BOSNIA HERZINGOVINIA

General

On 21 November 1995, In Dayton, Ohio, the former Yugoslavia’s three warring parties signed a peace agreement that brought to a halt over three years of interethnic civil strife in Bosnia and Herzegovina (the final agreement was signed in Paris on 14 December 1995). The Dayton Agreement, signed then by Bosnian President Izetbegovic, Croatian President Tudjman and Serbian President Milosevic, divides Bosnia and Herzegovina roughly equally between the Muslim/Croat Federation and the Republika Srpska while maintaining Bosnia’s currently recognised borders. In 1995-1996, a NATO-led international peacekeeping force (IFOR) of 60,000 troops served smaller, NATO-led stabilisation Force (SFOR) whose mission is to deter renewed hostilities. SFOR remains in place. A High Representative appointed by the UN Security Council is responsible for civilian implementation of the accord, including monitoring implementation, facilitating any difficulties arising in connection with civilian implementation, and coordinating activities of the civilian organisations and agencies in Bosnia. The Bosnian conflict began in the spring of 1992 when the government of Bosnia and Herzegovina held a referendum on independence and the Bosnian Serbs - supported by neighbouring Serbia - 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, Bosnia’s Muslims and Croats reduced the number of warring factions from three to two by signing an agreement in Washington creating their joint Muslim/Croat Federation of Bosnia and Herzegovina. The Federation, formed by the Muslims and Croats in March 1994, is one of the two entities (the other being the Bosnian Serb-led Republika Srpska) that comprise Bosnia and Herzegovina.

Economy

Bosnia and Herzegovina ranked next to The Former Yugoslav Republic of Macedonia as the poorest republic of the old Yugoslav federation. Although agriculture has been almost all in private hands, farms have been small and inefficient, and the republic traditionally has been a net importer of food. Industry has been greatly overstaffed, one reflection of the rigidities of communist central planning and management. Tito had pushed the development of military industries in the republic with the result that Bosnia hosted a large share of Yugoslavia’s defence plants. The bitter interethnic warfare in Bosnia caused production to plummet by 80% from 1990 to 1995, unemployment to soar, and human misery to multiply. With an uneasy peace in place, output has recovered in 1996-1998 at high percentage rates on a low base, but remains far below the 1990 level. Key achievements in 1998 included approval of privatisation legislation, the introduction of a national currency - the convertible mark , agreement with the Paris Club to reschedule official debt, and the conclusion of a Standby Agreement with the IMF. Economic data are of limited use because, although both entities issue figures, national-level statistics are not available. Moreover, official data do not capture the large share of activity that occurs on the black market. The country receives substantial amounts of reconstruction assistance and humanitarian aid from the international community. Wide regional differences in war damage and access to the outside world have resulted in substantial variations in living conditions among local areas and individual families. In 1999, Bosnia’s major goals were to implement privatisation and make progress in fiscal reform and management. In addition, Bosnia will have to prepare for an era of declining assistance from the international community.