Before the war, Bosnia was one of the poorest Yugoslav Republics (Direkcija za planiranje Bosne i Hercegovine, 2005:7). Its economy was industrially diversified. Half of the Bosnian output and employment was consisted of heavy industry, mining and metallurgy, energy distribution, as well as textiles, leather and The machinery (Andjelić, N., 2003). beginning of the war was followed with high inflation rate of nearly 120%, which reached the level of over 1,000% during the war. The GDP fell to around 20% of the pre-war level. The post-war unemployment was between 70% and 80%. Physical capital was largely destroyed. The production was almost stopped. The end of the war in Bosnia was followed by a reconstruction phase with strong external support inflows and steady economic growth rates. With big assistance flows Bosnia has been able to regain some of its economic losses, mainly through the private sector and the small enterprises which were established after the war. Today, Bosnian economy is relatively stable. On average, growth has five percent per year ever since the 2000, whereas inflation has remained under five percent for most of the decade (Centralna banka Bosne i Hercegovine, 2009:7). Prior to the global economic crisis, living standards in Bosnia were improving. The real GDP increased by 30% between 2000 and 2007. However, the global crisis reflected in Bosnia through decline in GDP by 2.91% in 2009 (BHAS, 2009). Since 2009, Bosnian economy has begun a slow recovery, which resulted in slight increase in GDP by 0.7% (BHAS, 2011). Currently, Bosnia has the most stable currency in the South Eastern Europe and the lowest inflation in the area (FIPA, 2012). Nonetheless, high unemployment rate and low living standards remain one of the main Bosnian problems. The private sector of Bosnia is growing continuously, however, direct and indirect foreign investments have decreased sharply since 2007. Privatization of formerly state owned companies has been lengthy, especially in the Federation of Bosnia and Herzegovina where political separation among religious political parties makes agreement on economic strategy
Before the war, Bosnia was one of the poorest Yugoslav Republics (Direkcija za planiranje Bosne i Hercegovine, 2005:7). Its economy was industrially diversified. Half of the Bosnian output and employment was consisted of heavy industry, mining and metallurgy, energy distribution, as well as textiles, leather and machinery (Andjelić, N., 2003). The beginning of the war was followed with high inflation rate of nearly 120%, which reached the level of over 1,000% during the war. The GDP fell to around 20% of the pre-war level. The post-war unemployment was between 70% and 80%. Physical capital was largely destroyed. The production was almost stopped. The end of the war in Bosnia was followed by a reconstruction phase with strong external support inflows and steady economic growth rates. With big assistance flows Bosnia has been able to regain some of its economic losses, mainly through the private sector and the small enterprises which were established after the war. Today, Bosnian economy is relatively stable. On average, growth has five percent per year ever since the 2000, whereas inflation has remained under five percent for most of the decade (Centralna banka Bosne i Hercegovine, 2009:7). Prior to the global economic crisis, living standards in Bosnia were improving. The real GDP increased by 30% between 2000 and 2007. However, the global crisis reflected in Bosnia through decline in GDP by 2.91% in 2009 (BHAS, 2009). Since 2009, Bosnian economy has begun a slow recovery, which resulted in slight increase in GDP by 0.7% (BHAS, 2011). Currently, Bosnia has the most stable currency in the South Eastern Europe and the lowest inflation in the area (FIPA, 2012). Nonetheless, high unemployment rate and low living standards remain one of the main Bosnian problems. The private sector of Bosnia is growing continuously, however, direct and indirect foreign investments have decreased sharply since 2007. Privatization of formerly state owned companies has been lengthy, especially in the Federation of Bosnia and Herzegovina where political separation among religious political parties makes agreement on economic strategy
PhD_Thesis_Danijela_Bogdanic.docx