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BOSNIA AND
HERZEGOVINA

 
  
  

 

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



Update No: 169 - (26/02/12)

On February 10, a major breakthrough came for Bosnia and Herzegovina in the shape of a newly–created central government, finally formed after more than 16 months of political gridlock between Serb, Croat and Muslim leaders. The state, divided into two autonomous, ethnically based regions - the Federation dominated by Bosniaks and Croats, and a Serbian entity, Republika Srpska - has lost innumerable political and economic advantages to the stalemate. A giant leap forward or a case of too little too late?

As in the previous government, Serb parties will control the main economic positions, with former Prime Minister Nikola Spiric as Finance Minister, whilst the defence and security positions will be taken up by Bosniak parties. The new Prime Minister of Bosnia is Vjekoslav Bevanda, a Bosnian Croat economist and former regional finance minister. Zlatko Lagumdzija of the Social Democratic Party (SDP), a previous candidate for the Prime Minister's post, will serve as Foreign Minister. Bevanda’s economic acumen will be of particular help with the first challenging objective of the new government – the creation of a budget and, following that, the addressing of Bosnia's long standing economic problems. The budget is a matter of urgency: state officials did not receive their salaries in the month of January as a result of this and the doors of national cultural institutions are closing as their employees face mountains of wage arrears. Bevanda has confirmed that he hopes that a budget will be passed by the end of March. Sixteen months of political stagnation meant that the opportunity to access valuable EU funds was missed and sixteen years on from the war that devastated the region, foreign investors are still somewhat wary. This is no surprise, given that according to the 2012 Index of Economic Freedom, drawn up by the Wall Street Journal and U.S. think tank Heritage Foundation, Bosnia is 'mostly unfree'. The survey found corruption to be prevalent and rule of law weak. Whilst there are signs of progress on this front, such as a summit on February 3, between the presidents of Bosnia-Herzegovina, Croatia, and Serbia to discuss ways of tackling the organized crime (which is widely considered to be the scourge of the Balkans as a whole), there is evidence of numerous practical problems in the state's economy. Unemployment reached a four-year high at the start of this year at 43% and a significant divide between rural and urban standards of living exists, with some rural communities enduring abject poverty.

There are also deeper problems inherent in the state's political settlement which sees certain issues managed on a federal level, others on an entity-based level, prompting endless bureaucratic hurdles and interethnic debates. Tensions have flared within the Bosnian Federation between Bosniaks and Croats following proposals by the Social Democratic Party to centralise the Bosnian Federation, via a proposed law that would transfer police authority from the cantonal to the entity-level. This has imperilled relations with the main Croat party, the Croatian Democratic Union (HDZ). On February 16, members of a Bosniak war victims association staged a protest in front of the state parliament in Sarajevo against calls by Serb MPs to abolish the state court and state prosecutor’s office. The war victims believed that if such a measure were to be passed, justice would not be observed as courts in Republika Srpska would not be able to act impartially. Whilst the motion would not be passed due to strong opposition from the MPs from the Federation of Bosnia Herzegovina, the issue nonetheless reflects the rapidity with which ethnic tensions can flare.

All this is a reminder of the fact that Bosnia’s future harmony depends on the cooperation between its different ethnic constituents, but also of the war that ravaged the region sixteen year ago, the shadow of which remains almost inescapable. War crimes trials continue to bring attention to the matter. At the start of February Bosnia's war crimes court announced former Bosnian Serb police officer, Radomir Vukovic, would receive a 31-year prison sentence after being convicted of acts of genocide. It was found that the officer had participated in the execution of over 1,000 men in the infamous Srebrenica massacre of July 1995. A revisitation of the war has also come in the unlikely form of Hollywood film star Angelina Jolie, whose directorial debut, "In the Land of Milk and Honey," premiered in Sarajevo this month. The film is apparently an unrepentantly harrowing account of the love affair between a Muslim artist and a Serbian officer during the horrors of the conflict of 1992-1995, and exposes in particular the systematic, widespread use of rape during the conflict. Whilst Jolie and the film's supporters argue that it is an opportunity to shine a light on injustices and in doing do, help the country comes to terms with its traumatized past, it has also understandably stoked tensions. While the Muslim daily Dnevni Avaz hails Jolie as "the Angel of Bosnia" describing her film as "a historical document", comparable in importance to the Dayton agreement, the film has provoked deep anger amongst some Serbs who view it as a demonization of their part in the war. It will not be shown in Republika Srpska.

Coming to terms with the past is nonetheless part of Bosnia’s future and in particular its attempt to resuscitate an EU bid, which remains a key part of the Balkan state’s long-term strategy. Polls show that 70-80% of Bosnians want to join the union, which, despite its problems, remains an attractive source of financial sustenance. Upon its formation, Bosnia's new central government immediately laid out ambitious plans to meet all conditions set by the European Union over the course of March and apply for membership of the bloc by the end of June. The EU High Representative for Foreign Affairs Catherine Ashton as well as EU Commissioner for Enlargement Stefan Fuele congratulated Bosnia on the creation of its new government and encouraged it in a statement “to concentrate on the pressing European integration agenda.” The process had been severely delayed by the gridlock of the last year. Nonetheless there seems to be some momentum at present. The first concrete step towards fulfilling the accession criteria, apart from the urgent issue of the budget, has come with an agreement to hold the country's first census since 1991, an understandably contentious issue in a nation where 50% of people were killed or displaced during the aforementioned ethnic wars. By March 12, Bosnia's state parliament must agree changes to the constitution which would allow members of ethnic minorities, non-Serbs, Croats and Bosniak Muslims, to run for top government posts.

Despite this period of momentum and high hopes, much remains to be done if Bosnia is going to recover from the political petrification which it has experienced over the past year, due to the sparring of its political elite. The government has had much to deal with over this past month. Aside from the economical and political matters, the climactic calamity that was the cold snap affecting all of Europe, forced the government to declare a state of emergency in snow-bound Sarajevo. A thaw is mercifully underway. We can but hope that with it comes the warming of political relations in the conflicted state.

 

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