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Bosnia: Economic Life Made Difficult In A Politicized Climate

By Ibrahim Polimac

Sarajevo, 2 April 1997 (RFE/RL) -- Economic activity is generally a major factor in fostering social stability. Businessmen have a stake in a peaceful, open market for their services and products; people with jobs tend to favour stable conditions which allow them to continue working.

In this spirit, there have been widespread hopes that the revival of economic activity in Bosnia-Herzegovina would help consolidate the peace and and set the scene for a lasting political settlement. A more stable political environment in turn generates increased business confidence and a better climate for investment.

It's true that since the 1995 Dayton peace accords brought a formal end to the fighting, a certain level of normality has arrived on the Bosnian economic scene: in stark contrast to the war years, market places are today bustling with activity and items of all sorts are being traded.

But beyond this primary level of activity, Bosnia's economy remains in tatters, its industries are idle, and more than half the population is unemployed. Pychologically, there remain wide gaps between the political "entities" which make up the state of Bosnia-Herzegovina. The two entities -- the Serb community's Republic of Srpska and the Muslim/Croat Federation -- have not been able to find much common ground on economic or other issues at national level. It was reported recently that the the entities were unable to agree even to a restoration of the phone system and on a single international dialing code.

The two entities, which retain their effective sovereignty under the Dayton accords, are facing much the same kind of economic problems. An RFE/RL correspondent in Sarajevo reports that a certain minimum of common attitudes can be identified among businessmen in both entities. They agree on in one form or another on such things as the need for reduced taxes and duties, the privatization of firms and banks and a proper legislative framework for business activities.

Whether Serb, Croat or Muslim, the business community also worries about the risks of a new war, how to deal with Bosnia's tattered and ruptured infrastructure of transport and communications, and about the costs and availability of equipment which actually works, and other practical issues.

Nevertheless a World Bank survey showed that, in the grand tradition of merchants though the centuries, the Bosnian businessmen look to the future with optimism. Practically all businesses believed sales are set to double over this year and next year.

Our correspondent reports that all although those polled consider a whole series of reforms as necessary, when they ranked those reforms by usefulness, their choices reflected an ethnic approach corresponding to nationalist preoccupations, not with purely economic thinking.

For example, those from the Muslim/Croat entity believed that key achievements would be unification and enforcement of legislation and policy relating to business and finance, completion of the peace process, cuts in tax rates and reconstruction of the infrastructure.

But in the Republic of Srpska those polled considered the unification of legislature across the two entities as the least useful of the reforms. And they ranked completion of the peace process only on the seventh place.

Similarly, when asked which government was the most relevant for everyday business, 80 percent of Serbs respondents said it was the government of their own entity while among the Muslims/Croats surveyed only 44 percent answered the same.

Our correspondent draws the conclusion that while businessmen across the board recognise the same problems, they react to them differently according to their ethnic allegiance. Therefore, the hopes and predictions that the economy would be the first and strongest reintegrating factor in Bosnia-Herzegovina will not be true until business and political leaders renounce politically or nationally motivated attitudes to economic issues, and look at those issues in purely economic terms.

Ibrahim Polimac is a Sarajevo-based journalist who contributes to RFE/RL's South Slavic Service.