BiH: Economic Reform or Fiscal Collapse?

On February 6, 2013, the Johns Hopkins University hosted an event titled "Bosnia and Herzegovina: Economic Reform to Prosperity or Fiscal Collapse and What to do about it?" Zivko Budimir, President of the Federation of Bosnia and Herzegovina, delivered the opening remarks regarding the tough economic situation facing BiH today.

According to panelist Goran Nedic of America-Bosnia Foundation, 0.7 percent of  BiH's GDP fell in 2012 and the unemployment rate rose to 45 percent. Political instability is a key factor contributing to the economic hardship in BiH. "BiH's small economy cannot survive with the huge state apparatus that it currently has. It is unproductive. NATO membership would be beneficial because it would offer some security to investors," added Mujo Selimovic, CEO of the MIMS Group.

Simplifying procedures would also help jumpstart the economy – for example, it takes ninety dates to register a company in BiH, as opposed to the U.S. where the process can be as short as a couple of hours. BiH's rich energy sector is also underutilized and BiH is currently the only country in the former Yugoslavia that exports energy. Although, BiH's smaller entity, Republika Srpska (RS) has created major roadblocks towards BiH's NATO accession, Jonathan Moore, Director of the Office of South Central European Affairs at the U.S. Department of State affirmed that the current focus of the U.S. Embassy in BiH is the reform of the Federation and that the U.S. Embassy has no similar efforts in Republika Srpska because of the nature of that entity.