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Key Economic Data 
  2002 2001 2000 Ranking(2002)
Millions of US $ 5,249 4,800 4,400 109
GNI per capita
 US $ 1,270 1,240 1,230 126
Ranking is given out of 208 nations - (data from the World Bank)


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Convertible Mark 

Zivko Radisic


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: 080 - (01/01/04)

Bosnia as the biggest test of new European force
The International High Representative (IHR) in Bosnia is the former head of the UK Liberal-Democratic Party, Lord Ashdown. His authority and that of his powerful office is sustained by the presence of nearly 12,000 international peace-keepers, troops from many countries. Some 1,500 are from the US. He says that the European Union must allay American fears and gain the trust of Bosnians if it wants to replace the NATO peacemakers in the federation. The S-For force of NATO is due to be replaced in the second half of 2004 by the EU-For in a time-frame that the US has criticised as too soon. The number of peacekeepers would be reduced to 6,000 to 8,000.
Indeed, Richard Holbrooke, the US negotiator of the Dayton Accord of 1995 that ended the 1992-95 war, and Bernard Kouchner, the French head of Medicins sans Frontieres, have doubted the wisdom of the withdrawal of all US troops from Bosnia, which the replacement involves. They note that, unlike Iraq, no US or coalition soldier has lost their lives in the S-For operation. The removal of US forces will contribute to a slackening of interest in Bosnia by the US Congress in their view and a reduction in aid. 
But Ashdown is adamantly in favour of the Europeanization of the peacekeeping operation. This chimes in with his strongly pro-EU stance, common to the Liberal Democrats in Britain. Europe's ambition to be heard in the world as on a par with the US is seriously impaired by its lack of a common defence. NATO is rightly seen as dominated by the US, whose defence budget is greater than the combined total of the next nine members, with easily the most advanced equipment. Europe's fledgling rapid reaction force has so far only taken part in small operations in Macedonia and the Congo. Bosnia is seen as the test case. If the EU cannot get its act together here, it will probably be curtains for the whole idea.
US reservations about the EU-For are linked to strong suspicions of the attempt by France and Germany to establish a European defence identity independent of NATO. But Washington seems to have warmed to the idea, particularly if it is under British command, because of its heavy engagements in Afghanistan and Iraq.
"Europe has to look serious about this," says Ashdown. "It cannot come in on the cheap. It has to come in as an effective force capable of securing the peace. It has to do it with bayonets fixed and flags flying." The EU would also need to improve its credibility with the local authorities, having stood helpless on the side-lines in the 1992-95 war, which was only ended by American intervention under President Clinton. 

Death of a great peacemaker
A key part of the success of the negotiations at Dayton was due to the concessions made at the time by Alija Izetbegovic, then the leader of Bosnian Muslims. He disliked the terms, but said that his people "needed peace more than justice."
In October came news of his death. He was formerly president of the Bosnia-Herzegovina Federation. He withdrew from political life in October, 2001.
Among many tributes from international figures, who knew him and worked with him to create the peace, was one by Clinton, who had just visited Potocari to join in the commemoration of the Srebrenica massacre of Bosnian Moslems in 1995, in which 8,000 people were killed by Bosnian Serb militia. The Bosnian Serb leader at the time, Radovan Karadzic, who ordered it, and General Ratko Mladic, who implemented it, are still at large. Until they are arrested and sent to The Hague, there will be a running sore in the body politic of the federation.
Ashdown said recently that the failure of S-For to find Karadzic was regrettable, but understandable. "This guy is probably up on the wildest mountain fastness in Europe where Tito hid 16,000 Partisans against six German divisions." He and Mladic are being protected by old security hands in the Serb Republic in Bosnia, as well as in Serbia itself.

Money for war crimes court
A revamp of the whole international effort to apprehend the war criminals is urgently needed. The international community is pledging $21.9 million to establish a war crimes court in Bosnia to lighten the load of the UN Yugoslav tribunal in The Hague, due to finish its work in 2010.
The US will give $9.4 million to support the new War Crimes Chamber, which will operate within Bosnia's state court system and prosecute low-level offenders form the war of 1992-95.About $38 million will be needed for the first five years. The court is due to open in 2004.
As the UN tribunal strives to handle dozens of cases in just three court rooms, the special court in Bosnia will meet a deadline for concluding all trials by 2008 and appeals by 2010. The tribunal's president, Theodor Meron, has warned that the deadline is optimistic, with 17 suspects still at large and more indictments expected.

Ashdown's role under criticism
Ashdown is familiarising himself with the grave problems of the nation under his rule and learning Serbo-Croat to add to his Chinese. He has his critics, however. 
In a scathing critique of seven years of Western efforts to turn Bosnia into a liberal-democracy a new report by the think tank on Balkan affairs, The European Stability Initiative (ESI), based in Berlin and Sarajevo, singles out Ashdown for rebuke for turning Bosnia into 'a European Raj,' deploying the methods of the British in India in the nineteenth century. They say that the sweeping powers vested in the Office of the High Representative are enfeebling the state, discouraging local political initiative and entrenching a culture of dependency. "You can't create a stable democracy by these authoritarian methods," says Gerald Knaus, director of the ESI and one of the report's authors. "There's a fundamental flaw in the system."
The criticism is more of his office, than of Ashdown personally, although he is accused of making greater use of his untrammelled powers as 'a benevolent despot' than his predecessors. On average he has been imposing 14 decrees per month since taking over in May, 2002, compared with four in 1999. His spokesman John Braithwaite, says that the correct number is 11.
The main contention is that there are no checks and balances on Ashdown's powers and no accountability, either nationally or internationally. The Office "can dismiss presidents, prime ministers, judges, and mayors without having to submit its decisions for review. It can veto candidates for ministerial positions without publicly to present any evidence. It can impose legislation and create new institutions without having to estimate the cost to the Bosnian taxpayer. The IHR is not accountable to any elected institution at all."
While these draconian powers might have been necessary in the immediate aftermath of war, they are now excessive and stultifying of local democracy, the report claims. Greater powers need to be exercised by elected Bosnian politicians.
Ashdown's officials concede that his sweeping powers "stunt the political development of the country," but opinion polling undertaken by his office has shown that there is broad support for his powers to force the pace of reform. 
One particularly controversial use of them has been to accelerate judicial reform. There was a large-scale purge of judges and prosecutors by his predecessors last year. Ashdown is trying to create a depoliticised, impartial and competent judicial system. Mr Braithwaite said that Bosnia's own politicians are too venal and corrupt to be entrusted with the job themselves. The controversy is likely to go on. At least nobody is denying that there is a forceful ruler in Sarajevo, intervening in a hands-on manner in even routine economic and political decisions. Afghanistan could do with that and perhaps the Central Asian state would be a better arena for the British martinet's talents. 

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Bosnian Serb government adopts strategy for settlement of domestic debt

The [Bosnian] Serb Republic government on 28th November adopted a framework strategic plan for the settlement of domestic debt, reiterating its willingness to continue with the implementation of the stand-by arrangement with the IMF, SRNA News Agency has reported.
The government's public relations bureau said that the adoption of the document indicated that for the first time something was being done about the problem of domestic debt which had existed for several decades.
"The frequency and manner of payments and the source of funding for the overall domestic debt will be regulated by special laws which will be adopted by 30 June 2004. The strategic plan envisages that payments should begin some time during 2004," the statement says. 
The domestic debt includes unsettled budgetary obligations of the Serb Republic by 31 December 2002, obligations stemming from the old foreign currency savings, obligations stemming from the material and non-material damage caused between 20 May 1992 and 19 June 1996 and executive judicial obligations, as well as other obligations stemming from the budget.
The statement adds that the government will meet its obligations in cash for unpaid disability benefits, amounting to 15m convertible marks, pensions to the amount of 60m marks and the payment to foreign currency savings account holders of up to 60m marks. The rest will be paid after the extent of the domestic debt is established fully.
The debt will be settled from several financial sources, including the funds from the succession to the former Yugoslavia and privatisation, as well as the regular budgetary revenue.

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Bosnia possibly to use port of Bar in Montenegro instead of Ploce in Croatia

The Bosnia-Herzegovina Presidency adopted a platform for Bosnia-Herzegovina's participation in the session of the inter-state council for cooperation with the Republic of Croatia in Sarajevo on 5th December, the Federation News Agency reported.
Sulejman Tihic, a member of the Presidency, said that Bosnia-Herzegovina would not raise the issue of the status of the port of Ploce at the session officially. Since Croatia is still reorganizing itself after the elections, the Bosnian side believes the time is not right to raise the issue, Tihic said. 
He confirmed that Bosnia-Herzegovina was thinking of using the port of Bar in Montenegro, and added that this would be a logical move since the negotiations on Ploce were taking too long.

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Shortlist for Vc motorway constructors ready in few months

The Bosnia-Herzegovina Council of Ministers, after 23rd November, is definitely no longer under the obligation to negotiate with Bosmal, but this company is still the most serious candidate for receiving the contract to build the motorway through Bosnia-Herzegovina on the Vc corridor, Bosnia-Herzegovina Transport and Communication Minister, Branko Dokic, said in Sarajevo on 27th November, the Federation News Agency has reported.
Minister Dokic told journalists that Bosmal did not fulfil the conditions it had forwarded to the Council of Ministers and which were accepted.
According to Dokic, this does not mean that Bosmal "is out of the game," but based on the activities concerning the project to date, it is still the first on the list of potential contractors.
Dokic said that the deadline for the advertised competition for submitting the project runs out on 24th November, and added that he expected to have a shortlist of companies interested in the project in the next few months.
It is certain that the project for building the motorway will be advertised by calling a public tender. The Bosnia-Herzegovina Council of Ministers will find a legal concept for calling the public tender, because without project documents and an economic feasibility study, there is no basis for finding a contractor," said Dokic.

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