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as well as by significant urbanisation growth. It is the period in which Bosnia
and Herzegovina experienced a significant economic growth and huge structural
changes, in which it has grown from predominantly agricultural country into a
medium developed industrial country, with significant sector of export services.
Generally, dynamical economic development by mid of the second half of the 20th
century did not reflect so much on growth of physical volume of the function of
work, as it reflected on change of socio-economic structure of population. This is
proved by absolute and relative lagging behind of increase of number of active popu-
lation against the total population of Bosnia and Herzegovina in period from 1991 to
2008. At the same time, it was evident that as an indicator of variable development
of function of work, relatively the highest activity was recorded at the beginning
of that period, while the highest number of active population was recorded at the
beginning of the1990s.
By the end of the war, the volume of economy of Bosnia and Herzegovina
reduced to around 35% of annual production. After the Dayton Agreement had been
signed, focus of activities of governments at all levels was on reconstruction of econ-
omy and society, by extensive international financial and technical assistance (US$
5.1 billion). Consumption of the government and donor funds was directed to recon-
struction of infrastructure and housing projects, and to establishment and strength-
ening of key bodies and institutions of governments of the state and entities, so that
they might bear responsibility for implementation of basic economic, political and
social reforms. In period from 1996 to 2000, high rates of economic growth were
achieved, which in some countries exceeded 20%. However, due to socio-economic
structure, which is dominated by industry and mining and the undeveloped primary
sector, such rates were not sustainable over the long term. Since 2000, the transition
process of Bosnia and Herzegovina has been accelerated, mostly due to monetary
stabilisation (low inflation, stable currency, and low external public debt), price lib-
eralisation and reform of financial system. In Bosnia and Herzegovina economic
development in 2007 in real conditions was 6.2%, which is the highest growth in
GDP in the past 5 years, while its average growth rate in this period was 5.2%, in
Bulgaria 5.6%, in Serbia 5.5%, in Romania 5.2%, in Albania 5.0%, in Croatia 4.6%
in Macedonia 4.0% and in Montenegro 4.0% (Table
15.1
and Fig.
15.1
).
Despite an absolutely and relatively slow growth of number of employed people,
more complex economic development has generated a strong socio-economic
Table 15.1
Regional comparison of GDP growth rate in 2007
Country
Growth Rate of real GDP %
PPP/Per Capita GDP (USD)
Bosnia and Herzegovina
6.2
7, 168
Bulgaria
5.6
8, 026
Serbia
5.5
5, 348
Rumania
5.2
8, 413
Albania
5.0
4, 929
Croatia
4.6
12, 336
Macedonia
4.0
6, 767
Montenegro
4.0
-
Source: World Economic Outlook 2006/MMF
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