Sustainable Development of Bosnia and Herzegovina. A Never Reached Goal?


Research Paper (postgraduate), 2018
14 Pages, Grade: B

Excerpt

Table of contents

Abstract

1 Introductory Considerations

2 The Lack of a Well-Structured Reconstruction Approach

3 The Lack of a Necessary Active Role of Domestic Authorities

4 Human Rights as Nobody's Responsability

5 Conclusion

6 Bibliography

Abstract

Bosnia and Herzegovina, a country which after 23 years of direct involvement of the international community in achieving its sustainable political and economic development, still exists as a kind of semi-international protectorate. In addition, Bosnia and Herzegovina's market has never been fully transformed into the western economy concept, where the lack of privatization of the state-owned companies is primarily emphasized. It remains doubtful whether the long-lasting intervention of the international community has delivered the necessary results for any kind of future sustainable development of Bosnia and Herzegovina.

1 Introductory Considerations

Ever since the war in Bosnia and Herzegovina (1992-1995) ended, and even before that, various development cooperation projects launched by numerous countries and by the international community as a whole have been implemented in Bosnia and Herzegovina, targeting countless fields of country's structure; from attempts to increase its administrative effectiveness, through initiatives for the much needed changes within the field of enhancement of political accountability and the country's infrastructure and finally, initiating moves to make the country's market more open and competitive. If we try to assess the impacts of all these development projects and initiatives and their expected long-term sustainability, it seems that most of them failed to make any sustainable effect. Unfortunately there are no accurate numbers showing the total amounts of funds invested in the reconstruction of Bosnia and Herzegovina, but in accordance to some sources, only the World Bank Mission to Bosnia and Herzegovina from 1996 to 2000 invested 2.7 billion Euro in the reconstruction of the country's basic infrastructure.[1] One of the facts that probably prevented Bosnia and Herzegovina from establishing the sustainable economy was the absence of foreign direct investments, a problem that lasts even today. Although the foreign trade investments have been made, they were mainly invested in the domestic and not the export production.[2] There are several causes for the low inflow of foreign trade investments in Bosna and Herzegovina e.g.: There are no enough attractive natural resources, the country is stuck in the unfinished privatisation of the state owned companies and, maybe, the most important factor is the political instability and overwhelming bureaucracy which simultaneously presents the main voting body for the currently ruling parties.[3] All these factors have forced the internationally community to inject the capital in order to affect the economic growth towards positive directions that ate the end made Bosnia and Herzegovina an aid driven country.[4] This statement leads us to a conclusion that all other development projects targeting the different pillars and spheres of the Bosnian society e.g. supporting democratic governance, strengthening government institutions, facilitating the political transition and transformation of the country and initiating a constitutional transformation or at least its simplification aiming at increasing the government effectiveness also failed. Another very important factor is the failure of the international community, given that from the beginning of their humanitarian and development intervention, there was no joint approach based on a mutually agreed agenda, prioritising the planned ways of actions. From the overall outcome of all the international assistance, it can be concluded that some international organisations e.g. OSCE or UNDP – the project delivery actors - have been running for the donor's funds, completely neglecting their primary goal which should be the delivery of the much needed assistance aimed at the country's future sustainable development. Through the time it seems that Bosnia and Herzegovina has become a spoiled child captured between interests of various stakeholders with no clear vision as its path towards progress is constantly stagnating. In the following chapters, through an analysis of the data provided by the various developing agencies’ and other donors' reports, an overall assessment of the impact of international aid projects and assistance as well as their long-term sustainability will be provided.

2 The Lack of a Well-Structured Reconstruction Approach

Before we approach the evaluation of the sustainability of numerous international development projects that have been implemented in Bosnia and Herzegovina since the end of the war, targeting the various reconstruction attempts, we need to present the state of the country's infrastructure at the end of the war. The outcome of the three-and-a-half-year war is that over 100 000 people lost their lives which at the same time presents the great lost in human capacities, important for any kind of economically sustainable development.[5] In addition, the same source estimates that 450 000 people fled abroad and have never returned. The total drop of population in Bosnia and Herzegovina after the end of the war amounted to approximately 1.1 million people.[6] The Foreign Trade Investment Chamber estimated that the war damage to personal and business assets ranges from 30 to 50 billion USD.[7] It is also calculated that in almost four years of war Bosnia and Herzegovina lost 40 billion USD in GDP based on calculation of the pre-war annual GDP which amounted to 10.3 billion.[8] Bearing in mind all the previously stated, Bosnia and Herzegovina has had a great challenge on its transition towards full recovery of its economy. It is also important to say that the international community through its various assistance projects supported by great international political pressure has played a leading role in the country's transformation process that has developed in two directions. Those directions that were supposed to be achieved were the development of a market economy and the political transition from socialism to capitalism. So far, perhaps the best development impact achieved through financial aid and loans given by the international community was the reconstruction of infrastructure (water supplies, electric power supplies, reconstruction of bridges and roads etc.).[9] Furthermore, it is a very interesting conclusion of some authors that there is almost no reform initiated and implemented by the country's authorities in Bosnia and Herzegovina.[10] That leads us to another conclusion - Bosnian authorities have just an executive role when it comes to the creation and implementation of the much needed reforms, not the creative one, simultaneously eliminating the local authorities’ responsibility for the success of the initiated reforms and their future sustainable development. In addition, another obstacle for the sustainable development of the Bosnia and Herzegovina's market economy was that Dayton Accord – the peace agreement created by the international community has no strong provisions regulating the future development of the Country's free market economy.[11] The leading transitional instruments, identical to those that were proposed to other transitional countries, were applied by the World Bank and International Monetary Fund to the reconstruction of Bosnia and Herzegovina. Those instruments, originated in an idea that the western model of free market and neoliberal economy should solve all the challenges of the Bosnia and Herzegovina's post war society, unfortunately demonstrated their inadequacy in the implementation phase.[12] All the problems derived from the war and all the shortcomings of the deeply rooted problems expressed in inefficiencies of the socialist market economy could have not been solved by the exclusive application of the western model of economy to the conditions of the Bosnia and Herzegovina's post-war society. Another obstacle for attracting the foreign investments is the unfinished privatisation of the state-owned enterprises. There is no hidden agenda among the governing political structure why the big part of these enterprises have not been privatized yet. Basically, the state-owned enterprises are in the ownership of the entity's government and they serve as the financial pump which maintains the social peace (same for the overwhelming administrative structure of the state), at the same time, have been used as the financial backing to the governing parties and their sustainable stay in power. It seems that the international community has been more focused on the strengthening of the sustainable development of the administrative and political mechanisms established by the Dayton Accord, rather than on incorporation of free market principles in the local development economy. When we speak about the international assistance that has been pumped into the country's desired development, we cannot disregard the devastating impact of corruption that has affected those funds, highly compromising the whole process of the implementation of the assistance. In 1999 the OHR (Office of the High Representative) investigated alleged cases of embezzlement of cash whose purpose was to help in the country's reconstruction.[13] In the post war period five big donor conferences were organised with the aim of providing the much-needed support to the devastated countries.[14] The main shortcoming of these conferences was that no mechanisms of oversight of the implementation of the donors’ funds were established. Even today it is not clear how much funds have been invested in the Bosnia and Herzegovina's recovery and where those funds are spent and how. The legislative state's bodies such as the Parliamentary Assembly of Bosnia and Herzegovina, the Parliament of the Federation of Bosnia and Herzegovina or the National Assembly of Republic of Srpska have never launched any investigating procedure to determine where and how the international assistance have been carried out. Still, after 23-year long process of reconstruction, Bosnia and Herzegovina is in a kind of a limbo. The political and economic structures are mutually depended and determined.[15] The best way to measure what the emergency and other international development project have achieved in last 23 years is to analyse the economic and demographic data for Bosnia and Herzegovina in 2017. The current population of Bosnia and Herzegovina is 3,797,799 and the average unemployment rate between 2007 and 2017 was 42.65 percent while in 1991, a year before the war started, the unemployment rate in Bosnia and Herzegovina amounted to 17.6 percent.[16] In addition, in accordance with some estimation Bosnia and Herzegovina has the highest youth unemployment rate in the world amounting to 57.5 percent.[17] All the presented data confirms that, beside the fact that in the post-war period there was a lack of uni-bi-multidirectional approach of the international community, the local authorities completely failed to provide any kind of response to the numerous challenges that have taken place since the end of the war until today.

[...]


[1] Zupčević and Čaušević (2009) presented the amount of the World Bank’s funds invested in Bosnia and Herzegovina’s basic infrastructure.

[2] The provided claim was confirmed in and supported by the publication titled Economics in Peace-making: Lessons from Bosnia and Herzegovina in 2009

(http://www.portlandtrust.org/sites/default/files/pubs/epm_bosnia_herzegovina.pdf).

[3] Ibid.

[4] Ibid.

[5] The total number of the people that lost their life as a direct consequence of the war have never been precisely calculated; The data showing the number of people lost their life during the war was presented by the ICMP (International Commission on Missing Persons).

https://www.icmp.int/where-we-work/europe/western-balkans/bosnia-and-herzegovina/.

[6] Ibid.

[7] Zupčević and Čaušević (2009) presented the amount of war damage during the war 1992-1996 to personal and business assets.

[8] Ibid.

[9] Tomaš (2013) expressed his opinion on the sphere where the international assistance made the greatest impact so far.

[10] Ibid.

[11] Ibid.

[12] Ibid.

[13] Divjak, B., Corruption in post-conflict reconstruction Bosnia and Herzegovina case stud – presented the number of cases of the alleged abuse of the international assistance https://ti-bih.org/wp-content/uploads/Documents/05-12-2007/Post-conflict_reconstruction_and_corruption_in_BiH.pdf.

[14] Ibid.

[15] Tzifakis(2006)presented concluding remarks on current state of the Bosnia and Herzegovina's society.

[16] The data showing the unemployment rate in 1991 and the average unemployment rate (https://www.theglobaleconomy.com/Bosnia-and-Herzegovina/Unemployment_rate/ https://tradingeconomics.com/bosnia-and-herzegovina/unemployment-rate).

[17] The data showing the youth unemployment rate in Bosnia and Herzegovina https://www.pri.org/stories/2014-10-09/why-bosnia-has-worlds-highest-youth-unemployment-rate.

Excerpt out of 14 pages

Details

Title
Sustainable Development of Bosnia and Herzegovina. A Never Reached Goal?
College
Leuphana Universität Lüneburg
Grade
B
Author
Year
2018
Pages
14
Catalog Number
V505436
ISBN (eBook)
9783346064967
Language
English
Tags
sustainable, development, bosnia, herzegovina, never, reached, goal
Quote paper
Peđa Đurasović (Author), 2018, Sustainable Development of Bosnia and Herzegovina. A Never Reached Goal?, Munich, GRIN Verlag, https://www.grin.com/document/505436

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