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The last train to Volkswagen's assembly plant at Vogosca, an industrial suburb in the hills above the Bosnian capital of Sarajevo, set out from Germany four years ago. It's still in Vogosca.

Most of the Serbs who once worked at the multi-ethnic plant are not. They left three months ago as part of a general exodus to Republika Srpska, the Bosnian Serb "entity" which occupies 49 percent of Bosnia-Herzegovina under November's Dayton peace agreements.Vogosca is part of the remaining 51 percent in the hands of the Croat and Muslim federation.

But the long line of brown German rail cars - rusting, and possibly booby-trapped - still blocks the tracks into the abandoned and looted factory which used to assemble Golf cars for sale in Yugoslavia and for export.

Restarting dozens of such plants and repairing the connecting infrastructure is crucial to Bosnia's economic recovery. The European Union, the U.S., Japan, Muslim states, the World Bank and other organiations have drawn up reconstruction programs costing more than $5 billion over four years. These efforts are the biggest and most complicated ever mounted for such a small country.

"But even so, international aid will only cover 5 percent of the total cost," warns Michael Koch, who runs a World Bank emergency farm aid project. "The rest depends on kick-starting the local economy."

That's going to be a slow and difficult process. It will depend on reintegrating regions that have been at war with each other and which retain separate armies and currencies. It will also depend on foreign investors.

Foreign companies such as ABB, the Swiss-Swedish multinational with a growing network of plants throughout former communist Europe, remain cautious. They want to sell equipment for the reconstruction effort, but they say that serious investment decisions will have to await the outcome of elections in September.

Such a leisurely game plan is not an option for the World Bank. It's helping to build the financial institutions which should underpin the attempt to create a functioning market economy for Bosnia.

It's no easy task to create a customs and banking system in a former Communist country which has suffered an estimated 100,000 deaths, the exodus of more than 1 million people and the destruction or damage of 65 percent of its homes. Bosnia also has 650,000 displaced refugees on both sides of the IFOR line dividing the Croat-Muslim Federation and Republika Srpska.

The failure so far of attempts to replace indicted war criminals such as Radovan Karadzic, the leader of Republika Srpska, with more cooperative Bosnian Serbs based in Banja Luka means that the building of common institutions that would include Bosnian Serbs has hardly begun.

The only economic linkages between the Muslim and Serb entities are those forged between the mafiosi who made fortunes during the war years through smuggling and trade in looted goods.

"The only way to get rid of the mafia is for the international community to help us to get rid of the war criminals who run it," says Hasan Muratovic, prime minister of the Bosnian Muslim government in Sarajevo.

Milan Cvikl, a World Bank economist from Slovenia who combines intimate knowledge of former Yugoslavia with five years of helping Poland's transition to a market economy, welcomes the sweeping away of the hundreds of police and militia checkpoints that hindered freedom of movement and trade.

"Before IFOR swept away all these potential shakedown points, it could take a truck six days to reach Sarajevo from the Croatian port of Rijeka. Now it can be done in a day, and with only one payment to the customs officers on the border between Croatia and the Bosnian Croat and Muslim federation," he says.

An attempt by the World Bank to build a common payments and customs system between the Croatian and Muslim sides of the Bosnian federation also moved forward last month with the establishment of joint Bosnian-Croat and Muslim-manned customs posts, monitored by EU customs officers, on the borders between Croatia proper and the Croat-Muslim Bosnian federation.

At the end of May, the cash-starved federation government in Sarajevo received its first $21.8 million in customs revenue.

The aim is to create a common central bank for Bosnia-Herzegovina and a national currency which would circulate in all parts of the state and be accepted by all its peoples - Serb, Croat and Muslim.

That remains a dream. For now, the Croatian kuna circulates alongside the D-Mark in western Herzegovina and other Croatian-controlled areas of the federation. The Bosnian dinar is used with the D-Mark in Muslim-controlled areas and the Yugoslav dinar, issued in Belgrade, circulates in Republika Srpska.

But the beginnings of a common inter-bank payments system have been laid, even though the clearing of payments between the two sides of the federation takes place with the physical delivery of D-Marks between the Muslim and the Croat-controlled sides of the territory.

The D-Marks are placed in an armored car that every Friday crosses a rebuilt bridge over the Neretva River. The river marks the effective border between the two communities in the ethnically divided city of Mostar, which is under EU administration.

Meanwhile, in an attempt to attract desperately needed foreign capital to boost business and industrial activity, the World Bank has approved a special Political Risk Guarantee Facility to support the financing of working capital for Bosnian enterprises. This would protect lenders from losses arising from war, civil disturbance or political interference.

The facility will do nothing to resurrect the factories destroyed or badly damaged by the fighting and shelling, but it could provide a lifeline for relatively modern chemical, steel and engineering plants in cities such as Tuzla and Zenica in central Bosnia. They were far enough from the fighting to preserve most of their facilities and housing relatively intact.

Many of these plants were sited in central Bosnia for strategic reasons - the Yugoslav regime under Tito wanted such industries protected from Soviet invasion in the mountainous heart of Yugoslavia - and supplied basic materials to factories in Serbia. Without the resumption of production by the steel, chemical and other heavy industrial plants in the formerly besieged central Bosnian cities or the isolated eastern Bosnian enclave of Gorazde, there will also be little chance of Serbia re-starting its own economy.

Some economists argue that funds shouldn't be wasted on re-opening these large, state-run factories and that resources should be channelled into new, private light industry and services.

But that's not the view of Selim Beslagic, the feisty mayor of Tuzla. A Muslim who negotiated the exodus of the Serb-dominated Yugoslav People's Army in 1992 and retained the multi-ethnic identity of the city, Beslagic doesn't want Tuzla to become dependent on foreign aid and wants the economy to be revived as quickly as possible.

His priorities are to provide jobs for demobilized soldiers and refugees and to resume production of goods which he knows are needed by factories in nearby Banja Luka in Republika Srpska and other factories in Serbia and Croatia.

"Tuzla has been a major source of energy, raw materials and products for Serbia since 1945. We also supplied 70 percent of all the table salt used in the whole of Yugoslavia. We want to re-create those linkages and even attract investors from Serbia," he says.

After four years of war, he's itching for the chance to re-establish commercial ties. "If the Dayton agreements are to be implemented, it will be the economy which defines our future relations with our neighbors."

(Distributed by Scripps Howard News Service.)