Bosnia and Herzegovina

D

Foreign Trade

In 1990 Bosnia’s imports totaled about $1.9 billion. They consisted primarily of fuel, machinery, transportation equipment, miscellaneous manufactured products, and chemicals. In the same year, exports totaled about $2.1 billion. They consisted mainly of miscellaneous manufactured products, machinery, and raw materials. The war severely disrupted Bosnia’s trade, with both the Federal Republic of Yugoslavia (now the separate countries of Serbia and Montenegro) and Croatia imposing economic blockades on the republic and supply routes being obstructed by the fighting. In 2004 imports totaled $4.9 billion and exports $1,615 million. The huge trade deficit reflects the degree of Bosnia’s dependence on foreign aid.

E

Currency and Banking

In January 1998, after Bosnia’s Bosniak, Serb, and Croat leaders failed to agree on a new national currency, the United Nations introduced one, the konvertibilna marka, or just marka. Marka banknotes entered circulation in June 1998 with a value equal to the German deutsche mark (In June 1998 1.79 deutsche marks equaled U.S.$1). Yugoslav dinars continue to circulate in the Serb Republic, and the Croatian kuna was used in the Croat parts of the Bosniak-Croat federation. Inflation came down in the federation following the introduction of the new currency. In the Serb Republic, price trends were less clear. The Central Bank of Bosnia and Herzegovina, established in 1997 under foreign administration, is the bank of issue for the marka. The Serb Republic and the federation each oversee their own banks.

F

Transportation and Communications

Much of Bosnia’s infrastructure, including its highways, railroads, and telecommunications network, was devastated in the war. In 1991 Bosnia had 21,168 km (13,154 mi) of highway, of which about half was paved. During the war, about 35 percent of the country’s highways and 40 percent of its bridges were damaged or destroyed. The railroad system consisted of around 1,000 km (600 mi) of track, of which three-quarters was electrified. Damage to the railway system was estimated at about $1 billion. There is an international airport at Sarajevo, which was also seriously damaged in the fighting. From 1995 to 1998 more than $1 billion in foreign aid was provided to rebuild Bosnia’s battered infrastructure. However, reconstruction of the road and rail network also has been hampered by Bosnia’s divisions. More is being done to reconnect the telecommunications network, with the European Bank for Reconstruction and Development (EBRD) coordinating national reconstruction and providing a $20 million loan. The fourth donors’ conference for Bosnia and Herzegovina, held in Brussels, Belgium, in May 1998, made improvement of infrastructure a continued priority for future aid.

The Economy section of this article was contributed by David Dyker.

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VI

Government

When Bosnia declared independence in 1992, it operated under a modified version of the Yugoslav constitution, which provided for a bicameral (two-chamber) legislature, a government headed by a prime minister, and a collective presidency with one representative from each of the three major ethnic groups. After the 1990 elections, in which most Bosnians voted along ethnic lines, Bosniaks enjoyed a slight advantage in representation. However, the Bosniak-dominated government was paralyzed during the war as the Croats and the Serbs established governments of their own and rejected its authority.

A new constitution was drafted as part of the Dayton accord, providing for a national government structured much as it had been under the previous constitution. There is a three-member presidency and a bicameral legislature. The central government has very little authority within the country, however, and for the most part its power extends only to foreign trade and foreign affairs. The new constitution recognizes Bosnia as a state officially composed of two entities, the Serb Republic and the Federation of Bosnia and Herzegovina. All governmental functions not given expressly to the central government belong to the entities.

The Bosniak-Croat federation has its own government. Its constitution was drawn up by U.S. government lawyers in 1994. The federation’s government is headed by a president and a bicameral legislature. However, this government has no authority except over foreign affairs. In addition, the legislature can easily be deadlocked when the deputies vote along ethnic lines. In reality, the federation has never really functioned, and the Croat-controlled areas of Bosnia remain free of control by the federation authorities, being closely linked with Croatia instead. In 1992 the Croats formed a breakaway state, the “Croatian Community of Herzeg-Bosnia.” Herzeg-Bosnia continues an unofficial existence. Its territory is integrated into the Croatian telephone and electrical networks, and residents use Croatian money and vote in Croatian elections. Like the Bosniak-Croat federation, the Serb Republic has its own constitution (drafted by Serb leaders in 1992) and complete governmental structure, including a president and unicameral legislature, the People’s Assembly. The government of the Serb Republic wields authority over domestic and foreign affairs.

In practice, the constitutional system of Bosnia does not provide the structure for a workable state. From 1995 through 1998 the only effective governmental decisions were those made by the High Representative, the position established by the European Union and the U.S. government to oversee implementation of the Dayton accord. By 1998 the High Representative, Carlos Westendorp, was proclaiming laws when the national legislature was deadlocked. The High Representative also removed elected officials from the governments of the entities and disqualified candidates for the 1998 elections on political grounds, primarily if he believed they could jeopardize implementation of the Dayton accord. Westendorp selected the flag for Bosnia when the presidency and central legislature could not agree on a design. The major qualification for this new flag was that its elements had no traditional political meaning to any of Bosnia’s ethnic groups. Bosnia is a member of several international organizations, including the Organization for Security and Cooperation in Europe (OSCE) and the United Nations (UN).

A

Executive

Bosnia’s three-member joint presidency comprises one Bosniak, one Croat, and one Serb member. All members are formally equal, with chairmanship of the collective body rotating every six months. The members of the presidency are elected by direct popular vote from their respective entities (two from the federation, one from the Serb Republic). Although the first elections, in 1996, were for two-year terms, the members are to be elected for four-year terms. The collective presidency is supposed to make decisions by consensus, and a provision exists for nullification of a non-unanimous decision by the presidency if so demanded by the entity whose representative has been outvoted. The presidency, as head of state, has some powers related to foreign policy and represents Bosnia internationally. The presidency also nominates the government, composed of Bosniak and Serb co-prime ministers (with a Croat deputy prime minister) and a cabinet known as the Council of Ministers. No more than two-thirds of the members of this cabinet may be from the Bosniak-Croat federation, and each minister must have deputy ministers from the other two national groups. Ministers are confirmed by the central legislature.

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