Under the High Auspices of H.E. Adnan Terzic, Chairman of the Council of
Ministers of Bosnia and Herzegovina
Entering the Bosnia and Herzegovina market...
INTERNATIONAL CONVENTIONS GROUP
c/o European Finance Convention Foundation
Brussels Rep. Office: Lenneke Marelaan 30, B 1932 Zaventem, Tel.: +32 2 733
5940 Fax: +32 2 733 6440
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20 7381 9291 Fax: +44 870 134 0064
CEE & SEE Office: Bulevar Lenjina 10d/I, YU Belgrade, Tel: +381 11 311 1257
Fax: +381 11 311 1787
: info@euroconvention.com -
: http://www.euroconvention.com
Introduction
Simultaneous with the process of reconstruction, Bosnia and Herzegovina is
entering a phase of positive economic development and economic stability. At the
five donor conferences, held so far, (the international community - countries
and international organisations, friends of Bosnia and Herzegovina) committed
themselves to donating $ 5,582 billion for the reconstruction of Bosnia and
Herzegovina. From these pledged funds, approximately two thirds have been
allocated or will be shortly. The largest donors for reconstruction of Bosnia
and Herzegovina are the European Union (EU), the World Bank, the Governments of
the United States of America, Japan, and Islamic countries amongst others
Thanks to these donations, major infrastructure reconstruction has taken place
along with a large number of housing projects. This has opened up new markets
for mortgage and leasing products.
Consequently, conditions for promoting new investments and development of the
economy are now in place with emphasis on Road Construction, electric Power,
Water and Water Waste and on SMEs. Bank consolidation and improving access to
finance for Micro enterprises through credit lines with local banks are at
present a priority. Bosnia and Herzegovina is also working actively on reforms
of its legal system and monetary policy. All these offers increasing
opportunities for strategic foreign investors.
Bosnia and Herzegovina today has a very stable and convertible currency,
completely tied to the DEM/EURO. This currency, Convertible Mark (KM), is one of
the most stable national currencies in Southeast Europe.
In the year 2000, the rate of economic growth was above 10%, and it is expected
to continue to be between 10-15% for the next two years. The main sectors in
which growth has taken place are in service and light industry, with small and
medium enterprises (SME) leading this process. Inflation is under control,
thanks to the engagement of the Currency Board and relatively strict fiscal
policy.
According to the provisions of the Law on Policy and Foreign Direct Investments
(FDI), foreign investors have the right to open an account in national or
convertible currency in any commercial bank in Bosnia and Herzegovina; convert
KM into any other convertible currency, and to have free and undisturbed
transfer abroad of all incomes realised by the investments in Bosnia and
Herzegovina. Local and foreign citizens have the right to open foreign currency
bank accounts in all authorised commercial banks, as well as the right of free
disposal of funds and their withdrawal.
Republika Srpska launched public tenders for
selling minority shares in 29 state companies at the stock exchange in Banja
Luka. The privatisation body successfully unloaded stakes in three of the
companies and expects to complete the tenders for the remaining 26 packages by
24 September.
Losses from the drought in Republika Srpska amounted to 61m euros,
according to the Bosnian Serb entity's agriculture ministry. To offset losses to
farmers, the ministry pledged to consider tax exemptions for the most seriously
hit regions and businesses.
