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Email this citationCIAO DATE: 07/04
Bosnia's Precarious Economy: Still not Open for Business
August 7, 2001
Abstract
Bosnia's economic reality is still bleak. After more than five years and five billion dollars of Dayton implementation, the country seems only at the beginning of an economic transition that should have begun in 1996.
Since Dayton, many impressive gains have been registered. These include a stable currency and functioning central bank; abolition of socialist-era payments' bureaus and notable improvements in the banking sector; rudimentary labour reforms and preliminary steps towards pension reform; as well as anti-fraud measures aimed at demolishing illegal parallel structures in the Bosniak-Croat Federation. Yet however necessary or desirable these achievements have been, they have not moved Bosnia significantly closer to sustainable economic growth or created an environment attractive to more than a handful of foreign investors. Most importantly, the international community has taken insufficient action to cut the Gordian knot that binds Bosnia's politicians to its state-owned firms and allows them to benefit from the funds and jobs they generate. This is seen most clearly in the failure of the international community's efforts to ensure the rapid and effective privatisation of the commanding heights of the Bosnian economy and the creation of a single economic space.
