New ESI report - The authoritarian temptation

10 December 2004

In recent weeks, South Eastern Europe has taken a series of extremely important steps towards integration into the European Union. On 6 October, the European Commission affirmed that both Romania and Bulgaria have functioning democracies and market economies, and are on track to join the European Union in January 2007. On the same day, it announced that Turkey fulfils the Copenhagen political criteria, and recommended opening membership negotiations. On a visit to Skopje, Commission President Romani Prodi remarked on the progress that Macedonia has made since submitting its membership application earlier this year. Croatia has already been accepted as a candidate, and will begin accession negotiations early in the new year.

It is the dramatic progress of its neighbours that highlights just how much ground Bosnia and Herzegovina has lost recently simply by standing still. Bosnia is still unable to begin negotiations for a Stabilisation and Association Agreement - the very first milestone on the long road to Europe. With its economy and political system still far from satisfying the Copenhagen criteria, the prospect of full EU membership seems decades away.

In fact, Bosnia and Herzegovina is more internationally isolated today than it was five years ago. It remains on the black list of countries for which a visa is required to travel to the European Union. Together with Serbia-Montenegro, it is one of the last countries in Europe excluded from NATO's Partnership for Peace programme, which with members like Turkmenistan, Belarus and Tajikistan has not traditionally been considered an exclusive club. It has not yet joined the World Trade Organization, whose 147 members include Moldova and Angola. The only major European organisation that Bosnia has been able to join is the Council of Europe. Yet in August 2004, the Parliamentary Assembly of the Council of Europe reviewed the quality of Bosnia's democracy, and questioned "the extent to which the current role of the [High Representative] is compatible with membership of Bosnia-Herzegovina in the Council of Europe" (Resolution 1384).

International isolation is not the only concern: over the past seven years, Bosnia and Herzegovina's economy has performed consistently worse than even the most pessimistic projections of its international advisers. In 1995, the World Bank hoped that the country would become creditworthy by 1998; now, the most optimistic projections are for 2007. Privatisation has failed to prevent the collapse of industries and very few strategic enterprises have found buyers. The international competitiveness of Bosnian products is low, and the progress of its neighbours towards the EU makes it even more difficult for Bosnia to attract foreign investment. A slight improvement in export performance over the past year cannot mask the fact that, in the first eight months of 2004, Bosnia and Herzegovina exported less to the European Union than Gaziantep, a Turkish city of 1.3 million inhabitants not far from the Syrian border.

As a result, Bosnians face a desperate shortage of employment. Less than a third of Bosnia's working-age population participates in the labour force, compared to an EU average of 64 percent, and employment rates among women and young people are among the lowest in Europe. Forced out of the formal economy, many Bosnians are scraping together a living from itinerant labour and informal trade, returning to a life of subsistence agriculture, or simply leaving the country.

The overall conclusion is stark: in the past five years Bosnia and Herzegovina has not just failed to catch up, it has fallen further behind the rest of Europe. A recent UNDP Early Warning Report commented:

"As a country and as a society, Bosnia and Herzegovina has been politically stagnating for several years now

Gerald Knaus