Economic History
The economy was slowed, because of destruction in the War. What was left of the Bosnian Industry after the war reflects the rigidity of the neo-liberal market economy, especially because of the very high unemployment and poverty rates. The economy after the war was weak due to the large percentage of import and low percentage of export. During the Bosnian War a lot of the economy and infrastructure was damaged or completely destroyed, causing the unemployment rates to skyrocket. Bosnia has been facing a dual challenge: rebuilding the infrastructure and finishing the transition from self-governed socialism to liberal market capitalism. The country receives a substantial amount of reconstruction assistance and humanitarian aid from the international community. Support for Eastern European Democracy assistance accounts for 20-25% of economic growth in Bosnia. Movement has been slow, but considerable progress has been made in economic reform since peace was re-established in the republic.
Current Economy
Bosnia has a transitional economy with limited market reforms. The economy relies heavily on the export of metals as well as on remittances and foreign aid. A highly decentralized government hampers economic policy coordination and reform, while excessive bureaucracy and a segmented market discourage foreign investment. With an uneasy peace in place, output recovered in 1996-99 but slowed in 2000-02 and picked up again during 2003-08, when GDP growth exceeded 5% per year. However, the country experienced a decline in GDP of nearly 3% in 2009 reflecting local effects of the global economic crisis. GDP has stagnated since then. Government spending, at roughly 50% of GDP, remains high because of redundant government offices at the state, entity and municipal level. High unemployment remains the most serious macroeconomic problem. Successful implementation of a value-added tax in 2006 provided a predictable source of revenue for the government and helped rein in gray-market activity. Bosnia and Herzegovina's top economic priorities are: acceleration of integration into the EU; strengthening the fiscal system; public administration reform; World Trade Organization (WTO) membership; and securing economic growth by fostering a dynamic, competitive private sector.
Comparison
In Bosnia, the labor force is about 1.49 million people and the unemployment rate is 44.1% of the population. Compared to three other countries in this region (Spain, Germany, and France) Bosnia is a much small country but it has also been hit a lot harder by war. Spain, Germany, and France all have very low unemployment rates, Germany being the lowest (5.3%) and they also have a very high labor force. Even though the countries have a larger population, it is very obvious that Bosnia and Herzegovina are still recovering from the war, years later.
Statistics
Crude oil:
Production: 0 bbl/day
Exports: 0 bbl/day
Imports: 22,140 bbl/day
Petroleum:
Consumption: 27,540 bbl/day
Production: 22,430 bbl/day
Exports: 10,460 bbl/day
Imports: 16,330 bbl/day
Production: 0 bbl/day
Exports: 0 bbl/day
Imports: 22,140 bbl/day
Petroleum:
Consumption: 27,540 bbl/day
Production: 22,430 bbl/day
Exports: 10,460 bbl/day
Imports: 16,330 bbl/day
Analysis
Bosnia and Herzegovina doesn’t produce or export any crude oil, but crude oil is imported. Oil is creating no income or revenue for this country, but importing oil to the country is costing money. If this country were to produce or import oil, not only would they be saving money but they would also make some sort of profit. But, petroleum is produced in Bosnia and Herzegovina. Less petroleum is produced than consumed and some petroleum is even imported and exported. The lack of crude oil and petroleum production and export could potentially cause a lot of economical and political problems in this country. If the country was to produce more of these vital resources, there could be many more jobs and other benefits to the citizens.
This raises these two questions:
This raises these two questions:
- How much effect does the lack of crude oil production actually have on the country’s economy?
- What factors are keeping the country from producing and exporting crude oil and petroleum?
Globalization
The area of globalization that affects Bosnia and Herzegovina is human rights. As the Soviet Union collapsed in the 1989-1991 period, countries that were under its control for generations struggled to reclaim their independent identities. The newly independent countries of Serbia and Croatia fought for territory and influence in Bosnia and Herzegovina, initiating the Bosnian War. In early 1992, the United Nations established the UN Protection Force to provide security for the flows of humanitarian aid that were flowing into Bosnia from the international community. The crisis in Bosnia provides an example of a case where the international community attempted to stop wartime violations of human rights in a manner somewhere between strict peacekeeping and full-blown military intervention. UN efforts in Bosnia were not entirely effective in meeting this objective, partially because they were too late in recognizing the true nature of what was happening and partially because sufficient resources were not devoted to the task. Bosnia and Herzegovina have experienced many violations of human rights including violence and even genocide. Many other countries have aided Bosnia and Herzegovina in positive ways, by helping rebuild the economy after the war, but other countries have negatively impacted Bosnia, like Serbia and Croatia did to start the Bosnian War.
Current Event Summary
Bosnians are protesting against the political paralysis and economic stagnation that have taken over one of Europe's poorest and most divided countries. Unemployed youth, war veterans and unhappy workers, among others, set fire to government buildings in Sarajevo, Bosnia and Herzegovina’s capital (Bilefsky, 2014). Hundreds have been injured during these protests, including dozens of police officers. The protests started in Tuzla, a former industrial center, when more than 10,000 factory workers gathered in front of a regional government building. The political and economic deterioration has its roots in the aftermath of the war in Bosnia, which ended in 1995 after more than 100,000 people were killed. Over the past several years, the poor and ethnically divided country has teetered from one crisis to the next (Bilefsky, 2014). The political instability has undermined the country’s prospects of joining the European Union, and fanned economic hardship, including unemployment of more than 27 percent.
References
Bilefsky, D. (2014, February 7). Protests over government and economy roil Bosnia. The New York Times. Retrieved from http://www.nytimes.com/2014/02/08/world/europe/protests-over-government-and-economy-roil-bosnia.html?ref=bosniaandherzegovina
Bosnia-Hercegovina profile. (2014, February 10). Retrieved from http://www.bbc.com/news/world-europe-17211415
CIA. (n.d.). Retrieved from https://www.cia.gov/library/publications/the-world-factbook/geos/bk.html
History.com Staff. (2009). Bosnian genocide. Retrieved from http://www.history.com/topics/bosnian-genocide
The Levin Institute. (2014). Globalization101.org. Retrieved from http://www.globalization101.org/
Bosnia-Hercegovina profile. (2014, February 10). Retrieved from http://www.bbc.com/news/world-europe-17211415
CIA. (n.d.). Retrieved from https://www.cia.gov/library/publications/the-world-factbook/geos/bk.html
History.com Staff. (2009). Bosnian genocide. Retrieved from http://www.history.com/topics/bosnian-genocide
The Levin Institute. (2014). Globalization101.org. Retrieved from http://www.globalization101.org/