Powered by IFAD

The Republic of Bosnia-Herzegovina was formed after the break-up of the former socialist Federal Republic of Yugoslavia and following the wars that took place from 1992 to 1995 among Bosnian Muslims, Croats and Serbs. The country covers a total land area of 51,210 km2and borders Croatia to the north and west, and Serbia and Montenegro to the east and south. A small corridor of land gives onto the Adriatic coast. Much of the country is mountainous, with steep wooded slopes interspersed with flat pasture. The population of 3.8 million is growing at an average annual rate of 2.5 per cent.

The country was devastated by three years of violent inter-ethnic fighting. Since the Dayton Peace Agreements ended the war in 1995, Bosnia-Herzegovina has made good progress in post-conflict reconstruction, social integration and state-building. The Dayton peace accord set out a new, complex internal governance structure. The country is now administered as two separate entities: a Muslim-Croat Federation of Bosnia and Herzegovina, and the Bosnian Serb Republic. Each has its own government, president and parliament, under the sovereignty of the central state government. There is also a small self-governing district, Brcko. As stability and integration of ethnic groups is achieved, these entities are gradually moving some administrative sectors towards centralization.

Agriculture

Bosnia-Herzegovina is very poor in agricultural resources. Large parts of the country are mountainous, with shallow soils. Less than 20 per cent of the land is suitable for farming. In modern times farming has made a limited contribution to the economy. Before the war agriculture contributed less than 10 per cent of gross domestic product (GDP). Immediately after the war this figure rose considerably, reflecting the decline in industry and services and the fact that many people had reverted to subsistence and small-scale farming. Currently the economic importance of agriculture is moving back to pre-war levels. In 2005 the agriculture sector contributed about 15 per cent of GDP.

Milk and meat are Bosnia's principal agricultural outputs, produced mainly by privately owned smallholder farms. Dairy farming dominates agricultural production, and livestock production in general contributes nearly 60 per cent of agricultural GDP. Other important agricultural products are wheat, maize, soybeans and tobacco.

Although the country imports over 65 per cent of its food needs, agricultural yields could be increased substantially to meet part of the country's food requirements. Agriculture and associated activities could also play a major role in rural economic revival and poverty reduction.

Economy

Before the war the Bosnian economy was diversified, with a large industrial sector. The collapse of the former Republic of Yugoslavia and the war that followed caused extensive damage to the country's economy. Infrastructure was severely affected, industry and services shut down and millions lost their jobs. Real GDP fell by 80 per cent and more than 2 million people were displaced either internally or abroad.

With the help of the international community, major reconstruction has taken place since the advent of peace in 1995. Bosnia has been able to regain quickly some of its economic losses, particularly through the private sector and the many small enterprises that were established after the war. Since 2000 the country has achieved macroeconomic stability, although the economy has yet to reach its pre-war level. Despite the problems it continues to face, Bosnia is generally considered a post-conflict success story.

Source: IFAD