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World > Europe > Bosnia and Herzegovina > Economy (Notes)

Bosnia and Herzegovina - Economy (Notes)


ECONOMY
Next to Macedonia, Bosnia and Herzegovina was the poorest republic in the old Yugoslav Federation. For the most part, agriculture has been in private hands, but farms have been small and inefficient, and food has traditionally been a net import for the country. Industry still is greatly overstaffed, reflecting the legacy of the centrally-planned economy. Under Tito, military industries were pushed in the republic; Bosnia hosted a large share of Yugoslavia's defense plants. Three years of interethnic strife destroyed the economy and infrastructure in Bosnia, caused the death of about 200,000 people, and displaced half of the population.

Considerable progress has been made since peace was reestablished. Due to Bosnia and Herzegovina's strict currency board regime, which links the Konvertibilna Marka (BAM) to the Euro, inflation has remained low. However, growth has been uneven, with the Republika Srpska outpacing the Federation for the first time since Dayton. Bosnia and Herzegovina's most immediate task remains economic revitalization. In order to do this fully, the environment must be conducive to a private sector, market-led economy. Privatization has been slow, and unemployment remains high. The introduction of a value-added tax (VAT) in 2006 has increased the government's tax revenues and resulted in a budget surplus.

BiH's top economic priorities are: acceleration of EU integration by concluding a Stabilization and Association Agreement (SAA); strengthening the fiscal system; public administration reform; World Trade Organization (WTO) membership; and securing economic growth by fostering a dynamic, competitive private sector. To date, work on these priorities has been inconsistent. The country has received a substantial amount of foreign assistance but must prepare for declining assistance flows in the future.


Facts at a Glance: Geography - People - Government - Economy - Communications - Transportation - Military - Climate - Current Time - Ranking Positions
Notes and Commentary: People - Economy - Government and Political Conditions - Foreign Relations - Relations with U.S.



Facts at a Glance
Geography
People
Government
Economy
Communications
Transportation
Military
Climate
Current Time
Ranking Positions


Notes and Commentary
People
Economy
Government and Political Conditions
Foreign Relations
Relations with U.S.





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