The 23rd International Business Forum (IBF), held in Sarajevo, the capital of Bosnia and Herzegovina, drew attention to the country’s privileged structure in the food, agriculture and livestock, tourism, construction, health, metal, furniture and forest products sectors and the opportunity to conduct duty-free trade with the EU. . At the summit, which was held with the participation of more than a thousand business people from all over the world, company-to-company (B2B) meetings were held and cooperation opportunities between Turkish and foreign business people with companies from these countries were discussed. The organization also drew attention to Bosnia-Herzegovina’s trade agreements with EU countries, and emphasized that the country could be used as a duty-free entry gate for Turkish and foreign business people in trade with the EU.
In Bosnia and Herzegovina, which is a country that needs investment especially in the field of development, the energy sector can currently use only 30 percent of its potential, and the mining and mineral sector and the tourism sector receive investments well below their potential.
General economic situation
In Bosnia and Herzegovina, which was a country with a heavy industrial infrastructure before the war, production focused on metallurgy and chemical industry, and production in the country prioritized meeting the needs of the Yugoslav domestic market. During the war, industrial facilities were severely damaged and the country’s industrial-based production structure was disrupted, and after the war, the economy shifted to the central services, banking, energy and tourism areas. In Bosnia and Herzegovina, where the most serious macroeconomic problem is unemployment, unregistered employment remains at a high level. The country’s economic priorities are integration into the European Union, strengthening the financial system, public administration reform, membership in the World Trade Organization and stable growth.
A Free Trade Agreement has been in effect between Turkey and Bosnia-Herzegovina, which is a member of the Central European Free Trade Agreement (CEFTA), since 2003. Although Bosnia and Herzegovina signed a Stabilization and Accession Agreement with the European Union (EU) in 2008, this agreement has not yet entered into force. This agreement, which will come into force after being approved by EU countries, will ensure that all Bosnia and Herzegovina products produced in accordance with EU standards enter the EU market duty-free and without any restrictions. This situation is expected to revitalize the country’s economy, increase competitiveness, and develop foreign direct investments and business areas.
Six key sectors with opportunities
International Business Forum Director Erol Yarar organized an exploratory trip to Bosnia-Herzegovina nine times in an eight-month period before the forum and visited the forests, factories, cities, towns and villages of Bosnia and provided information to Turkish and world companies about all the country’s assets. explored cooperation possibilities in detail. As a result of these field trips, six key sectors with great potential for cooperation and investment in Bosnia were identified. These sectors were grouped as food, agriculture and livestock, forest products and furniture, tourism, metal and automotive, health and construction. At the forum, a special session was held for each of these sectors and potential cooperation and investment opportunities were discussed under the supervision of business people and CEOs who are experts in the field. It was pointed out at the forum that there are virgin lands in Bosnia-Herzegovina, especially for organic agriculture and halal food market, and it was stated that the 50 thousand tons halal food market in Europe can be easily reached through investments to be made in Bosnia-Herzegovina. Bosnia and Herzegovina, where 7 million cubic meters of trees are cut annually, contains high amounts of raw materials for the forest products and furniture industry. In the tourism sector, it hosts 100 thousand Turkish and 150-200 thousand Arab tourists annually.
Following the protocol speeches, sectoral meetings and panels were held at the forum, allowing one-to-one business agreements to be made on a sectoral basis. On the second day of the meeting, factory tours were organized for guest business people.
Bosnia-Herzegovina – Türkiye Cooperation is Far Below Its Potential
In 2003, a Free Trade Agreement was signed between Turkey and Bosnia-Herzegovina. The trade volume between the two countries reached 660 million dollars in 2018. Therefore, the current cooperation remains well below the target volume of 1 billion euros. On the other hand, this figure appears to be well below its potential when looking at the historical, cultural and official relations between the two countries. The fact that Bosnia-Herzegovina has a 1000-kilometer land border with EU countries is considered a very important opportunity for Turkish business people.
Speaking at the International Business Forum, Istanbul Chamber of Commerce President Şekip Avdagiç described Bosnia-Herzegovina as a country of opportunities for business people. Emphasizing that these opportunities can only be evaluated if they are presented in detail, Avdagiç stated that trade should reveal common points rather than differences. Stating that countries can expand their horizons through trade, Avdagiç said that the ease of doing business in Turkey increased 17 places in 2019 compared to the previous year and invited the business people present at the meeting to invest in Turkey. He also stated that Bosnia is a very attractive country for Turkish companies that want to do business with Europe, as it has a 1,000 kilometer border with the EU and products can reach Europe within 15 hours by land.
Stating that four points should be carefully emphasized in order to improve the investment environment in Bosnia, Avdagiç listed them as follows: Bosnia-Herzegovina should move determinedly towards EU membership; Bosniak, Serb and Croat communities living in Bosnia should be united around the common Bosnian ideal; These societies should not be caught in the spiral of nationalism; Policies should be developed to keep educated young people in the country and those who go abroad should be brought back.
Advantages of Bosnia and Herzegovina
Bosnia and Herzegovina has a highly competitive human resource in the EU market in terms of education and language skills. In addition to low income tax and electricity prices, the stable course of the Bosnian-Herzegovinian currency Convertible Mark (KM) also offers a competitive production opportunity. In Bosnia-Herzegovina, where local and foreign investors have equal rights, 84 percent of investors state that their commercial expectations are met, and 70 percent want to invest the money they earn back in Bosnia-Herzegovina. In Bosnia and Herzegovina, which is a country that needs investment especially in the field of development, the energy sector can currently use only 30 percent of its potential, and the mining and mineral sector and the tourism sector receive investments well below their potential. Bosnia and Herzegovina is waiting to be discovered by organic agriculture investors with its fertile and uncultivated lands.
In the last five years, the metal processing, automobile sub-industry and spare parts sectors and the defense industry have been experiencing a rebirth in Bosnia. Cooperation between Turkey, which attaches great importance to the automotive sector, and Bosnia, which is good in the spare parts industry, in this field could be a win-win relationship for both countries. The fact that large projects in the infrastructure and construction sector are about to start in Bosnia will certainly have a stimulating effect on the market. In addition to the economic benefit it will bring to the region, the Sarajevo-Belgrade highway project is expected to make the stability and good relations in the region sustainable.
Turkish business people’s interest in the Bosnia-Herzegovina market, which is one of the countries where Turkey has the most advantage in terms of connections in the Balkan market, and their growth in the market by considering affordable prices and quality, will enable Turkey to carry out more duty-free trade with the EU through Bosnia-Herzegovina, which does not give up on the EU perspective. It is important to provide At this point, by using the opportunities in the six sectors identified in the International Business Forum and the field trips meticulously carried out before, before other countries, a difference can be made in the Balkans market and Bosnia and Herzegovina can be Turkey’s duty-free gateway to the EU in the long term.
[Assoc. Prof., a lecturer in the Department of Economics at the Turkish-German University. Dr. Elif Nuroğlu works in the fields of international economics, gravity model, empirical international trade, econometric modeling, empirical macroeconomics, artificial neural networks and fuzzy approaches]
Source: https://www.aa.com.tr/tr/analiz/bosna-hersek-turkiyenin-ab-ye-acilan-kapisi-ollamak/1670366
