1995, people who profited from war still control much of Bosnian political life.

?We made a peace in Bosnia with the people that controlled the guns. And these are people who defined themselves ethnically,? he says. ?So there is a government in Bosnia that defines everyone by their nationality. That makes it difficult to have people to stand up as individuals. And it makes it difficult to have politics that actually matter to people, because everything is tripped up by what nationality they belong to.?

Perhaps the most glaring example of failure to curb extremism is the fact that key war crimes suspects have yet to be brought to justice, such as Bosnian-Serb leader Radovan Karadzic, who is charged with genocide.

Rule of law and justice are undermined when war crimes suspects remain at large, says Carla del Ponte, chief prosecutor of the Hague International War Crimes Tribunal:

?If you want law and order to prevail, we have to ensure that international justice is credible. With the main perpetrators still at large, there can be no true sense of justice among those who lost their loved ones,? she says. ?(Radovan) Karadzic is my nightmare. Karadzic is now eight years at large. He is protected by the population, by the authorities, by the police, by all in Republika Srpska. So of course, it should be NATO?s works to arrest him. The arrest of Karadzic is important for democracy in Republika Srpska, for Bosnia-Herzegovina, for reconciliation.?

Wesley Clark, former NATO commander, helped work out security arrangements in the Dayton Accords. He says the failure to round up serious war criminals contributes to Bosnia?s current security problem:

?The great challenges in Bosnia have always been internal security, starting with the problem of the war criminals and the corruption that they have fostered in the country. The failure to create a rule of law has compounded the problems of economic development and other issues. I don?t see a way to defeat that in the near term. There is no magic bullet in dealing with the rule of law,? he says.

Bosnia?s economy remains stifled by corruption, an inoperative free market and near total dependence on foreign aid. It also lacks a major natural resource or industry as a base for speedy development. However, Mr. O? Brian says given the right incentives, Bosnians are ready to invest and revive their economy:

?There is always more saved money in the country than can ever be provided by the international community. The people need to be able to be given an incentive that they can put their money into a bank they trust, that it won?t be stolen by some group of thugs hiding behind a political label. So the money can be lent back out to start small business,? he says. ?We started that in the year 2000, and we saw the growth rates in 2001 and 2002 exceed expectations. They were more than twice than what the World Bank predicted. And that was in a time of slow world economy and decline in international assistance.?

Bosnia cannot be rebuilt overnight, say observers. And Bosnians themselves must largely do the building. The international community can only assist so much. The dismal alternative is a failed state in which crime and terrorism will flourish.