Financial contributions and economic outlook in Bosnia from Dayton to 2008 global economic recession

Following the end of the war in Bosnia (1992-1995), approximately 90 percent of Bosnia’s economic infrastructure and assets destroyed costing more than 20 billion dollars according to the World Bank sources. By the end of the war, the unemployment rate in the new state has reached to 90 percent. With the contribution of the World Bank and other NGOs into Bosnian economic rehabilitation and recovery process, unemployment rate in the country significantly fell to 30 percent. The latest studies in literature illustrates that “Conflict” naturally has negative effects on economic activity, investment climate, financial stability, welfare and growth rate of conflicting parties. Moreover, the link between the risk of conflict recurring level and the low income illustrated in studies must be taken into consideration seriously in the era of global economic recession. The peace and stability in Bosnia maintained by military contribution depends on the success of recovery process of Bosnian economy. However, the global economic recession has been affecting the economic activity in region. In this study, the effects of conflict in Bosnia on economic activity have been illustrated and the recovery process of Bosnian economy from The Dayton Accords to the era of global economic crisis has been evaluated. The role of the World Bank and NGOs in recovery process has been also examined.