Bosnia and Herzegovina: a worrying political, social and economic situation


On 19th April last year, the European Economic and Social Committee (EESC) adopted a new strategy to re-launch the Western Balkans’ integration policy. On this occasion, Andrej Zorko, rapporteur for the committee’s opinion, reaffirmed that “EU membership for the Western Balkans remains one of the EU’s priorities.” While the admission of Montenegro into the EU seems fixed in the near future, Serbian membership remains somewhat less realistic, and undoubtedly linked to the question of Kosovo. It seems unlikely for the two states not to join at the same time. But what of Albania and, in particular, Bosnia and Herzegovina?

Sarajevo remains exhausted from a conflict which plunged it into political, social and economic stagnation that is continually deteriorating, despite the numerous consequent funds granted – 2.4 billion since 1995 by the US, the International Community, and the European Union. Often diverted, the large amounts of financial aid have not improved the lives of the majority of Bosnians who remain prisoners of a political system in which the elite strive to resist any change.

The poorest state in Europe after Kosovo

Sarajevo is a two hour flight from Paris, yet time seems to have stopped long ago in Bosnia and Herzegovina. Although the tiny Bosnian capital – 300,000 inhabitants – gives the impression of a western city with its shopping centres, boutiques, and luxury hotels, these are primarily aimed at the many tourists coming from the Gulf States. Moreover, tourism is virtually the only sector with steady growth, the number of overnight stays skyrocketing.

The scope of the challenges that await Bosnia and Herzegovina in the coming decades can be understood without even straying too far from the centre. On the winding, mountainous roads of the “Republika Srpska”, it is not uncommon to come across cows on the roads and rubbish along the riverbanks. Bosnia is still a rural country where agriculture makes up 7% of its GDP – compared to a European average of 3%. Agriculture is still largely extensive, with few machines and is a hotbed for employment.

The fact remains that the economic situation is close to becoming dire. Bosnia and Herzegovina is, after Kosovo, the poorest state in Europe, according to a study carried out by Global Finance in 2017. With an average annual income of $11,000, Bosnia and Herzegovina is closely followed by another Balkan state: Albania, with $11,800. Only Kosovo ranks significantly lower, with an average annual income of $3,500, according to the World Bank. The unemployment rate in Bosnia and Herzegovina is 25% of the active population and considerably higher among 18-35 year olds.

The EESC report noted that “corruption, the weight of organised crime, the general weakness of public institutions and rule of law, as well as discrimination regarding minority groups, make up some of the problems encountered by the Western Balkan states. Even if their economies continue to grow, the six countries will still remain among the poorest in Europe. It is estimated that they will need at least 40 years to reach the standard of living in the EU.”

Over 50% of Bosnians live outside Bosnia

Emigration is one of the major problems in the Balkans, especially in Bosnia and Herzegovina: more than one out of two Bosnians live abroad. Mass emigration is explained by the conflict that ravaged the country from 1992-95 and subsequently by the inability to find a viable political system, as the primary purpose of the Dayton Agreement was none other than to bring peace.

Ever since then, in Bosnia and Herzegovina, unemployment has become endemic, the political system rife with corruption, and industry, which was once the driving force of Yugoslavia, is in decline. “All the young people want to leave the country,” states a member of the French embassy in Sarajevo. “As always, those who leave the country are the most qualified, and they do not come back. Brain drain is a real problem here. Those who are able to develop the country, to change it, are no longer here. This benefits the politicians more so than anyone else, who are able to do as they please since the intellectuals, engineers, and other people with qualifications are no longer here to change up the scene. It’s truly a vicious cycle,” he says.

The result is a game of musical chairs: Bosnians emigrate to Croatia, Serbia and Germany, whereas Croats and Serbs emigrate to Slovenia and Germany. Ultimately, the Balkan states are unequivocally losing their people, and Germany is their main destination.

A unique, and largely dysfunctional, political system

The final text, initialled in Dayton and signed in Paris on 14th December 1995, is made up of three elements: a General Framework Agreement for Peace, eleven annexes detailing steps to bring about peace and stability and the reconstruction of the Bosnian and Herzegovinian State, and an agreement on the signature and when it comes into effect.

Effectively, Bosnia and Herzegovina has a weak central state and two entities, one of which is a Federation of ten cantons: the Federation of Bosnia and Herzegovina, and the other an agglomeration of eight individual regions: the Republika Srbska. This results in thirteen different constitutions and a tripartite presidency where Bosno-Serbian, Bosno-Croat and Bosniac presidents all take part in a rotating presidency that changes every 8 months. As for the government, whose power is limited to the domains of the country’s currency, external relations, citizenship, and refugees, it is equipped with two Prime Ministers, two assemblies, and two legislative institutions. The country has over 760 MPs, 180 ministers, and 1,200 prosecutors and judges among its mere 4 million inhabitants.

This is in addition to the High Representative (HR), who is in charge of “taking actions against civil servants or government officials who are absent at meetings without a valid reason, or who the High Representative considers to have violated their legal obligations which were made under the peace agreement or the provisions for its implementation,” noted in a Senate report.

The Peace Implementation Council (PIC) granted “Bonn Powers” to the High Representative, which were extended to implement the Dayton Agreement. There are two types of these powers. One is known as the “substitution power”, through which the HR can take over the roles of local authorities and impose laws and policies which override obstacles created by local politicians in regards to certain aspects of the Dayton Agreement. The other is known as the “international power”, through which the HR can dismiss, suspend, block, and fine public officials for effective implementation of the Dayton Agreement.

During his term in office as the High Representative, Paddy Ashton never hesitated to dismiss politicians from the Republika Srpska in order to pass laws that they were blocking.

The situation today is completely different. Although the current High Representative, Valtin Inzko, still holds the “Bonn Powers” he does not use them. This is for at least two reasons: with the “Bonn Powers” granting him “dictatorial” power, how can one expect a transition to the rule of law, an accession criterion required by the EU, when Inzko himself would not respect it? Furthermore, Milorad Dodik, the president of the Republika Srbska, would know how to use a decision that goes against his interests to his own advantage.

In these conditions, the political, social, and economic situation in Bosnia is not only stagnating, but is also worryingly deteriorating. For the moment, Bosnians are keeping good faith against bad fortune. The trauma left over from the war is always stronger than the politico-socio-economic crisis. But for how much longer will this be the case?

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