Bosnia and Herzegovina Economics and Business

Bosnia and Herzegovina is a small, landlocked country located in the Western Balkans. It is bordered by Croatia to the north and west, Serbia to the east and Montenegro to the south. The economy of Bosnia and Herzegovina (BiH) has gone through a turbulent period with the 1992-95 war resulting in economic devastation. However, since then, BiH has been on an upward trajectory with a steady economic growth rate of around 3%.

The country’s main economic activity is services which account for more than half of GDP. The service sector includes telecommunications, banking, tourism and public administration among others. Industry accounts for around a third of GDP with metal processing, wood products, food processing and furniture making being some of the main industries. Agriculture makes up around 10% of GDP with tobacco being one of the major exports from this sector.

According to cheeroutdoor, BiH also has significant natural resources including coal and hydroelectricity which are used to generate power for domestic consumption as well as for export to other countries in Europe. In addition to this, there are also significant reserves of oil and gas in BiH although these have yet to be exploited due to lack of investment.

The government has been implementing structural reforms over recent years in order to promote economic growth. These reforms include privatisation of state-owned enterprises; liberalisation of trade; reduction in bureaucracy; improvements in infrastructure; modernisation of tax collection systems; improvement in access to finance through credit schemes; promotion of foreign direct investment (FDI); liberalisation foreign exchange regulations; reform banking system; development capital markets etcetera.

In terms of foreign trade, BiH mainly exports manufactured goods such as machinery & equipment along with food products such as fruits & vegetables while it imports mainly machinery & equipment as well as fuels & lubricants from other countries. The country’s main trading partners include Germany, Italy, Croatia, France, Slovenia, Serbia etcetera.

Overall, despite facing various challenges due to its location as well as political instability at times; Bosnia & Herzegovina has managed to maintain steady economic growth over recent years due its abundance natural resources which have enabled it develop various sectors within its economy while providing employment opportunities through both formal and informal sectors alike. As such, it can be said that BiH is on its way towards building a stable and prosperous economy that will benefit all its citizens alike.

The Serbian occupation of Bosanki Brod in October opened a corridor between Serbia and Krajina in Bosnia. The Serbian Bosnians conquered control of 70% of the area, thanks to the superiority of their artillery and tanks; it also managed to control the crossings of the River Drina, on the border between Serbia and Bosnia, which enabled them to illegally receive arms and other supplies from the Federal Republic of Yugoslavia. As a result of this support, the UN imposed an arms embargo and economic blockade on the Federal Republic, as well as an arms embargo on Bosnians and Croats.

Bosnia and Herzegovina GDP (Nominal, $USD) 2003-2017

Note: the capital city of Bosnia and Herzegovina, abbreviated as BIH by, is Sarajevo with a population of 301,000 (estimate 2012). Other major cities include Banja Luka with a population of 238,000, Tuzla with a population of 100,000, Zenica with a population of 93,000 , Mostar with a population of with a population of 68,000 (estimate 2012).

The Muslims were rapidly reduced in numbers in Sarajevo and other smaller areas, and could only count on financial and moral support from a few Islamic states and received only sporadic, humanitarian aid from the UN in the form of food supplies flowing into the country – and only with the permission of the Serbian Bosnians.

The Serbian President, Slobodan Milosovic, and his Croatian counterpart, Franco Tudjman, advocated for the division of Bosnia-Herzegovina into three ethnic units, one Serbian, one Croatian and one Muslim, within the framework of a federal state, which corresponded to a UN-EU peace proposal, which envisaged a division into semi-autonomous regions, under the control of the respective ethnic groups.

Croats, under the impression of the imminent division of Bosnia, sought to secure a favorable position of power, and in July launched an offensive against Hercegovina’s largest city, Mostar. The UN Human Rights Commission reported that 10,000 Muslims were detained in Croatian concentration camps, where they were subjected to torture and arbitrary executions.

At the same time, the situation in Sarajevo deteriorated with a lack of electricity, water and food. Despite epidemics, the population of 300,000 survived on minimal food rations, while aid organizations had trouble accessing the city. The UN threatened the Serbs in early 1994 to stop the attacks against Sarajevo and to withdraw their heavy artillery, but the resolution was never implemented.

  • COUNTRYAAH: Find major trading partners of Bosnia and Herzegovina, including major exports and major imports with latest trade value and market share as well as growth rate.

The UN and EU mediators drafted a proposal for a breakdown of Bosnia, with the Serbs to be allocated 52%, the Muslims 30% and the Croats 18% of the total territory. This territorial settlement divided the country into 3 ethnic, homogeneous republics, which forced the displacement of population groups from one republic to another. The play was rejected by the Bosnian government, who believed it would legitimize the already ongoing ethnic cleansing.

The US and Russia intensified pressure on the Serbs in the hope that they would accept this proposal. Croats and Muslims agreed on a federal agreement between the population groups: 51% of the country should be led by Bosnians and Croats, while the Serbs would control 49%, without splitting the republic into 3 ethnically “pure” states.

A federal agreement was signed by Presidents Franjo Tudjman of Croatia and Alija Izetbegovic of Bosnia, with support from the EU, Washington and Moscow, but the plan was rejected by the Serbs. Negotiations were made more difficult when Serbian President Slobodan Milosovic, who is the Serbian diplomatic representative, stated that he had no authority over the self-proclaimed Republika Srpska.

In 1995, the Bosnian Serbs captured hundreds of “blue berets” and captured Bihac. The situation changed radically when NATO launched bombing of the Serbian positions around the city of Sarajevo on August 30. Almost simultaneously, Croatia initiated the deportation of about 200,000 Serbs from the Krajina region, in an attempt to force the Serbs to the negotiating table.

Under intense military pressure from the United States and as part of Bill Clinton’s reelection campaign, one of the elements of the peace process initiated in Dayton, Ohio, was the election of September 1996, with the hope that it would lead to the choice of more tolerant leaders from the population groups involved.

The November/December 1995 Dayton Accords recognized the existence of two ethnically “pure” mini-states, based on either pure physical annihilation or displacement of ethnic minority groups; the two states are the Serbian-Bosnian Republic, Republika Srpska, and the Islamic-Croat Federation.

The International Criminal Court in The Hague made the head of the Republika Srpska, Radovan Karadzic, and his army chief, Ratko Mladic, responsible for the genocide. Under the Dayton Accords, people accused of war crimes are prohibited from participating in elections. Despite international condemnation, both of these two continue to be free and continue to have a significant influence in political life.

Bosnia and Herzegovina Economics and Business

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