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Key Economic Data 
  2003 2002 2001 Ranking(2003)
Millions of US $ 6,963 5,249 4,800 104
GNI per capita
 US $ 1,540 1,270 1,240 123
Ranking is given out of 208 nations - (data from the World Bank)

Books on Bosnia & Herzegovina

Update No: 182 - (26/03/13)

Bosnia's political problems continue, much to the concern of the international community so involved in its post-war incarnation. This fragile state, comprising two separate entities, Republika Srpska and the joint Federation of Bosnia and Herzegovina, according to the constitutional settlement of the Dayton Agreements of 1995, remains riven by ethnic division and secessionism. This prevents political and social progress. Bosnia, along with the Western Balkans as a whole, has offered lacklustre economic growth and citizens are becoming increasingly weary of low living standards. This state of political instability and discontentment could, some analysts say, mean Bosnia's Muslim community maybe be increasingly drawn towards extremism.

A considerable amount of the nation's restructuring in the post-war years was facilitated by funds from aboard. This is an important feature of the state's finances. The nation recently received €50 million from the Macro-Financial Assistance of the European Union, as the union hopes to reduce the impact of the fiscal crisis on the country. The IMF, a considerable contributor to the nation's coffers, had suspended loans to the country during the 18-month impasse when it failed to form a central government and therefore could not pass a budget. Once the government was formed at the end of 2011, and a budget passed, loans were unfrozen. However the IMF is keen to assert that the next 40 million euro tranche of a 400 million euro loan will only be released once a retirement law that would settle the matter of military pensions is adopted. The IMF wants Bosnia to revoke a law which allows former soldiers early retirement. On its most recent mission to the nation in February, mission head Ron van Rooden made some positive comments, stating that "progress was fairly good in the structural reform area but there are still a number of measures that are awaiting parliamentary approval." The state did meet its budget deficit target of 3% of national output last year.

The issue of pensions has caused considerable upset amongst the state's former servicemen. More than 1000 veterans have mounted protests outside parliament in Sarajevo demanding that their pay be restored. There is good reason for more general public discontent. Bosnia's unemployment rate rose to more than 44% in February. A recent UN survey found that 75% of young people in the country are unemployed and more than 50% would move abroad if they could. On January 21 a strike was held by teachers, policemen, judicial and tax office workers in protest against a 10% pay cut imposed as part of the austerity budget, signalling the level of frustration. Average monthly pay for teachers and policemen in the Serb Republic is between $545 and $750. As many other countries have found from austerity budgets, popular discontent is an almost unavoidable part of retrenchment. In its semi-annual South East Europe Regular Economic Report, the World Bank notes that all of the Western Balkans have been badly affected by the crisis. It warns states against avoiding unpopular austerity measures however, on the basis that those countries “are caught in a vicious circle that reinforces the cycle of long-term austerity, low if not negative growth, high debt, and even higher risks of social upheaval.” There has been a political toll. In Republika Srpska, the Serb dominated entity, the government reigned entirely on February 27th. Prime Minister Alexander Dzombic stated that the entity's president, Milorad Dodik, had requested that the government resign as it was failing to manage ongoing economic woes.

As the above example indicates, the nation's leaders are not necessarily promoting stability in the face of economic strife. There have been numerous problems for the nation's political structures. On February 12, the House of Representatives in the larger of Bosnia's two entities, the Federation of Bosnia and Herzegovina, passed a vote of no confidence in the government. A new parliamentary majority consisting of the Social Democratic Party, SDP, and the Alliance for a Better Future, SBB, the Croatian Democratic Union, HDZBiH, and its sister party, HDZ1990, which has for some time wished to dismiss half the members of the government, proposed the moved. The vote of no confidence was however then blocked by 12 MPS from the SDA, which is the largest Bosnian Muslim party. They described "vital national interest" as a reason for obstructing it, a mechanism designed to safeguard important ethnic rights. Now the case must go to the constitutional court which will decide whether vital ethnic interests are imperilled. There is an impasse in the Federation of Bosnia-Herzegovina as a result. The move to the constitutional court is no guarantee of a fast solution. The court issued a statement cautioning that it would only decide on such matters when it has a full panel of judges (there are currently only six and nine are needed). The court has already spent three years arguing with political leaders over whom to appoint. Ethnic conflict is an ineluctable part, it seems, of the political life of the country. The problems currently besetting the city of Mostar, the scene of heavy fighting in the 90s wars, reflects in microcosm this negative trend. Mostar has seen in 2013 without a budget. As a result, there are no funds to pay for services, such as schooling, emergency services, and public servants. Local elections that were supposed to be held in October of last year were delayed due to differences of opinion over electoral procedures. Plans to reform the electoral code have the town's Bosniak minority concerned about their representation. The international community has noted the situation with concern. "I think that the situation in Mostar is very dangerous," said Roderick Moore, a mediator between the town's rival council members.

Financial woes are one of the reasons why citizens are showing increasing discontent, along with the lack of a stable government. Many complain of the temporariness inherent in the Bosnia constitutional settlement. In a nation once riven by bloodshed, this is disquieting and has led to a new worrying development. Some analysts have noted that radical Islam is gaining strength in the country. Vlado Azinovic, a Sarajevo-based security expert and journalist who has written a book on whether Al-Qaeda has a presence in Bosnia, has said of the country's "temporariness", "as long as it stays like that, as long as we are facing a deep political and moral crisis of all values in society, it will remain a fertile ground for the spread of various radical ideologies, among which [radical Islam] has stood out recently." In February, the Brussels-based International Crisis Group released a report calling Islamism and nationalism in Bosnia a "dangerous tango." The ICG makes it clear that Wahhabist movements in Bosnia are limited and dispersed. What it does stress however is that the political and economic climate in the country is favourable to the development of radical movements. There have, to this date, been noted episodes involving wahhabists. In December of last year, an Islamic insurgent was sentences to 18 years behind bars for shooting at the U.S. embassy in Sarajevo the previous year. More worryingly there have been allegations that radical Islamist organizations in Bosnia and Herzegovina have been sending weapons to rising Syrian rebel groups such as the Jabhat al-Nusra, a jihadist group which shares some ideological similarities with Al-Qaeda. Included among these arms are Kornet and Fagot anti-tank systems delivered by the Soviet Union to former Yugoslavia in previous decades. During the 1990s conflict in the Balkans around 2000 militants from Arab states joined the war and many subsequently became nationalised citizens of Bosnia. It is from these militant roots that the current wave of extremism stems and has been galvanised by the conflict in Syria. Some say that support for the rebels in Syria is Bosnian Muslims repaying militant groups for support of their ethnic brothers during the Balkan wars.

The spectre of ethnic strife in all of its radical, violent manifestations never seems to recede in Bosnia's political psyche. At the start of March, Republika Srpska's President, Milorad Dodik announced that he would probably testify in the defence of alleged war criminal Radovan Karadzic, at the former's general's request, at the International Tribunal for the Former Yugoslavia (ICTY). Karadzic is on trial for 10 counts of war crimes at The Hague for his part in the conflict. Dodik commented that "Karadzic is an historically important personality as he gathered a strong political force and mobilised people to defend the national interests" of the Bosnia's ethnic Serb community during the conflict. This position is, many would argue, irreconcilable with a positive, conciliatory agenda. An optimistic note is however that rights activists have compiled a "Bosnian Book of the Dead" which offers statistical analysis of all those who died in the conflict, something which the nation's politicians have frequently refused to do. Mirsad Tokaca, who was responsible for the publication, believes that, "you can't preach against war and explain to people what war is without demonstrating the price of war in terms of human lives alone." The book is being heralded as a landmark for the country's attempts to move forward. It is regrettable that this is in spite of, not because of, support from the country's political leaders. 


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