SEATTLE — Poverty and hunger in Bosnia and Herzegovina are still major issues. The fragmented political system hinders economic reform and growth.
In early 2014, the population’s frustration over the dysfunctional system, including extreme unemployment of over 42 percent and great income inequality, caused violent protests to erupt all over the country. The discontent united unemployed youth and laid-off workers from the otherwise opposing ethnicities.
Administrative buildings in Sarajevo, the national capital, burst into flames, injuring hundreds of people. This brought a wave of international attention to the small Eastern European country. The protesters lamented the institutional paralysis that hinders reform in Bosnia and Herzegovina, as well as the expensive public administration battered by inefficiency and corruption.
In the three years since then, international attention has shifted elsewhere, but the country’s problems have not gone away. The economy experienced some modest growth. As of today, the unemployment rate shrunk to around 40 percent, and the annual growth rate of the GDP was around two percent in 2016. According to the Global Hunger Index, less than five percent of the population suffered from hunger in Bosnia and Herzegovina in 2016, a significant drop from the almost 10 percent rate in 2000. Approximately nine percent of children under the age of five are affected by stunting.
Bosnia’s Roma population suffers the most from economic hardship. In 2011, the United Nations Development Program (UNDP) reported that Roma children were “five times more likely to be underweight and twice as prone to stunting.” Almost 80 percent lived in poverty. Despite advances in the past years, malnutrition and economic hardship still affect parts of the population, and a resolution to the underlying political issues is not yet in sight.
The political paralysis shows in the country’s cooperation with the IMF that supports Bosnia and Herzegovina financially to help it carry out reforms. The goal is to stimulate the growth of the private economy and to rebuild the financial sector. However, Bosnia and Herzegovina struggled to meet the requirements for the IMF loan in 2017. Discord in the divided national and regional parliaments hinders efficient decision-making and the implementation of reforms.
The political system created by the Dayton peace agreement is highly complicated and inefficient. The state is governed by three presidents, each representing one of the three largest ethnic groups of Bosnia and Herzegovina, who govern in alternating cycles. Government coalitions are unstable and the system of checks and balances hinder desperately needed economic reforms.
The public sector is inflated disproportionately, which makes the state the largest employer in the country. The bureaucracy devours two-thirds of the public revenue. Wages in the private sector and pensions are very low. The environment is hostile to private businesses and investments, and the country’s export economy is weak.
At the moment, political decisions are still driven by the country’s ethnic tensions. Most of the political parties are affiliated with one of the different ethnicities, whose votes they try to gain and whose interests they represent. This system stands in the way of a successful reconciliation and puts a focus on ethnic over economic issues.
Between the ethnic groups in Bosnia and Herzegovina – the Muslim Bosniaks, the Orthodox Serbs and the Catholic Croats – deeply rooted tensions remain significant today. In schools, children are separated according to ethnicities and taught different interpretations of the country’s history, which cements the groups’ divisions even further.
The Balkan state’s economy is making slow progress. The numbers of people suffering from hunger in Bosnia and Herzegovina has also dropped significantly. However, an economic take-off is still hindered by political issues. Christopher Bennett, the communications director of the Office of the High Representative in Bosnia and Herzegovina, published a book on “Bosnia’s Paralyzed Peace” in 2016.
He argues that the underlying ethnic nationalist ideologies that caused the war in the 1990s are still lingering and preserved by the Dayton agreement. To fight the paralysis, he demands profound political reforms. According to Bennett, the electoral system created through Dayton should be replaced entirely.
This might be a necessary step to move the focus of the political debates from ethnic issues toward economic reforms that can stimulate growth and employment and ultimately end hunger in Bosnia and Herzegovina.
– Lena Riebl