Bosnia & Herzegovina
Executive Summary
Bosnia and Herzegovina's internal political environment in the years 2004 and 2005 was marked by sharp controversies that divided the county along ethnic lines. The ethnic cleavage once again demonstrated the need of profound reforms of the very texture of the state, which could be achieved only through forging the necessary constitutional amendments. As a result, the possibility of a future revision of the Dayton Agreement of 1995, which incorporates the Constitution of the republic, was brought out.
In addition to internal rivalry and partisanship, in the period 2004-2005 Bosnia and Herzegovina faced various foreign political challenges connected to its much desired association with the EU and NATO, as well as with its stalled relations with the International Criminal Tribunal for the former Yugoslavia. Developments were greatly influenced by EU's changing role in European security matters, and by purely internal reforms and transformations in the making in both entities of the country.
The steady growth of Bosnian economy in the period gave certain hopes of future overall internal stability and raising living standard, which were also expected to play a beneficial role in the fulfillment of the country's foreign policy priorities. Yet, a major contribution to GDP both in 2004 and 2005 had the informal sector accounting for an estimated 50 % of its total amount.
Despite the adoption of defence reform legislation throughout the year 2003 Bosnia and Herzegovina failed to meet the requirements for membership in NATO's Partnership for Peace (PfP) programme by NATO's Istanbul meeting in June 2004. Therefore, the Defence Reform Commission, established in May 2003, set a broader framework for the period 2004-2005 in the hope of Bosnia and Herzegovina's receiving a green light for PfP membership in the future. The major focus of the reform shifted to building up the state-level Defence Ministry, Joint Staff, and Operational Command. The institutional unification of Bosnia and Herzegovina as a precondition for the country's successful European and Atlantic integration also affected the intelligence and security structures.
Sources used for the profile: International Crisis Group, RFE/ RL, Stability Pact, ICTY, Central Bank of Bosnia and Herzegovina, CIA