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BRIEFJuly 19, 2024

Bosnia and Herzegovina and ľ¹ÏÓ°Ôº Group: 30 Years of Partnership

Since 1993, the World Bank Group has been a steadfast partner to Bosnia and Herzegovina, fostering a robust and lasting collaboration. Bosnia and Herzegovina has directly witnessed the benefits of international development support, which have enabled it to rapidly achieve upper-middle-income status. Today, the World Bank Group and Bosnia and Herzegovina remain dedicated to advancing the economy, enhancing living standards, and supporting the country¡¯s aspirations to join the European Union.

Early days of the partnership

Bosnia and Herzegovina exited from the 1992-1995 war devastated and divided, riddled with minefields, with police and military checkpoints preventing even the essential freedom of movement. By the end of 1995, Bosnia and Herzegovina's economic output had fallen to just 10-30 percent of the pre-war level. Gross domestic product (GDP) had collapsed to less than US$500 per capita, about 20 percent of its pre-war level. Most of the basic infrastructure and services were shattered and more than 80 percent of the population received some form of food aid.

  • Over 100,000 lives lost.
  • 2 million people were displaced or became refugees¡ªover half the pre-war population.
  • Per-capita GDP fell by 75% (from $1900 to $500).
  • Widespread job losses.
  • Most of the population fell into poverty.

In the immediate aftermath of this human and economic catastrophe, the initiated 16 emergency operations to rebuild transport and energy infrastructure, healthcare, and education facilities, and stimulate economic growth.

Sarajevo war time image

Post-war reconstruction

After the devastating war, Bosnia and Herzegovina worked with international partners, including the World Bank Group, to create a comprehensive economic recovery and reconstruction plan. This plan focused on four key areas:

  • stabilizing the macroeconomy and establishing new economic institutions,
  • supporting the transition to a market economy,
  • rebuilding infrastructure and facilitating refugee returns,
  • and normalizing the country's international financial and economic relations.

As part of the post-war reconstruction effort, local communities, authorities, and international partners collaborated to rebuild one of Bosnia and Herzegovina's most iconic landmarks. The Stari Most, or Old Bridge, in Mostar, destroyed on November 9, 1993, was restored and reopened nearly a decade later. This architectural resurrection has since become a powerful symbol of reconciliation in the once war-torn country, bridging not only the physical gap across the Neretva River but also the cultural and emotional divides left by the conflict.

Mostar Old Bridge

Bosnia and Herzegovina¡¯s path towards reforms

In recent years, Bosnia and Herzegovina has made significant strides in its reform efforts. The country has successfully transitioned from a low-income status to an upper-middle-income country and is now seeking to join the European Union. It became an IDA donor in 2023, positioning it to support other nations in their journey to stability and prosperity.

ľ¹ÏÓ°Ôº Group is collaborating with Bosnia and Herzegovina to support economic growth and facilitate reforms aligned with the country's EU aspirations. The partnership focuses on three main areas:

  1. Developing a dynamic private sector for job creation
  2. Improving public services quality and efficiency
  3. Enhancing resilience to climate shocks and natural events

In July 2022, a Country Partnership Framework for 2022-2026 was endorsed, addressing inclusive private sector employment, sustainable service delivery, and climate change resilience. This framework includes a cross-cutting gender theme to support vulnerable groups.

The partnership provides analysis, advice, and financing for reform programs, with potential access to $750 million in new lending from the World Bank. Additionally, the aims to attract private capital in key sectors using innovative advisory and investment products, supported by guarantees from the .