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  BOSNIA
HERZEGOVINA


REPUBLICAN REFERENCE

Area (sq.km)
51,129

Population
3,922,205

Capital
Sarajevo

Currency
Dinar

President
Mr Zivko Radisic

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Background:
Bosnia and Herzegovina's declaration of sovereignty in October 1991, was followed by a referendum for independence from the former Yugoslavia in February 1992. The Bosnian Serbs - supported by neighboring Serbia - responded with armed resistance aimed at partitioning the republic along ethnic lines and joining Serb-held areas to form a "greater Serbia." In March 1994, Bosniaks and Croats reduced the number of warring factions from three to two by signing an agreement creating a joint Bosniak/Croat Federation of Bosnia and Herzegovina. On 21 November 1995, in Dayton, Ohio, the warring parties signed a peace agreement that brought to a halt the three years of interethnic civil strife (the final agreement was signed in Paris on 14 December 1995). The Dayton Agreement retained Bosnia and Herzegovina's international boundaries and created a joint multi-ethnic and democratic government. This national government is charged with conducting foreign, economic, and fiscal policy. Also recognized was a second tier of government comprised of two entities roughly equal in size: the Bosniak/Croat Federation of Bosnia and Herzegovina and the Bosnian Serb-led Republika Srpska (RS). The Federation and RS governments are charged with overseeing internal functions. In 1995-96, a NATO-led international peacekeeping force (IFOR) of 60,000 troops served in Bosnia to implement and monitor the military aspects of the agreement. IFOR was succeeded by a smaller, NATO-led Stabilization Force (SFOR) whose mission is to deter renewed hostilities. SFOR remains in place at a level of approximately 21,000 troops.

Update No: 060 - (18/04/02)

Hunt for the fugitives
The international community is very concerned to follow up its victory in obtaining the surrender of Milosevic to the Hague by procuring the seizure of Radovan Karadzie, former leader of Serbian Bosnia. They are offering US$3.5m as a reward for information leading to his capture. He is known to be lurking in eastern regions of the Federation, always able to slip over into Serbia itself if necessary, where he has friends among the security forces, who with senior army figures are sheltering him.
Another fugitive from justice is Radko Mladic, former chief general of the Bosnian Serbs in the 1992-95 civil war. His whereabouts are quite unknown. He might be in Bosnia or in Belgrade itself, where he has been sighted.

Looking to the future
The Bosnian Serbs need to clear away the detritus of past misdemeanours. Their current leadership realise that and are cooperating. By helping to find the culprits they are showing their international respectability, which has earned them over US$5bn in international credit since the Dayton Agreement of 1995.
There is no longer any need to bribe the Bosnians to stay together. "In Bosnia four years of fighting led to a kind of exhaustion and realisation on all sides that war is not going to help them," says Wolfgang Petritsch, the International High Representative in Sarajevo, the top international official in the Balkans. The Afghan developments have massively underscored that.

Western involvement essential
But Mr Petritsch warns strongly against pulling out forces too soon in Bosnia, The troops are still needed to rebuild the country, ravaged by war. Petritsch and his colleagues are trying to create an independent judiciary and a legal framework for economic development, including clear rules on the recovery of property by refugees.
What the Bosnians need to do to keep the West interested is to set up legislation to attract foreign investment, not least because this is where the Americans could come back in force again. A new law on foreign investments was passed in the federation's lower house in late December, already adopted in the upper house. But it will take time to assess its full significance.

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BANKING

Bosnian minister, Iranian envoy discuss possibility of opening Iranian bank


The treasury minister of the Bosnia-Herzegovina joint institutions, Anto Domazet, and newly appointed Iranian Ambassador to Bosnia-Herzegovina, Said Mahmud Sadri, said that the previous economic cooperation between the two countries had been very successful and they were considering the possibility of its renewal, SRNA News Agency has reported, quoting the Bosnia-Herzegovina Council of Ministers.
The need for stronger financial cooperation and channelling the flow of capital from Iran to Bosnia-Herzegovina was especially stressed in the talks while, in that context, the need to open an Iranian bank in Bosnia-Herzegovina was being considered.
Ambassador Sadri informed Domazet of the intention of a delegation of Iranian bankers to organise a visit to Bosnia-Herzegovina so as to formulate the possibilities of business cooperation in the banking sector. 

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FOREIGN LOANS & AID

British envoy signs cash injection agreement with Bosnian economy minister

British ambassador to Bosnia-Herzegovina, Ian Cliff, and Bosnia-Herzegovina Foreign Trade and Economic Relations Minister, Azra Hadziahmetovic, signed a Memorandum on Understanding in Sarajevo, according to which the British government is to give Bosnia-Herzegovina a US$320,000 grant in order to prepare a strategy for economic development and the fight against poverty (PRSP), SRNA News Agency has reported.
According to the British ambassador, the funds are to be used for public consultations in order to shape the strategy for fighting poverty.
He added that it was necessary to draft the strategy as soon as possible because of the high poverty level in Bosnia-Herzegovina, which affected mostly the young, old, sick and disabled.
Hadziahmetovic said that she was confident that the PRSP project would be concluded in a few months.
She said that the Bosnia-Herzegovina Coordination Council for Economic Development and European Integrations, the Council of Ministers and entity governments would be responsible for drafting the project. Representatives from public life would also be involved, while close contacts with donors would also be maintained.

Bosnia, IMF sign standby arrangement to fund structural changes in economy

After the talks the Bosnia-Herzegovina authorities conducted with IMF representatives over the last few months, a letter of intent was signed in Sarajevo on 27th March, outlining economic and financial policy in both the Bosnia-Herzegovina state and entities. The resources from the standby arrangement agreement will become operative once approved by the IMF administrative board during its June session in Washington, BH Radio 1 has reported. 
Mirela Hukovic-Hodzicof the radio station reported: "The central part of the agreement refers to the entities' budgets for 2002. The agreement will be considered by the IMF administrative board in June. After this the resources are expected to become operative." 
The head of the IMF mission to Bosnia, Peter Doyle, said: "The programme will total 45 per cent of Bosnia-Herzegovina's quota. This amounts to 69 million SDRs or special drawing rights. This is envisaged to be the first of two programmes. The current 15-month programme will be followed by a three-year programme designed to tackle the structural problems of Bosnia-Herzegovina's economy with special emphasis on poverty."
Structural reforms and changes in the economic and financial polices in Bosnia-Herzegovina are the basis for reducing poverty and creating jobs, Chairman of the Bosnia-Herzegovina Council of Ministers, Dragan Mikerevic, has said: "I think that this agreement will be painful for both entities. We had to choose priorities, but are confident that in the period ahead we shall be able to overcome all difficulties."
The Bosnia-Herzegovina Central Bank governor, Peter Nicholl, says that the agreement is comprehensive and covers monetary, fiscal and a whole series of structural policies. It will also pave the way for our country to enter negotiations with other agencies."

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