The presidents of Burundi, Rwanda, Uganda, and Zaire (now DROC) began a regional initiative in 1995 to negotiate peace in Burundi. But Buyoya's July 1996 coup received mixed international response. Although publicly condemning the coup, many Western governments have privately supported Buyoya's return to power, believing that as a moderate he can bring peace to Burundi. Burundi's neighbors, however, have taken a surprisingly strong position against the coup. Immediately following the seizure of power, an emergency meeting of leaders of east African states implemented an economic blockade against Burundi, which was widely enforced. According to the new prime minister, more than US $162 million were lost in the first three months of the blockade.
Buyoya's main foreign policy concern has been gaining support for his regime. While officially calling for a return to democracy, Western governments have become increasingly open about their support for Buyoya. In an October trip to Africa, the U.S. secretary of state attempted to persuade the east African states to end the blockade, but their leaders subsequently reiterated their intention to isolate Burundi. Buyoya attempted to appeal to the leaders of the neighboring states by expressing a willingness to negotiate with the CNDD rebels, but the continuation of government-sponsored violence undercut his message of moderation. However, with conditions swiftly deteriorating in eastern DROC and the possibility of international intervention, Buyoya's promise to restore order gained greater international support.
Finally in 1999, after three years of economic sanctions against Burundi, East African nations met and voted to lift the sanctions. As one of the world's most heavily indebted nations, Burundi also qualified for debt relief from the United States. The economy of Burundi continued to flounder, however, with income from coffee exports declining due to lower world demand and global oversupply, and ongoing civil unrest and violent conflict between Hutu and Tutsi factions undermining the development of enterprise and commerce.
In February 2002, Buyoya held discussions with the European Union (EU) on funds reserved for Burundi within the framework of the ninth European Development Fund. The Fund earmarked €115 million for Burundi, with an additional €17.5 million to provide for human-sanitation aid. However, the EU has granted this aid on the condition of guaranteed security for its representatives charged with overseeing the implementation of EU programs. Buyoya also held talks in 2002 with the World Bank and the IMF on institutional cooperation with Burundi. Buyoya hopes that these talks will lead to other aid, as he believes "When one has a good relationship with the two Bretton Woods institutions, relations with other donors should not be a problem."
At the death of Julius Nyerere in October 1999, Nelson Mandela took over the task of moderating peace talks for Burundi, but Hutu rebels refused invitations to join the talks. The resulting plan, the Arusha Agreement, was drafted in 2000, and detailed a three-year power sharing agreement including a transitional presidency process, with Buyoya at the head, and a military and Parliament balanced between Tutsi and Hutu parties. Hutu rebels responded with greater, bloodier attacks that continued throughout 2001. Buyoya was inaugurated as president of the transitional government in November 2001. Peacekeeping troops from South Africa were in Burundi when the transitional government assumed power; other African nations planned to contribute troops to the effort in 2002, as the country prepared to hold elections.
By the end of 2002 though, progress had been made towards peace. In continuation with the implementation of the Arusha Agreement, the government had reached cease-fire agreements with three rebel groups, the CNDD (National Council for the Defence of Democracy), the CNDD–FDD (National Council for the Defence of Democracy–Forces for the Defence of Democracy), and the Palipehutu–FLN (Party for the Liberation of the Hutu People–National Liberation Forces). Buyoya still hopes to bring the Agathon Rwasa faction of the Palipehutu back to the negotiation table, and to assure the implementation of the agreements that have been made.
In early 2003, meeting in Addis Ababa, Ethiopia, the African Union (known until July 2001 as the Organization of African Unity—OAU) pledged to send military forces to observe the peace efforts in Burundi, where armed rebels continued to skirmish with government forces. African Union members—notably South Africa, Ethiopia, and Mozambique—hope that the presence of their peacekeeping forces will induce rebels to disarm while also preventing government reprisals.
The U.S. Department of State lists the Burundian government and the rebel factions among those nations in severe violation of human rights. Instability in neighboring DROC has caused governments of nations in the region, including Burundi, Rwanda, and Uganda, to send troops to support Congolese Tutsi in their attempts to restore security to border regions.