Bosnia and Herzegovina

Bosna i Hercegovina
Босна и Херцеговина
Bosnia and Herzegovina

Federation

Anthem
Državna himna Bosne i Hercegovine

←

Federation:
Dayton Agreement (1995)

→

Capital

Sarajevo

Government

Republic

High Representative

- From 2009

Valentin Inzko

Chairman of the Presidency

- From 2010

Nebojša Radmanović

Prime Minister

- From 2007

Nikola Spiric

Legislature

Parliamentary Assembly

- Upper house

House of Peoples

- Lower house

House of Representatives

History

- May 31, 1994

Washington Agreement

- December 14, 1995

Established by the Dayton Agreement

Area

51,209 km²

Population

- 2009

3,842,566

Density

75/km²

GDP

2009 (PPP)

- Total

US$ 31.1 billion

- Per capita

US$ 8,095

Currency

Convertible Mark

Bosnia and Herzegovina

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Bosnia and Herzegovina is a federal republic in the Balkans. It was established through the Dayton Agrement in December 1995, which created a federal state consisting of two political entities. The two political entities of Bosnia and Herzegovina are the Bosniak-Croat Federation and Republika Srpska. The Bosniak-Croat Federation, which formally is known as the Federation of Bosnia and Herzegovina, was established through the Washington Agreement in May 1994.

Background

Bosnia and Herzegovina's declaration of sovereignty in October 1991 was followed by a declaration of independence from the former Yugoslavia on 3 March 1992 after a referendum boycotted by ethnic Serbs. The Bosnian Serbs - supported by neighboring Serbia and Montenegro - responded with armed resistance aimed at partitioning the republic along ethnic lines and joining Serb-held areas to form a "Greater Serbia." In March 1994, Bosniaks and Croats reduced the number of warring factions from three to two by signing an agreement creating a joint Bosniak/Croat Federation of Bosnia and Herzegovina. On 21 November 1995, in Dayton, Ohio, the warring parties initialed a peace agreement that brought to a halt three years of interethnic civil strife (the final agreement was signed in Paris on 14 December 1995). The Dayton Peace Accords retained Bosnia and Herzegovina's international boundaries and created a multi-ethnic and democratic government charged with conducting foreign, diplomatic, and fiscal policy. Also recognized was a second tier of government composed of two entities roughly equal in size: the Bosniak/Bosnian Croat Federation of Bosnia and Herzegovina and the Bosnian Serb-led Republika Srpska (RS). The Federation and RS governments were charged with overseeing most government functions. The Dayton Accords also established the Office of the High Representative (OHR) to oversee the implementation of the civilian aspects of the agreement. The Peace Implementation Council (PIC) at its conference in Bonn in 1997 also gave the High Representative the authority to impose legislation and remove officials, the so-called "Bonn Powers." In 1995-96, a NATO-led international peacekeeping force (IFOR) of 60,000 troops served in Bosnia to implement and monitor the military aspects of the agreement. IFOR was succeeded by a smaller, NATO-led Stabilization Force (SFOR) whose mission was to deter renewed hostilities. European Union peacekeeping troops (EUFOR) replaced SFOR in December 2004; their mission is to maintain peace and stability throughout the country. EUFOR's mission changed from peacekeeping to civil policing in October 2007, with its presence reduced from nearly 7,000 to less than 2,500 troops. Troop strength at the end of 2010 stood at roughly 1,500. In January 2010, Bosnia and Herzegovina assumed a nonpermanent seat on the UN Security Council for the 2010-11 term.^[1]

Economy

The interethnic warfare in Bosnia and Herzegovina caused production to plummet by 80% from 1992 to 1995 and unemployment to soar. With an uneasy peace in place, output recovered in 1996-99 at high percentage rates from a low base; but output growth slowed in 2000-02. Part of the lag in output was made up in 2003-08 when GDP growth exceeded 5% per year. However, the country experienced negative GDP growth of almost 3% in 2009 due in large part to a reduction in exports caused by the global economic crisis. One of Bosnia's main economic challenges in 2010 has been to reduce spending on public sector wages and social benefits to meet the IMF's criteria for obtaining funding for budget shortfalls. Banking reform accelerated in 2001 as all the Communist-era payments bureaus were shut down; foreign banks, primarily from Austria and Italy, now control most of the banking sector. The konvertibilna marka (convertible mark or BAM)- the national currency introduced in 1998 - is pegged to the euro, and confidence in the currency and the banking sector has increased. Bosnia's private sector is growing and foreign investment is slowly increasing, but government spending, at roughly 50% of GDP, remains high because of redundant government offices at the state, entity and municipal level. Privatization of state enterprises, however, has been slow, particularly in the Federation where political division between ethnically-based political parties makes agreement on economic policy more difficult. A sizeable current account deficit and high unemployment rate remain the two most serious macroeconomic problems. 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. National-level statistics have also improved over time but a large share of economic activity remains unofficial and unrecorded. Bosnia and Herzegovina became a full member of the Central European Free Trade Agreement in September 2007.^[2]