Bosnia Infighting Stifles Competitiveness

Despite its huge potentials, Bosnia remains one of the World’s least competitive countries because its politicians hold up the key reforms, perpetuating a political crisis for their own interests, a top international diplomat in the country said.

“The people who are keeping Bosnia in the economic neighborhood of Uganda and Cambodia are the politicians who have shamelessly stood in the way of key economic reforms,” US diplomat Raffi Gregorian said.

Gregorian who is second in command at the Office of the High Representative in Bosnia spoke at the presentation in Sarajevo of the 2009-2010 global competitiveness report, a yearly publication of the World Economic Forum covering 133 major and emerging economies.

In the report which assesses the ability of countries to provide high levels of prosperity to their citizens, Bosnia was ranked at 109 out of 133 countries, just behind Uganda and just ahead of Cambodia.

According to the report, political instability and the inefficiency of government bureaucracy in Bosnia are responsible for more than half of the major problems in doing business in the Balkan country. Bosnia is one of the most over-governed countries in the world with 13 different layers of government and over 160 ministries which are eating up about 50 per cent of GDP.

Gregorian stressed that Bosnia has “vast untapped natural resources, access to huge markets (and) a pool of world-class workers,” but that the country’s poor ranking is due to failure by its political system to make things better.

“When we look at the cumulative results of Bosnian politics over the last three years we find tens of thousands of jobs lost, tens of millions of euros worth of international and domestic investment lost, and poverty on the increase all across the country,” Gregorian said.

Official figures show that nearly 60,000 Bosnians have been rendered jobless over the past twelve months, but labor unions claim the figure is closer to 100,000 since the official statistics do not take into account job losses in the gray economy.

More than a half a million of Bosnian workers or 41.8 per cent of the country’s workforce are officially unemployed.

However, the real unemployment rate is believed to stand at around 24 per cent as many Bosnians find livelihood in the gray economy which is estimated to generate over 26 per cent of the country’s official GDP.

The official figures also show that foreign investment in Bosnia in the first nine months of this year fell by 56 per cent compared to the same period in 2008.

“There is a clear correlation between entrenched corruption at the highest levels and the drop in competitiveness.  Water flows down hill, and the people are the ones getting wet, not the big bosses at the top,” he added.

Despite intense diplomatic pressure, Bosnian bickering political leaders keep failing to agree on the necessary political and economic reforms.