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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: 130 - (26/03/08)

The independence of Kosovo, declared on February 17, is the gripping issue in the Balkans. Bosnia in particular is intimately affected. Is UDI now inevitable by the Serb Republic there?

The presidency of Bosnia-Herzogina has naturally refused to recognise Kosovo's independence. But events can get out of control. 

The pivotal moment
Bosnia is a very significant country. It is right in the heart of the Balkans. It is attempting to achieve the near-impossible, to form a confederation of disparate peoples, divided by race and religion. 

This is after all the fundamental problem with Iraq, and indeed Afghanistan. There are surely lessons to be learnt here.

The three diverse communities fall into a most interesting pattern. Two are Christian, one Catholic, the other Orthodox, the third Muslim. It is a curiosity that the Catholics and the Muslims live in comparative harmony in the Croat-Muslim Republic, while the Orthodox Serbs are an eternal irritant to the body politic as a whole and to themselves in their own Serb Republic, the other constituent republic of the federal state.

The Serbs opt out?
The outcome of the elections in Serbia in February and the fall of the Kostunica Government in early March are going to have a huge impact in the Bosnian Serb Republic. If the Serbs defy the world by refusing to accept independence for Kosovo, as even moderate President Boris Tadic does, then there is something to be said for the Bosnian Serb Republic defying the world by leaving Bosnia and joining up with Serbia. There will be plenty of Bosnian Serbs to say as much at any rate. 


Let us heed the wise words of Lord Ashdown, the previous International High Representative of Bosnia-Herzogovina, as he lay down his burden last year.

Leaving the work unfinished 
by Paddy Ashdown 
After the tearing down of Saddam Hussein's statue, arguably the most iconic image of the Iraq conflict is that of President George W. Bush's 'Mission Accomplished' speech on the deck of the aircraft carrier Abraham Lincoln. Hubris has often proved a close companion to international intervention - and never more so than when it comes to announcing success and losing interest too early.

One of the relatively few international interventions that we can point to as successful was the one in Bosnia. It also was the only one - so far - that has been both US-led and conducted in a country where Muslims form the largest proportion of the population.

I say 'so far' not because the field is crowded, but because Bosnia's success is not yet assured and can still be lost if the international community takes its eye off the ball. I fear that is what some of the Western capitals most engaged in Bosnia's reconstruction are in danger of doing.

Peace has returned to Bosnia. One million refugees have returned to their homes. Two armies, three intelligence services and two customs services have all been welded into single state institutions. A broadly effective state government, funded by a single VAT taxation system, has been established. All three ethnic groups are cohabiting peacefully, if not yet cooperating enthusiastically, and the economy is growing, albeit from a very low base.

Troop numbers in the country are dropping fast as the job of foreign peacekeepers is now largely done. But the work of the international politicians, charged with creating a sustainable state, is not finished.

Below the level of state institutions, the bureaucratic monster created by the Dayton Agreement to govern a country of 3.5 million people still exists. The US-led attempt to reform this dysfunctional muddle of interlocking bureaucracies failed last year, chiefly because the European Union was not prepared to make constitutional reform a condition for EU membership.

Now the predominantly Serb entity, the Republika Srpska, emboldened by the international community's concentration on Kosovo and apparent nervousness about offending Belgrade, is seeking to reverse some of the key state reforms of recent years.

NATO is perceived in both Belgrade and Banja Luka to have relaxed its conditions on the capture of General Ratko Mladic and the former Bosnian Serb leader Radovan Karadzic as a price for membership in its Partnership for Peace. These two architects of wartime atrocities now look to be further away from justice than ever.

Meanwhile, police reform - the final but essential stone in creating the edifice of state institutions - is in danger of descending into a series of Potemkin compromises that will hobble the country's capacity to ensure its own rule of law.

Bosnia is held on the road to reform by the magnetic pull of the European Union and NATO and the tough push of the power of sanctions vested in the High Representative by the Dayton Agreement. In the last year, the pull of the EU has visibly weakened as European capitals have become more sceptical about further enlargement. The push of threatened sanctions has all but vanished. In consequence, local politicians have felt free to return to old habits rather than grasp new opportunities. The forces of radical Islam are showing renewed interest in the country, having been comprehensively rebuffed by the determined moderation of Bosnian Muslims in the past.

At best, Bosnia's remarkable progress over the past 10 years has come to a shuddering halt; at worst, things are actually beginning to go backwards.

The danger here is not a return to conflict - that is now well nigh impossible with a massively downsized single-state army. The danger is that the opportunity to finish the job is being lost and that Bosnia will be left as a dysfunctional space that we do not have the will to reform, but cannot afford to ignore.

The problem of Kosovo will not be easy to solve. But in the long term, Bosnia is the fulcrum of peace in the Balkans. Compromising on standards in Bosnia in the hope of achieving a quiet life in Belgrade will cost us much more in Bosnian dysfunctionality and an unanchored peace in the future. The international community needs to be much clearer about the standards it seeks and - especially in the case of the European Union - more muscular in demanding the conditions needed to achieve it.

Success is within our reach. A new high representative will soon be appointed in Bosnia. It is vital that he or she arrives with a clear plan and the full backing of international capitals to carry it through and finish the job.

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