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Email this citationCIAO DATE: 07/04
Why Will No One Invest In Bosnia and Herzegovina?
April 21, 1999
Abstract
The donor countries hoped the governments of Bosnia and Herzegovina would use the promised $ 5.1 Billion post-war reconstruction aid to undertake the structural changes necessary to transition from communism to capitalism. As donor-aid diminished, private investment would replace it, stimulated by structural reforms. Unfortunately, this has not been the case. Indeed, interviews with Bosnian and foreign businessmen show a common reluctance to invest in BiH.
The current economic and political structures in all three ethnic sections of BiH maintain the failed communist-era policies that contributed to former Yugoslavia's economic downturn and eventual break-up. These policies discourage business activity and investment. The continued existence and implementation of these failed economic policies and structures means that donor aid, no matter how wisely targeted or spent, will prove ineffective in creating long-term, sustainable economic development.
