Economical overview
Bosnia has had a hard time recovering after
the armed conflict of the 1990s when GDP per capita fell
to one fifth of what it was before the war. The
transition to a market economy is also slowed by the
deep political divide. As a result, lenders such as the
EU and the IMF have on several occasions withdrawn
promised funding.
Before the war there was an industrial base built on
mining, metal industry and forestry. But Bosnia was a
poor part of Yugoslavia, and the war broke down the
already fragile economy, unemployment spread and the
country became dependent on foreign aid. Many industries
were destroyed or forced to close, either because of
direct war actions or as a result of disruptions in
transport and electricity and fuel supply, among others.
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Countryaah.com:
Major imports by Bosnia and Herzegovina, covering a full list of top products imported by the country and trade value for each product category.
After the end of the war, the outside world pumped in
billions of dollars for reconstruction and growth was
double-digit for a few years, albeit from a low level.
As aid flows began to decline, growth fell sharply.
Between 2000 and 2008, the economy grew by an average of
5–6 percent per year. Thereafter, growth fell due to the
global financial crisis and was negative for a couple of
years. A large part of the foreign investment that
disappeared, and neither they nor growth have recovered
to the same levels as before the crisis.
GDP per capita in purchasing power standards
represents just under one third of the EU average.
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Abbreviationfinder.org: Check this abbreviation website to find three letter ISO codes for all countries in the world, including BIH which represents the country of Bosnia and Herzegovina.
Floods in 2014 (see Modern History) meant a
particular setback for the economy. The costs of
reconstruction are estimated to have corresponded to
around 10 percent of GDP and diluted the budget
deficit.
The difficulties in getting the economy to recover
are greater than many predicted after the end of the
war. With good access to raw materials and low
production costs, Bosnia seems to have good conditions
for attracting foreign investors. But political
instability, corruption, and hard-to-find bureaucracy
and poor coordination between various public
administrations seem daunting.
Bosnia suffers from continued high unemployment, and
a large part of the population lives below the poverty
line. Many support themselves in the black sector, ie
the informal economy with barter and exchanges that are
not registered by the authorities. For many Bosnians,
money that relatives abroad send home is an important
income. Money shipments from abroad declined for a
number of years, but in 2010–2018 stood at just over a
tenth of GDP, a high figure in Europe.
A law on the sale of state-owned companies was
adopted in 1998. Many small and medium-sized companies
were privatized within a few years, but with the sale of
large companies, things have become slower. Concerns
that jobs will disappear and rivalry between the various
groups of people have helped to slow down sales. There
is also criticism that sales have enriched individuals
and have not benefited the general public.
In 2012, the IMF granted a loan of approximately EUR
400 million over two years to alleviate the difficulties
caused by the financial crisis. On the other hand,
Bosnia undertook, among other things, to lose the
bureaucracy, implement changes in grant and pension
systems and increase the pace of privatization of
state-owned enterprises. The IMF loan was considered
particularly important as it would be followed by
support from the EU and the World Bank. But the payments
were frozen several times because of politicians'
inability or unwillingness to implement promised
reforms. The agreement expired in 2015 without the
entire loan being paid off, leaving large gaps in the
budgets for both entities. They had to turn to
commercial lenders, which drew criticism partly because
it was unclear who these were.
The IMF granted a new three-year support program of
EUR 550 million in 2016. A payment was made before the
loan was frozen in early 2017. Once again, the Bosnian
leaders had failed to live up to promises of, among
other things, increased fuel taxes, new banking laws and
the restructuring of telecom companies for future
privatization.
In connection with the corona crisis, in April 2020,
Bosnia was promised a temporary IMF loan.
FACTS - FINANCE
GDP per person
US $ 5,951 (2018)
Total GDP
US $ 19,782 million (2018)
GDP growth
3.1 percent (2018)
Agriculture's share of GDP
6.0 percent (2018)
Manufacturing industry's share of GDP
12.8 percent (2018)
The service sector's share of GDP
55.6 percent (2018)
Inflation
1.1 percent (2019)
Government debt's share of GDP
34.3 percent (2018)
External debt
US $ 14 495 million (2017)
Currency
convertible marks
Merchandise exports
US $ 6,083 million (2018)
Imports
US $ 10,624 million (2018)
Current account
- US $ 829 million (2018)
Commodity trade's share of GDP
99 percent (2018)
Main export goods
wood, paper, steel, energy
Largest trading partner
Croatia, Serbia and Montenegro, Germany, Austria
2009
December
The Constitution discriminates, according to the European Court of Justice
The European Court of Human Rights states that the Bosnian constitution
discriminates against ethnic minority groups, since only Bosniaks, Serbs and
Croats have the right to become president or members of the upper house, the
people's house. The so-called Sejdić-Finci case has been raised by two Bosnian
citizens, one of whom is Roma and a Jew. After the turn of the year, Parliament
voted for the constitution to be amended.
October
Biljana Plavšić is released from prison
Biljana Plavšić, president of Republika Srpska 1996-1998, is released from
prison in Sweden where she served a war crime. A government airplane is sent
from Republika Srpska to pick her up. In Bosnia, many war victims are upset.
The trial of Karadžić begins
Bosnian Serbs leader during the civil war Radovan Karadžić refuses to resign
when the trial against him officially begins in The Hague, citing that he has
not been given enough time to prepare. He has previously pleaded not guilty to
the 11 charges against him, two of which involved genocide. Karadžić was
arrested in Serbia in 2008 and handed over to the UN War Criminal Tribunal in
The Hague.
June
The High Representative stops law
The High Representative Inzko uses his special powers and refuses legislation
passed by the Parliament of the Republic of Srspska in May, which meant, among
other things, that control of police and judiciary would be transferred from the
national level to the two entities. Inzko points out that the law contravenes
the Dayton Agreement.
New Head of Government of the Federation
Mustafa Mujezinović, of the Bosnian party SDA, is appointed new Prime
Minister of the Federation. Representative Nedžad Branković resigned in May
following allegations of misappropriated public funds.
May
The US vice president condemns nationalist rhetoric
US Vice President Joe Biden visits Bosnia. He strongly condemns the
nationalist rhetoric that permeates politics in the country.
March
Brčko's status is determined
Parliament approves a constitutional amendment that upholds Brčko's status as
a neutral and autonomous area. The international community monitoring and
management of Brčko will cease from 1 September.
New High Representative is appointed
Austrian Valentin Inzko is appointed new High Representative and new EU
envoy, following Miroslav Lajčák who resigned in January to become Foreign
Minister of Slovakia.
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