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Bosnia and Herzegovina

Introduction to Bosnia and Herzegovina

Bosnia and Herzegovina's declaration of sovereignty in October 1991, was followed by a declaration of independence from the former Yugoslavia on 3 March 1992 after a referendum boycotted by ethnic Serbs. The Bosnian Serbs - supported by neighboring Serbia and Montenegro - responded with armed resistance aimed at partitioning the republic along ethnic lines and joining Serb-held areas to form a "Greater Serbia." In March 1994, Bosniaks and Croats reduced the number of warring factions from three to two by signing an agreement creating a joint Bosniak/Croat Federation of Bosnia and Herzegovina. On 21 November 1995, in Dayton, Ohio, the warring parties initialed a peace agreement that brought to a halt three years of interethnic civil strife (the final agreement was signed in Paris on 14 December 1995). The Dayton Agreement retained Bosnia and Herzegovina's international boundaries and created a joint multi-ethnic and democratic government. This national government was charged with conducting foreign, diplomatic, and fiscal policy. Also recognized was a second tier of government comprised of two entities roughly equal in size: the Bosniak/Croat Federation of Bosnia and Herzegovina and the Bosnian Serb-led Republika Srpska (RS). The Federation and RS governments were charged with overseeing most government functions. The Office of the High Representative (OHR) was established to oversee the implementation of the civilian aspects of the agreement. In 1995-96, a NATO-led international peacekeeping force (IFOR) of 60,000 troops served in Bosnia to implement and monitor the military aspects of the agreement. IFOR was succeeded by a smaller, NATO-led Stabilization Force (SFOR) whose mission is to deter renewed hostilities. SFOR remains in place although troop levels are being reduced.

Government

Capital:

Sarajevo

Independence:

1 March 1992 (from Yugoslavia; referendum for independence was completed 1 March 1992; independence was declared 3 March 1992)

National holiday:

National Day, 25 November (1943)

Economy

Economy overview:

Bosnia and Herzegovina ranked next to The Former Yugoslav Republic of Macedonia as the poorest republic in the old Yugoslav federation. Although agriculture is almost all in private hands, farms are small and inefficient, and the republic traditionally is a net importer of food. Industry has been greatly overstaffed, one reflection of the socialist economic structure of Yugoslavia. TITO had pushed the development of military industries in the republic with the result that Bosnia hosted a number of Yugoslavia's defense plants. The interethnic warfare in Bosnia caused production to plummet by 80% from 1992 to 1995 and unemployment to soar. With an uneasy peace in place, output recovered in 1996-99 at high percentage rates from a low base; but output growth slowed in 2000-02. Part of the lag in output was made up in 2003-04. National-level statistics are limited. Moreover, official data do not capture the large share of black market activity. The konvertibilna marka (convertible mark or BAM)- the national currency introduced in 1998 - is now pegged to the euro, and the Central Bank of Bosnia and Herzegovina has dramatically increased its reserve holdings. Implementation of privatization, however, has been slow, and local entities only reluctantly support national-level institutions. Banking reform accelerated in 2001 as all the Communist-era payments bureaus were shut down. The country receives substantial amounts of reconstruction assistance and humanitarian aid from the international community but will have to prepare for an era of declining assistance.

GDP:

purchasing power parity - $24.31 billion (2004 est.)

GDP - composition by sector:

agriculture: 13%
industry: 40.9%
services: 46.1% (2001 est.)

Agriculture products:

wheat, corn, fruits, vegetables; livestock

Industries:

steel, coal, iron ore, lead, zinc, manganese, bauxite, vehicle assembly, textiles, tobacco products, wooden furniture, tank and aircraft assembly, domestic appliances, oil refining (2001)

Transportation

Waterways:

Sava River (northern border) open to shipping but use limited because of no agreement with neighboring countries (2004)

Pipelines:

gas 170 km; oil 9 km (2003)

Ports and harbors:

Bosanska Gradiska, Bosanski Brod, Bosanski Samac, and Brcko (all inland waterway ports on the Sava), Orasje

Airports:

27 (2003 est.)

Heliports:

5 (2003 est.)

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