Challenge: Postwar Bosnia and Herzegovina

After the Dayton Peace Accords brought an end to the war of 1992-1995, Bosnia and Herzegovina (BiH) stood at a crossroads: the path of peace and reconciliation on one side; the path to ethnic division and conflict on the other. The country’s stability was and remains critical for the future of Europe and for U.S. interests in the region. To this end, the United States has sought to help BiH develop the foundations for a pluralistic and democratic society and a robust and growing free-market economy.

Countering corruption remains a key challenge and is closely linked to the continued need for reconciliation. Politicians often use fear of other ethnic groups as a means of cloaking continued corruption.  USAID programs focus on assisting BiH to achieve the economic and social reforms needed to implement the EU Reform Agenda.

Response: Rebuilding and Reintegration

The first decade after the war saw significant progress, from the rebuilding of BiH’s infrastructure to the establishment of state-level judicial institutions. Immediately after the war, USAID began targeted infrastructure projects to help restart businesses and assist citizens in returning to normal lives again. USAID assistance was instrumental in the repair of border bridges and large power plants. USAID also supported reconstruction and repair of water systems, schools, health clinics, roads, and power infrastructure–1,600 projects in all–and provided small grants and loans to enable minority refugees to return to their homes.

USAID’s initial business development loan program helped private businesses restart operations and provide jobs for citizens, and the reflows funded numerous other areas, such as deposit insurance, public sector accounting, agriculture production, and bank supervision, which stabilized and restored public confidence in the banking system. To ensure free and fair postwar elections, USAID provided training for citizens and election administrators, and provided domestic observers. USAID assistance also helped establish BiH’s first private, independent television network.

Since those first 10 years, USAID has continued to promote the rule of law and improve the effectiveness and responsiveness of institutions of governance; improve the business environment and contribute to sustainable economic growth; and assist BiH in becoming a more tolerant and pluralistic society. More recently, it has worked to help BiH increase its contributions to regional and global security.

Progress: Democratic and Economic Development on the EU Path

Since 1996, the U.S. Government, primarily through USAID, has provided more than $1.7 billion in assistance to support democratic, social, and economic progress in BiH and to advance the country toward its goal of Euro-Atlantic integration. BiH has made progress in re-building lives and infrastructure to allow citizens to enjoy an improved standard of living.

USAID’s economic development programs have promoted a competitive, market-oriented economy, with private sector-led job growth and improved governance for business activity. This includes support to targeted sectors in the economy—agriculture, wood and metal processing, textile, logistics/transport and tourism—as well as loan guarantee programs with commercial banks to unlock much-needed financial capital. On economic governance, USAID has helped BiH improve fiscal coordination and compliance at all levels of government. USAID has assisted BiH to establish a more transparent, modern system of direct taxation and collection of social benefits to create a more business-friendly environment. USAID has also promoted energy efficiency and improved energy policy to help BiH maximize its potential as a net energy exporter and to increase competition.

USAID’s democracy and governance assistance has helped BiH develop more functional and accountable institutions that meet citizens’ needs. Assistance has increased citizen participation in political and social decision-making through activities that strengthen the role of civil society. USAID has also assisted elected representatives to develop, draft, advocate and implement legislation and improve their responsiveness and accountability to their constituent. To support the rule of law, USAID projects have strengthened legal systems to provide transparent access to justice for all citizens.

To build trust across communities and at the national level, USAID’s reconciliation programs have engaged citizens from all walks of life – political, government, religious, and education officials, youth, women, religious communities, associations of war victims, and civil society groups – and provided opportunities for these BiH leaders and citizens to challenge their own beliefs then start transforming their communities.

USAID assistance is essential to ensuring BiH continues to advance and move beyond its complicated history to take its place alongside its Balkan neighbors as a member of the EU.

For Specific Results Achieved, see USAID Assistance in Bosnia and Herzegovina, 1996-Present.