Introduction
Bosnia and Herzegovina (BiH) has made notable strides in its economic development over the past two decades, transitioning to an upper-middle-income status and achieving candidacy for European Union (EU) membership. Despite these advancements, the nation faces challenges that necessitate comprehensive strategies to ensure sustainable economic growth. This essay examines BiH’s economic growth plan, focusing on key areas such as private sector development, infrastructure enhancement, energy transition, and rural development.
A robust private sector is pivotal for economic resilience and job creation. The World Bank Group’s Country Partnership Framework (CPF) for 2022-2026 emphasizes reforms aimed at increasing inclusive private-sector employment. This includes fostering a conducive business environment, enhancing competitiveness, and integrating BiH firms into regional and global value chains. The CPF outlines a commitment of approximately $750 million in new lending to support these initiatives (World Bank, 2022). Complementing this, the European Bank for Reconstruction and Development (EBRD) has adopted a strategy focusing on strengthening the private sector through skill upgrades and digitalization. This approach aims to enhance the competitiveness of small and medium-sized enterprises (SMEs) by promoting innovation and facilitating access to finance (EBRD, 2022).
Infrastructure development is critical for economic integration and growth. The Western Balkans Investment Framework (WBIF) has supported investments estimated at €7.2 billion in BiH’s public sector, focusing on transport, energy, and digital infrastructure. Notable projects include the construction of the Corridor Vc motorway, rehabilitation of the Brčko Port, and development of renewable energy facilities. These initiatives aim to improve connectivity, facilitate trade, and promote regional integration (WBIF, 2022). Transitioning to a low-carbon economy is imperative for BiH, given its reliance on coal and the environmental challenges it faces. The draft National Energy and Climate Plan (NECP) outlines strategies to introduce a carbon emissions trading scheme by 2026 and sets a target for 70% of gross final electricity consumption to come from renewable sources by 2030. This plan aligns with the EU’s Carbon Border Adjustment Mechanism (CBAM) and underscores the need for energy diversification and sustainability (EBRD, 2023).
Furthermore, a World Bank report highlights the necessity for BiH to invest $6.8 billion over the next decade to mitigate climate change impacts, particularly focusing on flood prevention infrastructure and the transition to renewable energy sources such as solar and wind (Reuters, 2024).
Agriculture remains a significant sector in BiH’s economy. The adoption of the Strategic Plan for Rural Development 2023-2027 aims to align agricultural policies with the EU’s Common Agricultural Policy (CAP). Key objectives include developing a competitive and climate-resilient agri-food sector, increasing productivity through digitalization and innovation, and promoting sustainable management of natural resources. This strategy is expected to attract investments and modernize the agricultural sector, contributing to overall economic growth (EU4Agri, 2023). Bosnia and Herzegovina’s economic growth plan encompasses a multifaceted approach addressing private sector development, infrastructure enhancement, energy transition, and rural development. Successful implementation of these strategies requires coordinated efforts among government institutions, private sector stakeholders, and international partners. By focusing on these key areas, BiH aims to achieve sustainable economic growth, enhance its competitiveness, and progress towards EU integration.
References
- World Bank. (2022). Bosnia and Herzegovina Country Partnership Framework for 2022-2026. Retrieved from https://www.worldbank.org
- (2022). EBRD Adopts New Country Strategy for Bosnia and Herzegovina. Retrieved from https://www.ebrd.com
- (2022). Bosnia and Herzegovina Investments. Retrieved from https://www.wbif.eu
- (2023). Bosnia and Herzegovina Country Assessment. Retrieved from https://2023.tr-ebrd.com
- (2024). Bosnia Needs to Invest $6.8 Billion to Tackle Climate Change Impact. Retrieved from https://www.reuters.com
- (2023). Strategic Plan for Rural Development of Bosnia and Herzegovina for 2023-2027. Retrieved from https://eu4agri.ba
