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BOSNIA AND
HERZEGOVINA


  
  

 

In-depth Business Intelligence

Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
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

REPUBLICAN REFERENCE

Area (sq.km)
51,129

Population
4,007,608

Capital
Sarajevo

Currency
Convertible Mark 

President 
Borislav Paravac



Update No: 100 - (25/08/05)

Karadzik at bay
The net may be closing on top war crimes fugitive Radovan Karadzic. A Bosnian Serb businessman, believed to be funding him, was arrested in Montenegro on 17th Augus on charges of fraud and embezzlement. 
Montenegrin police spokesman Branko Bulatovic said that Momcilo Mandic, a former Republika Srpska (RS) justice minister, was apprehended at his apartment in the resort city of Budva on a warrant issued by the Bosnia and Herzegovina (BiH) Prosecutor's Office. 
Mandic, believed to be one of the richest Bosnian Serb businessmen, is said to have amassed his wealth from running petrol stations. According to Reuters, there are also suspicions that between 1996 and 1997 he embezzled millions of Bosnian marka from the RS customs authority. 
Mandic also controlled Privredna Banka Srpsko Sarajevo, a small bank that was closed last November by High Representative Paddy Ashdown, due to financial irregularities. "Mandic and his associates in and outside politics did everything they could to strip the bank's assets and not pay its depositors, or its employees," Ashdown said at the time."There were also transactions that open up concerns that some funds may have been passed into war criminals' hands," he added. 
In September 2003, the US administration blocked all of Mandic's assets in the United States, also banning him from entering the country. His name is also on an EU blacklist. 
Mandic is believed to be one of Karadzic's key financiers. The former Bosnian Serb leader, indicted for genocide by the International Criminal Tribunal for the former Yugoslavia (ICTY), has been on the run since 1997. International pressure on RS and Serbia-Montenegro to arrest him and his military commander, Ratko Mladic, increased ahead of July's 10th anniversary of the 1995 Srebrenica massacre. 
NATO's commander in BiH, Brigadier General Stephen Schook, voiced confidence that the steps taken in recent weeks would yield results soon, amid signs that an increasing number of Bosnian Serbs now believe Karadzic should be delivered to the ICTY. "I am very optimistic that we hope we can conclude this chapter that is causing such delays in the progress of Bosnia and Herzegovina," Reuters quoted Schook as saying at a news conference in Brussels. 
BiH is seeking admission into NATO's Partnership for Peace (PfP) programme, a key first step towards eventual membership in the Alliance. NATO has twice put on hold an invitation for BiH to join the programme, citing lack of full co-operation with the ICTY. It has made it clear that the country will not be eligible for PfP admission as long as indictees sought by The Hague-based court remain at large. 

Police reform the key
There is nothing more important in any state than the rule of law. This is particularly so in the turbulent and corrupt conditions prevailing in the Balkans today.
Police reforms are one of the key conditions set by the EU for BiH to begin Stabilisation and Association Agreement talks. Urging senior officials in Bosnia and Herzegovina (BiH) to put the country's interests above those of their political parties, the Office of the High Representative (OHR) voiced hope Tuesday (16 August) that a meeting on police restructuring Wednesday will prove productive. 
"The OHR welcomes the important meeting of government institutions on police restructuring which will take place in Mrakovica," the office of the top international envoy in BiH, Paddy Ashdown, said in a statement on Tuesday. "It expects senior representatives, with negotiating authority, to attend these talks and to participate constructively in order to advance the process of negotiations on police reform." 
During the talks on the issue which began in late April the participating 11 main political parties in BiH reached a compromise on some of the core principles of the reform, particularly the establishment of a single police structure at the state level, free of political interference. The most controversial aspect of the reform defining the boundaries of policing zones was left to be dealt with during the second phase of the negotiations. 
However, the Serb Democratic Party (SDS) decided to retreat from the initial agreement, reached with the support of the party's own negotiators, saying the provisions allowing police forces to cross over the line separating the two entities, Republika Srpska (RS) and the Federation of BiH (FBiH), were unacceptable. 
A meeting to decide on the next steps in reaching a framework agreement on police restructuring ended in failure in July as the SDS and the Alliance of Independent Social Democrats failed to show up, thus blocking a deal. 
The meeting was hosted by the Republika Srpska (RS) government of Prime Minister Pero Bukejlovic. The prime ministers of BiH and FBiH, Adnan Terzic and Ahmet Hadzipasic, and other senior entity and state-level government officials have been invited to participate in the discussions. 
Police reform is a key condition BiH must meet to be able to begin negotiations on a Stabilisation and Association Agreement (SAA) with the EU. "BiH needs to reach an agreement on police restructuring by the beginning of September if it is to qualify for these key negotiations in time for the tenth anniversary of Dayton in November, and if it is to have any chance of catching up with its immediate neighbours, Croatia and Serbia-Montenegro," the OHR said. "The conditions for EU membership are non-negotiable, and until BiH's politicians are prepared to make reforms which meet these conditions, BiH's path to Europe will remain blocked." 
Citing the results of different opinion polls, Ashdown's office said that four out of five citizens of BiH want to join the EU and to see policing free of political interference. "They want their politicians to lead this country forward into modern Europe, not chain it to its past," the statement said.

NATO wants to merge Bosnian armies
A vital complement to a new police system should be a new military structure for the divided republic. After handing over Bosnian peacekeeping operations to the European Union in 2004, NATO is now hoping to claim credit for groundbreaking defence reforms in the Balkan country. 
The commander of NATO headquarters in Sarajevo, General Schook, told journalists in Brussels on August 18th that he believes the Serbian, Croatian, and Muslim communities of Bosnia will soon accept a NATO-engineered blueprint to fuse their forces into a single army. He said that if implemented, the reforms could represent a "fundamental shift" away from the division of the country into three parts cemented in the 1995 Dayton peace accord. Instead, Schook said, if the blueprint handed over to Bosnia's constituent communities in July works, Bosnia's army could soon for the first time be wholly owned by the state. "I'm extremely optimistic that we'll have significant reform in defence that catapults us from the dictates of Dayton into a single military force palatable to NATO, [under] one command -- one chain of command -- ethnic representation and a single budget," Schook said. 
The reforms should introduce what Schook described as a regimental system, borrowing heavily on the experience of Britain and Canada. The U.S. general said a division of the army into regiments -- while having no direct effect on the way it functions -- will allow the "entities" that make up Bosnia to preserve their military traditions and history. Regiments are fighting forces of about 3,000 soldiers. 
Schook said NATO advisers also kept a close eye on the alliance's own requirements while drawing up the new legislation. He said that while any membership decisions are a matter for the governments of NATO allies, the reforms, if properly implemented, will put Bosnia "on the path" toward NATO membership. 
The reforms will abolish conscription, and should result in the creation of a professional army numbering 9,000-10,000 men. They will also do away with the huge reserve force standing currently at some 40,000 men. In its place, a small professional reserve will be established whose size may not exceed more than half that of the new army. 
Schook said he hopes that the reform will "pull" in its wake other reforms geared toward strengthening Bosnian society and its governance.

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AUTOMOBILES

Car parts factory opens in Potocari 


A factory for auto parts opened on July 7th in the small city of Potocari for the Slovenian auto industry, Cimos, which already has another factory in the Bosnian city of Gradacac, Ansamed reported. 
The new factory, which was built in only two months, will employ some 150 people with annual revenue estimated at 15 million Euro. High Representative of the International community in Bosnia and the Muslim representative of the Bosnian tripartite presidency Sulejman Tihic attended the opening ceremony. 

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ENERGY

Bosnia wind energy can work 

Bosnian power utility, Elektroprivreda Herceg-Bosne, is studying the potential of the wind in Duvno and Livno, northwest of Mostar, to assess whether wind farms can be built there, Italian Foreign Trade Institute ICE said, Ansamed reported recently.
The data collected so far is more than encouraging. The Mostar University carried out studies on the feasibility of the construction of wind farms in the area of Podvelezje which would have a capacity of 210 megawatt. It has an enormous potential and Austrian investors have already asked the Mostar city authorities for the concession of the operation of the plants. The energy is expected to be exported to Austria.

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EXPORTS

Bosnia exports 870m Euro in H1 

In the first six months of 2005 Bosnia exported goods amounting to about 870m Euro and imported goods for 2.51bn Euro, Ansamed reported recently. 
According to ICE (Italian Trade Commission) in Sarajevo, the trade deficit amounted to 1.6bn Euro, 26 per cent of which was represented by the food sector. According to Jago Lasic, deputy president of the Chamber of Commerce of Bosnia-Herzegovina, it is necessary to introduce quotas for imports and to fix a quota for imports from foreign markets in order to protect the national production.

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FOREIGN COOPERATION

Iran to render technical services to Bosnia-Herzegovina 

Iranian Deputy Foreign Minister for European and American Affairs, Morteza Sarmadi, expressed Iran's readiness on July 13 to render technical and engineering services to Bosnia and Herzegovina and participate in infrastructural projects of the country particularly in constructing hydro power plants and dams, New Europe reported. 
Sarmadi, who is in Sarajevo as President Mohammad Khatami's special representative to participate in a ceremony commemorating the 10th anniversary of Srebrenica massacre, made the remark in a meeting with Bosnian Deputy Foreign Minister, Antun Rilo. The ambassador expressed sympathy with families of the victims and stressed the importance of administering justice by arresting and bringing to justice the culprits behind the event. Rilo, for his part, appreciated Iran's assistance to Bosnia in recent times. He said Bosnia will never forget Iran's humanitarian aid.

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FOREIGN LOANS

Bosnia sets credit line for SMEs buys 

The Italian government has set up an 18 million Euro credit line for the development of the private economy in Bosnia-Herzegovina, which is going through a difficult transition phase, AGI reported on July 28. 
The funds will be used to purchase new machinery, raw material and services from Italy. The project also entails the supply of technical assistance to the involved enterprises and banks. A group of well chosen private banks will receive low interest rate loans from the Bosnian government for the project, and will be responsible for paying back the loan.

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