Flag of Bosnia and Herzegovina

Bosnia and Herzegovina country brief

Overview

Bosnia and Herzegovina (BiH) lies at the heart of the Balkans. It shares its northern, western and southern borders with the Republic of Croatia and borders Montenegro and Serbia to the east. With a territory of 51,129 square kilometres, Bosnia and Herzegovina is slightly smaller than Tasmania. Its population of approximately four million is made up of three main ethnic groups - Bosniaks, Croats and Serbs. The capital of Bosnia and Herzegovina is Sarajevo.

Bilateral relations

Australia recognised Bosnia and Herzegovina in May 1992, soon after independence. Bosnia and Herzegovina established resident diplomatic representation in Australia in late 1994 under a Chargé d'Affaires, and the first Ambassador presented credentials in 2000. The first Australian Ambassador to Bosnia and Herzegovina, resident in Vienna, presented credentials in Sarajevo in November 1995. Australia opened an Honorary Consulate in Sarajevo in January 2005.

Australia has a continuing interest in efforts to maintain peace and build prosperity in Bosnia and Herzegovina. Since 1993-94, Australia has contributed humanitarian assistance worth over A$17 million to countries in the region, including to Bosnia and Herzegovina. Most of these funds have been provided through international aid agencies, for example the UN High Commissioner for Refugees, the World Food Program and the International Committee of the Red Cross. The Australian Embassy in Vienna has a small direct aid program for Bosnia and Herzegovina aimed at grass-roots humanitarian needs.

Bilateral trade with Bosnia and Herzegovina is modest, with a total two-way merchandise trade of just under A$11.3 million during the 2010-11 financial year. Australian exports between 2010-11 were worth approximately A$8.8 million while imports amounted to almost A$2.4 million. Principal exports include live animals, meat (excluding beef) and civil engineering equipment. The main imports from Bosnia and Herzegovina for the 2010-11 period were footwear, clothing and furniture.

The Prime Minister’s Special Envoy to Eastern Europe, the Balkans and the Caucasus, Dr Russell Trood, visited Bosnia and Herzegovina in March 2012, where he met with a range of government officials. The Minister of Foreign Affairs of Bosnia and Herzegovina, HE Mr Sven Alkalaj, visited Australia as a Guest of Government in February 2011 and met with then Foreign Minister Rudd and Trade Minister Emerson.

An Australian parliamentary delegation led by President of the Senate, Senator John Hogg, visited Bosnia and Herzegovina in October 2008. A return visit by a parliamentary delegation from Bosnia and Herzegovina took place in October 2009.

In June 2005, Chairman of the Presidency, HE Mr Borislav Paravac, conducted Bosnia and Herzegovina’s first high-level visit to Australia.

Constitutional Arrangements

Previously a constituent republic of the Socialist Federal Republic of Yugoslavia, Bosnia and Herzegovina proclaimed independence in March 1992. This triggered a three-year conflict during which the three ethnic groups were at war with each other in varying alliances. The Dayton Peace Agreement, signed on 21 November 1995, put an official end to the fighting.

The Dayton Agreement endorsed the principle that Bosnia and Herzegovina would remain a single state within existing borders. It divided the country into two entities: the Federation of Bosnia and Herzegovina (the Federation), populated mainly by Bosniaks and Croats and comprising 51 per cent of the country; and the Republika Srpska (RS), with a predominantly Serb population, holding 49 per cent of the territory. Dayton set up a federal government with the following elements:

The Federation and the Republika Srpska both have their own parliamentary assemblies.

The Dayton Agreement also established the Office of the High Representative (OHR) as the highest authority with powers to impose legislation and remove unsatisfactory officials. The High Representative (Valentin Inzko, former Austrian diplomat, since 26 March 2009) holds wide-ranging powers to impose laws and binding decisions in cases where the Government is unable to agree, or where it is deemed to be in the interest of the economic and political development of the country. The willingness by successive High Representatives to use these 'Bonn Powers' has been crucial to progressing reforms.

On 10 July 1996, the European Commission opened an office in Sarajevo. The main task of the office at the time was to manage humanitarian aid and reconstruction projects. The European Commission office became the Delegation of the European Union to Bosnia and Herzegovina on 1 December 2009. Since September 2011, the Head of the EU Delegation has simultaneously served as the EU Special Representative in Bosnia and Herzegovina (a function which had previously been combined with the role of the High Representative). This position is currently held by Ambassador Peter Sorensen of Denmark.
A NATO-led Stabilisation Force (SFOR) had the task of maintaining peace on the ground in Bosnia and Herzegovina from the end of the war in 1995, when troops totalled 60,000, to early December 2004. As the situation in Bosnia and Herzegovina improved, the focus of its activities shifted from peacekeeping to crime prevention, principally targeting the trafficking of people, weapons and drugs.

In July 2004, the Council of the European Union agreed to undertake a military operation in Bosnia and Herzegovina under the framework of the European Security and Defence Policy. In December 2004, the EU Force (EUFOR) took over from SFOR. EUFOR aims to build a stable, viable and multi-ethnic country which cooperates peacefully with its neighbours and progresses towards EU membership.

NATO has maintained a small headquarters in Sarajevo with the task of providing advice on defence reform and certain operational tasks such as counter terrorism, supporting the International Criminal Tribunal for the Former Yugoslavia (ICTY) and intelligence sharing with the EU.

Recent political developments

The most recent general elections in Bosnia and Herzegovina took place on 3 October 2010 for: Presidency of Bosnia and Herzegovina; House of Representatives of the Parliamentary Assembly of Bosnia and Herzegovina; President and Vice-President of Republika Srpska; National Assembly of Republika Srpska; and House of Representatives of the Parliament of the Federation of Bosnia and Herzegovina and the ten Cantonal Assemblies.

The results for the Tripartite Presidency were as follows: HE Mr Željko Komšić (Croat) of the Social Democratic Party with 60.61%; HE Mr Nebojša Radmanović (Serb) of the Alliance of Independent Social Democrats with 48.92%; and HE Mr Bakir Izetbegović (Bosniak) of the Party for Democratic Action with 34.86%. Chairmanship of the Presidency rotates every eight months. The chairmanship is currently held by Mr Bakir Izetbegović.

After 16 months of negotiations, Bosnia and Herzegovina’s parliament confirmed Mr Vjekoslav Bevanda (Croat) as Chair of the Council of Ministers and the country’s new Prime Minister on 12 January 2012, bringing to an end the country’s protracted political crisis. On 10 February 2012, the new government was officially formed. Mr Zlatko Lagumdžija (Bosniak) was confirmed as Minister of Foreign Affairs and Deputy Prime Minister, while Mr Mirko Šarovic (Serb) was appointed Minister of Foreign Trade and Economic Relations.

Foreign Policy

During the NATO summit in Riga on 29 November 2006, Bosnia and Herzegovina was invited to join the Partnership for Peace program. It accepted the invitation on 14 December 2006. Membership of the program is an important step towards joining NATO. On 22 April 2010, NATO Foreign Ministers approved a Membership Action Plan (MAP) for Bosnia and Herzegovina. However, before it can begin the steps of the MAP process, Bosnia and Herzegovina must resolve all issues concerning state defence property.

In February 2008, Bosnia and Herzegovina became a member of the Regional Cooperation Council (RCC). The RCC is intended to sustain focused regional cooperation in South East Europe through a regionally owned and led framework that also supports European and Euro-Atlantic integration. Its headquarters is in Sarajevo.

Bosnia and Herzegovina was accepted as a member of the Council of Europe in April 2002, a significant achievement in terms of Bosnia and Herzegovina's desire to be part of European integration.

In June 2008, Bosnia and Herzegovina signed a Stabilisation and Association Agreement (SAA) with the EU. Bosnia and Herzegovina has not yet formally applied for EU membership, but remains a potential candidate country.

Bosnia and Herzegovina served as a non-permanent member of the United Nations Security Council between 1 January 2010 and 31 December 2011. It also held the Presidency of the UNSC in January 2011. The key theme of its Presidency was 'Post-Conflict Institution Building'.

Recent political developments

The economy of Bosnia and Herzegovina is still largely transitional. Successive governments have pursued structural and market reforms since inter-ethnic conflict ended in the mid-1990s, but privatisation has been slow and government spending remains high at roughly 50% of GDP. The coordination of economic policy is made considerably more difficult by the highly decentralised nature of the government and its ethnically-based power-sharing arrangement. Despite these difficulties, Bosnia and Herzegovina enjoyed sustained economic growth between 2003 and 2008.

The global financial crisis caused the economy to contract in 2009. In the same year, Bosnia and Herzegovina signed a standby arrangement with the International Monetary Fund (IMF) to help mitigate the effects of the global economic downturn. In 2011, Bosnia and Herzegovina had a GDP growth rate of 2.2%, indicating continuing improvement in the country’s financial situation. Ongoing problems include high poverty and unemployment rates. Official figures listed 43.3% unemployment in 2011, but it is thought actual unemployment is closer to 18-22% when unofficial employment is factored into the statistics.

In September 2007, Bosnia and Herzegovina became a full member of the Central European Free Trade Agreement. The country benefits from autonomous trade measures introduced by the EU in September 2000 which allow more than 95 percent of all exports (including agricultural products) to enter the EU duty and quota free. Accordingly, most of Bosnia and Herzegovina’s trade is with nearby European countries. Its main export partners in 2010 were Slovenia (20.4%), Croatia (16.6%), and Italy (16.5%). Croatia (22.2%) and Slovenia (13.5%) were also leading import partners in 2010, with Germany (13.3%) and Italy (11.4%) close behind. Major exports are metals, clothing, and wood products. Principal imports include machinery and equipment, chemicals, fuels, and foodstuffs.

Updated June 2012