Bosnia and Herzegovina (BiH) is located in South Eastern Europe, in the centre of the Balkan Peninsula near the Adriatic Sea, bordered by Croatia to the north, west and south, Serbia to the east, and Montenegro to the southeast. It has a diverse ethnic population of an estimated 3.8 million. The country is rich in natural resources, such as coal, iron ore, bauxite, copper, lead, zinc, cobalt, manganese, nickel, clay, gypsum, salt, sand, timber and hydropower, and also benefits from a favourable climate for agriculture and tourism. BiH is also rich in biodiversity and is home to 1,800 endemic species of Balkan flora and numerous threatened species.
Throughout its history, BiH has been affected and influenced by numerous empires and rulers, from the Roman and Byzantine empires, through the Middle Age Kingdom of Bosnia and Ottoman rule, to the Austro-Hungarian annexation at the close of the 19th Century. After the First World War BiH became part of the Kingdom of Serbs, Croats and Slovenes and soon after was renamed the Kingdom of Yugoslavia. After the Second World War the country became one of the six republics of the Socialist Federative Republic of Yugoslavia. Following the referendum of 1 March 1992, Bosnia and Herzegovina declared independence on 3 March 1992, and became a member of the United Nations on 22 May, 1992 (GA Resolution 757).
As a result of the 1992-1995 violent conflict in BiH, half of its pre-war population of 4.2 million were displaced internally and externally, over 100,000 were killed or disappeared and most of its infrastructure and economy was destroyed. The Dayton Peace Accords (DPA), signed on 14 December, 1995 ended the conflict and brought peace.
The Dayton Peace Accords ended the war but created a complicated and expensive governance structure for BiH’s three constituent peoples, Bosniaks, Serbs and Croats, as well as 17 recognised minorities collectively referred to as “Others”. This structure consists of two Entities, Republika Srpska and the Federation of Bosnia and Herzegovina (FBiH); ten cantons within the FBiH; Brčko District; and 141 municipalities. Thirteen prime ministers, fourteen legislatures, nearly 150 ministers, five presidents, and three constitutional courts govern this small nation.
In the immediate post-war period of the 1990s and early 2000s the international community stabilised the country by employing a number of political and security instruments and by providing extensive humanitarian aid and development assistance. During this period there was tangible progress in BiH, such as the creation of institutions and establishment of administrative frameworks, the reconstruction and rehabilitation of homes and infrastructure, as well as the return of refugees and displaced persons to their pre-war homes, and to take full repossession of their property.
During the last several years BiH has experienced a number of challenges in political, economic and social terms.
Widespread corruption, accompanied by weak rule of law and complicated bureaucratic apparatus, creates an investment-unfriendly environment, resulting in a decrease of foreign investment. The large, expensive and inefficient administration itself represents a heavy burden for the budget and weakened economy.
After the promising signs of growth in the early 2000s, the BiH economy began to decline. This was partly due to the global recession, but also due to the country’s own specific problems. However, a tentative fragile recovery is now beginning to emerge. The economy is characterised by a high level of informal employment, a high inactivity rate of people of working age (56%) and a high unemployment rate of youth (45-50%). The total ILO-defined unemployment rate is 29%, while the official or registered unemployment rate is 46.1%. The human capital of the BIH economy is suffering from the phenomenon of acute ‘brain drain’.
Croatia is one of BiH’s major foreign trade partners. Its entry into the EU in July 2013 is expected to adversely affect trade and commerce with BiH, with particular impact on some 50,000 agricultural producers whose products will not be eligible for export into the EU market due to the strict EU certification standards.
BiH’s accession to the EU and its associated requirements has provided a strong framework for broad reform goals. BiH is striving to sign the Stabilisation and Association Agreement (SAA) and the UNDP fully supports BiH’s EU aspirations and is therefore working closely with the EU and other partners to enhance the capacity of BiH authorities and citizens in their efforts to achieve this goal. In order for the EU agenda to move forward the authorities of BiH are required to implement the European Court of Human Rights (ECHR) decision on Sejdić-Finci , which has thus far not been implemented.
Furthermore, the legacy of war crimes and the slow progress with regard to the implementation of transitional justice, are critical issues that BiH needs to address in order to put the past behind it and to move forward. Facing the past, truth-telling and civic dialogue need to be strengthened in order that social educational and political institutions, as well as the media, can work as one to bring BiH’s communities together so that they can more effectively address common problems. Thus, the peace-building process and reconciliation are still required and will continue to be a strong focus of UNDP’s engagement in BiH.
Furthermore, the remnants of war continue to threaten people even in times of peace. BiH is the most mine-contaminated country in Europe, and one of the most contaminated in the world. Much progress was made in the early years following the conflict in demining the country, and mine awareness education has been successful in limiting mine-related incidents and injuries. However, the large ammunition surpluses and three quarters of a million illegal weapons in civilian possession continue to jeopardise the security of citizens and communities.
Over the first decade of the millennium, BiH has achieved progress in a number of areas. The annual average GDP growth of 6% has led to a reduction in poverty of almost 4%. The results achieved in terms of poverty reduction are fragile and are being reversed, because even minor declines in economic growth can cause an increase in poverty, as many Bosnian citizens live only just above the poverty line.
The large foreign trade deficit has decreased significantly, but is still sizeable; foreign debt is kept at a moderate level and the inflation rate remains low. BiH’s dependence on international aid has also decreased considerably but is still present, as is the dependence on remittances by Bosnians living abroad. With UNDP support, in 2009 the Government took over responsibility for donor co-ordination with the goal of achieving better management of development aid. However, this has only been partially successful.
The goal of reaching universal primary education should potentially be achieved by 2015, (97.6% as of 2011/2012). Secondary school enrolment has improved substantially, from 68.3% in 2000 to 91.8% in 2011, as has the enrolment rate for higher education, from 23% in 2000 to 38% in 2011. However, the quality of higher education still needs to be improved, as does the link to labour market needs.
The legal and institutional framework to improve gender equality and the empowerment of women exists, but actual positive changes in employment practices, income generation opportunities and political participation are modest. Gender parity in education is high, however, especially in higher education.
Child mortality has decreased and child health is showing steady improvement, though further efforts are needed to reach 2015 goals. Maternal health has improved significantly and maternal mortality is very rare. However, BiH faces serious demographic and population problems, primarily with the decrease in the birth rate. The prevalence of HIV has remained at a low level and the prevalence of tuberculosis has decreased, although it is still the highest in Europe.
Access to drinking water and sewage system has increased significantly, but further efforts are needed to ensure access for all. Most of the water and wastewater systems suffer from a high level of network leakage and water loss is estimated at around 60%.