Bosnia and Herzegovina: Early Warning Report 2009

Early
Warning
System
2009
The UNDP is the global development network of the UN, an organisation advocating for change and connecting
countries through knowledge, experience and resources to help people build a better life. The UNDP is on the ground
in 166 countries, working with them on their own solutions to global and national development challenges. As these
countries develop their local capacity they can draw upon the people of the UNDP and its wide range of partners.
Copyright 2010 by the United Nations Development Programme (UNDP) in Bosnia and Herzegovina, 48 Marala
Tita, 71000, Sarajevo.
Supervisor: Armin SIRO
Project Manager & Editor: Nicola NIXON
Project Associate: Mersiha URI
Reviewed by: Yuri AFANASIEV, UN Resident Coordinator; Peter Van RUYSSEVELDT, Deputy Resident Representative;
Armin SIRO, Assistant Resident Representative; Amna BERBI, Human Security and Justice Cluster Coordinator;
Asja ENGI, Communications Analyst; Klelija BALTA, Democratic Governance Cluster Coordinator a.i./Gender Ad-
visor; Lucia DESIGIS, Programme Analyst; Marta NOVOVI-MLINARI, Communications Associate
Team Leader: Adnan EFENDI
Authors: Dina DURAKOVI, Adnan EFENDI, Aleksandar DRAGANI, Eldar SARAJLI, Edin ABANOVI and Igor PA-
LANDI
Translation: Desmond MAURER
Cover design: Vedran MUJAGI
DTP & layout: Lana NOGO
ISSN: 1986-5678
The views expressed in this report are those of the authors and do not necessarily refect the views of the United Nations
Development Programme.
Foreword
With 2009 closed behind us and the Early Warning System (EWS) fnishing its ninth year of monitoring public
opinion in the key areas of politics, economy, social security, ethnic relations and public safety, the UNDP
is struck by the degree to which the situation has remained virtually unchanged, although not for the better,
over the past several years. The list of the most important current issues and problems remains as it was
and includes the following:
- a lack of improvement in the process of EU integration and the slow implementation of the
various associated reforms;
- continued failure to revise the post-Dayton institutional arrangement in such a way that would be
acceptable to the representatives of three constitutive peoples, while at the same time
guaranteeing political and institutional stability through efective government;
- the lack of sound economic policies aimed at encouraging stronger economic growth and
development.
The forewords to both the 2008 and 2007 annual reports highlighted the extent to which the political sit-
uation and institutional improvements in the country had benefted from an economic cushion, over recent
years; however, at the same time, it warned that this could not be expected to remain the case for much
longer. The situation is now clearly diferent, especially given the impact of the global fnancial crisis during
2009. Throughout the year the structural incapacity of the political system in Bosnia and Herzegovina to
deal with the economic crisis became increasingly evident. We entered 2010 following a year that was also
characterised by failed or stalled political negotiations and a distinct lack of progress on the road to the
European Union. With an October election on the horizon, it is unlikely that any signifcant improvement
in these areas will occur.
Yuri Afanasiev
UN Resident Coordinator in Bosnia and Herzegovina
Early Warning System 2009
3
Executive Summary
The year 2009 will be remembered as one in which many problems afected diferent areas of life. This did not just
afect Bosnia and Herzegovina (BiH) at the local level of, which is monitored directly by the Early Warning System re-
ports, but also to a very great extent in terms of the country's regional and the global context. This report provides
explicit evidence that the country passed through a recessionary phase in its economic development, encountered
a series of political and institutional obstacles that hindered accelerated progress towards the European Union and
the NATO alliance and experienced a whole series of events related to the problems of social discontent, social ex-
clusion, nationalist political intolerance and a general deterioration in public and personal safety. Given the nature
of the general situation in BiH during 2009 it is no surprise that overall the Stability Index for BiH (Graph 1) has fallen,
continuing a trend that has been present for the last three surveys.
The two components of the general Stability Index were recorded as being depressed in the November 2009 poll,
which was also the case with all of the sub-indices that were monitored in this report, including those for economic,
inter-ethnic, social and political stability. In other words none of the areas analysed in this report saw progress during
2009, which is worrying in itself. One might cite a number of reasons for this situation for each individual area under
observation, but there are also a large number of factors that are endogenously interwoven in more than one area
at the same time. One of the basic aims of this report is to identify systemic problems in BiH and to provide early
warning to stakeholders in each of the areas covered by the analyses. Accordingly, in the following
110
100
90
80
70
60
50
S
t
a
b
i
l
i
t
y

I
n
d
e
x

f
o
r

B
o
s
n
i
a

a
n
d

H
e
r
z
e
g
o
v
i
n
a
Chain index
Composite index
101.61
63
100
63
101.67
61
100
64
96.83
61
98.44
63
98.39
61
100
59
103.39
61
101.64
62
101.59
64
101.67
61
95.38
62
96.67
58
98.41
62
96.61
57
100
60
96.72
59 61
96.83
61
100
63
98.36
60
101.56
65
98.36
60
100
63
96.72
59
101.69
60
104.92
64
101.61
63
100
64
101.64
62
101.61
63
103.45
60
100
62
103.51
59
98.33
59
The Stability Index for Bosnia and Herzegovina
May
00
Feb
04
Apr
02
Apr
06
Jun
01
Feb
05
Jan
03
Apr
07
Jun
08
Jan
01
Sep
04
Aug
02
Sep
06
Dec
01
Sep
05
Sep
03
Nov
07
Nov
08
Aug
00
Jun
04
Jun
02
Jun
06
Aug
01
Jun
05
Jul
03
Sep
07
Oct
08
Apr
01
Nov
04
Oct
02
Nov
06
Mar
02
Nov
05
Nov
03
Mar
08
Nov
09
1
Source: research opinion poll conducted by Prism Research for this project in November 2009.
Graph 1: The Stability Index for BiH
1
4
text a brief summary of the key fndings from the various sections is provided, with more detail available in the indi-
vidual sections.
The frst section reviews the political environment in BiH. On the basis of the results of the public opinion poll, held
in November, it has been concluded that there have been very few positive developments in BiH in terms of political
life and in how the domestic political process is unfolding (I. POLITICAL STABILITY). In actual fact the opposite is the
case as the political crisis has deepened further. As a result of these events BiH has fallen even further behind the
other countries in the region, which is confrmed by the fact that BiH is signifcantly behind the other former Yugoslav
states with regard to the process of Euro-Atlantic integration.
The political crisis is largely the result of an absence of even a minimum level of political consensus over the future
of the state. Unfortunately, given the way in which the polity of BiH was conceived, the question of responsibility for
the current situation has become a very complex problem with multiple dimensions.
To cap a series of political problems, the perception of confdence in government institutions reached dramatic pro-
portions in 2009 (II. CONFIDENCE IN GOVERNMENT INSTITUTIONS). This may well be a consequence of the situation
in the political scene, as described above, and also of the general absence of or weakness in the institutional mech-
anisms that should be used to mitigate the negative impact of certain political activities.
The results of the poll also revealed diferences in the views held by the respondents of diferent ethnicities and how
they rated the performance of government and the international institutions. Unfortunately, it would appear that
these diferences are increasing, in line with the views of the respective political elites. This divergence of opinion is
an indicator of deep political and institutional as well as social crisis where the main form of identifcation would still
appear to be nationality.
Moving on to the economic environment in BiH, the frst thing worth noting is that the global fnancial and economic
crisis did not spare the local economy over the past year (III. ECONOMIC SITUATION IN BiH). Consequently, industrial
production fell by 12% in the Federation of Bosnia and Herzegovina (FBiH) during the frst eleven months of 2009,
while, somewhat unexpectedly, rising by 18% in Republika Srpska (RS)
2
. The rather high value of the index for the
oil producing sector, thanks to production starting at the Bosanski Brod refnery, throws considerable light on the
reasons for the disproportional results in RS when compared to the FBiH.
While the trends of the Index of Industrial Production difered by entity, unemployment rose in both of the entities
of BiH. Compared to 2008 the fgure grew by 23,000 people (approximately 5 %)
3
. It is interesting that unemployment
grew more in RS (6.3 %) than in the FBiH (2.7 %) during the frst ten months of 2009
4
.
Retail prices in BiH fell moderately in both entities when compared to the same period in 2008, which is one of the
signs of recession
5
. In the monetary feld, the Central Bank of BiH reported a fall in foreign currency reserves during
both 2008 and the frst six months of 2009. However, during the second half of 2009 there was a moderate rise in
their level, which is a positive sign.
2
Federal Statistics Ofce Mjeseni statistiki pregled No. 12, Year XIII, December 2009; Republika Srpska Statistics Ofce Mjeseno saoptenje
No. 219/09: Indeksi industrijske proizvodnje December 2009.
3
BiH Statistics Agency Statement: Registrirana nezaposlenost u Oktobru 2009, No. 10, Year III; Federal Statistics Ofce Mjeseni statistiki
pregled broj 12, Year XIII, December 2009; Republika Srpska Statistics Ofce (www.zzrs.org), December 2009.
4
Statistics Agency of BiH Statement: Registrirana nezaposlenost u Oktobru 2009, No. 10, Year III; Federal Statistics Ofce
Mjeseni statistiki pregled broj 12, Year XIII, December 2009; Republika Srpska Statistics Ofce (www.zzrs.org), December 2009.
5
Data for BiH: Statistics Agency of BiH Statement: Indeks potroakih cijena u BiH u oktobru 2009, Year III, No. 11.
5
6
The Business Environment Survey conducted for the UNDP Early Warning System by Prism Research: Business to
Business Survey - top 150, November 2009.
7
Public opinion poll conducted by Prism Research in November 2009.
The November poll, looking at how the public viewed the economic situation over the past year, saw the highest
percentage of the sample describing the economic situation as having deteriorated. Nearly 50% of the sample said
that the economic situation has deteriorated, which appears to be an accurate refection of the actual conditions
and the trends shown by the ofcial indicators.
Whereas the public opinion poll suggests that the general public of BiH has a very poor opinion of the current eco-
nomic situation, a survey of the business sector, carried out at the same time, showed a very diferent response to
the situation (IV. THE BUSINESS ENVIRONMENT IN BiH). In fact, the November poll showed a signifcant positive turn-
around in terms of the assessment of the economic situation in comparison to the year before. However, while the
answers received suggest that the economic situation in BiH has improved this should be interpreted as the business
sector saying that the situation is better than in 2008, but certainly not that there has been any major improvement
in the economy. Therefore, if exactly a year ago the greatest deterioration in economic confdence in recent years
was noted then this turnaround is a sign that there has been some improvement in the eyes of the business sector.
More simply, as suggested by certain ofcial indicators (e.g., the condition of the foreign currency reserves of the
Central Bank of BiH), perhaps the worst of the recession in BiH has passed.
Despite the fact that most businesses described the economic situation as better
6
the survey noted a sharp rise in
the level of corporate debt. It was assumed that during the recession that gripped the BiH economy in 2008 and
2009 many companies decided to increase their level of debt in order to overcome the stagnation. Given such a
course of events it is no surprise that the percentage of business people who said they had made a loss was up on
the previous year.
In the section that analyses income and the social welfare system in BiH the data presented continues to illustrate
the very poor socio-economic circumstances of the average household in BiH (V. INCOME AND SOCIAL WELFARE).
Whereas ofcial statistical data does not show a fall in living standards or purchasing power the results received
through the poll show a clear reduction in spending within the framework of the household budget. The proportion
of the household budget allocated for food has increased, which has left insufcient room for the other needs to be
met. The number of households in BiH living on an income of less than 500 BAM monthly has increased
7
. The reasons
for these trends may well lie among the consequences of the economic crisis: job losses may have reduced the income
of individual household members along with lower salaries in certain areas or branches of industry and a reduction
in pensions and beneft payments for certain categories of the population.
The economic crisis, in addition to its impact on the quality of life and living standards, has left its mark on expecta-
tions. The number of individuals who expect their household income to fall over the coming six months has increased,
while 15 % of those in employment thought that they might lose their job over the subsequent three months
8
. The
current situation and an uncertain future have increased the number of respondents who would support public
protests, strikes and demonstrations. The situation is particularly worrying in the FBiH, where almost two-thirds of
respondents stated that they would take such action.
At the policy level social inclusion still does not appear to be very high on the agenda of many government repre-
sentatives, in spite of the fact that more than half of the general population consider themselves as socially excluded
on some grounds (VI. SOCIAL INCLUSION). This impression received confrmation through the fact that work on the
Social Inclusion Strategy for Bosnia and Herzegovina has already been ongoing for two years. Limitations in the im-
plementation of documents that have been adopted may also be stressed, such as the BiH Strategy for Inclusion of
the Romany and the Disability Policy of BiH.
6
The public opinion poll conducted in November 2009 showed no major changes with regard to perceptions of social
exclusion, although the economic crisis has increased the number of people excluded on the basis of unemployment.
The current unemployment insurance system allows for beneft payments to only 2% of the unemployed, while the
basic role of the employment bureau has been reduced to securing the right to healthcare. Generally speaking, the
economic situation is worse in rural than in urban areas, as a result of low and irregular income, the unregulated em-
ployment status of people working in agriculture and the current pension and disability insurance policy. The situation
is similar when the sample is examined from a gender perspective, where the levels of cash income favour men and
other disparities can be found in the enjoyment of legally guaranteed employment-related rights. The failure of these
policies to provide enough support for a decent standard of living is most likely a contributing factor behind the
desire of nearly two-thirds of the population aged between 18 and 35 to leave the country.
On the basis of the survey results, it appears that perceived inequality, based on being of an ethnic minority, in certain
areas of BiH is 'partly' responsible for denying certain groups equal participation in formal institutions and other
spheres of public life.
The indicators for the last reporting period suggest that relations between the various ethnic groups in BiH have de-
teriorated moderately (VII. ETHNIC RELATIONS AND STABILITY). The Interethnic Stability Index is down on the previous
reporting period. The worsening political situation in the country and the long-standing failure of political negotia-
tions between the ethnic leaders, principally on constitutional change, may be perceived as having contributed to
this fall.
The poll conducted in November also showed a fall in the level of support for refugee return and an increase in con-
cern that war might break out again were EUFOR to withdraw, as well as an increase in ethnic distance (particularly
between Croat and Bosniak respondents). On the other hand, there was also a modest increase in the willingness,
based on better job prospects, to move to a town where another ethnicity was in the majority. This was particularly
marked amongst the younger generation, most likely due to the burning problem of youth unemployment.
In terms of their support for nationalist political platforms, overall, it appears that, according to the poll, people do
not believe that the ethnic nationalist parties are the answer to their political problems, as has been the trend for
some time. Bosniak respondents in particular appear to be disappointed by their ethnic political representatives.
However, support for the main ethnic parties of Serb or Croat afliation was somewhat stronger, as can be seen from
the continued support of Croat respondents for the HDZ and the support of Serb respondents for the SNSD
9
. Yet in
the poll results most people seemed largely apolitical, at least with regard to support for political parties. A certain
number of respondents either expressed no desire to vote or were unsure as to which of the parties on ofer to give
their vote. As a result of poor political relations in BiH the people's identifcation with both their ethnic community
and the State may have declined to some degree. This is mostly true of the Bosniaks respondents, whose level of
pride in both their ethnicity and the State has fallen more signifcantly during the recent reporting period than has
been the case for those who identifed themselves as Serb or Croat respondents.
Finally, concerns over public and personal safety in BiH are increasing as is evident from the downward trend of the
Security Stability Index (VIII. PUBLIC AND PERSONAL SECURITY). The reasons behind this modest fall can be attributed
to the recorded increase in break-ins at privately owned buildings as well as the number of serious crimes in both
entities of BiH, namely murder. Public attitudes are most likely still infuenced by last year's debates over public safety
and a number of unfortunate events that involved minors. In addition to the poor general sense of public safety, as
refected in the poll results, public perception in this regard may well have been infuenced by the efects of the
global fnancial crisis. This is also likely to be connected to the prospect of social unrest and dissatisfaction among
certain categories of the population with state and entity government economic policy.
8
SPublic opinion poll conducted by Prism Research in November 2009. See Chapter 4, Graph 2 The number of people
who expect their income to decrease.
9
Public opinion poll conducted by Prism Research in November 2009.
7
The data, in this regard, shows that the social and fnancial causes of public dissatisfaction that are likely to cause
public unrest are more important, at least to a certain degree, than the political, namely ethnic, factors which are
normally considered as playing the dominant role within BiH society. The percentage of the public who would take
to the streets over their national rights was considerably smaller than the percentage that would do so over job
losses. The data from the reporting period thus suggests the primacy for the individual of social/fnancial status over
ethnic/national rights in BiH. Similarly, there is interesting data which indicates that the age group most ready to
protest is for those between 36 and 50 years of age; one might have expected, as a general principle, that the younger
generation would generally be more prepared to resort to such public expressions of discontent.
While the rates for almost all categories of criminal activity were up in the FBiH there was actually less dissatisfaction
with the level of police assistance received. In RS, on the contrary, there has been a signifcant change in public dis-
approval of special police actions. Similarly, more than half of the sample said that they thought corruption was a
factor in the police force, which has had a considerable impact on the overall perception of the police's role in society.
This, at least in part, refects the political context in which the police operate; the force's approval rating is higher in
RS than in the FBiH, in spite of the high level of dissatisfaction with the actual police assistance received in RS and of
the level of perceived corruption within the force. Like the police, the courts' public approval rating is also in decline.
Following the key fndings of the previous summary it may be imagined that the life satisfaction of respondents
could be afected by many of the social, economic, political and other problems discussed in the report. In the last
poll we included a question that asked respondents about their life satisfaction; a question that was replicated from
the European Quality of Life Survey (EQLS). According to the results of the EQLS, residents of the EU are generally
satisfed and happy with their lives
10
and report their life satisfaction to be at an average of 7 out of 10. Yet the situ-
ation in BiH is quite diferent; the average value of life satisfaction was only 5.6 out of 10. If this result is compared
with the EQLS survey then BiH sits towards the bottom of the list of EU member states and EU candidate countries.
In the EQLS the lowest scores were obtained in Bulgaria (5.0), Macedonia (5.2) and Hungary (5.6), while the highest
level of life satisfaction was evident in Denmark at 8.5. Yet it cannot be said that the situation in BiH is necessarily
worse than in other countries in South East Europe, especially having in mind that life satisfaction in BiH appears to
be the same as in Hungary and slightly better than in Bulgaria and Macedonia. All in all, many problems discussed
in this report most likely impact negatively upon the broader life satisfaction of BiH citizens.
10
European Foundation for the Improvement of Living and Working Conditions (2006): Second European Quality of Life
Survey, frst fndings, p. 2.
8
Contents
Foreword....................................................................................................................................................................................... 3
Executive Summary .................................................................................................................................................................. 4
Contents ....................................................................................................................................................................................... 9
Key Indicators for BiH ............................................................................................................................................................... 11
I. Political Stability ................................................................................................................................................................. 14
1. The Political Stability Index ....................................................................................................................................... 15
2. The Reporting Period at a Glance ........................................................................................................................... 16
3. Public Pessimism at a Dramatic Level .................................................................................................................... 18
4. Support for the European Integration Process is High .................................................................................. 20
5. More than Half will Not Vote for the Current Political Parties .................................................................... 21
6. Conclusion ...................................................................................................................................................................... 23
II Confdence in Government Institutions ...................................................................................................................... 24
1. The Reporting Period at a Glance ....................................................................................................................... 25
2. Diferent Ethnic Groups' Confdence in Institutions Vary Greatly ........................................................... 27
3. Support is Up for the Ofce of the High Representative ............................................................................ 29
4. Conclusion ...................................................................................................................................................................... 31
III. The Economic Situation in BiH ........................................................................................................................................ 32
1. The Economic Stability Index Falls .......................................................................................................................... 33
2. Results for Industrial Production Difer by Entity .............................................................................................. 34
3. Increased Unemployment Still a Major Macroeconomic Problem ............................................................. 36
4. Retail Prices and Central Bank Foreign Currency Reserves both Modestly Down.............................. 37
5. Balance of Foreign Trade Moderately Improved .............................................................................................. 40
6. Public Opinion on the Economic Situation further Worsens ........................................................................ 42
7. Conclusion ...................................................................................................................................................................... 44
IV. The Business Environment in BiH ................................................................................................................................. 45
1. The Economic Situation in 2009 Better than the Previous Year ................................................................. 46
2. Increase in Bosnian and Herzegovinian Company Debt ............................................................................... 48
3. Institutional Problems Hinder Business Sector Development ..................................................................... 50
4. Domestic Institutions Cause High Direct and Indirect Costs ........................................................................ 52
5. Conclusion ....................................................................................................................................................................... 56
V. Income and Social Welfare ................................................................................................................................................ 57
1. The Social Stability Index for Bosnia and Herzegovina ................................................................................. 58
2. Number of Low-income Households Increasing .............................................................................................. 61
3. Crisis afects Public Expectations ........................................................................................................................... 63
4. Purchasing Power and Living Standards in Moderate Decline .................................................................... 67
9
Contents
5. Minimum Living Standards and Social Protection Require more Attention .......................................... 71
6. Conclusion ................................................................................................................................................................... 73
VI. Social Inclusion .................................................................................................................................................................. 74
1. Social Inclusion: How High is it on the Governments Agenda?................................................................... 75
2. At the Last Count, more than Half the Population were Socially Excluded.......................................... 77
3. Social Inclusion and Ethnic Division ................................................................................................................... 81
4. Consociational Democracy: Cause or Consequence of Social Exclusion ................................................ 84
5. Conclusion ..................................................................................................................................................................... 87
VII. Ethnic Relations and Stability .......................................................................................................................................... 88
1. The Interethnic Stability Index and the Political Context in Bosnia and Herzegovina ....................... 89
2. Ethnic Division and Discrimination on the Rise ............................................................................................. 91
3. Declining Support for Refugee Return ............................................................................................................... 93
4. Social Distance: Party Politics and the Ethnic Afect .................................................................................... 95
5. Ethnic Pride and the State of Bosnia and Herzegovina ............................................................................... 99
6. Conclusion .................................................................................................................................................................... 101
VIII.Public and Personal Security ......................................................................................................................................... 102
1. The Security Stability Index: a Gentle but Steady Fall ................................................................................... 103
2. Collective Security: what after EUFOR?................................................................................................................ 105
3. The Global Economic Crisis and the Potential for Social Unrest .................................................................. 107
4. Personal Safety and Criminal Activity.................................................................................................................... 109
5. Confdence and Perceived Corruption within the Police and Judiciary ................................................. 112
6. Conclusion ..................................................................................................................................................................... 114
Special Insert on the Environment ..................................................................................................................................... 115
10
Key Indicators for BiH
Do you think the High Representatives powers should be reduced,
in creased, or stay the same?
100.0
90.0
8%
61%
22%
9%
33%
74%
3% 3%
19%
24%
25%
18%
80.0
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0
Increased
Reduced
Stay the same
DK/NA
Bosniak majority Croat majority Serb majority
Number of low income households (in %)
100.0
90.0
80.0
70.0
60.0
50.0
40.0
4 .0 7
59.4
86.3
28.1
38.1
66.5
71.4
38.6
37.6
30.0
20.0
10.0
0.0
Sept 08
FBiH
RS
Brko District
Nov 08 Nov 09
No. (in %) who expect household income to contract
25.0
10.0
20.0
5 0 . 0
15.0
0. 0 0
2 4 0. 0
13.62
21.63
18.77
14 24 .
10.80 10.53
11.53
Nov 08 Nov 07 Nov 09 Jun 8 0
Urban
Rural
No. of people who think they may lose their job during
next three months (in %)
0. 0 0 10. 0 0 20. 0 0
17. 9 0
15.41
12.91
22.28
30. 0 0
Nov 09
FBiH
RS
Nov 08
Central Bank Bosnia and Herzegovina Foreign Currency Reserves
(in millions of KM)
8.000
7.000
6.000
5.000
4.000
3.000
2.000
1.000
0
XII
2003
XII
2006
XII
2004
XII
2007
XII
2005
XII
2008
I
2009
II III IV V VI VII VIII IX X
Company trading in BiH
90
80
70
60
50
40
79
18 18
26 26
31
16 20
79 77 78
72
63
69 67.3
32.7
30
20
10
0
April
2007
Dec
2007
Dec
2008
Nov
2009
Sept
2007
Mar
2008
Aug
2008
Sept
2008
Profit (%)
Loss (%)
With regard to current political conditions, things in BiH
are getting worse
100
T
o
t
a
l

s
a
m
p
l
e

%
90
80
70
60
50
40
67.0%
50.0% 50.9%
63.4%
75.0%
30
20
10
0
March 08 June 08 Sept 08 Nov 08 Nov 09
All things considered, would you say that Bosnia and
Herzegovina will benefit from membership of the European Union?
100
80
60
%
40
86 7 . %
67 6 . %
74 5 . % 77 7 . %
20
0
Yes
No
Don t know/
Won t answer
Bosniak majority Croat majority Serb majority Brko district

11
Some people say that only the ethnic or ethnically affiliated parties
in BiH can protect the vital ethnic/national interests of the ethnic
group they represent. Do you agree or disagree with this opinion?
100
90
80
70
60
50
40
30
20
10
0
Disagree
Agree
BiH FBiH RS Bosniaks Serbs Croats Brcko
How proud are you of belonging to your ethnic group?
Not very
Not at all
Not important
Somewhat
Very proud
13%
76%
2% 3%
4%
Do you think that in the case of EUFORs withrawal from BiH there
might be an another war?
Dont know
No
Yes
64%
11%
25%
No. of people who have confidence in others - November 2009 (in %)
25.0
18.38
16.40
20.50
17.98
6.88
12.90
10.0
20.0
5 0 . 0
15.0
0. 0 0
Minorities
Majorities
Bosniak majority areas Croatian majority areas Serbian majority areas
% who expect deterioration in BiH due to the current political
situation - minorities
100
90
80
70
60
50
40
90,7
82,5
60,3
47,4
41,2
75,9
46,6
82,1 81,1
30
20
10
0
Nov 07 Nov 08 Nov 09
Minority in BMA Minority in CMA Minority in SMA
% who expect deterioration in BiH due to the current political
situation
100.0
90.0
80.0
70.0
60.0
50.0
40.0
80.2 52.9 71.4
79.4 79.7 89.6
82.4 50.3 64.0
30.0
20.0
10.0
0.0
Bosniak majority areas
Croat majority areas
Serb majority areas
12
Average salary trends in FBiH and RS (in the first 10 months of 2009)
900
RS
FBiH
700
800
791
785
771
781 786
773
794
792
790 786
789
813
795 798 792
793
793
783
785
790
01/09 03/09 05/09 07/09 09/09 02/09 04/09 06/09 08/09 10/09
Would leave BiH if they had the opportunity (in%)
100.0
90.0
80.0
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0
Nov 08
Nov 07
Nov 09
BiH
45.58
40.36
44.02
FBiH
46.41
40.08
52.10
RS
44.21
41.56
32.69
18-35
65.90
63.29
66.54
36-50
56.42
39.38
51.92
51+
19.54
17.57
22.22
Trends in the Consumer Price Index (CPI) in FBiH and RS
(in the first 10 months of 2009)
101.50
101.00
100.50
100.00
99.50
99.00
98.50
98.00
RS
FBiH
01/09 03/09 05/09 07/09 09/09 02/09 04/09 06/09 08/09 10/09
99.90
99.90
99.90
99.90
90.50
100.10
101.00
99.79
100.30
100.90
99.70
99.90
99.90
99.90 99.90
99.00
100.10
100.00
100.30
100.60
13
I.
Political
Stability
By Dina Durakovi
1. The Political Stability Index
2. The Reporting Period at a Glance
3. Public Pessimism at a Dramatic Level
4. Support for the European Integration Process is High
5. More than Half will Not Vote for the Current Political Parties
6. Conclusion
15
The level of the Political Stability Index for 2009 was the lowest since our surveys began and is an urgent indicator of
political conditions in Bosnia and Herzegovina. In a year that many consider to have be the least stable politically
since the Dayton Agreement was signed negative trends have dominated not only political life at the state level and
the work of all state level institutions, but also lower level institutions. The economic crisis showed its teeth during
2009; however, dealing with it has hardly been at the forefront of politicians' attention, no more than it has been a
priority for the responsible state level institutions. This has also contributed to this exceptionally poor general picture.
Representatives of international institutions continued to operate in 2009 much as they had done in 2008, with clear
signs of declining interest and infuence over political events within the country. Unfortunately, this process was not
accompanied by any improvement in the performance of the state level institutions during 2009, no more so than it
had been earlier.
Graph 1: The Political Stability Index
11
110
100
90
80
70
60
50
40
P
o
l
i
t
i
c
a
l

S
t
a
b
i
l
i
t
y

I
n
d
e
x
Chain index
Composite index
May
00
Feb
04
100
56
Apr
02
101
56
Apr
06
100
54
Jun
01
96
56
Feb
05
100
54
Jan
03
96
57
Apr
07
92
52
Jun
08
90
48
Jan
01
103
56
Sep
04
100
53
Aug
02
103
57
Sep
06
96
52
Dec
01
98
57
Sep
05
94
49
Sep
03
94
55
Nov
07
96
52
Nov
08
102
51
Aug
00
96
54 56
Jun
04
94
53
Jun
02
98
55
Jun
06
100
54
Aug
01
103
58
Jun
05
96
52
Jul
03
101
58
Sep
07
103
54
Oct
08
104
50
Apr
01
103
58
Nov
04
101
54
Oct
02
103
59
Nov
06
107
56
Mar
02
96
55
Nov
05
110
54
Nov
03
101
56
Mar
08
101
53
Nov
09
92
47
The Political Stability Index for Bosnia and Herzegovina
11
Source: Table 11 was under annex to the Prism Research poll conducted for this project in November 2009.
16
The negative political trends of 2008 continued and worsened during 2009, as the depth of the crisis afecting political
processes in Bosnia and Herzegovina became clear. It would not be going too far to say that the State as a whole
founds itself in perhaps its worst political crisis since the Dayton Agreement was signed, an assessment which is sup-
ported by the value of our Political Stability Index for 2009.
As pointed out in the annual report for 2008, representatives of the SNSD, the SDA and the HDZ in BiH reached agree-
ment in principle (the so-called Prud Agreement) late that year on key political issues, which included the status of
state owned property, the status of Brko district and a census. This was an attempt to kick-start the political process
out of the dead calm that it had fallen into during the second half of that year. Yet it immediately became obvious
that the parties to the agreement held such diferent interpretations as to what had been agreed as to make it ques-
tionable whether any real agreement had in fact been reached. Pessimistic predictions were proven accurate as the
process stumbled before it had even begun and the lack of political will to reach a compromise was obvious.
The use of negative rhetoric in political life continued unabated from the very beginning of 2009, with the ruling
coalition a coalition in name only. Throughout the year increasingly aggressive signals were sent by the governing
SNSD in Republika Srpska (RS) that stressed the inviolate nature of the entity, while denying the State and its institu-
tions, rejecting talks on constitutional change and questioning the role of the international community. On the other
hand, the Federation of Bosnia and Herzegovina was sufering from internal problems and increasingly poor relations
between the ruling SDA and HDZ BiH. Representatives of the Croat parties became increasingly vocal about how
dysfunctional the Federation was and about their own disadvantaged status at both the federal and the state level,
while representatives of the Bosniak parties continued to advocate for the strengthening of the state level of gov-
ernment, albeit without ofering any concrete plans for dealing with the crisis. As mentioned above, the performance
of state level institutions has probably never been lower than during 2009. As a result of this climate no major ad-
vances were made in the reform process.
BiH made no signifcant progress with regard to the Euro-Atlantic processes during 2009. Approval was not forth-
coming for the liberalisation of the visa regime, because the relevant EU institutions concluded that the country had
not met the conditions specifed. Moreover, at the beginning of December approval was denied to Bosnia and Herze-
govina to move forward with the NATO Membership Action Plan (MAP), essentially for the same reasons. Finally, the
European Commission reported that Bosnia and Herzegovina had not made satisfactory progress in the EU accession
process, issuing its most negative progress report to date in mid-October
12
. It is stated in the report that progress
towards EU accession has been negligible, that the political climate has signifcantly worsened, that only a small
number of the laws whose passage is required by the process have actually been passed and that the implementation
of reforms continues to go slowly because of the absence of political consensus.
13
By contrast, there has been signifcant progress on the path to European integration in the region. In early November
Croatia and Slovenia reached agreement over international arbitration to deal with the long-running border dispute
that had threatened to put an abrupt halt to Croatia's progress towards EU accession. The European Union also ap-
12
European Commission 2009: Progress Report 2009, at
http://www.delbih.ec.europa.eu/docs/ProgressReport20092.pdf .
13
Ibid.
Political Stability
17
proved the liberalisation of the visa regime for Montenegro, Serbia and Macedonia, which came into efect as of 19
December and means that the citizens of these countries can now travel to European Union countries (except Great
Britain and Ireland) without visas. At the same time, a clear message was sent to Bosnia and Herzegovina from the
institutions of the European Union and the NATO alliance that there would be no relaxation of conditions and that
the country would have to begin to meet its obligations.
The relationship of local ofcials to the international community also remained conficted. While representatives of
parties from RS took a very clear stand on this issue by claiming that the international community was part of the
problem and not the solution for Bosnia and Herzegovina the representatives of parties based in the Federation gen-
erally took the view that the international community should play an even more active role.
The international community launched a further attempt to deal with the crisis in the form of a joint initiative of the
United States and the European Union. The former High Representative, Carl Bildt, together with US Deputy Secretary
of State, James Steinberg, initiated yet another round of talks between the political leaders on constitutional change.
The American-European initiators presented a package of constitutional amendments which would have, amongst
other things, reinforced the House of Representatives by increasing the number of deputies, increased the number
of deputies in the House of the Peoples, restrained abuse of the principle of the protection of vital national interests
and strengthened the role of the Chair of the Council of Ministers, but would have retained entity voting. The package
contained changes which, in the view of many, seemed relatively modest and insufcient. The so-called Butmir
Process lasted a relatively short period of time, because after only a few rounds of negotiation and revision of the
initially proposed changes the fnal proposal was only acceptable to the SDA. The other parties rejected it either be-
cause it did not include enough changes or because it included too many.
In 2009 there was a change of High Representative, as Miroslav Lajak left to take up the position of Foreign Minister
of Slovakia in March. He was replaced by Valentin Inzko, an Austrian diplomat with previous experience as Ambas-
sador to Bosnia and Herzegovina. Right at the beginning of his mandate the new High Representative was faced
with a multitude of problems. One of his frst decrees, intended to ensure the continued operation of the state owned
electricity transmission company, Elektroprenos BiH
14
, met with an exceptionally strong reaction from RS, whose
Premier announced that it would be the last such decree and that any attempt to impose decisions in the future
would be rejected by the smaller entity.
The threat was tested quickly enough. Throughout the year the leaders of the ruling parties took diametrically op-
posed positions on the issue of extending the mandate of foreign prosecutors and judges at the Court of Bosnia and
Herzegovina. While representatives of the Croat and Bosniak parties supported retaining foreign citizens in these in-
stitutions, SNSD representatives, supported by most other parties in RS, in no uncertain terms opposed extending
their mandate.
A decision was fnally brought by the High Representative on 14 December when he issued a decree ensuring that
foreign citizens would continue to have a presence in the court for the next three years, but only in the war crimes de-
partment. This decree left everybody unhappy, including those who had supported the continued presence of for-
eigners. The latter were dissatisfed that the decree did not relate to foreign judges and prosecutors in all departments
and in particular the Department for the Fight against Organised Crime and Corruption. On the other hand, the parties
from RS, led by the SNSD, refused to recognise the High Representative's decision as valid, calling an extraordinary
session of the RS National Assembly over the issue and even threatening to hold a referendum. A rare positive event
in the political life of BiH in 2009 was the countrys acceptance as a non-permanent member of the UN Security Council,
with a mandate from 2010-2012. This took place in October and was preceded by a furry of diplomacy. Membership
of the Security Council is considered to be Bosnia and Herzegovina's greatest foreign policy success since the end of
the war, though one must stress that the real challenges lies ahead. Given the domestic political climate and the dif-
culty of reaching consensus on issues where the country must have a single position, there is justifed concern as to
how ready Bosnia and Herzegovina is to participate appropriately and competently in the work of the Council.
14
The relevant decisions are available at http://www.ohr.int/decisions/archive.asp.
18
3. Public Pessimism at a Dramatic Level
The negative trends in political life were accompanied by similar trends in public opinion. At the end of 2009 we
noted a very worrying level of pessimism amongst the sample as a whole regarding the future of Bosnia and Herze-
govina. As much as 75% of the total sample described the political situation as deteriorating, while just 17% felt that
things were moving in a positive direction (see Table 1 in annex). The most dramatic results were for the Bosniak sam-
ple, which had a very negative view during 2008 and by the end of 2009 as much as 91% of this group felt that Bosnia
and Herzegovina was moving in the wrong direction. Pessimism was also at very high levels for the samples from
the other two groups, though not as high: 71% of the Croat sample and 63% of the Serb sample shared the view that
the State is headed in the wrong direction politically. It is important to note that there was a signifcant increase in
pessimism amongst all three groups in late 2009 when compared to the same period in 2008, with pessimism up 11
points for the Bosniak sample, 13 points for the Serb sample and 18 points for the Croat sample.
These indicators are in line with the samples' assessments of the economic conditions in the country. Some 80.5% of
the total sample described the economic situation as poor in November 2009, which represents a rise of approxi-
mately 15 points on the same period the previous year, while just 1.1% felt that the economic situation was good.
More details on the results of our poll related to this question may be found in the economic section of this report.
The percentage of the sample of people that would leave Bosnia and Herzegovina if the opportunity arose was
44%, a modest increase on the previous year, while the 18 to 35 age group continued to stand out in regard to this
opinion. The main change that we noticed relates to the 36 to 50 age group. In this group some 13% more of the
sample (giving a total of 52%) stated that they would be prepared to leave Bosnia and Herzegovina to live in another
country. Looking at the breakdown according to ethnicity the main change noted was amongst Bosniak respondents:
17% more compared to the last survey. For the two other groups the number that gave a positive answer to the ques-
tion fell, so that 36% of Croat respondents and 33% of Serb respondents now say that, if ofered the opportunity to
do so, they would leave Bosnia and Herzegovina to live in another country (see Tables 4 and 5 in the annex).
19
Graph 2: In what direction do you think Bosnia and Herzegovina is headed?
15
15
Source: Table 1 in annex.
Political Stability
0
10
20
30
40
50
60
70
80
90
100
67.0%
50.0%
50.9%
63.4%
75.0%
March 08 June 08 Sept 08 Nov 08 Nov 09
T
o
t
a
l

s
a
m
p
l
e

%
With regard to current political conditions, things in BiH are getting worse
20
At the same time, support amongst the overall sample for the European integration process has risen by some 7
points, compared to late 2008, reaching 83%. Bosniak respondents continued to be the most likely to express support
(94%), followed by the Serb sample (73%, up 16 points on the previous period) and then Croat respondents (71%)
(see Table 6 under annex). In spite of the relatively similar levels of support expressed by the respondents of all ethnic
groups their views on the European Union itself difered considerably. As much as 70% of the Bosniak sample had a
very positive view of the European Union, compared to just 26% of the Serb sample and 38% of the Croat sample.
Members of these two groups were more likely to hold a relatively positive view of the European Union: 53% of Serb
respondents and 41% of Croat respondents. Approximately 10% of the Serb sample, 7% of the Croat sample and 2%
of the Bosniak sample held a generally negative view of the EU (Table 8 in annex). Nevertheless, more than half of
the total sample thought that Bosnia and Herzegovina would beneft from EU membership: 68% of the Croat sample,
75% of the Serb sample and 87% of the Bosniak sample (see Table 7 in annex).
4. Support for the European Integration Process is High
Graph 3: Will Bosnia and Herzegovina beneft from EU membership or not?
16
0
20.0
40.0
60.0
80.0
100.0
86.7%
67.6%
74.5%
%
77.7%
Brko district
No Yes Don't know / don't answer
All things considered, would you say that Bosnia and Herzegovina will benefit from
membership of the European Union?
16
21
During 2009 the Bosniak sample was the most negative in its assessment of how the governing parties have per-
formed, which is no doubt related to their highly pessimistic attitudes about the future of the country and the econ-
omy. This was also the subsample with the most clearly defned attitudes regarding how the parties are doing, as a
considerably smaller number of individuals from this ethnic group, compared to the two others, failed to express an
opinion with regard to the performance of the parties.
Dissatisfaction amongst the Bosniak sample was very obvious. As much as 83% did not consider the parties in gov-
ernment to be even relatively successful in defning and implementing key reforms, while 90% described them as
being insufciently responsible and or accountable to the public and 89% took the view that they do not deserve to
remain in power. However, when asked whether a change of the parties in government would accelerate the imple-
mentation of key reforms and the economic recovery of the country far fewer, only 66%, said that they thought it
might. This certainly suggests a considerable lack of confdence in the parties that represent the alternative to the
current Government, but nonetheless more than half of this ethnic sample believed that a change would bring an
improvement.
The two other ethnic samples were considerably less critical of the impact of the parties in power. Not unlike 2008,
the Serb sample's position in 2009 was not unanimous. When asked whether they considered the governing parties
to be relatively successful in defning and implementing key reforms 35% said that they did, 25% said they did not
and 38% were unwilling to answer the question. The response to other questions was similar: 27% of the Serb sample
said the ruling parties showed sufcient responsibility towards the public, 33% said they did not, while 36% were
undecided. Some 30% of this group said that the ruling parties deserved to remain in power, but 20% said a change
in the parties at the top would bring an improvement with regard to the implementation of key reforms and economic
recovery.
Croat opinion lay somewhere in the middle; just over half this group (51%) felt the government was failing in the im-
plementation of key reforms, while 56% said that the governing parties did not show sufcient responsibility towards
the public. Some 52% of this group said that the governing parties did not deserve to remain in power, while 45%
said that replacing them would bring economic recovery and accelerated implementation of key reforms (see Table
10 in annex).
It is also interesting to review the responses of the public when asked What party they would vote for if general
elections were held now? The frst thing to notice is that more than half of all groups would not choose any of the
political parties currently on ofer, while some 17% said that they had no intention of voting, 23% that they would
not vote for any particular party and 19% refused to answer the question as to whom they would vote for. The most
popular of the political options on ofer to the sample as a whole continued to be the SNSD (14 % of the total sample),
followed by the SDP (9%) and the SDA (7%). The showing of the SNSD is a consequence of the continued high level
of support the party enjoys with the Serb sample, 35% of whom said that they would vote for the SNSD. The party
has practically no support amongst the other two ethnic groups. Serb sample support for the SDS fell visibly during
2009 with just 4% saying that they would vote for the party right now, which is down by 7 points on the fnal quarter
of 2008. One of the reasons for this may well be the appearance of a new party on the political scene in the smaller
entity of Bosnia and Herzegovina, led by the former senior SDS party ofcial Dragan avi. Approximately 2% of the
Serb sample would vote for his Democratic Party and, given that this is a newly formed party, we will follow its per-
formance in future reports.
5. More than Half will Not Vote for the Current Political Parties
22
Turning to the Croat sample, the HDZ continues to enjoy by far the most convincing support with 29% of respondents
from this group saying that, if elections were held at the time, they would vote for the HDZ. They are followed by the
Narodna stranka Radom za boljitak at 4%, while support for the HDZ 1990 has collapsed with just 1% of the Croat
sample ready to vote for this party, which is down 4 points on the fnal quarter of 2008. With the Bosniak sample, the
SDP enjoyed the greater support (19%) then the ruling SDA (15%), although both parties saw their support decline
in 2009. There was a signifcant drop in support for the Stranka za BiH during the reporting period, with just 2% of
Bosniak respondents saying that they would vote for this party at present, down fve points on the previous reporting
period (see Table 9 in annex).
Political Stability
23
There were almost no positive developments in Bosnia and Herzegovina in 2009 in either political life or in how the
domestic political process is unfolding. The opposite is the case, in fact, as the radicalisation of political life has con-
tinued and the political crisis has further deepened. As a result of these events Bosnia and Herzegovina has fallen
even further behind the other countries of the region, as confrmed by the fact that Bosnia and Herzegovina is the
only one (alongside Albania) whose citizens have not been granted a liberal visa regime by the EU, as well as the only
one not to have made signifcant progress in the process of Euro-Atlantic integration. Our survey results well illustrate
the general atmosphere of pessimism aficting the country. It is particularly worrying that as much as 75% of the
public thought that Bosnia and Herzegovina is headed in the wrong direction, while 81% also believed that the eco-
nomic situation in Bosnia and Herzegovina is poor.
The political crisis is largely due to the absence of even a modicum of political consensus over the future of the State,
although one should not ignore the reduced interest of the so-called international community in becoming involved
to any signifcant extent in a political process for which it is, nonetheless, still an unavoidable element. The fact that
each active intervention by the High Representative requires lengthy consultation and the harmonisation of the po-
sitions of the member states of the Peace Implementation Council, often resulting in a consensus that is at the ex-
pense of the true interests of the State, has put the wind at the back of radical political forces. On the other hand,
neither should one pass lightly over the fact that the primary responsibility for the condition of the country lies ex-
clusively with the domestic political establishment. Unfortunately, given the way that the polity of Bosnia and Herze-
govina was conceived, with an Ofce of the High Representative that depends on the agreement of states with very
diferent interests and positions, the question of responsibility for the current situation becomes a very complex
problem with multiple aspects. This creates a situation with no obvious way out, in which institutional responsibility
is a fuid category and the prospects for resolving the political crises are ever diminishing.
6. Conclusion
II.
Confdence in
Government
Institutions
By Dina Durakovi
2. Diferent Ethnic Groups' Confdence in Institutions Vary Greatly
3. Support is Up for the Ofce of the High Representative
4. Conclusion
25
The downward trend in institutional stability that was already evident in 2008 continued throughout 2009. The pro-
found political crisis in Bosnia and Herzegovina has led to almost absolute gridlock in state level institutions and has
had a very serious impact on the performance of lower level authorities. In state level institutions it is already usual
for political crises to produce serious problems in their day-to-day operations, which in 2009 resulted in the failure
to meet the conditions for progress towards Euro-Atlantic integration and the liberalisation of the visa regime. In
fact, it was the failure of the state level Parliament to pass the required legislation that was the main reason for Bosnia
and Herzegovina being left of the list of countries that are no longer subject to visa requirements by European Union
member states, being denied inclusion in the NATO Membership Action Plan and receiving the worst progress report
to date in the EU accession process.
17
The main aspects of state level institutional functionality remain much as in
the previous year with extreme politicisation of the political decision making processes, outvoting on an ethnic basis
and a lack of compromise. In the absence of institutional mechanisms, which might help to mitigate these negative
aspects, state level institutions fnd themselves practically incapable of functioning.
There is also crisis at the level of the Federation of Bosnia and Herzegovina in how both the Government and Parlia-
ment are doing their jobs. The positions of the main coalition partners, particularly the SDA and the HDZ BiH, are in-
creasingly remote, which seriously hinders the entity's institutions in meeting their obligations. One indicator of the
depth of the political crisis in the Federation is the fact that Mostar, a city whose Council is dominated by the SDA
and the HDZ BiH, had no mayor for more than 14 months, because the two parties were incapable of agreeing on
whom to select. This resulted in complete gridlock in the City Hall, where it proved impossible to pass the city budget
and to fnance city institutions. It was only in December 2009, after it had become entirely clear that the local politi-
cians were in no position to resolve the crisis, that the High Representative decreed a change to the city statutes
which allowed a mayor to be elected by a simple majority in the third round of voting. Following this the sitting
mayor, the HDZ candidate, was re-elected.
The institutions of Republika Srpska (RS) continued to operate with considerable coherence, largely due to the over-
whelming predominance of one party in all government bodies: the SNSD. One of this party's most important coali-
tion partners, the PDP, has withdrawn from government, but without any major impact on how entity institutions
function.
The difculties that the Ofce of the High Representative has faced in its attempt to have a stabilising efect on do-
mestic political processes are due to the fact that the representatives of the diferent ethnic groups have very diferent
views on the work (and even the continued existence) of this institution, as can clearly be seen through our survey
results. This has been the source of additional friction in political life. Moreover, it has long been clear that the coun-
tries represented on the Peace Implementation Council disagree signifcantly over the modus operandi of the Ofce
of the High Representative in Bosnia and Herzegovina. The new High Representatives use of the Bonn authorities
caused a powerful reaction in RS. Following his most recent decision, in December 2009, to impose a ruling on the
extension of the mandates of foreign judges and prosecutors in state level judicial institutions, the Government of
RS announced its intention to hold a referendum in that entity on these decisions and actually passed draft amend-
ments to the relevant legislation to facilitate doing so. RS institutions also intend to conduct a census of the entity
population, given the failure to reach agreement over a countrywide census.
17
European Commission 2009: Progress Report for 2009, available at
http://www.delbih.ec.europa.eu/docs/ProgressReport20092.pdf.
Confdence in Government Institutions
26
The High Representative and a number of other international ofcials have clearly described these decisions as anti-
Dayton. Given the absence of a general consensus regarding the international community's role in Bosnia and Herze-
govina, even amongst its own most senior representatives, it remains unclear as to how and indeed whether the
international community will take serious action should the RS institutions actually carry out what they have an-
nounced.
27
2. Diferent Ethnic Groups' Confdence in Institutions Vary Greatly
The diferences between how the various ethnic samples rate the institutions of government widened even more
signifcantly during 2009. On the one side there are the Bosniak respondents, whose distrust of institutions at all
levels increased dramatically throughout 2009. Consequently, only some 15% of respondents from this group now
approve of the job being done by state level and federal institutions, while as few as 9% expressed approval of the
job being done by RS institutions. At the municipal level only 18% of respondents approved the performance (23%
less than was registered in the last quarter of 2008). At the same time, respondents from this group showed growing
approval of the international institutions active in Bosnia and Herzegovina, so that 65% of Bosniak respondents ex-
pressed confdence in the work of the EUPM (an increase of around 8%), while some 60% approved of the job being
done by the European Union (up 6%) and 53% expressed their approval of the work being done by the institutions
representing the United States (an increase of some 7%) (see Table 2 in annex).
In line with these results there has also been an increase in the percentage of the Bosniak sample that thinks corrup-
tion is an issue in government bodies. With the exception of the Presidency of Bosnia and Herzegovina, where no
change was noted, there has been an increase in the samples belief that corruption is present in its most severe form
("very widespread") in all of the institutions of government, most particularly in entity level institutions. Thus, 66% of
the Bosniak sample believed corruption to be very widespread in the Government of the Federation of Bosnia and
Herzegovina, 63% considered this to be the case with regard to the Parliament of the FBiH, 76% with regard to the
Government of RS (representing an increase of 12 percentage points) and 74% with regard to the National Assembly
of RS (an increase of 10 percentage points). If one adds to this the signifcant number of respondents who believed
that corruption is "present to some degree" at all of these levels of government then the views of this group of re-
spondents becomes even more alarming. That is, taken together, more than 80% of the respondents from this group
believed that corruption is either "very widespread" or "present to some degree" within state level institutions and
in the institutions of the Federation, while more than 90% believed the same to be true of the institutions in RS (see
Table 5 in annex).
In contrast, the views of Serb respondents were practically the reverse. This group approved, to a very signifcant de-
gree, of the job being done by institutions at all levels of government. Some 49% expressed their approval of the
performance of state level institutions, while more than 40% did so for the institutions of the Federation. When it
came to approval for the job being done by the institutions of RS we noted, despite a decline compared to the end
of 2008, that this group of respondents was still more likely than not to express its approval of the Government and
the National Assembly of RS. Thus, 67% supported the Government of RS (fve points down on the previous reporting
period) and 64% did so for the National Assembly of RS (down eight points). Compared with the previous reporting
period there were no major changes in regard to international institutions in Bosnia and Herzegovina, with the level
of confdence found amongst this group varying from 33% for institutions which represent the United States
18
to
44% for the OSCE (see Table 2 in annex). This group of respondents was, however, more convinced than in the previous
reporting period that corruption is widespread. Thus, more than 70% of the respondents from this group believed
that corruption is "present to some degree" or "very widespread" in state-level institutions, although the percentage
of this group that believed that corruption is present in its most severe form was less than that of the Bosniak re-
spondents. The situation is similar for entity institutions with around 76% of respondents believing that corruption
is either "present to some degree" or "very widespread" in the institutions of the Federation of Bosnia and Herzegov-
ina, while 65% believed it to be the case for the institutions of RS (see Table 5 in annex).
18
This represents a growth of some 6 points.
28
As is already customary, the views of the Croat respondents were somewhere in between those of the Bosniak and
Serb respondents. No change in opinion was noted with regard to state level institutions with 34% expressing their
support for the Presidency of Bosnia and Herzegovina and around 31% doing so for the Parliamentary Assembly and
the Council of Ministers of BiH. There was a moderate decline when it came to the entity institutions with between
27% and 28% of Croat respondents expressing their support for the job being done by the institutions of the Feder-
ation of Bosnia and Herzegovina, but just 11-12% did so for the institutions of RS and we noted a decline in support
for municipal institutions of around 10 points (now at 26%). We noted a signifcant increase during the course of this
reporting period in support amongst Croat respondents for the international institutions active in Bosnia and Herze-
govina; it is now between 44% (an increase of 9 points) for the institutions of the United States and 51% for the EUPM
(an increase of almost 15 points) (see Table 2 in annex). With this group we also noticed a modest decline in the belief
that corruption is present in state level institutions at all levels. However, the majority continue to believe that cor-
ruption is either "present to some degree" or "very widespread" in state level institutions, as did 58% when it came
to the institutions of the Federation and as much as 65% with regard to the institutions of RS (see Table 5 in annex).
On the other hand, it is worth noting that the various ethnic samples had quite similar views as to whether the efec-
tiveness of the state level and entity institutions had improved or deteriorated over the past fve years. Thus, 51% of
Croat respondents, 47% of Serb respondents and 41% of Bosniak respondents believed that there has been no change
in the efectiveness of state level institutions over the past fve years, while 26% of Bosniak respondents, 21% of Serb
respondents and 19% Croat respondents believed that it has deteriorated (see Table 10 in annex). The picture was
very similar with regard to the efectiveness of entity level institutions, with the exception that 28% of Serb respon-
dents believed that the efectiveness of entity institutions has improved over the past fve years, which is no doubt
linked to the signifcantly greater level of general approval accorded to the performance of entity institutions by
members of this ethnic group (see Table 11 in annex).
Graph 1: Approval ratings for institutions
19
Nov 09 Nov 08
0
10
20
30
40
50
60
Presidency BiH
Parliament
Council of
Ministers
FBiH
Parliament
FBiH
Government
RS National
Assembly
RS
Government
Municipial
Authorities
FBiH
Cantonal
Authorities
49
41
41
38
39
40 40
56
39
34
32
29
29
32
31
32
39
19
%
I approve of the job being done by...
19
29
We noted a moderate increase in the approval rating for the Ofce of the High Representative in 2009, up from 46%
during the last reporting period to 51%; we also noticed that this support was a little higher amongst women (53%)
than for men (50%). This increase in approval refects the improved, albeit uneven, results for all of the ethnic groups.
The largest increase in approval, of 13 points, was noted with regard to the group of Croat respondents where 48%
expressed their support for the Ofce of the High Representative. The approval rating of the Serb respondents was
35%, an increase of 3 points, while the approval rating for the Bosniak respondents was almost double that at 68%,
which is 7 points up on the previous reporting period (see tables 1 and 2 in the annex).
There was also an increase in the percentage of respondents who gave positive marks to the various measures being
implemented by the Ofce of the High Representative. Looking at all of the groups combined just under 50% took
a positive view of the efectiveness of political, economic and public administration reform measures, while anticor-
ruption measures were given a positive rating of 39%. The Ofce of the High Representative continued to receive by
far the best rating from Bosniak respondents, 71% of whom gave positive marks for the political reforms (up 15 points
on the previous reporting period), while 65% expressed their support for the economic reforms (also up 15 points)
and 48% for anticorruption measures (up 4 points). Serb respondents were much more critical, though even for them
we noted a modest increase in support for all of the Ofce of the High Representative's reforms during this reporting
period: 26% had a positive view of the Ofce of the High Representative's measures in the area of political reform, as
did some 30% with regard to economic reforms and anticorruption measures. The level of support amongst Croat
respondents was around 39% for economic and political reform and around 31% for anticorruption measures (see
tables 6 and 7 in annex).
Very signifcant diferences remain in the attitudes of respondents towards the authorities of the High Representative.
Croat respondents were split fairly equally between believing that the High Representative's powers should be in-
creased, reduced or left as they are. In contrast, there has been no increase in the percentage of Serb respondents
who believe that the High Representative's powers should be reduced (now 75%), while just 3% believed that they
should be increased. The attitude of Bosniak respondents was entirely the opposite with 61% of this group (that is
19 points more than in the previous reporting period) believing that the High Representative's powers should be in-
creased, while 22% believed that they should be left as they are and just 8% believed that they should be reduced.
It is interesting to note that 7% less women than men believed that the powers of the High Representative should
be reduced. At the same time, almost the same percentage of women was unable to answer this question (see Table
9 in annex).
3. Support is Up for the Ofce of the High Representative
30
Graph 2: Attitudes to the powers of the High Representative
20
8
0
10
20
30
40
50
60
70
80
Reduce
Increase
Stay the same
22
9
61
33
24
25
18
3 3
19
74
Don't know / don't wish
to answer
%
Are you in favour of the High Representative in BiH's powers being
reduced, increased or staying as the are?
20
31
4. Conclusion
The crisis in how government institutions function reached dramatic proportions in 2009. This was a consequence
of the absolute absence of institutional mechanisms which might be used to remove or at least mitigate the negative
impact on institutional performance. These mechanisms would allow the work of the state level government insti-
tutions to work properly. In such a situation the international community was not able to stabilise the domestic po-
litical process. On the one hand, the expectations, primarily of representatives of the Bosniak parties, that the
international community will solve the internal problems have not only been proven to be obviously unfounded,
but actually presented an obstacle to fnding solutions where they must originate from, namely the domestic political
process. On the other hand, the calls from the representatives of RS for the full exclusion of international factor from
the political process combined with obstruction within state level institutions left little room for optimism over what
may be expected should that actually happen. Whatever the ultimate outcome of these various tendencies it is clear
that at this moment in time they represent an additional strain on the political process and are having a negative im-
pact on how state level institutions function.
Our poll results are a reliable indicator of developments in politics. Diferences between the views held by the re-
spondents of the diferent ethnicities and how they rate the performance of government and international institu-
tions are increasing, generally in line with the views of the respective political elites. This major divergence in opinion
is an indicator of a deep political and institutional as well as social crisis.
III.
The
Economic
Situation in
BiH
By Adnan Efendi
1. The Economic Stability Index Falls
2. Results for Industrial Production Difer by Entity
3. Increased Unemployment Still a Major Macroeconomic Problem
4. Retail Prices and Central Bank Foreign Currency Reserves both Modestly Down
5. Balance of Foreign Trade Moderately Improved
6. Public Opinion on the Economic Situation further Worsens
7. Conclusion
33
The Economic Stability Index has seen a downward trend over the last three waves of polling. More precisely, there
has been a reduction in the value of the Economic Stability Index for Bosnia and Herzegovina since October 2008
(see Graph 1). Given the onset and development of the economic recession in the world and, with a minor time lag,
in Bosnia and Herzegovina, these results came as no great surprise, because they simply confrmed for the umpteenth
time that public opinion in the country is of considerable relevance when looking at economic trends here. The
downward trend in the Economic Stability Index held for both the chain and the composite indices. We would not
be surprised if this negative movement of the index were to continue in future surveys, as the impact of the recession
in Bosnia and Herzegovina is still noteworthy. There will be more on this when we deal with ofcial statistics later in
the text.
Graph 1: The Economic Stability Index for Bosnia and Herzegovina
21
50
60
70
80
90
100
110
Survey
Chain index 96.7103 104 100 101 95.3 101 100 100 101 100 98.4100 98.4100 101 96.8 101 101 96.8 98.396.6 103 101 98.3101 101 98.396.7 96.6103 100 101 100 98.3
Composite index 61 59 61 64 64 65 62 63 63 63 64 64 63 63 62 62 63 61 62 63 61 60 58 60 61 60 61 62 61 59 57 59 59 60 60 59
May
00
Feb
04
Apr
02
Apr
06
Jun
01
Feb
05
Jan
03
Apr
07
Jun
08
Jan
01
Sep
04
Aug
02
Sep
06
Dec
01
Sep
05
Sep
03
Nov
07
Nov
08
Aug
00
Jun
04
Jun
02
Jun
06
Aug
01
Jun
05
Jul
03
Sep
07
Oct
08
Apr
01
Nov
04
Oct
02
Nov
06
Mar
02
Nov
05
Nov
03
Mar
08
Nov
09
Economic stability index for Bosnia and Herzegovina
21
In recent years industrial production has regularly recorded signifcant rates of increased production, both with regard
to the economy of Bosnian and Herzegovinian as a whole and at the entity level; however, the impact of the global
economic crisis during the reporting year of 2009 did not pass BiH industry by. Consequently, industrial production
in the Federation of Bosnia and Herzegovina was down some 12% in the frst nine months of 2009 compared to the
same period the previous year, whereas industrial production continued to grow in Republika Srpska (RS), rising 19%
(see Table 2). Ignoring other factors and indicators in our assessment, total industrial production in RS registered few
negative consequences of the global crisis, which was primarily due to increased production of coke and petroleum
derivatives in this Bosnian and Herzegovinian entity. We will have more to say on this later.
In the Federation of Bosnia and Herzegovina industrial production rose in only three sectors during the frst 11 months
of 2009 compared to the same period for the previous year. The production of tobacco products increased by 12%
and the production of chemicals and chemical products was up by 1.8%. Publishing activities (printing) and the re-
production of recordings also saw a growth of 1.8%.
22
While most branches of industry saw a signifcant reduction
the following three sectors sufered the greatest negative consequences of the economic crisis: the production of
motorised vehicles, trailers and semi-trailers (-73%); the production of ofce machinery and computers (-59%) and
recycling (-36%).
23
Clearly it was those sectors closely related to the automobile industry that recorded the highest
relative fall in production, which is in line with trends worldwide. This also illustrates how the impact of global eco-
nomic events spill over into the markets of smaller countries like Bosnian and Herzegovinian. Given that there has
been a modest improvement in automobile industry-related production at the level of the world economy we expect
the condition of this indicator to be somewhat better in the coming year.
22
Source: Federal Statistics Ofce Mjeseni statistiki pregled No. 12, Year XIII, December 2009.
23
Source: Ibid.
34
2. Results for Industrial Production Difer by Entity
Table 2.
Indices of the physical scale of industrial production in Bosnia and Herzegovina

Entity

1-12 2008
1-12 2007
Results achieved during 2009

11 2009
2008

1-11 2009
1-11 2008

Best
performing
sector

Worst
performing
sector
FEDERATION OF BOSNIA
AND HERZEGOVINA
107.9 86.6 88.2
Tobacco
production
Car industry
REPUBLIKA SRPSKA
116.8 129.6 118.8
Petrol
production
Production of
technical
equipment
Source: Federal Statistics Office D No. 12, Year XIII, December 2009;
Republika Srpska Statistics Office D No. 219/09: Indeksi industrijske proizvodnje, December 2009.
The Economic Situation in BiH
35
The three most successful sectors in RS during the period under review in 2009, compared to 2008, were: the pro-
duction of coke and petroleum derivatives (3,015), the production of other means of transport (1,227) and the pro-
duction of chemicals and chemical products (258).
24
The production of coke and petroleum derivatives rose by some
3,000% compared to the same period in 2008, which can be safely attributed to the start of operations at the Bosanski
Brod oil refnery. Impressive rates of this sort are actually possible under conditions where production which was
previously non-existent or producing minimal results is being started up. In any case, this impressive indicator, at
least in relative terms, did result in good average fgures for industrial production in RS, which helps to explain the
diference between the entities with regard to their success in terms of industrial production. The least successful
sectors in RS's industry appeared to be the production of radio, television and communications equipment; the pro-
duction of base metals and the production of other electrical machinery and equipment. The value of the indices for
the three sectors shows production of approximately 50% of the levels in 2008.
25
24
Source: Statistics Ofce of RS Monthly Statement No. 219/09, Indeksi industrijske proizvodnje, December 2009.
25
Source: Statistics Ofce of RS Monthly Statement No. 219/09, Indeksi industrijske proizvodnje, December 2009.
36
The high rate of unemployment in Bosnia and Herzegovina must surely represent one of the country's
greatest macroeconomic problems. It is true that the increase in the number of the registered unemployed
noted over recent years came to a halt during 2008 and that the number of unemployed had begun to
gradually reduce during the year. Unfortunately, in 2009 we again saw an increase in the number of the
unemployed in Bosnia and Herzegovina compared to the previous year, no doubt as a consequence of
global economic events. Thus, while some 480,000 people were unemployed at the end of 2008, the num-
ber had passed above 500,000 again by October 2009 (see Table 3).
We noted that the number of the unemployed rose by some 23,000, a high of 5%, during 2009 compared to the level
in 2008. We also noted that women made up a higher percentage of the unemployed than men: 50.5% compared to
49.5% respectively. If we look at the breakdown in terms of qualifcations we fnd that the unemployed are most
likely to have VKV or KV (craftsman and master craftsman) qualifcations (183,325) followed by the NK (semiskilled or
unskilled labour) (160,827) and considerably fewer with any form of higher (Tertiary, but not University) education
(16,083).
26
A look at unemployment by entity shows that the number of unemployed increased in both entities during the frst
10 months of 2009 with 2.7% in the Federation and 6.3% in RS. It is worth noting that the percentage increase in the
number of unemployed during 2009 was higher in RS than in the Federation, which is in sharp contrast to the results
for industrial production in the entities. In other words, while industrial production in RS experienced growth over
2009 unemployment rose; this confrms our conclusions from the previous section that this was a matter of steep
relative growth in production only in certain sectors which did not generate sufcient new jobs during 2009 to reduce
unemployment or even maintain it at the then current levels. In any case, unemployment remains a major macro-
economic problem for Bosnia and Herzegovina and afects both entities; we may expect a further increase in the
number of unemployed by the end of the year.
3. Increased Unemployment still a Major Macroeconomic Problem
Table3.
UnemploymentinBosniaandHerzegovina
BosniaandHerzegovina 2007 2008 January
2009
October
2009
TotalUnemploymentinBiH 520,432 480,313 488,496 503,979
UnemployedWomeninBiH 247,279 254,274
UnemployedMeninBiH 241,217 249,705
Unemployed Highly Skilled in
BiH
12,516 16,083
FederationofBiH 342,174 351,444
RepublikaSrpska 134,798 143,305
Sources:StatisticsAgencyofBiH Statement:RegistrirananezaposlenostuOktobru
2009,No.10,YearIII;FederalStatisticsOfficeMjesenistatistikipregledbroj12,Year
XIII,December2009;StatisticsOfficeofRepublikaSrpska,(www.zzrs.org),December
2009.
26
Sources: Statistics Agency of BiH Statement: Registrirana nezaposlenost u oktobru 2009, No 10, Year III, December 2009.
37
While we have witnessed the gradual growth of retail prices in Bosnia and Herzegovina over recent years, particularly
following the introduction of VAT in 2006, it would seem that 2009 brought a structural change. There was no increase
in prices during the frst 11 months of 2009, compared to the same period for the previous year. In fact, a modest fall
in prices was registered, which was the case in both entities (see Table 4).
The structural changes we clearly found in this indicator for 2009 only confrmed that the economy experienced re-
cessionary tendencies during that year. That is to say that just as the essential characteristic of an economic expansion
is a gradual increase in prices, so that expansion and rising prices are trends that go hand-in-hand, prices often fall
during a recession. This is exactly what we are seeing in Bosnia and Herzegovina. While major price rises are not good
for the economy the same applies to falling prices. However welcome they may be to the individual they are not an
indicator of a healthy economy. In short, if prices are falling then this is generally due to an overall downtrend in con-
sumption in the economy, which is why prices begin to fall. This then draws after it a whole chain of negative conse-
quences, such as falling production, an increase in unemployment and problems with fnancing the budget, etc.
Given that the Bosnian and Herzegovinian economy sufered all of the above during 2009 it is more than clear that
Bosnia and Herzegovina was afected by the global recession during 2009 and that the modest fall in prices was sim-
ply additional confrmation in favour of this conclusion.
The main decline in the price index was related to clothing and footwear as well as to transport. This was the case in
both Bosnian and Herzegovinian entities. Thus, at the level of Bosnia and Herzegovina retail prices in the transport
sector fell by some 10%, while prices in the clothing and footwear sector fell on average by 4%.
27
On the other hand,
the highest price rises were for alcoholic beverages and tobacco and restaurants and hotels. Again, this was the case
in both entities. Higher alcohol and tobacco prices were certainly due to the introduction of additional excise duties
on tobacco products, which occurred during the current year
28
and again applied to both entities.
4. Retail Prices and Central Bank Foreign Currency
Reserves both Modestly Down
Table 4.
Retail Price Index in Bosnia and Herzegovina
Retail Price Index Nov 2009
0 2005
Nov 2009
Nov 2008
Jan- Nov 2009
Jan- Nov 2008
Retail Price Index in Bosnia and Herzegovina 116.0 99.3 99.6
Retail Price Index in the Federation of Bosnia and
Herzegovina 116.2 98.9 99.7
Retail Price Index in Republika Srpska 115.9 99.7 99.5
Source: Data for BiH: Statistics Agency of BiH Statement: /, 2009, Year III, No. 11.
Data for FBiH source: Federal Statistics Institute D 12, Year XIII, December 2009.
Data for RS: Republic Statistics Institute Monthly Statement: Indeks potro No. 217/09, December 2009.
27
Source: Statistics Agency of BiH Statement: Indeks potroakih cijena u BiH u oktobru 2009, Year III, No. 11.
28
Data for the FBiH: Federal Statistics Ofce Mjeseni statistiki pregled broj 12, Year XIII, December 2009; Data for RS:
Statistics Ofce of RS Monthly Statement: Indeks potroakih cijena, No. 217/09, December 2009.
38
And fnally, a very important monetary indicator that we have consistently monitored is the total gross foreign cur-
rency reserves of the Central Bank of Bosnia and Herzegovina. In recent years the reserve has seen steady growth at
the annual level, with a total value reaching 6.7 billion BAM in December 2007. However, as previously noted, there
was a reduction in the foreign currency reserves during 2008 and in the fnal month of the year it was some 400
million BAM lower than it had been at the end of 2007.
30
With regard to 2009 we noted a modest reduction in the foreign currency reserves in the frst six months, practically
from month to month, but also that their level began to rise modestly in July 2009 and by October 2009 it was already
a little higher than it had been in December 2008. There was a further modest fall in the value of the foreign currency
reserves in November 2009.
29
Source: Public opinion polls conducted for this project by Prism Research, survey results for 2006-2009, please see
Table V in annex.
30
Source: Central Bank of BiH, www.cbbh.gov.ba, December, 2009 and Table 6 in annex.
Graph 2: Predictng retail price trends in Bosnia and Herzegovina, 2006-2009
29

74.9
63.0
71.8
81.1
83.8
87.5 87.6
60.2
62.8
54.7
40.0
50.0
60.0
70.0
80.0
90.0
100.0
Sep
2006
Dec
2006
April
2007
Sep
2007
Nov
2007
May
2008
Jun
2008
Sep
2008
Nov
2008
Nov
2009
%
Responses forecasting further price rises in BiH (as % of all responses)
39
In any event, it is not difcult to surmise the reason for the reduction recorded during and in particular at the end of
2008. The global fnancial crisis indirectly resulted in the withdrawal of deposits from the Bosnian and Herzegovinian
banking system and this caused the foreign currency reserves of the Central Bank of BiH to be reduced. In our last
Early
Warning System annual report (2008), with regard to the reduction in the foreign currency reserves, we stated that
it was a matter of a short-term reduction in deposits and that consequently there was no need to panic, as we did
not expect any such fall to jeopardise the functions of the Central Bank's Currency Board. Trends throughout 2009
confrmed this, as the outfow of foreign currency reserves was efectively staunched and it can be expected that by
the end of 2009 the foreign currency reserves will be at a level similar to that of late 2008.
In any event, the global fnancial crisis is a reality and its indirect impact is clearly visible on the Central Bank indicators;
however, nonetheless, we believe that we can make out signs of a softening. This may suggest that the worst may
well have passed and that positive developments are to be expected in the coming period, if not of the intensity
that we saw in previous years, and that there should certainly be no major negative trends regarding the level of the
foreign currency reserves for this institution at the annual level.
Graph 3: Central Bank of Bosnia and Herzegovina foreign currency reserves in 2009
31

Central Bank of Bosnia and Herzegovina Foreign Currency Reserves (in millions of KM)
0
1.000
2.000
3.000
4.000
5.000
6.000
7.000
8.000
Dec
2003
Dec
2004
Dec
2005
Dec
2006
Dec
2007
Dec
2008
Jan
2009
Feb Mart April May Jun Jul Aug Sept Oct
31
Source: Ibid.
40
In recent years Bosnia and Herzegovina's balance of trade has been marked by negative trends, with a low import-
export ratio on the one hand and the steady growth of the defcit on the other. During 2008 Bosnia and Herzegovina
generated a defcit in foreign trade of more than 9.5 billion BAM, with an import-export ratio of 41%.
32
In contrast to
these trends in foreign trade from earlier years we found a major change in the movement of the foreign trade indi-
cator during the nine month period in 2009 under review; this was primarily due to the reduction in the volume of
trade, which afected imports, exports and the overall defcit. The total volume of Bosnia and Herzegovina's trade
during the frst nine months of 2009 was 14.6 billion BAM, of which nearly 10 billion BAM was for imports and just
5. Balance of Foreign Trade Moderately Improved
Table7.
ThebalanceofforeigntradebetweenBosniaandHerzegovinaandabroad
(millionsofBAM)fortheperiodsofIXfor2008/09.
JanOct2008 JanOct2009
Changein%
Export 5,849 4,649 20.5%
Import 13,598 9,984 26.6%
Volume 19,447 14,633 24.76
Balance 7,749 5,335 31.16
ImportExport
ratioin%
43.0% 46.6% +8.26
Source:ForeignTradeChamberofBiHPregledianalizaostvarenerazmjenezaBiH fortheperiod01to10
2008/09,November2009
4.6 billion BAM for exports. The resulting ratio of imports to exports produced a foreign trade defcit worth 5.3 billion
BAM; the coverage of imports by exports was 47% (see Table 7). Comparing these indicators to those for the same
period in the previous year we found that trade was down by some 5 billion BAM, with imports down by a little more
(27%) than exports (21%). This led to an increase in the coverage of imports by exports from 43% for the frst 10
months of 2008 to 46.6% for the same period in 2009. While the modest growth in the import-export ratio suggests
improving trade conditions all of these changes may certainly be attributed to recessionary tendencies and reduced
purchasing power, both on the part of consumers within Bosnia and Herzegovina and in other markets. In other
words, the modest increase in the import-export ratio, in combination with a signifcant reduction in the volume of
trade, can hardly be described as a positive development for the external sector of the Bosnian and Herzegovinian
economy.
Bosnia and Herzegovina's most important foreign trading partners have for some time been, in descending order,
Croatia, Serbia, Germany, Italy and Slovenia. The country with which Bosnia and Herzegovina has the largest trade
defcit is Croatia: the defcit for the period in question in 2009 being 1.1 billion BAM. When we look at groups of coun-
tries Bosnia and Herzegovina has the greatest volume of trade with the European Union, accounting for 51% of all
foreign trade. A considerable percentage of the country's overall trade is also with the CEFTA countries (Croatia,
Serbia, Montenegro, Macedonia, UNMIK/Kosovo, Albania and Moldova) amounting to around 35%, with the remain-
ing 14% spread across other countries.
33
32
Source: Statistics Agency of BiH Statement: Statistika vanjske trgovine, Year IV, No. 12, January 2009.
33
Source: Foreign Trade Chamber of BiH, Pregled i analiza ostvarene razmjene za BiH za period 01 do 10 mjesec 2008/09
godine, November, 2009.
41
A breakdown of Bosnia and Herzegovina's foreign trade by product group shows that the agricultural sector still
dominates imports, followed by fossil fuels. On the other hand, products from the ores, metals and related products
sector lead when it comes to exports. Yet this sector was also the one to see the greatest relative fall in both exports
and imports.
34
34
Source: Ibid.
42
Following an analysis of the statistical indicators of the condition of the Bosnian and Herzegovinian economy we
regularly turn our attention to the public's assessment of the economic situation in the country, both for the imme-
diately preceding period and for the one to come. In this way we can follow to what degree public perceptions refect
the actual economic changes and to a certain extent gain the public's prognosis of what the future holds. Without
going into detail, we think that in previous surveys public opinion has proven highly consistent with what has actually
been going on in the Bosnian and Herzegovinian economy.
More than half of the sample in all surveys conducted during 2008 rated the economic situation as similar to that of
the year before. Unfortunately, approximately one-third of the sample felt that the economic situation in the country
had deteriorated, although answers in the third quarter of 2008 were somewhat more positive. Answers in the fnal
quarter were amongst the worst, with the largest percentage of the respondent group describing a deteriorating
economic situation and the smallest percentage describing the economic situation in the country as having im-
proved.
Looking at the results for November 2009 we must conclude that this is the worst assessment of the economic situ-
ation in Bosnia and Herzegovina to date. Some 46% of the overall sample expressed the view that the situation in
the economy had worsened, while the percentage describing it as having improved was the lowest to date (5%) (see
Graph 4). Naturally, keeping in mind the global events and the series of economic, fnancial, banking, social and other
crises as well as the statistical indicators analysed in the frst part of the report, there is little wonder that this was the
response.
6. Public Opinion on the Economic Situation Further Worsens
35
Graph 4: How the public viewed the economic situaton in 2008 and 2009
35
Worse
The same
Better
0
10
20
30
40
50
60
Mar 2008 Jun 2008 Sep 2008 Nov 2008 Nov 2009
%
13.5
34.3
14.0
33.7
51.5
51.5
57.1
15.5
27.0
10.8
34.5
5.4
45.9
47.0
53.8
Asessment of the economic situation over the previous year
43
If we look at a breakdown of the answer to this question by entity we see that the answers from the Federation were
more pessimistic, with a greater number of prognoses of economic deterioration. To be more precise, 48% of the
sample rated the economic situation as having gotten worse, while 45% described the situation as unchanged.
36
The most positive responses to this question came from the respondents in Brko District. Moreover, the prognoses
for the coming period were also not optimistic and were generally worse than the projections we received during
2008.
As usual, the most common response from the sample during all of the surveys in 2008, as well as the November
survey of 2009, was that the economic situation in the coming year would not change signifcantly. Yet in earlier sur-
veys the number that predicted deterioration was normally insignifcantly larger than those predicting an improve-
ment in the economic situation. In this survey we found twice as many respondents giving pessimistic estimates as
those that gave optimistic ones. More exactly, almost one in every three of the sample expected an economic dete-
rioration, while just 15% of those asked actually expected better days, at least when it came to the economy in Bosnia
and Herzegovina (see Graph 5). We did not identify any signifcant deviations in the obtained results after disaggre-
gating the data in accordance to the gender of the respondents.
Graph 5: How the public view the economic situaton in the coming year
37
74.9
63.0
71.8
81.1
83.8
87.5 87.6
60.2
62.8
54.7
40.0
50.0
60.0
70.0
80.0
90.0
100.0
Sep
2006
Dec
2006
April
2007
Sep
2007
Nov
2007
Maz
2008
Jun
2008
Sep
2008
Nov
2008
Nov
2009
%
Responses forecasting further price rises in BiH (as % of all responses)
36
37
44
Industrial production fell by 12 % in the Federation during the frst eleven months of 2009, whereas it rose by 19 %
in RS. The rather high value of the index for the oil producing sector, thanks to the commencement of production at
the Bosanski Brod refnery, throws considerable light on the reasons for the results in RS. The main percentage increase
in the Federation was in the production of tobacco products.
While the trends in the Index of Industrial Production difered by entity unemployment rose in both of the entities.
The fgure was up by some 23,000 in 2008, approximately 5 %. Unemployment grew more in RS (6.3 %) than in the
Federation (2.7 %) during the frst three quarters of 2009.
Retail prices in Bosnia and Herzegovina fell moderately in both entities of the country during the frst nine months
of 2009 when compared to the same period in 2008. Such a result represents a structural change compared to the
results for previous years, when we regularly recorded moderately rising retail prices. The cause of such trends was
certainly the reduction in consumption caused by the global recession, which did not pass Bosnia and Herzegovina
by. A fall in demand for goods and services as a rule leads to a fall in prices, such as has obviously happened in the
Bosnian and Herzegovinian market.
The Central Bank of BiH has for some time recorded positive trends regarding accumulated foreign currency reserves,
which reached a level of 6.7 billion BAM. However, the Central Bank has not gone unscathed by the indirect negative
impact of the global economic and fnancial crisis. The reason for stating this is the reduction in the foreign currency
reserves during 2008 and the modest fall during the frst six months of 2009. Yet during the second half of 2009 there
was a moderate rise in the level of the foreign currency reserves at the Central Bank and we hoped that by the end
of the year this trend would have generated a value of reserves at a level a little higher than the balance at the end
of 2008.
Looking at how the public viewed the economic situation over the past year, in our November poll we noted the
highest percentage of our sample to date describing the economic situation in the country as having deteriorated.
Nearly 50 % of the sample said that the economic situation had deteriorated, which is no doubt a good refection
of the actual conditions and the trends shown by the ofcial indicators. When comparing the answers to this question
between the entities the results from the Federation were less positive. Looking at the coming period most respon-
dents did not expect signifcant changes, while just 15% thought that the economic situation in the country might
improve.
7. Conclusion
IV.
The Business
Enviroment
in BiH
By Adnan Efendi
1. The Economic Situation in 2009 Better than the Previous Year
2. Increase in Bosnian and Herzegovinian Company Debt
3. Institutional Problems Hinder Business Sector Development
4. Domestic Institutions Cause High Direct and Indirect Costs
5. Conclusion
46
The results of our surveys into the economic situation in Bosnia and Herzegovina during 2008 were not just poor,
but they also showed a general deterioration from quarter to quarter. By reviewing the conducted quarterly surveys
we found that the best relative results were for the third quarter, the worst being for the fnal quarter of the year. In
the diagram (Graph 1) we see that nearly 70% of the sample in the fnal quarterly survey for 2008 described the eco-
nomic situation in the country as having deteriorated, the highest sample percentage to date to take such a view.
Given the recessionary tendencies, which did in fact appear in late 2008, and the level of insecurity, which industrialists
in Bosnia and Herzegovina were encountering for the frst time in recent memory, such results can hardly be consid-
ered as surprising.
During 2009, unfortunately, the dynamic of quarterly polling was interrupted and as a result we only have answers
from the very end of the year (November 2009) to analyse. But when we did analyse the results received in response
to the question on the economic situation in Bosnia and Herzegovina in November 2009 we were positively surprised.
What we found was a signifcant positive shift in business opinion, with nearly half the sample from the business
sector taking the view that the economic situation had improved compared to the previous year. While this result
was somewhat unexpected, it would appear that business people in Bosnia and Herzegovina are sending the mes-
sage that the situation has improved, that the worst is over and that the economic situation in the country is better
than it was a year ago. This shift can only be interpreted as an announcement of better days ahead for the Bosnian
and Herzegovinian economy, given that exactly a year ago we recorded the largest drop in confdence in the eco-
nomic situation in the country to date.
1. The Economic Situation in 2009 Better than the
Previous Year
Graph 1 Expectatons regarding the economic situaton
38
0
10
20
30
40
50
60
70
80
April
2007
Sept
2007
Dec
2007
Mar
2008
Aug
2008
Sept
2008
Dec
2008
Nov
2009
%
Better
The same
Worse
The economic situation compared to the previous year
38
47
When we turn to look at our business sample's expectations for the coming six months we should remember from
our previous report that expectations for the frst six months of 2009 were quite poor. If we look at the ofcial statis-
tical indicators for the frst half of 2009 it seems that they were justifed, confrming for the umpteenth time the fore-
casts of our business sample. However, it appears that the deterioration of economic conditions that did take place
during the frst half of 2009 was less evident during the second half and, as we concluded in the economic section
of this report, there may even be modest signs of recovery. Finally, when we came to business sector expectations
for the frst half of 2010, as with the previous question, we were again surprised by the positive shift which appeared
in the answers to this question. It is true that the majority of the sample (57%) felt that the situation would be similar
to what it was during 2009; however, given that in the fnal survey of 2008 most of the sample registered a deterio-
ration of economic conditions in the country (62%) this result is surely a sign that business managers do not expect
the economic situation in the country to deteriorate in the immediate future, which under the circumstances we
may certainly consider as a positive development. Moreover, a considerable percentage (38%) of the sample actually
expected the economic situation to improve.
39
All in all, it would appear that our business sample's response suggests that the period of economic downturn in
Bosnia and Herzegovina is behind us and that recessionary tendencies should not be expected in the coming period.
The Business Environment in BiH
39
48
2. Increase in Bosnian and Herzegovinian Company Debt
Business people in Bosnia and Herzegovina characterised the economic situation during 2009 as having improved
in comparison to the previous year. With business people we can be sure that their opinion is largely based on the
fnancial performance of the companies surveyed. In other words, we may expect some improvement in their fnancial
performance, as the responses to our most recent survey confrms. Thus, an absolute majority of the sample (73%)
40
said that they were, fnancially speaking, in a better position than the previous year, a response consistent with those
of the previous section. Similarly, in the most recent survey we noted a considerably larger number of companies
making full use of their production capacity than was the case in 2008.
41
Here one should perhaps keep in mind that
the sample's responses relate to a comparison of current economic conditions with those of a year ago, so that the
relative improvement we are registering does not de facto have to mean that the state of the economy is good. We
may recall that the responses at the end of 2008 on the fnancial performance of companies were the worst we had
ever received. Accordingly, all we can conclude is that companies in Bosnia and Herzegovina were in a better fnancial
position in November 2009 than they were at the end of 2008, which was the worst of the last several years during
which we have been monitoring the business sector.
Moving on to forecasts for 2010 we found that business people expected their fnancial situation to improve further,
which is to say that they anticipated expansionary tendencies within the economy. According to the results of our
November poll a high percentage (73%)
42
of the sample expected their companies' fnancial position to improve,
which is certainly a noteworthy level of optimism. There were no major diferences between the entities in this re-
gard.
While most of the respondents took the view that their fnancial position had improved their answers regarding
changes to debt levels suggested that things are perhaps not as simple as they might seem. In fact, we have already
mentioned that a relative improvement in their fnancial position in comparison to the previous year does not have
to mean a de facto improvement, as the following table makes clear. In our November poll we noted the largest in-
crease in recent years in the debt burden of Bosnian and Herzegovinian companies (see Table 4).
40
41
42
Table 4.
,in the previous year?
Greater (%) The same (%) Less (%) N/A (%)

Sept
2008
Dec
2008
Nov
2009
Sept
2008
Dec
2008
Nov
2009
Sept
2008
Dec
2008
Nov
2009
Sept
2008
Dec
2008
Nov
2009
BiH 34 37 67 42 35 30.6 24 28 2
FBIH 31 35 68 43 38 29.3 26 27 2
RS 41 42 62 41 33 37.5 18 25
Source: The Business Environment Survey conducted for the UNDP Early Warning System by Prism Research: Business to
49
The sharp increase in debt for the absolute majority of companies in Bosnia and Herzegovina (67%) resulted in a very
similar pattern of answers in both entities, which is sufcient indication of how business people have tried to mitigate
the impact of the global economic crisis. Thus, the impact of the economic crisis last year, which resulted in a fall in
production for both domestic and foreign markets, as we saw in the economic section of this report, was certainly
one of the reasons why companies have sought a way out through increased debt. Of course, this increase in debt is
also partly due to increased investment; however, the steepness of the increase is certainly not due to a sharp increase
in capital investment at a time when production and consumption were falling; rather it represents an alternative
source of business fnance under conditions of economic stagnation.
Finally, we may fnd some confrmation of our earlier comments in the sample's response as to how their companies
performed during the second half of 2009. As can be seen from Graph 2, while a plurality of companies was still able
to achieve positive trading we noticed that the percentage operating at a loss was the largest to date (33%). Moreover,
we see that the negative trend has already been present for a number of quarters.
To round of our analysis we may conclude that the fnancial position of most companies did in fact deteriorate, due
to increased debt and negative trading, but that when compared to the end of 2008 the fnancial position of busi-
nesses in Bosnia and Herzegovina was relatively better.
Graph 2: Company trading in Bosnia and Herzegovina
43
Loss (%)
Profit (%)
0
10
20
30
40
50
60
70
80
90
April
2007
Sept
2007
Dec
2007
Mar
2008
Aug
2008
Sept
2008
Dec
2008
Nov
2009
79 79 77 78
72
63
69
67.3
32.7
31
26 26
18
20
16
18
Company trading in BiH
43
50
3. Institutional Problems Hinder Business Sector Development
Responses in regard to how helpful the various levels of government are to the business sector in overcoming ob-
stacles have hardly been encouraging for many quarters now. During 2008 results varied from quarter to quarter,
with the worst assessment recorded in December, particularly for state and entity levels.
44
Yet the responses to our
most recent survey showed that a majority of companies held the view that the authorities provide at least some
help in dealing with business problems. We may interpret this change in mood as a refection of an attempt at the
diferent levels of government to take measures to mitigate the economic crisis and in particular the commitment
of government at all levels to the budgetary reforms required for approval of the International Monetary Fund (IMF)
Stand-by Arrangement.
45
The state level authorities received the best rating (see Table 8), which is supported by our
interpretation of the answers and given the fact that state level Government was rated as the most relatively suc-
cessful in implementing reforms relevant for IMF approval. Unlike most previous surveys, this time it was the lower
i.e., cantonal and municipal levels of government that received the worst rating.
As well as our analysis of the Government's efectiveness in providing support to business people in Bosnia and
Herzegovina, for a number of years we have been monitoring key obstacles to business in the country. Table 9 in-
cludes a list of potential obstacles that Bosnian and Herzegovinian companies face, as well as the results from the
last three quarterly surveys.
Table 8.
How helpful are the various levels of government to the business sector in dealing with obstacles to business?

Very To some degree
Neither help
nor hinder
Generally
unhelpful
Very
unhelpful

Sept
08

Dec
08

Nov
09

Sept
08

Dec
08

Nov
09

Sept
08

Dec
08

Nov
09

Sept
08

Dec
08

Nov
09

Sept
08

Dec
08

Nov
09
State 1 3 30 11 5 56 29 26 14 22 27 19 29
Entity 2 2 16 16 11 60 26 20 22 21 26 1 19 28
Cantonal 1 2 8 22 19 53 19 13 38 22 26 1 19 25
Municipal 3 2 13 16 20 44 20 15 42 23 28 1 23 24
Source: The Business Environment Survey conducted for the UNDP Early Warning System by Prism Research: Business to Business
Survey - top 150, November 2009.
44
45
The Stand-by Agreement was approved in July 2009, but 72 % of the quota followed the completion
of the review in March 2010.
51
In most of the surveys carried out over recent years the sample identifed high taxation rates, unfair competition, po-
litical instability and the courts as the main problems facing business. In our last survey, conducted in November
2009, this list changed so that the three most important obstacles to conducting business in Bosnia and Herzegovina
(obstacles rated as either "very" or "somewhat") were customs procedures (76%), labour market regulations (72%)
and the Tax Administration (72%) (see Table 9). This is the frst time that customs procedures and labour market reg-
ulations have appeared as major obstacles to conducting business, but the Tax Administration has on occasion ap-
peared high on the list in earlier surveys of the key obstacles to conducting business in Bosnia and Herzegovina. Yet
if we take an average of the results for the last three years we fnd that the main obstacles have been unfair compe-
tition and corruption. These were identifed as obstacles by an average of 70% of the business sector, which is a clear
indicator of what the main barriers to business in Bosnia and Herzegovina are as well as what should be the priority
when addressing the problems that face the private sector in this country.
Table 9.
How big an obstacle to successful business are the following:

Very Somewhat Not much Not at all

Sept
08

Dec
08

Nov
09

Sept
08

Dec
08

Nov
09

Sept
08

Dec
08

Nov
09

Sept
08

Dec
08

Nov
09
Customs procedures 21 19 26 46 39 50 17 25 23 12 12 1
Tax rates 39 48 9 33 28 48 17 17 41 6 2 2
Unfair competition 34 42 13 26 27 52 25 16 34 7 9 1
Corruption 37 42 13 25 26 45 20 12 39 5 6 3
How the courts work 43 45 22 22 26 36 20 16 38 5 3 4
Political instability 26 34 19 39 27 42 23 24 36 3 6 3
Labour market regulations 24 28 19 31 31 53 27 21 24 11 14 3
The Tax Administration 20 19 7 34 38 65 29 29 27 9 9 1
Procedures for work/trading permits 36 38 19 29 29 42 20 20 35 7 8 4
Environmental regulations 17 17 17 35 36 49 30 23 32 9 12 2
Safety regulations and standards 11 14 18 28 30 53 36 31 27 13 15 2
Lack of trained staff 17 19 19 34 34 49 25 26 31 16 14 1
Source: The Business Environment Survey conducted for the UNDP Early Warning System by Prism Research: Business to Business
Survey - top 150, November 2009.
52
As has become evident from our business sector survey results, institutions determine how successful domestic com-
panies are in the conduct of their business. We have also monitored the efciency of the "relevant" institutions in
Bosnia and Herzegovina from the beginning of 2008. Having identifed the key economic and non-market institutions
(or state organisations) of relevance for business performance, in the hunt for economic growth, we then wanted to
see how well certain institutions were doing their jobs. The following table shows the results from the last three quar-
terly surveys.
When rating the institutions, which according to economic theory and practice are considered to be relevant for the
business sector and economic growth, in November 2009 companies in Bosnia and Herzegovina ranked the following
as the least efective: the legal system, the entity tax administrations, the Directorate for European Integration, the
banking agencies and the Foreign Trade Chamber of Bosnia and Herzegovina. While the legal system was regularly
ranked very poorly in previous surveys, our most recent research is interesting primarily because of the poor showing
of the Directorate for European Integration (DEI) and the banking agencies. One possible explanation is that the busi-
ness people of Bosnia and Herzegovina expected more from the DEI with regard to progress in the area of European
integration. How far Bosnia and Herzegovina is lagging behind its neighbouring countries on the path towards Eu-
ropean integration must certainly have infuenced this climate of opinion. Let us not forget either the series of recent
problems related to flling the most senior positions in this institution. Moreover, the banks, which had previously
4. Domestic Institutions Cause High Direct and Indirect Costs
Table 10.
How well do the following institutions do their job?

Very well

Quite well

Quite poorly Very poorly

Sept
08

Dec
08

Nov
09

Sept
08

Dec
08

Nov
09

Sept
08

Dec
08

Nov
09

Sept
08

Dec
08

Nov
09
Central Bank of BiH 24 30 29 43 39 53 7 4 17 6 6
Indirect Tax Authority 15 16 12 47 50 64 23 18 21 8 9 1
Entity tax administrations 11 6 11 46 48 52 25 25 35 13 17 1
The courts 4 3 10 18 17 46 39 36 34 30 35 1
Directorate for European
Integration 7 7 20 22 18 40 26 20 37 11 10 2
FIPA 4 3 15 29 19 55 18 18 28 20 19 1
Privatisation Agency 1 2 13 20 14 54 28 22 32 25 28
Banking Agency 7 5 11 28 32 53 29 20 30 8 7 5
Employment Bureaux 3 3 16 31 36 50 34 24 27 16 17 6
Foreign Trade Chamber of
BiH 7 4 17 28 29 44 32 30 35 20 18 1
Entity chambers of
commerce 9 11 19 28 28 46 31 27 31 20 19 3
Social Funds 20 2 17 9 10 50 33 26 28 33 37 4
53
received relatively good marks, are now in the category of those performing poorly. Again, we can only assume that
one of the possible reasons for this view is the uncertainty in the banking sector (e.g., the increase in interest rates
and credit conditions) that followed the global fnancial crisis as well as, perhaps, high expectations of the banks in-
tervening in the sector.
As usual, the Central Bank of BiH and the Indirect Taxation Authority were rated as the most efective institutions.
They are the key state level institutions responsible for macroeconomic stability in the country and thus for monetary
and fscal policy. The Foreign Investment Promotion Agency also stood out due to its high rating.
A relation can be seen between the informal institutions (that is informal connections and rules of behaviour) and
day-to-day business. This is why we regularly monitor the answers to a question on how much people in the business
sector use informal institutions.
certainly have infuenced this climate of opinion. Let us not forget either the series of recent problems related to
flling the most senior positions in this institution. Moreover, the banks, which had previously received relatively good
marks, are now in the category of those performing poorly. Again, we can only assume that one of the possible rea-
sons for this view is the uncertainty in the banking sector (e.g., the increase in interest rates and credit conditions)
that followed the global fnancial crisis as well as, perhaps, high expectations of the banks intervening in the sector.
As usual, the Central Bank of BiH and the Indirect Taxation Authority were rated as the most efective institutions.
They are the key state level institutions responsible for macroeconomic stability in the country and thus for monetary
and fscal policy. The Foreign Investment Promotion Agency also stood out due to its high rating.
A relation can be seen between the informal institutions (that is informal connections and rules of behaviour) and
day-to-day business. This is why we regularly monitor the answers to a question on how much people in the business
sector use informal institutions.
Table 11.
Please indicate to what extent you use various forms of informal connections and
contacts e.g., family, friends and colleagues in the day-to-day conduct of your business.
Mart 08 Jul 08 Sept 08 Dec 08 Nov 09
Very much
3 8 9 11 28
Somewhat 28 26 31 27 61
Not much 32 31 32 28 10
Not at all 29 22 19 24 1
No answer 8 13 8 10
Source: The Business Environment Survey conducted for the UNDP Early Warning System by Prism Research:
Business to Business Survey - top 150, November 2009.
54
It is interesting to note that the results for all the quarterly polls in 2008 indicated that informal institutions are used
extensively in Bosnia and Herzegovina. Informal connections and contacts are used to a greater or lesser extent by
close to 70% of companies, a percentage that increased signifcantly in the November survey.
46
Thus, in the most
recent survey more than 20% of the sample used informal institutions to a great extent, while more than 60% used
informal connections and rules of behaviour to a somewhat lesser degree (see Table 11 and Table 12 in annex). The
vast majority of the business sector sample used alternative informal institutions on an everyday basis and we noted
a modest relative increase in the number of respondents that held this view in the last few surveys, most particularly
in our most recent quarterly poll.
Lastly, the efcacy of the institutional framework can also be looked at indirectly through the costs that such institu-
tions cause to the private sector. These costs are known as transaction costs and include both direct monetary costs
and indirect costs expressed for example in terms of the amount of time spent on various institutional procedures,
obtaining required information, costs due to poor institutional performance and so forth. According to the results of
the November survey, an absolute majority of the sample (more than 80%)
47
thought that they face higher transaction
costs than they should, both in terms of direct monetary costs and time consuming procedures.
48
Of particular in-
terest is the high percentage of the sample that considered the high indirect cost of institutions as a problem, which
is certainly given little attention in ofcial statistics, in spite of the clear hindrance this represents to local companies
in the conduct of their business.
Since 2008 we have also been monitoring our sample's estimates as to the actual level of direct and indirect costs in-
curred due to institutions, bearing in mind that these costs have been identifed by the business sector as a major
problem for the success of their business activities. According to the results of our November poll, direct payments
to institutions in Bosnia and Herzegovina increased business costs from 0 - 10% in 80% of companies and by 5-10%
in more than 40% of companies, while there was little diference between the entities in the results.
49
With regard
to indirect or opportunity costs incurred by the business sector, our attention was drawn to how high the estimates
of these costs were, as can be seen in Table 6.
In 40% of companies the indirect costs of the business sector were between fve and ten percent higher due to poor
institutional performance, regardless of whether we were looking at the sample for Bosnia and Herzegovina or at
the entity samples (the estimate for Republika Srpska was slightly lower). There were also a large number of forecasts
in the 10 to 20% range (26% of companies), which is an exceptionally high level of costs. All in all, the estimates for
institutional costs in Bosnia and Herzegovina suggest that the cost burden on the business sector is particularly prob-
lematic when it comes to the indirect costs companies encounter, but which are not published in the ofcial statistics.
Table 14.
Please indicate how much higher your overall operating costs are due to the indirect impact
of state level institutions.
Sept 2008 Dec 2008 Nov 2009
Mart 08 BiH FBiH RS BiH FBiH RS BiH FBiH RS
0-5 % 10 13 15 18 13 34 32 44
5-10 % 27 27 23 25 21 29 39 40 31
10-20 % 26 33 5 21 24 13 26 26 25
N/A 13 10 23 14 13 21 1 1
Source: The Business Environment Survey conducted for the UNDP Early Warning System by Prism Research: Business
to Business Survey - top 150, November 2009.
Please note: The full table is available in the annex under Table XVI.
46
Source: See also Table 12 in annex.
47
Source: Table 13 and 14 in annex.
48
Source: Ibid.
49
55
And fnally, amongst the results of our November poll we have estimates as to how the efciency/efcacy of state
level and entity institutions may have changed over the previous fve year period. Even though Bosnia and Herze-
govina's progress towards the European Union and towards Euro-Atlantic integration is primarily dependent upon
progress in institutional terms it is equally interesting to approach these questions from the perspective of business
people, who provide a qualitative assessment of any change in efciency.
As may be seen from the results for the responses to this question (Table 17), an absolute majority of the business
people surveyed held the view that institutions in Bosnia and Herzegovina, both at the state level and at the entity
level, were less functional than previously. Thus, 63% of the sample said that state institutions have become less
efective, while 53% said the same for entity level institutions. The answers we received did not difer signifcantly
between the entities. In any event, not one response was recorded to the efect that state level institutions had im-
proved their performance, as was also the case for the responses for entity institutions. Such a pattern of responses
must surely be of concern and not just because institutional efciency in Bosnia and Herzegovina has not improved
at either the state or entity level, but because such answers consistently suggest deterioration.
Table 17.
Please indicate to what extent the important of the effectiveness of domestic institutions in
your line of work has changed over the past five years
Nov 2009 Nov 2009
STATE LEVEL INSTITUTIONS ENTITY INSTITUTIONS
BiH FBiH RS BiH FBiH RS
Significantly worse 26 26 25 20 20 25
Somewhat worse 37 37 38 33 33 31
No change 38 38 38 46 46 44
Somewhat better 1 1
Significantly better
Do not know
56
In the surveys conducted during 2008 the economic situation in Bosnia and Herzegovina was assessed as deterio-
rating. Yet we saw a signifcant positive turnaround in our recent November poll assessment of the economic situation
compared to the year before. While the answers received suggested that the economic situation in Bosnia and Herze-
govina has improved we interpret this as the business sector saying that the situation is better than in 2008, but cer-
tainly not that there has been a major improvement in the economy. So, if just over a year ago we noted the greatest
deterioration in economic confdence in recent years, then this turnaround is a sign that there has been some im-
provement in the eyes of the business sector. More simply, it would seem that the worst of the recession in Bosnia
and Herzegovina has passed. In addition to this assessment of the current state of business there have also been
more optimistic prognoses for the coming period, in so far as a large percentage of companies said that they expect
the economic situation in the country to improve along with their own fnancial results.
Despite the fact that most businesses described the economic situation as better, we noted a sharp rise in our survey
in the level of corporate debt. We assume that during the recession that gripped the economy in 2008 and which we
are monitoring to some extent in 2009 most companies sought a way out of the temporary pressures that lead to
stagnation by increasing their levels of debt. Given such a course of events, it is no wonder that the percentage of
business people who said that they made a loss was up on the previous year and in the quarterly surveys. Therefore,
we may certainly conclude that the fnancial position of most companies has in reality deteriorated as a result of
higher debt levels and negative trading, but also that the business sectors fnancial position is nonetheless still better
relative to late 2008.
In assessing the efectiveness of the various levels of government in Bosnia and Herzegovina we have noted some
progress, particularly at the state-level. We interpret these responses in light of the fact that the business sector would
seem to have recognised the Governments eforts to help overcome the current economic problems that are facing
the country, with the state level government having taken a particular lead in regard to budgetary reforms. The can-
tonal and municipal authorities received the worst ratings.
When assessing the performance of individual institutions it has already become standard for the state level institu-
tions of monetary and fscal policy, which are the Central Bank of Bosnia and Herzegovina and the Indirect Taxation
Authority, to receive the best ratings. They have now been joined by the Foreign Investment Promotion Agency. The
worst rated institutions include the courts, the entity tax administrations, the Directorate for European Integration,
the banking agencies and the Chamber of Foreign Trade. We were particularly surprised by the poor rating received
by the Directorate for European Integration; we assume that this is due to Bosnia and Herzegovinas regression on
the road to Europe, which has been evident for some time. We believe that the banking agencies received such a
low rating because of a series of problems in the banking sector of Bosnia and Herzegovina, particularly related to
questionable interest rate hikes and credit conditions at a time of global fnancial and banking crisis.
In the context of our particular focus on where indirect costs arise in Bosnia and Herzegovina, most companies de-
scribed the direct and indirect costs caused by institutions as hindering the conduct of business, principally as a
result of the institutions poor efciency. Institutional efectiveness is not merely rated as low, but an absolute majority
of the respondents thought that it has declined over the past fve years, particularly at the state level. Under such
circumstances it is no wonder that most business people use their own informal institutions (i.e., their own connec-
tions and contacts) to makes things work. In November 2009 we registered a particular increase in the use of informal
institutions.
5. Conclusion
V.
Income and
Social
Welfare
By Aleksandar Dragani
1. The Social Stability Index for Bosnia and Herzegovina
2. Number of Low-income Households Increasing
3. Crisis afects Public Expectations
4. Purchasing Power and Living Standards in Moderate Decline
5. Minimum Living Standards and Social Protection Require more Attention
6. Conclusion
58
1. The Social Stability Index for Bosnia and Herzegovina
The Social Stability Index showed no change in November 2009 when compared to November 2008, in spite of the
fact that 2009 was a year of economic crisis. In November 2009 the Social Stability Index was at 46 points above its
lowest level. Graph 1 shows the movement of the Index by quarters since the beginning of 2005. Reasons for this
lack of change since the previous period may be sought in the similar number of low income households and the
public's unchanged expectations and purchasing power. The condition of the Social Stability Index is certainly also
related to job losses in various branches of industry throughout the year, lower wages in some areas and correspond-
ingly lower pensions.
It should be mentioned that while the Social Stability Index continues to record a lower value than the other indices
the economic and political stability indices are now only one point above it. We have mentioned the correlation be-
tween the Social Stability Index and the economic and political stability indices in previous reports.
51
40.00
50.00
60.00
70.00
80.00
90.00
100.00
110.00
120.00
Chain index
Composite index
92.00 97.83 93.33 102.38 104.65 102.22 100.00 102.17 104.26 91.84 95.56 106.98 97.83 102.22 100.00 100.00
S
o
c
i
a
l

S
t
a
b
i
l
i
t
y

I
n
d
e
x
The Social Stability Index for Bosnia and Herzegovina
46 45 42 43 45 46 46 47 49 45 43 46 45 46 46 46
Feb 05 Jun 05 Sep 05 Nov 05 Apr 06 Jun 06 Sep 06 Nov 06 Apr 07 Sep 07 Nov 07 Mar 08 Jun 08 Oct 08 Nov 08 Nov 09
Graph 1: The Social Stability Index for Bosnia and Herzegovina
50
50
51
The degree of correlation (on a scale of +1 to -1) between the social stability and the economic stability indices for the period May 2000 to
November 2009 was 0.72, which indicates a strong positive connection between the two indices, without going into the reasons for these
causally consequential relations. At the same time, the degree of correlation between the Social Stability Index and the Political Stability
Index was 0.55, which also represents the existence of a signifcant link between the two indices.
Income and Social Welfare
59
In the fnal quarter of 2009 the number of households with less than 500 BAM in income rose in both entities and in
Brko District. The only group for which this trend did not hold true was the "minority" populations in Bosniak and
Croat majority areas. For all other demographic categories (urban/rural, male/female, etc.) covered by our survey we
found an upward trend in the number of low-income households (income of less than 500 BAM monthly). It should
be mentioned that there was an increase in the number of households without income in November 2009 when
compared to November 2008, which not only refects the consequences of the crisis but also the inefectiveness of
the current social security system when it comes to securing minimum living standards.
The reporting period coincided with both the economic crisis and a drastic reduction in public revenue. It is partic-
ularly worrisome that some 45% of the total sample for Bosnia and Herzegovina expected the economic situation to
worsen even further over the coming year, while some 40% expected household income to reduce and 15% of the
employed thought that they might lose their job in the subsequent three months.
According to our data, purchasing power and living standards appear to have fallen moderately. Naturally, this is not
immediately obvious from the ofcial statistical data, as there was no change during 2009 in the average wage or
price levels. According to the response to our public opinion poll, one may deduce a reduction in purchasing power
from the fact that average household costs in November 2009 amounted to 767.5 BAM compared to 907.79 BAM in
November 2008. This situation means that a given household is now allocating a higher percentage of its resources
to food, clothing and footwear, while either reducing spending on other needs or simply doing without. At the same
time, ofcial statistics show no change in the average wage in either entity.
53
At the same time, when we look at the ofcial statistical data 2009 appears to have been a period during which the
Consumer Price Index fell overall, regardless of the trends with regard to individual goods and services. If we look at
the data by the form of consumption for the frst 10 months of 2009, in comparison with the frst 10 months of 2008,
we fnd that prices in Republika Srpska (RS) rose most for alcoholic beverages and tobacco, housing, fuel, restaurants
and hotels, while there was a fall in the price of transport, clothing and footwear. During the same period prices in
Graph 2: The number of people who expected their income to decrease
52
0.00
5.00
10.00
15.00
20.00
25.00
20.40
14.24
11.53
10.53
10.80
13.62
21.63
18.77
Nov 07 Jun 08 Nov 08 Nov 09
Rural
Urban
No of people who expect their household income to decrease
52
Source: Table 7a in annex.
53
60
the Federation of Bosnia and Herzegovina rose most for alcoholic beverages and tobacco, restaurants and hotels
and for accommodation and fuel; there was also a fall in the price of transport, clothing and footwear.
The most important factor in regard to the social security system relates to the dependence of existing funds (health
insurance, child protection, pension and disability insurance and unemployment insurance) on the income and
salaries of the employed population. As 2009 saw the number of those employed fall, along with salaries in certain
branches, there was a reduction in the funds' income, with a concomitant increase in pressure on the resources avail-
able to the funds from new benefciaries. The fact that in the preceding years only 1.9% of the unemployed had re-
ceived some form of payment in the case of unemployment speaks volumes for the inefectual nature of the current
system and its capacity. With regard to the pension funds it was evident on the threshold of 2010 that the authorities
were aware of the problems that lay ahead. The Government of RS draft budget for 2010 revealed their fear of a
breakdown and an attempt to overcome the problems by increasing government transfers to the RS Pension and
Disability Insurance Fund. No similar moves have yet been seen in the Federation, but the fact that the average pen-
sion in that entity fell by some 6% between November 2008 and November 2009 indicates the obvious problems. It
will be very interesting to see how the authorities deal with the demands and needs of the benefciaries of existing
public funds, given the upcoming elections.
54
54
61
According to our poll results for November 2009 the number of low-income households (less than 500 BAM per
month) rose from 33% to 39% in Bosnia and Herzegovina as a whole (see table 1a in annex). The number of house-
holds with less than 500 BAM per month income in the Federation rose from 28% to 38%, while it rose from 38% to
39% in RS and from 66.5% to 71% in Brko District. It should be noted that the number of households with a monthly
income above 1,500 BAM was similar at the end of 2009 to what it had been at the end of 2008 (around 5% in the
Federation and around 2.5% in RS). Generally speaking, salaries were highest in the fnancial sector, followed by
public institutions and companies.
With regard to income in what our methodology classifes as the majority areas the results of our poll in November
2009 revealed an increase in comparison to November 2008 in the number of households with less than 500 BAM
per month income in Bosniak majority areas (from 31% to 40%) and in Croat majority areas (from 16% to 27%). These
trends did not hold true for the "minority populations" in the areas where one of the constitutive peoples was in the
majority. In fact, the number of low-income households amongst the minority populations actually fell in Bosniak
majority areas (from 50% to 49.5%) and in Croat majority areas (from 30% to 29%), although in contrast the number
of low-income households grew amongst the minority populations in Serb majority areas (from 56% to 59%). (For
more detail see Table 2 in annex.)
According to our November 2009 poll results there has been an increase in the number of low-income households
compared to November of the previous year, both in urban areas (from 25% to 33%) and in rural areas (from 39% to
44%). The number of low-income households also increased regardless of whether one took gender or age as the
criterion, with the evident exception of the over 50 age group (see Table 1).
2. Number of Low-income Households Increasing
Graph 3: Number of households with an income of less than 500 BAM
55
Number of low income households (in %)
47.0
28.1
37.6
59.4
38.1 38.6
86.3
66.5
71.4
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
100.0
Sept 08 Nov 08 Nov 09
FBiH
RS
Brko District
55
62
Before moving on, let us review the data from Table 1, which makes clear the increase in the number of households
with no income whatsoever. Regardless of whether they lived in urban or rural areas or if the respondents belonged
to younger or older age groups or were male or female it is clear that there was an increase in the number of income-
less households between November 2008 and November 2009. The ponderous, rigid and inappropriate social pro-
tection system, particularly when it comes to sudden unemployment or failure to receive salary, has most likely played
a major role in this increase of some 4.5% of households in Bosnia and Herzegovina that are without income.
Table 1
Monthly household income, including the wages and earnings of all household members, child allowance,
pensions and any other sources of income (in %)
BiH
Income in
BAM Urban Rural Male Female 18-35 36-50 51+

Nov
08.
Nov
09.
Nov
08.
Nov
09.
Nov
08.
Nov
09.
Nov
08.
Nov
09.
Nov
08.
Nov
09.
Nov
08.
Nov
09.
Nov
08.
Nov
09.
No income 2.0 3.9 4.4 5.0 2.8 5.7 3.9 3.4 3.3 4.7 2.9 4.7 3.8 4.3
<100 1.3 1.9 2.7 3.7 1.9 3.0 2.3 2.9 0.9 2.0 0.5 2.5 4.4 3.9
101 - 200 2.4 8.6 6.8 12.6 4.6 9.5 5.3 12.2 0.6 3.4 4.4 4.5 9.8 20.0
201 - 300 6.6 5.5 8.9 8.6 6.9 6.4 8.8 8.1 2.0 4.8 5.5 2.1 15.6 11.7
301 - 400 10.7 10.3 14.5 11.1 13.9 10.9 11.9 10.5 9.4 9.2 12.5 14.5 16.8 10.1
401 - 500 2.3 2.7 1.4 2.7 1.6 2.3 2.0 3.1 1.0 2.6 1.4 3.5 2.8 2.3
Sub-total
up to 500
BAM 25.3 32.8 38.6 43.7 31.7 37.8 34.1 40.1 17.1 26.7 27.2 31.8 53.2 52.3
Source: Public opinion poll conducted by Prism Research
63
The reporting period saw continuous breaking news on the economic crisis, layofs, civic protests and disturbances,
social tension and the perception of an uncertain future. While domestic authorities are were looking for an answer
to the question as to how the crisis was likely to afect Bosnian and Herzegovinian society and the economy the pro-
grammes for actually dealing with the problems either did not exist or were to be found in the requirement that
action be taken to meet the International Monetary Fund's conditions and the obligations under the Stand-by
Arrangement. Ad-hoc measures, an infexible system and individual and institutional irresponsibility have aided the
economic situation caused by the crisis to deepen even further, as could be seen from the daily media reports on
layofs, reduced salaries and worse to come.
At the same time, as can be seen in the economic section of this report, the Bosnian and Herzegovinian public were
of the view that the economic circumstances of their households have worsened. Such opinions, with the concomi-
tant fall in the number who thought that their households economic circumstances had improved over the past
year, were registered in our research in both entities as well as in Brko District (see Table 2).
In regard to the expectations for the future, the number of optimists, that is the number of people who expected
the economic situation to improve over the next twelve months, declined in both entities, while the number of pes-
simists, that is the number of people who expected the economic situation to get worse, increased throughout the
country (for more detail see Table 5 in the annex and the economics section of this report).
Similarly, a comparison of our November 2009 poll results with those of November 2008 shows that less people ex-
pected their household cash income to increase over the coming six months in the Federation (from 18% to 17%).
In contrast, the number increased in RS (from 26% to 29%). This optimism on the part of some respondents in RS is
interesting, especially at a time when salary cuts were announced in the public sector and difculties were present
in the other sectors. At the same time, in both entities there was an increased number of people who expected their
household cash income to decrease over the coming six months, namely from 14% to 22% in the Federation and
from 9% to 18% in RS (see Table 3 below). According to our sample, people in Serb majority areas were the most op-
timistic (as many as 29% said that they expected their cash income to rise). At the same time, the greatest concen-
3. Crisis afects Public Expectations
Table 2
,

BiH FBiH RS
Bosniak
majority
areas
(BMA)
Croat
majority
areas
(CMA)
Serb
majority
areas
(SMA)
Survey
Nov
08
Nov
09
Nov
08
Nov
09
Nov
08
Nov
09
Nov
08
Nov
09 Nov 09 Nov 09 Nov 09
TOTAL
BETTER 10.76 5.43 10.24 4.72 9.39 5.40 43.77 20.17 4.3 6.2 5.4
The same 53.78 47.00 51.95 44.77 58.24 50.58 28.00 43.73 44.8 44.5 50.6
TOTAL
WORSE 34.46 45.86 36.73 47.77 31.63 43.73 25.41 36.10 49.9 39.8 43.7
DK/NA 0.99 1.71 1.09 2.74 0.74 0.29 2.82 0.9 9.5 0.3
Total 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.0 100.0 100.0
Source: Public opinion polls conducted by Prism Research
64
tration of pessimists was to be found in the Bosniak majority areas, with 23.5% of respondents in these areas expecting
their cash income to be reduced. If we take respondent age as our criterion then one can note an increase in the
number of people from all age categories that expect their income to fall.
After an exceptionally turbulent period with regard to the price of goods and services between 2007 and 2008 the last
year (2009) proved to be a year in which the economic crisis found expression through a levelling of of prices, their
stability and a modest fall through the year. When comparing the results of our November 2009 public opinion poll with
those of November 2007 and November 2008 we noted a fall in both entities as well as in Brko District in the number of
individuals who expected prices to continue to rise. Yet the announcement by the Bosnian and Herzegovinian telecom
operators of price corrections at the beginning of 2010 and the perceived moderate increase in the price of fuel and elec-
tricity have probably afected public perceptions in regard to future price growth. This is evident in the fact that in No-
vember 2009 some 72% of people in the Federation and 54% of people in RS continued to expect further price increases.
At the same time, the number of individuals in Brko District who expected prices to rise remained low, at just 6% (see
Table 8 in annex).
Table 3
Do you expect any change in the level of your household cash income over the next six months (in %)?

FBiH RS
Bosniak
majority
areas
Croat
majority
areas
Serb
majority
areas
18-35 36-50 51+
Quarter
Nov
08
Nov
09
Nov
08
Nov
09
Nov
08
Nov
09
Nov
08
Nov
09
Nov
08
Nov
09
Nov
08
Nov
09
Nov
08
Nov
09
Nov
08
Nov
09
TOTAL
REDUCE 14.2 22.2 8.9 18.0 13.6 23.5 16.6 17.2 8.9 18.0 13.4 17.7 9.0 22.1 12.3 20.9
TOTAL
INCREASE 18.4 17.1 25.6 28.7 14.6 14.8 33.3 25.5 25.6 28.7 24.1 24.4 18.6 23.1 19.4 17.6
No
change 62.8 56.8 60.6 46.4 67.7 59.3 43.4 47.5 60.6 46.4 57.2 54.9 68.2 50.0 64.1 54.6
DK/NA 4.6 3.9 4.9 6.9 4.1 2.4 6.8 9.7 4.9 6.9 5.3 3.1 4.2 4.8 4.2 6.9
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Source: Public opinion polls conducted for this project by Prism Research
Graph 4: Number of people who expect prices to rise
56
0
20.00
40.00
60.00
80.00
100.00
No of people who expect prices to rise (in %)
RS
FBiH
Brcko District
89.51
83.87
100.00
78.08
74.92
71.58
0.43
54.43
6.00
56
65
When comparing the data from our November 2009 public opinion survey to that of November 2008 the number of
people who thought that they might lose their job increased in the Federation, reduced in RS and remained un-
changed in Brko District (see Table 4). In November 2009 17% of the sample from the Federation and 13% of the RS
sample thought that they might lose their jobs over the coming three months. Those most pessimistic about be-
coming jobless were in the 18 to 35 age group, 20% of them in fact. This situation is indicative of the problematic
status of a large number of employees in the private sector, particularly younger ones, in the absence of unions or
union organisation.
At the end of this section we will turn our attention to the number of people that supported the holding of public
protests, strikes and demonstrations with regard to particular issues (job losses, low salaries, rights, etc). This is im-
portant information given the several dozen protests that took place in the preceding period. The most important
of these were protests by war veterans, servicemen and the disabled in Sarajevo; teaching staf in the Una-Sana Can-
ton, public sector employees in the Herzegovina-Neretva Canton, the employees of the company Vranica, etc. By
comparing the November 2009 public opinion poll to that of November 2008, as discussed in Chapter 1, we found
that the number of individuals that supported the holding of public protests, strikes and demonstrations had in-
creased in both entities as well as in Brko District (see Table 10 in annex). It should be of concern that nearly two-
thirds of the public in the Federation was prepared to engage in some form of protest, regardless of the issue in play
(job losses, the inability to fnd a job, low salaries and pensions, recovery of property, etc).
If we look at our sample the answers we received reveal the following:
the inhabitants of the Federation were still more inclined to support protests, strikes and
demonstrations than those of RS or Brko District (Graph 5);
urban populations were more likely than rural populations to ofer support to organised forms
of the expression of dissatisfaction regarding particular social problems. This represents a change
in the trend for previous periods, when the rural population was more inclined to support protests
than the urban population;
the 36 to 50 age group was the most ready to protest, which represents a change from the
preceding reporting period when it was the 18 to 35 age group that was most prepared to protest;
the population of the Federation was most inclined to support protests, strikes and demonstrations
related to job losses (67%), low salaries and pensions (66%) and their inability to fnd
employment (62%);
at the same time, the inhabitants of RS were most inclined to support the holding of public protests,
strikes and demonstrations related to low salaries and pensions (42%), job losses (40%) and ethnic
or civil rights (40%). It is noteworthy that citizens in RS were beginning to turn more to
economic issues that afect their lives at the expense of the political and institutional issues
that were previously dominant;
in Brko District people were most ready to support organised forms of an expression of
discontent with regard to the issue of low salaries and pensions (55%), the recovery of property
(51%) and in opposition to Government policy (49.5%).
Table 4
Expect to be jobless during the next three months (in %)
FBiH RS 18-35 36-50 51+
Sept 08 Nov 08 Nov 09 Sept 08 Nov 08 Nov 09 Sept 08 Nov 08 Nov 09 Nov 08 Nov 09 Nov 08 Nov 09 Nov 08 Nov 09.
14.97 15.41 17.09 8.98 22.28 12.91 11.39 0.00 0.00 22.62 19.90 14.46 11.56 12.63 13.84
66
Graph 5: Number of individuals who support the expression of public protest
57
0.0
10.0
20.0
30.0
40.0
50.0
60.0
Job loss Entity Policy Poor
salaries/pensions
Ethnic and civil
rights
Recovery of
property
Conduct of
international
community
Inability to find
a job
70.0
Percentage of people who would support public protest related to... (Nov. 09)
RS
FBiH
Brcko District
57
Source: Table 10 in annex
67
A look at the entity statistics ofces data on the movement of average salaries and the retail price indices allows us
to conclude that there were no signifcant developments during 2009 (see Table 5).
The average monthly wage in October 2009 was 789 BAM in RS and 789.83 BAM in the Federation. On the basis of
the data for the frst 10 months of 2009 it was evident that there were no signifcant changes in the level of the
average wage. By comparing data for September 2009 and October 2008 we found that the average wage in RS had
increased by just 0.38% and that the average wage in the Federation had increased by just 0.56% (for more detail
see Table 6).
4. Purchasing Power and Living Standards in Moderate Decline
Table 5
Trends of the average wage and the consumer price indices in RS and the FBiH (2009)
RS
Month 01/09 02/09 03/09 04/09 05/09 06/09 07/09 08/09 09/09 10/09
Average wage (in BAM) 771.00 813.00 781.00 786.00 773.00 794.00 792.00 790.00 786.00 789.00
CPI (Consumer Price Index) 99.90 99.70 99.90 98.50 99.90 100.10 101.00 99.79 100.30 100.90
FBiH
Month 01/09 02/09 03/09 04/09 05/09 06/09 07/09 08/09 09/09 10/09
Average wage (in BAM) 790.55 785.21 795.20 797.97 792.26 792.88 792.94 782.76 784.86 789.83
Source: the entity statistics offices
Table6
DataontheaveragewagebysectorforRSandtheFBiHforDecember2007,October2008andSeptember2009
RS FBiH
December
2007
October
2008
September
2009
Wage
growth
(Sep
09/
Oct08)
December
2007
October
2008
September
2009
Wage
growth
(Sep
09/
Oct08)
Agriculture 537.00 659.00 573.00
13.05%
607.03 727.30 680.05 6.50%
Fisheries
555.00 683.00 609.00
10.83%
423.56 483.66 551.84 14.10%
Miningandquarries 672.00 903.00 922.00 2.10% 645.98 751.05 758.40 0.98%
Manufacturing 446.00 510.00 518.00 1.57% 507.04 562.18 560.77 0.25%
Electricity,gasandwater
697.00 871.00 922.00 5.86% 1082.41 1235.22 1230.64 0.37%
Construction 533.00 567.00 551.00 2.82% 450.95 516.36 508.90 1.44%
Wholesaleandretail,motorvehicle
repairsandpersonalorhousehold
goods
442.00 536.00 546.00 1.87% 482.09 522.85 539.48 3.18%
Hotelsandrestaurants 400.00 450.00 475.00 5.56% 460.88 517.32 528.32 2.13%
Transport,warehousingand
communications
763.00 752.00 833.00 10.77% 871.36 977.26 957.58 2.01%
Financialmediation 1269.00 1204.00 1256.00 4.32% 1254.25 1257.11 1210.46 3.71%
Activitiesrelatedtoproperty,rental
andbusinessactivities
688.00 676.00 625.00 7.54% 693.70 757.62 769.86 1.62%
Governmentadministration,defence
andmandatorysocialinsurance
910.00 1059.00 1071.00 1.13% 951.99 1099.49 1100.02 0.05%
Education 552.00 890.00 895.00 0.56% 740.23 820.20 809.16 1.35%
Healthcareandsocialwork
664.00 1143.00 993.00
13.12%
827.28 971.48 972.09 0.06%
Othercommunal,socialorpersonal
services
530.00 620.00 632.00 1.94% 702.45 744.77 761.56 2.25%
TOTALonaverage 628.00 783.00 786.00 0.38% 696.74 780.51 784.86 0.56%
Source:theentitystatisticsoffices
68
Comparing the data for September 2009 to that of October 2008 we saw that in RS employee wages had increased
the most in the areas of transport, warehousing and communications as well as in the generation and supply of elec-
tricity, gas and water. At the same time, wages in the Federation increased the most in the areas of fsheries, retail
and wholesale trade and the provision of personal and communal services. Certain activities experienced a fall in
wages, for example agriculture, fsheries and healthcare in RS and in agriculture, fnancial mediation, transport, ware-
housing, etc in the Federation. It is an interesting fact that in most cases, with the exception of fnancial mediation,
the highest wages were in the public sector (administration, government ofces, utilities, healthcare, etc).
During 2009 the level of the average pension and the lowest pensions in both entities stagnated, but there was a
surprising increase in the maximum pension. According to the data of the entity pension and disability insurance
funds the average pensions paid out in November 2009 were 343 BAM in the Federation and 316 BAM in RS. This
shows a decline of 6% in the Federation and of 1% in RS, compared to the average pension for November 2008. At
the same time, the lowest pensions grew not a whit, remaining at 160 BAM in RS and 296 BAM in the Federation.
With regard to the highest pensions, a growth of 11% was recorded in RS and as much as 40% in the Federation (see
Table 12a in annex and Graph 6).
One thing that went in favour of the public of Bosnia and Herzegovina was the Consumer Price Index which stagnated
during 2009 and even recorded modest defation and a reduction in the cost of products and services. The entity
statistics ofces data shows that the Consumer Price Index for October 2009 was around 1.1%, down on the index
for October 2008 in RS and about 1.8% down in the Federation (see Table 7). If we compare the data for the frst nine
months of 2009 with that for the frst nine months of 2008 we also fnd that average prices for goods and services
were about 0.5% down in RS and 0.2% down in the Federation.
Graph 6: Average, minimum and maximum pensions by entty
58

Data on pensions in FBiH and RS - November 2008 and 2009
296.36
296.36
160.00
160.00
1.393
1.977
1.409
1.565
368.42
343.00
319.41
316.22
0 500 1000 1500 2000 2500
Nov 08
Nov 09
Nov 08
Nov 09
F
B
i
H
R
S
Max. pension
Min. pension
Aver. Pension
58
69
What is particularly worrying here is the increase in prices for communications services and for accommodation and
fuel. While there was, by defnition, a reduction in the demand for certain goods and services, due to reduced pur-
chasing power, prices in these areas have not shown a typical market reaction, which indicates the monopolistic po-
sition of those ofering these products and services, with the knock-on efect on purchasing power and living
standards.
The November 2009 public opinion poll, in comparison to the November 2008 and November 2007 polls, reveals a
relative increase in the amount of the household budget being spent on food (including cofee and drinks), as may
be seen from Table 8.
Table 8
Average household costs, itemised (in %)
FBiH RS
Quarter
Nov
07
Nov
08
Nov
09
Nov
07
Nov
08
Nov
09
Food (including coffee and drinks) 29.8 40.2 37.6 33.0 36.7 42.7
Clothes and footwear 6.4 5.5 6.3 7.1 6.8 7.6
Cigarettes/tobacco 5.3 4.0 4.3 5.1 3.8 4.0
Personal hygiene items 6.2 6.0 7.2 6.4 6.4 6.5
Fuel and car maintenance 6.1 5.5 7.1 5.9 6.2 3.5
Public transport: bus and tram 2.6 1.4 1.6 1.7 1.6 1.3
Kindergarten/child care 1.3 0.2 0.2 0.6 0.1 0.0
Debt repayment 4.2 5.9 3.0 4.0 3.7 2.5
Works and house repairs 3.3 1.9 2.5 2.8 2.4 0.9
Medicine and treatment 7.0 5.0 6.0 6.3 4.9 4.1
Recreation 3.4 2.4 1.9 4.2 2.8 1.6
C 4.6 3.0 4.9 4.7 3.4 1.8
Power 8.6 6.3 7.7 9.8 7.8 6.9
Water 3.6 2.0 3.0 2.4 1.5 2.0
Telephone 6.1 4.3 4.1 5.1 4.7 4.1
Gas 1.5 0.2 0.3 0.8 0.6 0.1

Table 7
Consumer Price Index (CPI) by category (October 2009)
RS FBiH

1-10
2009/
1-10
2008
10
2009 /
10
2008
1-10
2009/
1-10
2008
10
2009 /
10
2008
Total 99.50 98.90 99.80 98.20
Food and non-alcoholic
beverages
98.60 96.40 100.50 96.50
Alcohol and tobacco 109.30 119.50 106.80 114.60
Clothes and footwear 97.10 96.40 95.30 95.30
Accommodation, water,
electricity, gas and other
fuels
104.70 103.60 104.40 101.20
Furniture, household
goods and regular
maintenance
101.10 99.10 101.10 99.10
Health 100.80 101.90 100.40 100.90
Transport 88.60 89.60 88.30 90.50
Communications 102.60 102.60 100.80 99.70
Recreation and culture 102.40 101.00 104.50 101.70
Education 100.80 100.40 98.40 100.80
Restaurants and hotels 104.00 101.70 106.50 105.80
Other goods and services 103.10 102.30 101.90 100.30
Source: the entity statistics offices
70
Interpretation of this data is rather challenging as it does not correspond well to the data from ofcial statistics, which
is the data on the Consumer Price Index, where the prices for these items have been reduced. It is also interesting to
note that households in both entities were allocating less to repay debts, for works around the house and for recreation
and childcare. The explanation for this is no doubt hidden in the reduced purchasing power of the average Bosnian
and Herzegovinian household. Consequently, according to the response to our public opinion poll, this reduced pur-
chasing power can be seen in the fact that average household spending in Bosnia and Herzegovina was 908 BAM in
November 2008, but just 767 BAM in November 2009 (which in any case is not sufcient to satisfy all of the needs of
the average household in Bosnian and Herzegovina.
59
On the basis of this data, we may more comfortably assert that
absolute spending on food has not changed that much, but its relative share within the reduced household budget has.
If we look at average spending in accordance with the household budget-line in Bosnia and Herzegovina for November
2009 the respondents indicated that the major areas requiring allocation were food (265 BAM on average per house-
hold), clothing and footwear (67 BAM on average per household) and fuel and car maintenance (51 BAM on average
per household).
Graph 7: Average spending by the household budget-line
60
Average spending by household budget line in BiH (in KM)- November 2008 and 2009.
0.00 50.00 100.00 150.00 200.00 250.00 300.00 350.00
FOOD (INCLUDING COFFEE AND BEVERAGES0
CLOTHES AND SHOES
CIGARETTES/TOBACCO
PERSONAL HYGIENE
FUEL AND CAR MAINTENANCE
TRANSPORT - BUS AND TRAM
KINDERGARTEN/CHILD CARE
PAYMENT OF DEBTS
HOME MAINTENANCE
MEDICINES AND HEALTHCARE
RECREATION
CHILDREN'S EDUCATION
ELECTRICITY
WATER
TELEPHONE
GAS
Nov 09
Nov 08
59
It should be mentioned that the unions in Bosnia and Herzegovina have published the amount required to cover the
unions consumer basket, which in October was around 1,600 BAM for a four member family, or twice the level of the
annual salary/ average wage in either the Federation of Bosnia and Herzegovina or Republika Srpska.
60
71
5. Minimum Living Standards and Social Protection Require more Attention
On a number of occasions during 2009 the authorities in RS paid advances, increased instalments and even tried to
change legislation in order to free up resources to pay for pensions. While the situation in the Federation pension in-
surance fund was relatively stable, there were problems regarding payments for disabled veterans. Too little care was
paid to the process of approving the right to make increased payments to the disabled veteran population, which
put further pressure on the federal budget during 2009.
61
By comparing the poll results for November 2009 to those of November 2008 we found that there was an increase
in the number of people in Bosnia and Herzegovina who placed their household below the average (see Table 9).
Thus, in November 2009 45% of the sample in the Federation, 53% in RS and 73.7% in Brko District described them-
selves as being below the average with regard to their household economic situation. This pattern of opinion was
probably to the result of the then current socio-economic position of almost of half the population in terms of the
impact of the crisis on (un)employment and income levels and the absence of energetic measures to secure the min-
imum standard of living.
As it currently stands, the pension and disability insurance system is established so that contributions deducted from
the wages of the employed are used to pay pensions. The system has proved unsustainable, because it allows only
basic social security to be covered. Yet, given the situation and trends in Bosnia and Herzegovina, the situation is
characterised as follows: poor demographic trends (falling birth-rate and longer life expectancy), poor labour rela-
tions, high unemployment, the consequences of the war, above average disability numbers and emigration by the
younger generation. The system is fnanced on the basis of compulsory contributions for social insurance, which are
proportional to the base wage. Attempts to introduce second and third pillars of pension insurance have been un-
successful, and have remained in the form of lip-service; this is largely as a result of the problems facing the current
system of fnancing and related legal and institutional problems.
Coverage for the unemployed by some form of unemployment beneft is considerably lower than in the other coun-
tries of South Eastern Europe (average 12%). In fact, a meagre 1.9% of those registered as unemployed in Bosnia and
61
The passing of the Law on the Rights of Demobilised Soldiers and their Family Members (SN FBiH No. 61/06) confrms,
amongst other things, their rights to monetary compensation during extended periods of unemployment, incentives,
positive discrimination with regard to employment, preferential status with regard to loans to stimulate employment
and the right to healthcare. The entry into force of this Law means that some 60,114 demobilised veterans and 8,136
disabled veterans (whose rights to benefts are based on other legal provisions) have the right to such benefts. .
Table 9
Household status: self-described (in %)
BiH FBiH RS

Sept
08
Nov
08
Nov
09
Sept
08
Nov
08
Nov
09
Sept
08
Nov
08
Nov
09
Sept
08
Nov
08
Nov
09
Barely surviving 9.5 8.1 14.9 7.7 5.1 8.3 11.7 11.5 23.7 13.7 25.7 28.5
Well below average 14.0 11.4 12.1 12.0 9.2 11.6 15.4 14.3 11.6 44.4 17.3 27.7
A bit below average 19.7 24.3 22.0 17.5 24.4 25.1 23.1 24.1 17.7 19.7 24.4 17.6
TOTAL below average 43.2 43.8 49.0 37.2 38.7 45.0 50.2 49.9 53.0 77.8 67.4 73.7
72
Herzegovina receive benefts, with minor diferences by entity (2.2% in RS and 1.5% in the Federation).
62
The social
welfare system is considered inefectual and in no condition to ensure minimum social protection for the unem-
ployed. Unemployment benefts are regulated diferently in the two entities (the right to unemployment beneft
lasts for a maximum of 24 months in the Federation and 12 months in RS). Approximately two-thirds of those regis-
tered as unemployed in Bosnia and Herzegovina have access to free health insurance. At the same time, about 20
million BAM is allocated annually in the Federation to fnance health insurance for 200,000 benefciaries who are reg-
istered as unemployed, which is half of all resources for the social welfare of the unemployed.
Bosnia and Herzegovina spends 4% of GDP on cash payments through social security programmes that are not based
on contributions.
63
With such a large part of GDP going on cash payments Bosnia and Herzegovina allocates more
public spending for this purpose than most other countries in Europe or Central Asia: expenditures are far higher
than the other countries of the region, which tend to average around 1.6%, and more than the countries of the OECD,
whose spending is around 2.5%. Such a level of expenditure on cash payments through social welfare programmes
that are not based on contributions is fscally very difcult to sustain, particularly given the looming impact of the
global fnancial and economic crisis on the national revenue. According to a World Bank analysis, in spite of this sig-
nifcant fscal allocation for cash-based social protection payments, which are not based on contributions, the worst
of amongst the population are still very poorly covered. One fact that is cited is that the lion's share of spending on
this type of beneft is transferred to individuals who are, statistically speaking, amongst the wealthiest ffth of the
population of Bosnia and Herzegovina. In contrast, those from the poorest quintile only receive 18% of all cash pay-
ments for social protection (not fnanced from contributions), which means that this covers less than their percentage
in terms of the population of Bosnia and Herzegovina as a whole.
62
The BiH Labour Force Survey for 2006/2007; the draft Social Inclusion Strategy of BiH (Council of Ministers of BiH).
63
The World Bank (2009), Biljeke o politici - socijalna davanja u Bosni i Hercegovini: kreiranje odrivog sistema socijalne
zatite zasnovanog na stvarnim potrebama, Sarajevo, Pp. 3-8.
73
Our November 2009 public opinion poll survey continues to indicate the very poor socio-economic circumstances
in which the average household in the country lives. While the ofcial statistical data does not show a fall in living
standards or purchasing power the results of our quarterly poll show a clear reduction in spending within the frame-
work of the household budget. As a consequence, the proportion of the household budget allocated to spending
on food has increased, which leaves insufcient room for other needs to be met. A comparison of the results for No-
vember 2009 and those of November 2008 shows that the number of households in both entities and Brko District
living on an income of less than 500 BAM has increased. The reasons for these trends must surely lie in the conse-
quences of the economic crisis: job losses that reduce the income of individual household members, lower salaries
in certain areas or branches of industry and a reduction in pensions and beneft payments for certain categories of
the population.
In addition to its impact on the quality of life and living standards, the economic crisis has left its mark on expectations.
The number of individuals that expected their household income to fall over the coming six months increased, while
the number of those in employment who felt that they might lose their job over the subsequent three months also
increased to 15%. The current situation and the uncertain future have moved large numbers to support public
protests, strikes and demonstrations. The situation is particularly worrying in the Federation, where almost two-thirds
of the citizen body are prepared to protest.
Given how economic trends have resulted in reduced personal income and individual household consumption it is
hardly surprising that government revenue also fell during 2009. This was particularly the case for the funds, the pen-
sion system, the health insurance system, unemployment benefts and child and maternity benefts, which are entirely
dependent upon salaries and wages paid within Bosnia and Herzegovina. To avoid the collapse of the current budget
system and the funds, in July 2009, Bosnia and Herzegovina activated a Stand-by Arrangement with the IMF: drawing
down 1.057 billion US Dollars. This "injection" by the IMF allowed for a temporary bridging of the problem, but the
fundamental challenges remain to be faced, especially given the need to reduce public expenditure, reform the social
insurance system and prevent a further deterioration of the social protection system.
6. Conclusion
VI.
Social
Inclusion
By Aleksandar Dragani
1. Social Inclusion: How High is it on the Governments Agenda?
2. At the Last Count, more than Half the Population were Socially Excluded
3. Social Inclusion and Ethnic Division
4. Consociational Democracy: Cause or Consequence of Social Exclusion
5. Conclusion
75
1. Social Inclusion: How High is it on the Governments Agenda?
64
Here one should mention that this aspect of social inclusion has been recognised within the UNDP integrated local
planning methodology, where, alongside economic and ecological development, considerable attention has been
paid to social development in local communities within Bosnia and Herzegovina.
65
Zlokapa. Z (Ed), Kocka do kocke - dobro je dobro graditi (modeli organizacije lokalne samouprave,
EDA Banja Luka, 2007.
As Bosnia and Herzegovina's (BiH) long-term goal is that of EU membership it is hardly surprising that there has been
a focus on social inclusion/exclusion issues over the past couple of years. Nonetheless, the concept has still not found
its proper place within government policy and too often it is reduced to the analysis of problems, but without an ap-
propriate government response. These claims are confrmed by the fact that work has been ongoing on the Social
Inclusion Strategy of BiH for two years.
In addition, the existing policies, on which political consensus has been reached, are not actually being implemented.
The Disability Policy of Bosnia and Herzegovina, passed by the Council of Ministers of BiH in June 2008, and the BiH
Romany Inclusion Strategy, passed in 2005, are obvious examples in support of this claim. The fact that certain types
of documents (policies, strategies, plans, etc.) are being adopted in Bosnia and Herzegovina without the appropriate
planning of resources to implement them is of particular concern. A glance at the state and entity draft budgets for
2010 clearly shows that there has been no increase in the resources allocated for the realisation of these strategic
documents against 2009.
Generally speaking, to be socially excluded means to be left out of the social mainstream and to be denied particular
economic, social and political rights enjoyed by others.
There are numerous sources of social exclusion in BiH. One derives from the territorial divisions that arose during the
war and that were institutionalised after the corresponding separation of the "minorities" from the "majorities", which
led to the creation of approximately 30 new local government units. The war, which ended in 1995, institutionalised
these ethnic diferences within the framework of the administrative organisation of the country. If it is the government
institutions, within the framework of the current administrative boundaries, that bear the burden of responsibility
for social policy within the territories that they cover then it is fair to identify them as generally responsible for the
policy of social inclusion. The inequality that has appeared in certain areas of Bosnia and Herzegovina, behind which
lies an ethnic background, continues to deny certain groups equal participation in social institutions and other
spheres of social life.
64
Another source of exclusion is the fact that some individuals and groups live in poorly developed areas with few
prospects. By reviewing the numerous local units it is evident that approximately 80% of councillors in local assem-
blies come from urban areas, while just 20% come from the rural parts of any given municipality; this is in spite of
the fact that normally the geographical distribution of the population is the opposite.
65
The situation regarding
higher level decision makers is similar and therefore the policies intended to improve the quality of life for the rural
population tend to be ad-hoc and even bereft of any real intention to actually do something in these areas. It has
been recognised that artifcial barriers are created in backward areas and that these barriers limit the prospects for
the inhabitants to fully participate in the social mainstream and reduces their inclusion within the broader community
and the dominant system of values. In fact, individuals and or groups from backward regions are less likely to enter
educational institutions (young people from such areas are less likely to attend school and tend to leave school ear-
lier), sufer high unemployment and low-incomes, while part-time or temporary employment is the norm, as opposed
to permanent employment.
76
Rural areas in Bosnia and Herzegovina also tend to sufer from very poor access to and the quality of public services.
66
Schools are poorly equipped and academic standards are generally very low, healthcare services are neither easily
accessible nor of an acceptable standard, while public transport is either not available or insufcient to meet residents'
needs; there is also practically no economic activity in such areas.
Another source of social exclusion is certainly that of the life circumstances or phase in which an individual fnds
her/himself. Some phases of life certainly render an individual more vulnerable or more exposed to social exclusion
due to circumstances, disease, disability or simply age. In this regard it is usual to mention two categories, namely
the young and pensioners, although the group also comprises single parents and the disabled. On the basis of recent
research,
67
one can note that youth unemployment is approximately twice the average rate for the country. Pensioner
income is also many times lower, even though this group's costs can be many times higher due to their need for
treatment and care. In the absence of appropriate policy in the areas of employment, healthcare and social protection
many individuals from these groups may be considered as socially excluded.
Ultimately one must look for the causes of social exclusion in the dynamic of social change that has overtaken Bosnian
and Herzegovinian society since the beginning of the 1990s. Changes to the social system, the introduction of market
principles and changes within the dominant social relations following on from the introduction of democratic plu-
ralism, changes to property ownership and the processes of transition, transformation and liberalisation have all af-
fected major parts of the population of Bosnia and Herzegovina. One of the most important causes of the appearance
of a large number of socially excluded individuals is the economy and its collapse during the 1990s. Major structural
changes have resulted in many people being unable to fnd a proper place in the labour market or to fnd employ-
ment after losing their jobs in the great conglomerates. While many analysts and theoreticians talk of the need to
improve the education system so that Bosnia and Herzegovina can participate properly in the international division
of labour, on the basis of competition, there has been little change conducive to this end in real life. These claims are
backed up by data on the nature of the labour force, education policy and results, the use of information technology,
emigration patterns and the general system of values.
Social Inclusion
66
World Bank (2009), Od stabilnosti ka funkcionisanju - lokalna uprava i isporuka usluga, Sarajevo, 2009.
67
Statistics Agency of BiH: the BiH Labour Force Survey for 2007 and 2008.
77
As early as 2007, when the UNDP Human Development Report focused on social inclusion issues was presented,
68
it
was stated that more than half of the population of Bosnia and Herzegovina could be considered as socially excluded
on one or other grounds. In fact, the General Social Exclusion Index, which measures the interdependence of living
standards, health, education, inclusion in the social mainstream and access, showed that 50.32% of the population
was socially excluded on some basis. In the meantime, there have been no major changes in social policy that might
reduce this disheartening data, but there are indications that the crisis which marked 2009 may in fact have led to
even more people becoming socially excluded.
Comparison of the November 2009 and November 2008 opinion polls revealed no signifcant changes with regard
to social exclusion; however, the economic crisis has increased the number of people who may, on the grounds of
unemployment, be slowly becoming socially excluded individuals. While our surveys generally analyse the sample's
expectations of job-losses, ofcial statistics show that several tens of thousands of workers did in fact lose their jobs
during 2009, which is discussed in more detail in the economic section of this report. For data on expectations related
to losing one's job sometime in the coming three months by entity (see Table 1).
Diferent education levels can contribute to the level of exclusion. One of the main causes of unemployment in Bosnia
and Herzegovina is the general level of education. According to ofcial statistical data
69
the number of illiterate
people in Bosnia and Herzegovina is somewhere around 5.5%, while the number of people who did not fnish primary
school is around 12%. Around 31% of the population went no further than primary school, while only just over half
have fnished secondary school. Just 8% of the population make up the group of individuals with some form of
tertiary education.
While it is estimated that Bosnia and Herzegovina has more rural than urban inhabitants,
70
development in recent
decades has left its mark on the situation and population in rural areas. According to economic indicators, confrmed
by our survey results,
71
household income and the general economic conditions are much worse in rural areas than
in urban ones (see Graph 1). The number of low-income households (income less than 500 BAM) increased during
2009 in both rural areas and towns. According to our November 2009 public opinion poll, the number of households
with income less than 500 BAM in rural areas was 44%, while the number in urban areas was 33%. The unclear em-
ployment status of individuals engaged in agriculture, low and irregular income, inadequate pension and disability
insurance policies for farmers and farm labourers and the low level of participation in decision making mean that a
large numbers of rural dwellers can be considered as socially excluded.
2. At the Last Count, more than Half of the Population were
Socially Excluded
Table 1
Those that think they may lose their job during next three months (in %)
FBiH RS
Sept
08
Nov
08
Nov
09
Sept
08
Nov
08
Nov
09
Sept
08
Nov
08
Nov
09
14.97 15.41 17.09 8.98 22.28 12.91 11.39 0.00 0.00
68
UNDP BiH 2007, Social Inclusion in Bosnia and Herzegovina, Human Development Report for 2007, Sarajevo.
69
Data from the Statistics Agency of BiH draft Social Inclusion Strategy for Bosnia and Herzegovina, June 2009.
70
World Bank population break down estimates place the population of Bosnia and Herzegovina as being 53%
rural and 47% urban.
71
See the section on Incomes and social Welfare.
78
We found a similar situation when we looked at gender. Thus, the public opinion polls (see the section on Income
and Social Welfare) revealed that women described their economic position as lower compared to men, while fe-
male-headed households reported less household cash income. A male/female breakdown is also possible for labour
relations, with some employers not meeting their legal obligations on maternity leave.
Looking at the age groups within the population we found a number of forms of social exclusion. Young people are
the most vulnerable with regard to employment, as is evident from the Labour Force Survey data, which shows youth
unemployment (15 to 25) as twice the average rate. Naturally, this is a major reason for young people, i.e., 18 to 35,
wanting to leave Bosnia and Herzegovina in such large numbers (Graph 2).
73
Social Inclusion
Graph 1: Number of low-income households in urban and rural areas
72
0.0 10.0 20.0 30.0 40.0 50.0
No. of households with less than 500 KM income
U
r
b
a
n
R
u
r
a
l
Nov 09
Nov 08
Nov 09
Nov 08
43.7
38.6
32.8
25.3
72
73
An additional reason for wanting to leave the country is the authorities responsibility over visa liberalisation, which
has yet to materialise. Bosnia and Herzegovina and Albania are the only countries in the Western Balkans whose
citizens still require visas for EU countries, as of 19 December 2009.
79
At the same time, our quarterly survey results show that people from the 50+ age group are in a worse position than
the rest when it comes to cash income. This group includes a lot of pensioners as well as people who lost their jobs
during the privatisation process and the restructuring of the former major conglomerates, as well as any hope of
fnding employment due to their declining physical abilities and obsolete education (qualifcations and skills).
It is an interesting fact that as many as 28% of the people who belong to the 51+ age group have incomes below
200 BAM, which adds to the large number of households with very low incomes that make this group an impover-
ished one. Households without income make up around 4.5%, representing an exceptionally large group of people
living without any income at all. The older population (65+) comprise around 15% of the overall population in Bosnia
and Herzegovina. On the basis of their income levels, health and participation in the community many of them may
be considered as being socially excluded. The over 65s make up 18.5% of the population of Republika Srpska (RS)
Social Inclusion
Graph 2: Number of people who would leave Bosnia and Herzegovina if the opportunity arose
74
Nov 09
Nov 08
0
10.00
20.00
30.00
40.00
50.00
60.00
70.00
18 - 35 36 - 50
Would leave BiH if opportunity arose (in %)
51+
Table2
Monthlyhouseholdincome,includingallsalariesandpaymentsreceivedbyallhouseholdmembers:child
allowance,pensionsandanyothersourceofincome(in%)
1835 3650 51+
Nov08 Nov09 Nov08 Nov09 Nov08 Nov09
Noincome 3.3 4.7 2.9 4.7 3.8 4.3
<100 0.9 2.0 0.5 2.5 4.4 3.9
101200 0.6 3.4 4.4 4.5 9.8 20.0
201300 2.0 4.8 5.5 2.1 15.6 11.7
301400 9.4 9.2 12.5 14.5 16.8 10.1
401500 1.0 2.6 1.4 3.5 2.8 2.3
No.ofhouseholds 17.1 26.7 27.2 31.8 53.2 52.3
Source:PublicopinionpollsconductedfortheneedsofthisproductbyPRISMResearch
74
80
and 13.3% of the Federation of Bosnia and Herzegovina
75
(FBiH). Structural demographic indicators indicate that RS
is one of the geographical areas with the oldest population profle, as the ratio between the older population (65+)
and those younger than six is 3.9. This indicator for the Federation is 2.3. The steady increase in the elderly population
and pensioners combined with a falling or, at best, unchanging number of employed places constant pressure on
the existing pension and disability insurance systems and funds, straining their sustainability. In times of crisis, such
as Bosnia and Herzegovina currently fnds itself in, a sturdy and sustainable pension system is one of the most im-
portant topics of social policy.
Social Inclusion
75
Data of the Statistics Agency of Bosnia and Herzegovina: Draft Social Inclusion Strategy for
Bosnia and Herzegovina, June 2009.
81
3. Social Inclusion and Ethnic Division
76
UNDP BiH (2007): Social Inclusion in Bosnia and Herzegovina, Human Development
Report for 2007, Sarajevo.
Ethnic division is one factor that contributes to the level of social exclusion in Bosnia and Herzegovina and there are
three ways in which this is the case. The efects of ethnic division are clearest in the process of return, while minorities,
as a consequence of the very poor integration of returnees to their pre-war places of residence, are one of the most
noticeable socially excluded groups. This can be seen not only through their limited political participation and access
to services, but also in their alienation from regular social processes in the areas where they live.
76
It is also clear from the data obtained through the public opinion polls conducted in November 2008 and November
2009 (see Table 5) that cash income also varies on the basis of ethnicity. The number of low-income households (in-
come less than 500 BAM) was greater for the minority population in areas in which one of the constituent peoples
formed the majority than the number of such households belonging to the majority population group in those ter-
ritories. Looking only at the data for November 2009 we found that the number of households who classifed them-
selves as a minority in one or more of the territories was 49.5% in Bosniak majority areas (BMA), 29% in Croat majority
areas (CMA) and 59% in Serb majority areas (SMA). At the same time, the number of low-income households belong-
ing to the majority population in these areas was 40% in BMA, 27% in CMA and 39 % in SMA. The most important
data contained in the table relates to the number of households that classifed themselves as a minority and without
income over the previous three months. In November 2009 the number of such households in Serb majority areas
was 16%, up from 5% in November 2008. That so many households claimed to be without income is a clear conse-
quence of the impact of economic crisis, as manifested in the income levels of the minority population in RS. The re-
duction in economic activity and consequent loss of opportunities to fnd temporary or part-time work, of the sort
normally done by this category of the population, has had a major impact on incomes themselves, particularly given
the fact that resources and programmes earmarked for returnee populations are less than adequate.
82
It is possible to draw some conclusions in regard to the poor material and fnancial circumstances of minorities com-
pared to the majority on the basis of the data regarding possession of consumer durables. At the end of 2009 (No-
vember) a smaller percentage of the minority population had a mobile phone than did those belonging to the
majority populations in Bosniak or Serb majority areas, just as a smaller number of minority population households
were in possession of telephone connections or cars (see Table 6). The reasons can certainly to be sought in terms of
the difculties experienced by returnees in integrating, the prejudices that certain majority populations have against
minorities and the corresponding reduction in opportunities for fnding employment and securing the income nec-
essary to purchase durable consumer goods.
People do not become excluded simply because they are currently without work or income, but because their future
prospects are poor.
77
That the minorities are "more sceptical" than the majorities in Bosnia and Herzegovina is clear
from the data on the sample's expectations in regard to their household economic circumstances over the coming
year. That is to say, according to our November 2009 public opinion poll the number of individuals that expected
Table 3
Monthly household income, including all salaries and payments received by all household members, including
child allowance, pensions and any other source of income (in %)
Income in BAM
Bosniak majority areas
(BMA)
Croat majority areas
(CMA)
Serb majority areas
(SMA)
Quarter Nov 08 Nov 09 Nov 08 Nov 09 Nov 08 Nov 09
No income 2.6 5.7 1.5 0.7 4.5 3.9
<100 1.2 2.1 1.6 1.3 3.1 4.5
101 200 5.4 7.9 3.7 5.6 14.9
201 300 6.0 7.3 5.0 10.8 10.4 6.0
301 400 14.4 14.0 6.5 9.4 12.5 6.8
401 500 1.6 3.3 1.2 1.3 2.0 2.6
Sub-total up to 500 BAM 31.3 40.4 15.7 27.2 38.1 38.6

Income in BAM
Minority populations in
BMA
CMA
SMA
No income 4.3 2.0 2.6 1.2 4.6 16.1
<100 6.2 2.5 1.6 3.8 8.6
101 200 9.3 9.1 6.6 6.7 7.7 11.7
201 300 20.5 14.2 8.8 10.3 13.9 4.9
301 400 13.7 17.2 9.4 8.0 23.3 10.2
401 500 3.8 7.0 1.2 2.7 7.7
Sub-total up to 500 BAM 57.7 49.5 29.9 29.0 56.0 59.2
Source: Public opinion polls conducted for the needs of this product by Prism Research

Table 4
Possession of consumer durables
Bosniak respondent - majority Croat respondent - majority Serbs respondent - majority
Nov 07 Nov 08 Nov 0 Nov 07 Nov 08 Nov 09 Nov 07 Nov 08 Nov 09
Telephone 83.3 85.7 80.7 75.1 73.4 73.2 63.8 71.4 65.9
Mobile
phone 64.3 74.6 79.1 61.2 73.1 66.0 64.9 65.2 74.9
Car 47.9 49.2 49.9 61.4 68.2 61.8 48.7 54.6 46.5
Minorities in BMA Minorities in CMA Minorities in SMA
Nov 07 Nov 08 Nov 09 Nov 07 Nov 08 Nov 09 Nov 07 Nov 08 Nov 09
Telephone 84.5 80.5 58.2 76.5 62.5 76.1 63.8 51.2 76.4
Mobile
phone 60.5 47.6 67.5 56.3 53.1 71.3 64.9 62.2 64.9
Car 28.3 31.3 40.4 54.3 36.9 52.1 48.7 24.5 34.3

Social Inclusion
77
porer, eljka, 2003: Koncept drutvene iskljuenosti, asopis Drutvena istraivanja, No. 69-70, 2004, Zagreb,
Institut drutvenih znanosti. .
83
their economic situation to deteriorate was larger amongst the minority populations in Bosniak and Croat majority
areas. At the same time, the number of individuals that expected their economic circumstances to deteriorate was
less amongst the minority populations in Serb majority areas. The reason for such a situation is certainly not that
there are a larger number of optimists amongst the minority groups in Serb majority areas, but because a greater
number of them expected their circumstances to remain unchanged (see Table 5).
Table 5
Expectations regarding changes to their household economic situation over the
coming year (in %)

Bosniak
respondent
majority areas
(BMA)
Croat
respondent
majority areas
(CMA)
Serb
respondent
majority areas
(SMA)
Quarter
Nov
08
Nov
09
Nov
08
Nov
09
Nov
08
Nov
09
TOTAL DETERIORATION 30.2 30.4 15.0 14.5 21.8 33.7
Remain the same 56.7 55.5 65.8 54.4 52.2 45.1
TOTAL IMPROVEMENT 8.2 11.0 14.7 18.8 20.2 18.2
DK/NA 4.8 3.0 4.5 12.4 5.8 3.0
Total 100.0 100.0 100.0 100.0 100.0 100.0
Minorities in BMA
Minorities in
CMA
Minorities in
SMA
Quarter Nov 08
Nov
09
Nov
08
Nov
09
Nov
08
Nov
09
TOTAL DETERIORATION 26.7 31.1 20.7 17.1 24.1 22.9
Remain the same 64.5 47.5 59.9 51.9 60.5 61.3
TOTAL IMPROVEMENT 8.1 15.3 18.6 17.0 13.0 14.0
DK/NA 0.7 6.0 0.7 14.0 2.4 1.8
Total 100.0 100.0 100.0 100.0 100.0 100.0
Source: Public opinion polls conducted for the needs of this product by Prism Research
Social Inclusion
84
Social exclusion can take on various forms due to diferent social and cultural activities. Regardless of the diferences,
what is common to all forms of exclusion is a lack of individual participation in social institutions and access to serv-
ices. Individuals may participate in the local community and neighbourhood or in group activities while remaining
excluded from key economic, political and other social institutions. It is not necessary that they feel isolated or ex-
cluded, but if they are not participating in the institutions of the wider society in which they live and if they have no
or only difcult access to the services that society provides then they are marginalised in the least certain parts of
the broad spectrum of social activities. Consider, for example, 2009 and the Bosnian and Herzegovinian team's per-
formance in the qualifying round for the football World Cup in South Africa. While it is normal throughout the world
for football teams to be supported regardless of diferences over individual players or the clubs they come from the
divisions in Bosnia and Herzegovina go so deep that they afect this area of life. Thus, given the large numbers of
members of the Serb and Croat populations who identify themselves with the corps nationaux of their patron states
of Serbia and Croatia the level of their support for the football teams of Serbia and Croatia is also considerable.
One should also distinguish participation in group activities and the possession of a sense of belonging to a group or
community from that of taking action within social institutions. The low level of participation in social institutions
difers fundamentally from having a sense of belonging to a group or community.
79
Social interaction creates a col-
lective consciousness, collective spirit and or a collective system of values which holds a group together. That there is
a lack of harmony in Bosnia and Herzegovina when it comes to group and civic identity, as a refection of participation
within a group compared to participation in social institutions, is clear from our public opinion poll data (Table 6).
4. Consociational Democracy:
78
Cause or Consequence of Social Exclusion
Table 6
Pride in membership of one's own people (%) - November 2009

Bosniak
respondents Croat respondents Serb respondents
Majority Minority Majority Minority Majority Minority
Very proud 73.4 65.5 82.4 79.2 72.3 75.1
Somewhat 14.4 18.4 11.5 10.8 13.0 12.9
Not particularly 4.3 5.2 1.6 0.9 7.7 5.7
Not at all 3.3 5.1 0.2 1.4 4.3
Of no importance 3.6 3.0 2.2 6.3 2.4 4.9
Do not know/Cannot decide 1.0 2.0 0.7 0.1
DK/NA 0.8 1.3 1.4 0.3 1.5
Total 100.0 100.0 100.0 100.0 100.0 100.0
Source: public opinion polls conducted by Prism Research
78
Arend Lijphart, Constitutional design for divided societies, Journal of Democracy Volume 15, No. 2, April 2004.
79
This is largely a consequence of the situation regarding social capital in Bosnia and Herzegovina. According to the
most recent Human Development Report for Bosnia and Herzegovina UNDP BiH 2009, Ties That Bind: Social Capital
in Bosnia and Herzegovina, Human Development Report for Bosnia and Herzegovina 2009, Sarajevo Bosnia and
Herzegovina is a country where the linking of social capital predominates, but there is a low level of bridging and
connecting of social capital, which confrms the views of Robert Putnam with insight into the situation in Bosnia and
Herzegovina. The dominant role played by so-called exclusive social capital, at the expense of inclusive social capital,
is an important factor in social exclusion processes.
85
According to the November 2009 public opinion poll, in the areas where they represent the majority population the
Croat respondents were most likely to feel a strong sense of pride in belonging to their ethnic group/people (82%).
A somewhat smaller percentage of Bosniak respondents and Serb respondents (73% and 72% respectively) felt a
similarly strong sense of pride in belonging to their respective peoples. If we looked at the minority populations in
those areas where one of the constitutive peoples was in the majority then we found little or no diference in the
number of individuals that felt a strong sense of pride in belonging to their ethnic group/people. Thus, 79% of indi-
viduals from the minority population in Croat majority areas, 75% in Serb majority areas and 65.5% in Bosniak majority
areas expressed a strong sense of pride in belonging to their respective ethnic group or people.
During the reporting period the poll results regarding pride in civic identity/citizenship of Bosnia and Herzegovina
made it clear that ethnic/national and civic identities are in tune only for the members of the Bosniak national group,
while civic identity is considerably less marked among members of the Croat and Serb populations (Table 7).
If one compares the data on ethnic/national pride with the data on pride in being a citizen of Bosnia and Herzegovina
we are led to reiterate our earlier conclusion, namely that Bosniak respondents tended to equate identity based on
membership of a national or ethnic group and civic identity in accordance with citizenship of Bosnia and Herzegovina,
but that this was not the case with the Serb and Croat ethno-national groups, who felt considerably more pride in
their ethnic membership of their ethno-national group.
Comparing the data for November 2009 to that of November 2008 showed that the number of people who expressed
a strong pride in their citizenship of Bosnia and Herzegovina had declined for the populations living in both Bosniak
and Serb majority areas, while the number actually rose in Croat majority areas. These trends also held true for the
minority populations in those areas where one of the constituent peoples was in the majority. An explanation for
this decline in the number of the very proud may be sought in the current economic and political situation, as well
as in the unfulflled expectations (particularly with regard to association with the European Union and visa liberali-
sation).
Social Inclusion
Table 7
Pride in Bosnian and Herzegovinian citizenship (in %)
Bosniak respondents Croats respondents Serbs respondents
Nov 08 Nov 09 Nov 08 Nov 09 Nov 08 Nov 09

Major
ity
Minor
ity
Majo
rity
Min
ority
Maj
orit
y
Min
ority
Maj
orit
y
Min
ority
Maj
orit
y
Min
ority
Maj
orit
y
Min
ority
Very proud 80.7 87.0 61.7 52.4 32.5 75.4 52.4 69.3 23.7 72.9 17.9 46.4
Somewhat 11.2 8.7 18.7 17.4 33.8 12.5 25.1 13.6 20.1 9.8 16.5 16.7
Not particularly 5.4 2.7 6.5 12.3 13.8 3.0 7.7 1.3 15.7 1.1 22.7 21.6
Not at all 0.4 8.5 9.6 4.7 1.1 6.5 7.1 20.8 5.3 20.7 3.0
Of no
importance 0.8 3.3 3.2 14.0 6.7 6.7 6.5 17.7 10.2 18.0 8.0
Do not
know/Cannot
decide 0.9 0.8 1.0 2.0 0.3 0.7 1.2 1.0
DK/NA 0.6 0.8 0.2 3.2 0.9 1.4 0.9 2.2 0.9 0.7 3.2 4.3
Total 100.0 100.0
100.
0
100.
0
100.
0
100.
0
100.
0
100.
0
100.
0
100.
0
100.
0
100.
0
Source: public opinion polls conducted by Prism Research

86
While public discussion continues regarding the relationship between ethnicity/nationality and citizenship and on
problems related to polarisation of the diferent sides around these issues and constitutional changes there is very
little actual engagement in these issues.
The lack of any consensus regarding the concept of multi-ethnicity and how it may be refected in Bosnian and Herze-
govinian society and the State, as well as the constant conficts over the current model of consociative democracy
and the Westminster Model of Civil Society, will continue not only to be a cause but also a consequence of the social
exclusion of a large number of individuals. In the absence of a common approach to society and the State it would
appear that those who proft most care least for the problems and efects of social exclusion, but are nonetheless re-
sponsible for creating policy in this area.
Aside from the fact that they represent the human rights of another generation the problems of employment, edu-
cation, healthcare and social protection remain subordinate to the politicisation of ethnic relations within Bosnia
and Herzegovina.
Social Inclusion
87
Social inclusion still does not appear to be high on the agenda of government representatives, in spite of the fact
that more than half the general population consider themselves to be socially excluded on some grounds (ethnicity,
geographic location, life situation/phase and or the dynamic of social change). This impression receives confrmation
from the fact that work on the Social Inclusion Strategy of Bosnia and Herzegovina has been ongoing already for
two years, with no indication as yet as to when the document will be adopted and become binding for decision mak-
ers.
The November 2009 public opinion poll showed no major changes with regard to social exclusion, although the eco-
nomic crisis has increased the number of people who are gradually becoming socially excluded on the basis of un-
employment. The current system of unemployment protection allows beneft payments for only 2% of the
unemployed, while the basic role of the employment bureaux is limited to securing the right to healthcare. Generally
speaking, the economic situation is worse in rural than in urban areas, as a result of low and irregular income, the
unregulated employment status of people working in agriculture and the current pension and disability insurance
policy.
The situation is similar when we look at our sample by gender, where we found disparities between men and women
with regard to levels of cash income (favouring men) and the enjoyment of rights under employment-related legal
obligations. Systematic policies which do not provide enough support for a decent life continue to be one of the
main reasons behind the desire of nearly two-thirds of the population aged between 18 and 35 to leave the country.
In addition, the level of inequality that is evident in certain areas of Bosnia and Herzegovina, the basis of which is
ethnic background, denies certain groups equal participation in formal institutions and other spheres of social life.
Therefore, it is hardly surprising that in certain areas where one or the other of the constituent peoples is in the ma-
jority there are examples where members of the minority population tend to have lower income, experience higher
levels of unemployment and are generally fnancially worse of. The current political situation, like forecasts of the
political situation during the upcoming election period, is unlikely to be conducive to signifcant change in the policies
that deal with socially excluded individuals and groups.
This is not unrelated to how the public views the job being done by the institutions of Bosnian and Herzegovinian,
which is clearly with a massive lack of confdence in their performance and the policies for which they are responsible,
including social inclusion policy, employment, education, healthcare and social protection.
5. Conclusion
VII.
Ethnic
Relations
and
Stability
By Eldar Sarajli
1. The Interethnic Stability Index and the Political Context in Bosnia and Herzegovina
2. Ethnic Division and Discrimination on the Rise
3. Declining Support for Refugee Return
4. Social Distance: Party Politics and the Ethnic Afect
5. Ethnic Pride and the State of Bosnia and Herzegovina
6. Conclusion
89
As shown in Graph 1, the Interethnic Stability Index has fallen by fve points compared to the last report: from 77 to
72. This decline represents the frst break in the upward movement of the index in the past two years, from November
2007 to the present. In November 2009 the index returned to the same level as it had held in March 2008. The fuc-
tuation of the index over the reporting periods was, naturally, caused by the specifc dynamic of political and social
relations in BiH; therefore, this fall in the Interethnic Stability Index was not entirely unexpected, bearing in mind the
political events that occurred during the reporting period. Yet we can say that the fall in the index was due to both
the local and to the regional political situation as well as to the global situation, which has left its mark on Bosnian
and Herzegovinian society. The global recession and the regional political context have also had an impact on the
stability of relations between ethnic groups in BiH.
As a specifc dimension of social relations ethnicity very largely refects rather than determines social trends, as is
particularly evident in the Balkan or Bosnian and Herzegovinian context. Beginning with the experience of the col-
lapse of Yugoslavia within the context of the dissolution of international socialism and the social reaction in the form
of a growth in the importance of ethnic identity, it is evident that relations between diferent ethnic groups refect
wider geopolitical and geo-social forces. In other words, ethnic relations between individuals and groups depend
directly on the wider social and political context in which they occur. However, ethnicity has exceptional power to
1. The Interethnic Stability Index and the Political Context in
Bosnia and Herzegovina
Graph 2: Predictng retail price trends in Bosnia and Herzegovina, 2006-2009
80
60
70
80
90
100
110
Chain index
Composite index 73 69 73 72 73 74 76 75 76 75 75 76 75 76 76 74 76 75 76 77 77 74 72 75 76 79 76 76 77 76 72 78 74 78 77 74
94 10 98 10 10 10 10 10 98 10 10 98 10 10 97 10 98 10 10 10 96 97 10 10 10 10 10 10 10 98 10 10 10 98 96
I
n
t
e
r
e
t
h
n
i
c

S
t
a
b
i
l
i
t
y

I
n
d
e
x
May
00
Feb
04
Apr
02
Apr
06
Jun
01
Feb
05
Jan
03
Apr
07
Jun
08
Jan
01
Sep
04
Aug
02
Sep
06
Dec
01
Sep
05
Sep
03
Nov
07
Nov
08
Aug
00
Jun
04
Jun
02
Jun
06
Aug
01
Jun
05
Jul
03
Sep
07
Oct
08
Apr
01
Nov
04
Oct
02
Nov
06
Mar
02
Nov
05
Nov
03
Mar
08
Nov
09
The Interethnic Stability Index for Bosnia and Herzegovina
80
Source: research conducted by Prism Research for the purposes of this project, November 2009.
90
infuence all spheres of social life, as well as to guide its political and social development. Relations between ethnic
groups within the country are under the direct impact of politically, socially and culturally more dominant regions,
as well as of the conditioning global context, which already represents the country's historical condition. However,
as such, ethnic relations are also the means of extensive political manipulation. Behind every heightening of com-
munity relations in BiH there is, practically as a rule, a particular political strategy, presented through a concrete po-
litical relationship or the action of the mass media. Every decline in the Interethnic Stability Index in the run-up to an
election testifes precisely to the political and contextually determined nature of ethnic relations in BiH.
Ethnic Relations and Stability
91
Evidently, the most recent reporting period was largely determined by the political nature of many events. We assume
that a number of key elements of the Bosnian and Herzegovinian political situation contributed directly to the height-
ening of relations and the consequent fall in the Interethnic Stability Index. After the agreement on police reform,
which did open the doors of the European Union to BiH through the signing of the Stabilisation and Association
Agreement, there has been no further major progress in mutual agreement between the political leaders of Bosnian
and Herzegovina. The failure of the process of negotiations begun last year in Prud and confict, not simply between
but within ethnic camps, have raised the perception of the ethnic situation and defated public confdence in the
prospect for an improvement in the overall political situation. This is particularly clear from the responses regarding
perceptions of where BiH is headed politically. Compared to November 2008, when a little more than half of the sam-
ple (58%) said that they thought the situation in BiH was deteriorating, the situation today is much worse: more than
70% of the sample is now of this opinion, with just 19% (compared to 30% last year) of the view that the situation is
improving (for more detail see Table 15 in annex).
Turning to the political positions of the ethno-political leaders in BiH they remain largely unchanged. Bosniak politi-
cians continue to insist upon the most comprehensive constitutional reforms possible, in order to secure the maxi-
mum level of centralisation of political decision making and strengthen the position of the State against the entities.
Under the current agreement both entities political systems are doing their best to ensure the maximum degree of
political and cultural autonomy for the ethno-national community in BiH.
elations between the ethno-political communities and the international community are also difcult. This is partic-
ularly true of the already traditionally poor relations between politicians from RS and the Ofce of the High Repre-
sentative (OHR). In October 2007 Serb representatives walked out of state level institutions and threatened the
functioning of the State of BiH itself, which raised tension between the ethnic groups to a new high. The disagreement
between RS and the OHR had the potential to raise tension between Serb respondents and Bosniak respondents in
particular, because the nature of the confict is highly complementary to the ideological diferences and strategic
priorities of Serb and Bosniak ethno-politics in BiH.
Quite certainly, this and similar cases during the reporting period, which have been accompanied by quite sharp
ethno-nationalist rhetoric, have led to an increase in the number of cases of verbal harassment and physical attack
on the basis of ethnic or national identity. The number of the sample that said they had been subject to harassment
or physical attack once on the basis of their ethnic or national identity in November 2009 was double what it had
been in November 2008: 3.5 % compared to 1.6% the year before. The percentage that said they had never been at-
tacked was down by fve percentage points, from nearly 95% to 90%. The increase was similar for all three of the
dominant ethnic groups in BiH, which bears witness to a widespread trend. The situation was somewhat more serious
in urban areas than in rural ones: the responses recorded a certain increase in the number of attacks in urban areas.
A similar pattern of trends was found with regard to majority versus minority areas and in the gender breakdown: in
each case the number of responses indicated that ethnic discrimination in BiH is slowly rising, which confrms the
lower value of the Interethnic Stability Index during the reporting period (Graph 2; Table 1a in annex).
2. Ethnic Divisions and Discrimination on the Rise
92
Graph 2: Responses regarding verbal harassment and physical atack
81
0
10
20
30
40
50
60
70
80
90
100
No - Never Yes - Once Yes - On a number
of occasions
Yes - Often
Nov 2008
Sep 2008
Nov 2009
Have you or anyone you live with been subjected to verbal harassment or physical attack solelydue to your ethnicity/nationality?
81
Source:Table 1a in annex
93
The worsening of ethnic relations during the reporting period was also evident through the indicators regarding
support for minority refugee return. Support has fallen by six full points from last year's 90% full or partial support
in towns to just 84% (see Graph 3). Support has declined in all surveyed categories: down four points in rural areas
and fve points amongst men and women. There has also been a reduction in support for minority return in all age
groups, averaging 6% (Table 2a in annex).
The question arises as to what could have caused such a signifcant fall in support for minority return. First, the overall
political situation is certainly not encouraging for the integration of minority returnees into a society determined by
majority ethnic norms. However, the trend of increased support for minority return registered in the previous two
reporting periods was positively refreshing. This trend was even to be expected, in the wider historical context, given
the years that have passed since the preceding confict and the cumulatively greater level of individual freedoms. In
this regard, in comparison with the previous two reporting periods, when support increased by nearly 7 points, there
has been a reduction in support for minority return.
There does, however, appear to be a perfectly rational and politically determined reason for these changes in per-
ception. Yet the inherent difculties of achieving a political consensus on the future constitutional organisation of
the country (which had become more than obvious after a series of failed negotiations ranging from Prud to Butmir)
3. Declining Support for Refugee Return
Graph 3: Questons related to return in Bosnia and Herzegovina
82
Disagree
Agree
0
10
20
30
40
50
60
70
80
90
BiH FBiH RS
To what extent do you agree or disagree that members of minority peoples, who lived in this municipality before the war, should return to their homes?
82
Source:Table 2a in annex.
94
represented, in this context, the main contribution to the decline in support for minority return. We may assume that
the continuous failure to reach political consensus reintroduced to the public discouraging the already fragile con-
fdence in the possibility of coexistence. Similar sentiments were also encouraged by media discourse. The reassur-
ances of representatives of the international community and by certain domestic leaders
83
that it would not come
to confict were, nonetheless, insufcient to maintain the trend of support for minority return in BiH.
This was also refected in the moderate increase (up 3%) in the percentage of respondents that believed that if EUFOR
withdraws from BiH war might once again be possible. What is of most concern in this respect and that will certainly
have an impact on future perceptions and the acceptance of minority return is the fact that the percentage of re-
spondents that believe war could break out after the withdrawal of EUFOR has been constantly growing over the
past two years. In September 2008 the number was 17%, whereas in November 2009 it had risen to 25%. This belief
in the hypothesis of the coming of new conficts is one of the key causes for the publics lack of confdence in safe
minority return. This fear was greatest among Bosniak respondents and it is amongst them that the largest rise in
the trend was noticed: rising from last year's 27% to the current 35%, amongst Serb respondents the increase was
more modest from 20% to 21%, while it was only amongst Croat respondents that the trend was down, from 20% in
November 2008 to 18% in November 2009 (see Table 10 in annex).
83
See BH Dani, No. 645, 23 October 2009.
95
4. Social Distance: Party Politics and the Ethnic Afect
Refecting the overall situation, vis--vis ethnic relations, the reporting period saw a lower degree of acceptance of
coexistence with members of other ethnic or national groups. The percentage for which it was unacceptable to live
in the same state as Bosniak respondents grew by more than fve points compared to last year, reaching 15% in No-
vember 2009. This increase in the unacceptability of coexistence with Bosniak respondents was particularly evident
among respondents who identifed themselves as Croat by ethno-nationality and for whom such unacceptability
has risen a full 10 points on last year, from 12% in November 2008 to 22% in November 2009. This change may be
largely explained by a shift in the political scene and a certain increased tension in relations between the Bosniak
and Croat ethno-political blocks on a number of grounds, such as the radicalised debates on the establishment of a
public Croat language television channel and the so-called third entity. At the same time, there occurred a process
of limited strategic rapprochement between the Croat and Serb ethnic parties, with concomitant activities by the
print media.
With regard to the Serb sample, the level of unacceptability of living with Bosniaks was similar to that of the previous
survey, with a moderate increase on last year. In November 2009 the number of Serb respondents who considered it un-
acceptable to live in the same state as Bosniaks was 20%. The acceptability of living together with Croats has risen mod-
estly, particularly in majority Bosniak areas (in contrast to minority ones, see annex), which in 98% of cases accept the
idea of a common life with Croats. In majority Serb areas the situation was more or less unchanged (88% considered it
acceptable to live in the same state as Croats), while in minority ones the number was somewhat larger (96% compared
to 88% last year). The acceptability of living with Serbs was also in modest decline, from a total of 92% in the last reporting
period to 88% in this one. This decline was low for Bosniak respondents, 93% of whom accepted the idea of coexistence
with Serbs (a 0.7% diference from last year). The same was for Croat respondents, 70% of whom approved the same idea
with only a 2% diference from last year. There were no major discrepancies between the answers of men and women to
these questions, any more than with regard to the questions regarding the desirability of living in the same neighbour-
hood as people of a diferent ethno-national profle. Such an option was considered approximately as acceptable as living
in the same country as the others or children from one set of ethnic parents sharing a school bench with children of an-
other set of ethnic parents. The situation was naturally quite diferent when it came to the matter of how acceptable it
was for family members to marry someone from a diferent ethno-national group. This option was not considered ac-
ceptable by more than 50% of any of the various groups (give or take a few percentage points) and the indicators were
in fact on average some 3 or 4 points lower for this reporting period compared to those collected last year (see annex for
more detail).
Generally, even though the acceptability of coexistence is an idea that is accepted by the majority of all three Bosnian
and Herzegovinian communities the level of acceptability is a little down on last year. It is to be expected that the trend
will continue to be determined by the dominant party-based ethnic politics, the political context and the burning political
issues and problems.
Turning to the acceptability of the option of moving to a town where another ethnic group is in the majority on the basis
of better employment prospects we found a somewhat more optimistic situation. Overall, 42% of both male and female
respondents replied in the afrmative to this question, which represents a signifcant increase on the previous reporting
period when the number of such answers was 33%. The main change was with the Bosniak ethno-national group, whose
readiness passed the 50% threshold and was up by nearly 20 points on the previous reporting period. Compared to No-
vember 2008, when just 39% of Bosniak respondents replied afrmatively, in November 2009 the number was up to 59%.
The percentage of like answers from members of the Croat group was up by just one point standing at 35%, while the
percentage for the Serb ethno-national group was 33% (approximately 6 points up on the previous reporting period).
96
One might expect that the indicator of willingness to move to a town where another ethnic group is in the majority
due to better job prospects to be explainable (that is, complementary to) the data on economic circumstances, given
that it is directly related to the respondent's economic circumstances, but this does not seem to be the case. While
the percentage of Bosniak respondents who described their situation as generally poor
85
was quite high (around
82%), which can in principle explain their willingness to move to a town where another ethnic group is in the majority.
The situation was entirely the reverse with the Serb ethnic group, where 94% described their situation as generally
poor, but also indicated in large numbers that they were not prepared to move to another "ethnic" town for better
job prospects. It would appear that in this case the ethno-nationalist bonds are much stronger than the potential for
changing one's economic circumstances, which at least partially refutes the theory
86
of the rigid dependence of
ethnic expression on individual socio-economic circumstances.
It is interesting that there were no major diferences in the gender or urban/rural splits: rural respondents were just
4% more willing to take such a step than those in urban areas. The variations were greater when it came to age
groups. More than half (54%) of the respondents in the 18-35 age group replied afrmatively to the question. This
indicator could be explained by high youth unemployment and their inability to fnd work where they live. The con-
clusion imposed by these indicators is that ethnic distance amongst the young could be reduced by the development
of a labour market that transcends ethnic and entity boundaries and brings the younger population into an environ-
ment of closer business and economic cooperation.
Moving on to the questions that considered the support for ethno-national parties, which frequently serves as the
basic reference for ethnic distance and stability in the political situation, we found little change in the answers from
the previous reporting period, with just a moderate decline in support of a couple of percentage points. This means
that, like last year, more than two-thirds of respondents (71%) believed that the ethno-national parties cannot ensure
the protection of the vital national (ethnic) interests that they so strongly advocate. As expected, this percentage
was highest in Brko District (94%), while the diference between the Federation and RS was just 3% (70% versus
73%). Turning to the diferent ethnic groups, we found the greatest level of support shown by Croat respondents
with 25% of respondents taking the view that the ethno-national parties can ensure their vital national interests. The
lowest level was amongst Bosniak respondents (12%). Some 20% of Serb respondents also took this view. These
diferences can no doubt be explained by the nature of political events over the past number of months in 2009.
Graph 4: Response rates for labour force mobility by ethnic groups
84
0
20
40
60
80
100
120
Bosniak Croat Serb
No
No answer
Yes
Would you move to town where the majority are of an ethnic group you do
not belong to for better job prospects?
84
Source: Research conducted for the purposes of this project by Prism Research in November 2009.
85
For more details see the sections on economic stability and income.
86
Daniel Bell, Ethnicity and Social Change, in the Moynihan edition of Nathan Glazer and P. Daniel Ethnicity:
Theory and Experience. Harvard University Press, 1975, Pp. 141-177.
97
Graph 5: Respondent answers on the protecton of natonal (ethnic) interests
87
Agree
Disagree
0
10
20
30
40
50
60
70
80
90
100
BiH FBiH RS Brko Bosniaks Serbs Croats
Some people say that only the ethnic or ethnically affiliated parties in BiH can protect the vital ethnic/national interests of the ethnic group
thay represent. Do you agree or disagree with this opinion?
Nonetheless, if elections had been held the week following the interview questionnaire the balance of political forces
on the Bosnian and Herzegovinian scene would probably look as follows:
87
Source: research conducted for the purposes of this project by Prism Research in November 2009.
2%
16%
10%
23%
18%
2%
4%
7%
12%
Radom za Boljitak, 2%
HDZ, 10%
Won t vote, 16% '
None, 23%
SNSD, 12%
Don't know, 18%
SBiH, 2%
SDA, 4%
SDP, 7%
If elections were held this week, who would you p obably vote for? r
98
Graph 6: The involvement of the religious communites in politcal events
88
30%
Not much
Some
A lot
None
34%
22%
7%
How much influence do you think religious communities have on political events in BiH?
88
We see that nearly half of the sample was undecided with regard to their party of preference, while the other half
was basically divided between the main ethnic parties (excluding the 7% who said they would vote for the SDP). A
change in preferences by Bosniak respondents for parties of their own ethnic provenance can be highlighted. Bosniak
support for the Party for BiH (SBiH) has fallen from 6% last year to 1% this year, SDA support fell from 15% to 13%,
while the newly established Alliance for a Better Future, appearing now for the frst time in these surveys, recorded
3% of respondents saying that they would vote for them (see annex).
Moving on from party politics, the religious communities have also exerted a powerful infuence in public life in BiH
over the recent past. This is clear from the indicators of what the respondents thought about the infuence of the re-
ligious communities on political life in the country. Here we noted a defnite increase compared to last year, whereas
29% of the sample said that they thought the religious communities had a "strong" infuence over political events,
the current fgure is 34%.
99
The fact that the situation regarding ethnic relations was somewhat worse during this reporting period compared
to the preceding one would suggest an increase in the level of ethnic pride, but the data shows that this was not the
case. The number of respondents saying that they were "very proud of their personal ethnic identity decreased from
83% in the last reporting period to 76% in this one.
The fall of this indicator was most obvious for Bosniak and Serbs respondents, where the numbers who expressed
such strong pride has decreased on last year by seven and nine percentage points respectively (from 85% to 72% for
Bosniak respondents and from 81% to 72% for Serb respondents). The level of ethnic pride recorded amongst Croat
respondents was insignifcantly lower than before, by 0.1 of a percentage point and currently stands at 82%. There
were no major diferences between the various gender, urban/rural and age categories. In each of these cases the
level of ethnic pride was a number of percentage points lower than last year. However, there has been an interesting
inversion in the levels of ethnic pride with regard to the minority and majority areas of each for the three peoples.
Compared to the previous reporting period, when a larger percentage was recorded within minority environments
as expressing strong pride in belonging to their people (which is understandable, having in mind the contextual and
reactive nature of ethnic expression) there was an inversion in November 2009: that percentage is now somewhat
lower in minority than in majority ethnic areas. Nonetheless, the explanation for the general fall in the level of ethnic
pride should be sought in the nature of recent political events within each of the Bosnian and Herzegovinian ethno-
polities. That this left its greatest mark on the responses of the Bosniak respondents is shown precisely by the re-
sponses on ethnic pride: compared to the previous reporting period the level of strong ethnic pride in minority
Bosniak areas fell from 91% to 65%, while in majority areas it fell from 85% to 73%.
Graph 7: Levels of ethnic pride in Bosnia and Herzegovina
89
76%
3% 2%
4%
13%
Somewhat
Not very
Not at all
Not important
Very proud
5. Ethnic Pride and the State of Bosnia and Herzegovina
89
100
The overall level of pride in being a citizen of BiH has also been falling. During the previous reporting period the
number who said that they felt "very proud of being a citizen of BiH was 54%, while today the number is 47%. The
most signifcant change was to be found in the Bosniak sample where the indicator fell by more than 20 points over
the course of the year, from 82% in November 2008 to 60% in November 2009. There was also a decline in the per-
centage of Serb respondents who said that they were especially proud of their identity as citizens of BiH: from 36%
to 23%. It is interesting to note that the percentage of Croat respondents who were proud of their identity as Bosnian
and Herzegovinian citizens was up, from 40% last year to 55% this year. It would appear that in this case the major
change is to be seen in the Bosniak context, which may be largely explained in terms of not just the overall political
situation in BiH but the constant failure to strengthen the position of BiH in the international and regional context.
The slow process of liberalisation of the visa regime and European integration process has afected all Bosnian Herze-
govinian ethno-national groups. All of this has had an impact on the degree of civic identifcation with the State of
BiH, as well as on the level of pride in civic identity.
Graph 8: Levels of civic pride in Bosnia and Herzegovina
90
Somewhat
Not very
Not at all
Not important
Very proud
48%
9%
11%
12%
20%
How proud are you of being a citizen of Bosnia and Herzegovina?
90
101
We may conclude from the indicators for the last reporting period that relations between the various ethnic groups
in BiH have deteriorated moderately. This was evident from a number of indicators. The Interethnic Stability Index
was down on the previous reporting period and one may presume that the worsening political situation in the coun-
try and the long-standing failure of political negotiations between the ethnic leaders, principally on constitutional
change, were largely responsible for this fall. As well as the ethno-political rhetoric and the regional and global situ-
ations which have afected the trends within Bosnian and Herzegovinian society, tighter economic living conditions,
the global recession and the regional political context have also afected the stability of ethnic relations in BiH.
There was a fall in support for refugee return in the November survey along with an increase in concern that, were
EUFOR to withdraw, war might break out again as well as an increase in ethnic distance (particularly between Croats
and Bosniaks) and a modest increase in the willingness to move to a town where another ethnicity is in the majority
because of better job prospects. This was particularly marked amongst the younger generation, obviously due to of
the burning problem of unemployment. The people of BiH continue, to a considerable degree, to believe that the
ethnic nationalist parties are not the answer to their political problems. Unlike the Bosniak respondents, who appear
to be disappointed by their ethnic political representatives, the support for the main ethnic parties of Serb or Croat
afliation was somewhat more marked, as can be seen from the continued support of Croat respondents for the HDZ
and even somewhat increased support among Serb respondents for the SNSD. However, most respondents seemed
apolitical, at least with regard to party afliation. A very large number expressed no desire to vote or were unsure as
to which of the parties on ofer to give their vote. As a result of poor political relations in Bosnia and Herzegovina the
people's identifcation with both their ethnic communities and the State has declined to some degree. This was most
true of the Bosniak respondents, whose level of pride in both ethnicity and the State has fallen more signifcantly
during the recent reporting period than was the case for those who identify themselves as Serbs or Croats.
6. Conclusion
VIII.
Public and
Personal
Security
By Eldar Sarajli
1. The Security Stability Index: a Gentle but Steady Fall
2. Collective Security: what after EUFOR?
3. The Global Economic Crisis and the Potential for Social Unrest
4. Personal Safety and Criminal Activity
5. Confdence and Perceived Corruption within the Police and Judiciary
6. Conclusion
103
1. The Security Stability Index: a Gentle but Steady Fall
Graph 1: The Security Stability Index for Bosnia and Herzegovina
91
80
90
100
110
Chain index
Composite index 89 89 89 88 88 89 88 88 87 89 87 88 88 88 86 86 86 88 87 87 88 86 87 86 86 86 88 85 86 88 88 86 85 88 88 87
10 10 98 10 10 98 98 98 10 98 10 10 10 97 10 97 10 10 10 10 97 10 98 10 97 10 98 97 10 10 10 96 10 10 98
S
e
c
u
r
i
t
y

S
t
a
b
i
l
i
t
y

I
n
d
e
x
May
00
Feb
04
Apr
02
Apr
06
Jun
01
Feb
05
Jan
03
Apr
07
Jun
08
Jan
01
Sep
04
Aug
02
Sep
06
Dec
01
Sep
05
Sep
03
Nov
07
Nov
08
Aug
00
Jun
04
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Aug
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Jul
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Oct
08
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01
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06
Mar
02
Nov
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03
Mar
08
Nov
09
The Security Stability Index for Bosnia and Herzegovina
Following the two earlier reporting periods during which the Security Stability Index did not change we saw it fall
modestly in the most recent poll. Compared to last year, when stability was indicated by the index at 88 points, it lies
one degree lower this year, at 87 points on the index scale.
There are a number of fundamental parameters whose infuence on the condition of the Security Stability Index of
Bosnia and Herzegovina are important to recognise. The frst is that the general security situation has hardly changed
compared to the previous two reporting periods (during 2008), which were under the strong infuence of lamentable
events related to juvenile delinquency and crime. While local and state level authorities have taken limited action in
this area (principally related to defning strategic steps at the local level and passing the proposed police reform Law
at the state level) the public impact of these measures seems to have been at best tepid. Further incidents involving
underage individuals took place in Sarajevo, including one killing. Like the earlier killing of Denis Mrnjavac in 2008,
the killing of Amar Mistri in August 2009 provoked a reaction, albeit rather milder, that expressed the publics ex-
treme dissatisfaction with the level of public safety in the capital city of BiH.
92
91
92
See news archive at http://www.oslobodjenje.ba/index.php/fash/index.php?id=2043
Public and Personal Security
104
The security situation was not much better in the other parts of BiH. According to data carried by news agencies in
November 2009,
93
there were 44 murders in Bosnia and Herzegovina during the frst nine months of the year. Twenty
four of them were committed in the territory of the Federation of BiH and 20 on that of Republika Srpska (RS). Of the
total number of victims seven were women; the remaining victims were men.
A major problem that feeds the publics sense of a general lack of safety in BiH would appear to derive more from
the inability of the law enforcement agencies to prevent such events in advance than from a lack of responsibility on
their part for taking action after a criminal act has taken place. This would seem clear from the fact that of the 44
above mentioned murders during the frst nine months of 2009, only one remains unsolved, while the other 43 have
been completely resolved. This was evident even in the case of Denis Mrnjavac: the cantonal court in Sarajevo deliv-
ered its verdict on the Mrnjavac case in June 2009, sentencing the perpetrators of the act to 15, 10 and 4 years in
prison.
94
The efectiveness of police and judiciary action after the fact was in this case, no doubt due in part to the
strength of the public reaction. One may assume that this was also the reason for the similar response of the security
forces in the other cases. Nonetheless, it would appear that what most concerns the public is the relatively high level
of criminal activity throughout the country in the frst place, which the police evidently have difculty keeping a
proper lid on. This includes the large number of cases involving weapons. According to UNDP data reported in the
main print media, there was a 403% increase in the use of weapons in such incidents over the nine month period in
BiH.
95
This would appear to be the main problem feeding into the public's sense of personal vulnerability.
93
See news archives at http://www.intermezzo.ba/latn/?page=9&kat=2&vijest=31426.
94
See news archives at http://www.24sata.info/vijesti/bosna-i-hercegovina/sarajevo/9778-Ubistvo-Denisa-Mrnjavca-
Ademiru-Lelovicu-Berinu-Talicu-cetiri-godine-zatvora.html
95
See Dnevni Avaz, U BiH porast oruanih incidenata za 403 posto, 9 December 2009, p. 11.
105
According to recent information EUFOR will remain in BiH until the general elections in October 2010, after which
they will withdraw from the country. While this decision remains a subject of discussion at the European Union foreign
policy level, the fact that this information has for some time already been a matter of discussion
96
in the media and
in the public sphere in BiH has had a direct impact on the assertions of long-term security and stability in BiH. This is
also clear from the Early Warning System's data for 2009. In this year (2009) the number of people who thought that
war might be a possibility in BiH, were EUFOR to withdraw, increased by some three points, from 22% to 25% (see
the discussion in the section on ethnic relations).
Given the political aspect of this question certain diferences were certainly to be expected in how the diferent
ethnic groups would approach it. The largest increase in concern that there might be a new war, once EUFOR with-
draw, was found amongst Bosniak respondents (from 27% to 35% over the year), with a smaller increase amongst
Serb respondents (from 20% to 21%) and none at all amongst Croat respondents, where the trend was in the opposite
direction (from 20% to 19%). Given the role of the international community in maintaining overall stability in BiH
such trends are very understandable. EUFOR has a marked stabilising and political function in the country and so
any change in circumstances will produce, at least at the rhetorical level, a signifcant reaction. This is particularly
true for the Bosniak sample who are evidently more susceptible to geopolitical security concerns, given that the re-
gional political situation, which is based on ethno-national kinship, at least in so far as it determines the support of
Serbia and Croatia, hardly favours them.
It is interesting that in the most recent reporting period the 18-35 age group amongst respondents was more con-
cerned than their elders about the withdrawal of EUFOR: the number expressing such an opinion increased by seven
points, from 19% to 25% during 2009, but no particular deviations from the general trend were noted with regard to
the gender or urban-rural categorisations.
Graph 2: Responses regarding the possibility of a new outbreak of conict in Bosnia and Herzegovina
97
25%
64%
No
Yes
Don't know
11%
Do you think war might break out if EUFOR withdraw?
2. Collective Security: what after EUFOR?
96
See Dnevni Avaz, EUFOR ostaje do izbora, 8 December 2009, p. 5.
97
106
The visa liberalisation process is adding to the concern of certain population groups within the general public and
is directly related to the possibility of EUFOR withdrawal from BiH. While perhaps not directly contributing to the
public's sense of insecurity, the strict visa regime certainly gives cause for thought in regard to the long-term stability,
as it is directly related to the integration of BiH into the security structures of the European Union and NATO. It is pre-
cisely because of the visa regime that certain population groups have reacted more forcefully to the announcement
of the withdrawal of EUFOR from BiH. Two examples being the Bosniak sample, who, we assume, must feel rather
under protected in the regional context and the respondents aged between 18 and 35, whose desire to travel and
emigrate is signifcantly hampered under the visa regime, thus deepening the sense of concern over the situation if
EUFOR were to withdraw from BiH. As indicated in earlier United Nations reports in BiH, as well as by the Early Warning
System, 64% aged 18-35 would emigrate if the opportunity arose.
107
The social situation in BiH during the reporting period was made even worse by the development of the global eco-
nomic crisis and its consequences for the country. The short-term consequences, directly related to the increase in
unemployment, were particularly worrisome because of the consequences of the fnancial crisis.
98
The unemploy-
ment rate, according to the most recent data, has peaked (see the section on economic stability). All this feeds into
the potential for social unrest in BiH, a country already considerably weakened by a difcult transitional period, a
complex privatisation process and an increase in social inequality and ethnic tension. The very process of integrating
BiH into the global and regional economy presents an additional burden. The potential that this represents for the
development of social dissatisfaction was clear to see throughout 2009, when particular categories of the population
(veterans, disabled veterans and similar categories of social welfare benefciaries) in the Federation displayed their
high level of dissatisfaction with the conditions for the entity Government's credit arrangement with the International
Monetary Fund, which resulted in the organisation of a series of minor protests. There were no major social distur-
bances, but the current pattern of relations between the federal authorities and these population groups suggests
that the possibility for complications and more signifcant protests remains.
While these structural relations gave some indications that social unrest might become a threat to the security of
(the Federation of ) BiH over the forthcoming period the data does not appear to reveal any signifcant changes with
regard to the public pulse. The percentage of the sample willing to take part in public protests, for a given social or
political cause, averaged 50% or below during the reporting period. The major change during the period related to
the context of protests over job losses, where the percentage of the sample ready to protest in this case has increased
from 48% to 52% over the past year. It is interesting to note that social reasons seem somewhat more important than
the political or ethnic ones that have generally been dominant within Bosnian and Herzegovinian society: the per-
centage who would engage in protests to protect ethnic rights was 49%, with an insignifcant increase of 1.7% on
the previous year. Hence this data, to a certain extent, confrms the primacy of individual (fnancial) status over group
or political rights in BiH. Looking at the breakdown by entity one of the most interesting indicators was that the sam-
ple from the Federation expressed considerably greater readiness to protest over job losses than the respondents
from RS: 60% compared to 38%. The latter suggests that the citizens of the Federation are rather more sensitive to
the problem of unemployment than those in RS. The sample from the Federation was generally more ready to protest
against the entity authorities (47%) than the respondents from RS (34%); however, the trend in the Federation has
been downward since November 2008 (when it was 49%) and runs counter, at least to some degree, to the media
picture of conditions in this part of BiH that suggests the possibility of an outbreak of social unrest.
3. The Global Economic Crisis and the Potential for Social Unrest
98
See data on http://www.poslovni.hr/130124.aspx
108
Turning to civil and ethnic rights, it is only among the Bosniak respondents that we can speak in terms of a majority
prepared to protest in their defence: 64% of the Bosniak ethno-national group would protest to protect such rights,
compared to just 42% of Croat respondents and 40% of Serb respondents. This data would also appear to run counter,
at least to a certain degree, to the ofcial ethno-political discourse of the main parties. This applies in particular to
those with a Croat afliation who argue that citizens from the Croat ethno-national group in BiH are extremely dis-
satisfed with the level of political inequality. Yet in fact, this trend has been in signifcant decline, when it comes to
the Bosnian and Herzegovinian Croat respondents, down from last year's 54% to 42% today. There has been a par-
ticular increase in this trend among Bosniak respondents and to a lesser extent among Serb respondents (see Table
8 in annex).
With regard to gender disaggregation, it is worth noting that men were more likely than women to protest against
job losses (55% compared to 50%), while the age group 36-50 was the sample group most likely to engage in such
activities (63%). While the generally accepted opinion in contemporary culture is that the younger generation are
more ready to protest for various social, economic and political causes this does not appear to be the case in BiH: in
every question of this section it was the middle generation (from 36 to 50) that took the lead, while the youth and
the over 50s showed less willingness to participate in public protests (see Table 8 in annex). It would seem that this
data confrms the claim of sociologists regarding the inertness of young people in BiH as both a cause and a conse-
quence of their difcult socio-economic circumstances.
Graph 3: Responses regarding public protests, strikes and demonstratons in Bosnia and Herzegovina
99
25%
64%
No
Yes
Don't know
11%
99
109
4. Personal Safety and Criminal Activity
Compared to last year there has been a modest increase in the trends of criminal acts including burglary, car theft
and the theft of other valuables. Burglary of houses and apartments has increased overall from 1% in the previous
reporting period to 3% in this reporting period. The rate of car theft has increased from 0.6% to 1.7%, while the theft
of other valuables increased from 2% to 3% in 2009. There is an interesting diference between the entities with
regard to car theft: while the percentage was somewhat higher in the Federation (4% when compared to 2008) it
was practically negligible in RS where 0.8% of the sample said that they or a family member had been the victim of
such a crime during 2009. Only in the territory of Brko District was the level higher than in the Federation of BiH, by
just 0.7% (thus totalling 5%). In general terms, the level of recorded criminal activity in any of the categories was
lower in RS than in the Federation (see Table 1 in annex). There could be many reasons for such a situation, ranging
from the efectiveness of the police to the diferent levels of economic development and thus the opportunity for
theft in the frst place. Similar diferences were noted between rural and urban areas; the theft rates were practically
double in all categories in urban areas. Similarly, men were much more exposed to theft than women (see Table 1a
in annex).
The number who sought police assistance on some grounds doubled from 4% in the previous reporting period to
9% in the current one. While this doubling was recorded in both entities the resulting rate was considerably higher
in the Federation where the number of those who sought police intervention rose from 5% to 10%, compared to an
increase from 3% to 6% in RS. As in the previous case, more calls were made to the police in towns than in rural areas
(12% compared to 7%) with more made by men than by women (9% compared to 8%), although the increase for
women was 5 points up on the previous period, when it was 4%. Looking at minority and majority ethnic areas, it
was only in the Serb ethnic sample that we found a higher percentage of calls for police assistance in minority areas.
Unlike the Serb respondents, both Bosniak and Croat respondents were more likely to call for police assistance in
ethnic majority areas.
110
The increase in the number of calls for police assistance was accompanied by an increase in the level of dissatisfaction
with what the police actually did when called. Compared to the previous year, when just over 48% expressed dissat-
isfaction with police assistance, the percentage has increased this year to 53%. The data for the individual entities
was interesting. While a higher level of criminal activity was recorded for almost all categories in the Federation the
level of satisfaction with the police assistance received fell, down from 58% last year to 48% this year.
Graph 4: Responses by the general public on the frequency of seeking police assistance
100
Nov 09
Nov 08
0
10
20
30
40
50
60
70
80
90
100
Yes No
During the past three months, have you or a member of your close family sought police assistance for any reason?
Don't know / no answer
No
Yes
0
10
20
30
40
50
60
How satisfied or unsatisfied were you what the police did?
Not at all satisfied
Quite dissatisfied Quite satisfied Entirely satisfied
100
111
This data would appear to suggest that the diferent rates of criminal activity in the Federation and RS cannot be
written of to diferent levels of police efectiveness. In fact, the only general conclusion that one can draw is that the
police in the Federation seem to be more efective in providing assistance after a given criminal act has taken place
(as confrmed by the previously mentioned fact of a virtual 100% success rate in dealing with murder cases), while
the police in RS may be, to some extent, more successful in preventing criminal activities from happening in the frst
place.
Turning to the reports of police exceeding their authority during the reporting period, the data indicated a certain
increase in the number of respondents who witnessed such excesses. During the previous reporting period just 8%
of the sample witnessed some form of abuse of police authority, whereas this year the number has risen to 12%. In
this case we also noticed a major diference between the entities. The percentage in the Federation increased by
three points (from 8% to 11%), but by nine points in RS (from 7% to 16%). We saw similar trends in the other various
respondent categories: urban-rural, gender and majority-minority (see Table 5a in annex).
112
5. Confdence and Perceived Corruption within the Police and Judiciary
One of the causes of dissatisfaction with police assistance, as well as the generally poor perception of the role of the
police forces in society, was that these institutions were generally perceived to be corrupt. Earlier UNDP reports drew
attention to this fact,
101
which has received additional confrmation from the most recent Early Warning System data.
Thus, 61% of the overall sample for BiH said that they believed that abuse of ofce, bribery and corruption were
factors in police operations. It is interesting that the situation was so similar in both entities, within 2 points, and in
line with the general picture, although the trend in the Federation was downward while in RS it had increased a by
couple of points.
No doubt as a result of the perceived level of police corruption, the approval of police performance has been falling.
The percentage that approved of how the law enforcement agencies were doing their job was down on the 2008
fgure of 61% to 53% this year. In the Federation the percentage was up by 8 points (from 42% to 50%), while it was
down by three points in RS (from 76% to 73%).
Graph 5: Percepton of the extent of police corrupton
102
20%
15%
3%
27%
34%
Not much
To some degree
Fairly
Very
How widespread do you think corruption, that is bribery or abuse of office for private purposes, is in the police?
Not at all
101
E.g., the Human Development Report on The Ties that Bind: Social Capital in Bosnia and Herzegovina, UNDP,
Sarajevo, 2009, p. 81.
102
113
One should note that according to the data from the reports the approval rating for the police in RS was undeniably
higher than that of the Federation, even though other indicators, namely the data on the level of satisfaction with
the police assistance received and the data on perceived police corruption, suggests otherwise.
The data also shows a decline in the level of support for the courts in BiH. While last year 54% of the sample responded
in the afrmative when asked whether they approved of the performance of the courts in BiH this year just over 48%
of the sample did so. Support in the Federation fell from 46% to 39%, while support in RS fell from 65% to 63%. As in
the case of the approval of how the police were doing their job, the respondents from RS were much more apprecia-
tive of the job the judicial bodies in the entity were doing than the sample in the Federation.
Graph 5a: Approval levels for the work of the police
No
Yes
0
10
20
30
40
50
60
70
80
FBiH RS
Do you approve of the work of the police?
114
Concerns over public and personal safety in Bosnia and Herzegovina are increasing, as is evident from the downward
trend of the Security Stability Index. The reasons behind this modest fall can be guessed at with a fair degree of cer-
tainty by just looking at the registered increase in break-ins into privately owned property and in the number of se-
rious crimes (e.g., murders) in both entities of BiH. Public attitudes still appear to be infuenced by last year's debacle
over public safety and a number of unfortunate events involving minors. In addition to the poor general sense of
public safety, public perceptions in this regard have been signifcantly infuenced by the global recession and the
economic problems that have appeared in BiH as a refection of the global context. This is connected in particular to
the prospect for social unrest and dissatisfaction amongst certain categories of the population with state and entity
government economic policy. The data in this regard shows that the social and fnancial causes of public dissatisfac-
tion that are likely to cause public unrest are more important, at least to some degree, than the political i.e., ethnic
factors that are normally considered to play the dominant role in Bosnian and Herzegovinian society. The percentage
of the public who would take to the streets over their national rights was considerably smaller than the percentage
that would do so over job losses. The data from the reporting period thus confrms the primacy for the individual of
social/fnancial status over political rights in BiH. Similarly, there is interesting data which indicates that those most
prepared to protest come from the 36-50 age group; one might have expected, as a general principle, that the
younger generation would generally be more ready to resort to such a form and expression of public discontent.
While the rates for almost all categories of criminal activity were up in the Federation there was actually less dissat-
isfaction with the quality of police assistance received. The reverse was the case in RS, where there has been a sig-
nifcant change in respect to public disapproval of special police actions: rising from last years very low level of
dissatisfaction with the level of police assistance of 18% up to 75% this year. Similarly, more than half of the sample
said that they thought corruption was a factor in the police force, which has had a considerable impact on the overall
perception of the police's role within society.
6. Conclusion
Special
Insert on the
Environment
By Igor Palandi
116
Bosnia and Herzegovina, as a country in transition, is faced with numerous social and economic problems and
amongst the most pressing are the problems related to environmental protection and the use of natural resources.
The pressures on the environment are evident, not least because BiH is still being used largely as a source of natural
resources (timber, energy, etc.) and a supply base for the immediate and wider surrounding area. In recent years
there has been some progress towards improving environmental protection and the better management of natural
resources, but not enough. For sustainable development to be reached, as advocated by the EU, there must frst be
better links between the social and economic aspects and those of the environment. For this to happen the relevant
institutions must pay more attention to activities that will produce progress on this issue.
The wider public has an important role to play in this process, as it can and should put more pressure on decision
makers. A public that is well informed on environmental protection issues is a key factor for the measures needed to
integrate the environment into other social and economic sectors. In order to arrive at a better picture of public opin-
ion in BiH three questions related to environmental protection were included in the public opinion poll conducted
for the Early Warning System Report. From the results received (Graph 1) it is possible to conclude that the public is
well informed about the main environmental issues facing BiH today. They agree to a considerable extent with the
strategic documents prepared on this theme in BiH, which single out air and water pollution and the problems related
to the creation of waste as the main problems. Public opinion in BiH on climate change (Graph 2) is also in line with
expert opinion, which stresses that climate change has been recognised as one of the main threats to future devel-
opment at both the global level and in BiH itself. Of particular interest is the data on the publics readiness to pay
more for environmentally acceptable products i.e., to change their own behaviour in order to protect the environ-
ment. According to the survey, nearly 80% of the people surveyed would change their behaviour to beneft the en-
vironment in BiH.
These indicators ofer some guidance for the political parties and leaders in BiH regarding the publics increasing
level of awareness on environmental issues and how they relate to sustainable development. Naturally, there is a
need to do more on additional education and programmes to stimulate environmentally responsible behaviour and
this approach should be used to encourage the public to engage in environmental protection issues and increase
pressure on decision makers.
Public Awareness of Environmental Protection as an Issue in Bosnia and Herzegovina
Special Insert on the Environment
117
Graph 1: Perceptons of the ecological problems in BiH
103
Somewhat
Not much
Not at all
to answer
To what extent is the environment in BiH subject to climate change?
Considerably
3%
7%
11%
37%
42%
Graph 2: Perceptons of the eects of climate change in BiH
104
Water pollution
Toxic substances in the
environment
Watste creation /
insufficient recycling
to answer
What is the main ecological problem facing BiH today?
Air pollution
7%
21%
36%
17%
19%
103
104
118
Special Insert on the Environment
Graph 3: Support for environmental protecton in BiH
105
Probably, yes
Probably not
Definitely not
to answer
Definitely, yes
4%
13%
6% 30%
47%
Would you be prepared to pay more for more ecologically sound product (eg. recycled paper, organic food) or to change your behaviour
(eg. recycled bottles, save energy at home) to protect the environment?
105
ANNEX
120

In which direction would you say Bosnia and Herzegovina is headed, given the current political situation?
All
Gender
Sample Male Female

March
08
June
08
Sept
08
Nov
08
Nov
09
March
08
June
08
Sept
08
Nov
08
Nov
09
March
08
June
08
Sept
08
Nov
08
Nov
09
% % % % % % % % % % % % % % %
Worse 67.0 50.0 50.9 63.4 75.0 70.3 48.3 51.8 63.8 76.8 63.8 51.7 50.1 63.0 73.1
Better 23.8 35.9 36.0 25.0 16.5 21.8 40.4 36.3 26.9 15.1 25.8 31.5 35.7 23.1 17.9
DK/NA 9.2 14.1 13.1 11.7 8.5 7.8 11.3 11.9 9.3 8.1 10.5 16.8 14.3 13.9 8.9
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Source: Public opinion polls conducted by PRISM Research
Table 1
100
Mach 08
T
o
t
a
l

s
a
m
p
l
e

%
June 08
67.0 %
50.0 % 50.9 %
63.4 %
75.0 %
80
60
40
20
0
Graph 2 - With regard to current political conditions, things in BiH are getting worse
1

I. POLITICAL STABILITY
121

In which direction would you say Bosnia and Herzegovina is headed, given the current political situation?
Sample Bosniak majority
Croat majority
Serb majority

March
08
June
08
Sept
08
Nov
08
Nov
09
March
08
June
08
Sept
08
Nov
08
Nov
09
March
08
June
08
Sept
08
Nov
08
Nov
09
% % % % % % % % % % % % % % %
Worse 78.8 54.4 57.2 79.7 90.5 57.7 57.5 61.5 52.9 70.5 57.3 42.5 42.5 50.3 62.9
Better 16.1 31.7 31.8 13.5 6.0 26.5 27.9 23.3 24.7 15.9 30.6 43.0 42.0 34.6 24.2
DK/NA 5.1 13.9 11.0 6.8 3.4 15.8 14.6 15.1 22.4 13.5 12.2 14.5 15.5 15.1 12.9
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Table 2

How would you describe the economic situation Bosnia and Herzegovina is in?
Sample All Bosniak majority Croat majority Serb majority

Nov 08 Nov 09 Nov 08 Nov 09 Nov 08 Nov 09 Nov 08 Nov 09
% % % % % % % %
Very poor 29.1 42.2 37.3 47.0 12.0 27.8 14.6 24.4
Generally poor 36.6 38.3 40.3 36.4 23.1 47.1 46.8 37.9
Neither good nor bad 29.8 17.7 21.3 15.4 46.8 20.6 32.9 35.4
Generally good 2.9 1.1 1.2 16.2 0.7 3.1 0.6
Very good 0.4 0.2 0.4
DK/NA 1.3 0.8 0.9 1.6 3.7 2.5 1.6
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
TOTAL POOR 65.7 80.5 77.6 83.5 35.0 74.9 61.4 62.3
Neither good nor bad 29.8 17.7 21.3 15.4 46.8 20.6 32.9 35.4
TOTAL GOOD 3.3 1.1 0.2 1.2 16.6 0.7 3.1 0.6
DK/NA 1.3 0.8 0.9 1.6 3.7 2.5 1.6
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Table 3
122

Would you leave Bosnia and Herzegovina to live in another country, if opportunity arose?
Responses All
Age group
18 35 36 50
March
08
June
08
Sept
08 Nov 08
Nov
09
March
08
June
08
Sept
08
Nov
08
Nov
09
March
08
June
08
Sept
08
Nov
08
Nov
09
% % % % % % % % % % % % % % %
Yes 42.2 38.2 41.6 40.4 44.0 64.7 61.3 64.5 63.3 66.5 51.1 46.1 45.6 39.4 51.9
No 47.5 50.3 47.9 46.3 49.4 23.6 27.7 24.3 19.2 27.7 35.9 39.7 41.6 48.9 39.0
DK/NA 10.3 11.4 10.6 13.3 6.6 11.7 11.0 11.2 17.5 5.7 13.0 14.3 12.7 11.7 9.0
TOTAL 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Table 4

Would you leave Bosnia and Herzegovina to live in another country, if opportunity arose?
Sample Bosniak majority
Croat majority
Serb majority
March
08
June
08
Sept
08
Nov
08
Nov
09
March
08
June
08
Sept
08
Nov
08
Nov
09
March
08
June
08
Sept
08
Nov
08
Nov
09
% % % % % % % % % % % % % % %
Yes 48.7 36.8 48.2 39.2 56.3 41.4 43.5 48.8 43.4 36.4 34.7 38.0 31.5 41.6 32.7
No 44.2 52.4 41.2 44.8 36.4 44.7 40.4 44.0 43.2 51.1 52.0 50.8 56.3 47.6 63.2
DK/NA 7.2 10.8 10.6 15.9 7.3 14.0 16.2 7.2 13.5 12.5 13.3 11.2 12.1 10.8 4.1
TOTAL 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Table 5
123

To what degree do you support the process of Bosnia and Herzegovina joining the European Union?
All
Bosniak majority
Croat majority
Serb majority
Sept
08
Nov
08
Nov
09
Sept
08
Nov
08
Nov
09
Sept
08
Nov
08
Nov
09
Sept
08
Nov
08
Nov
09
% % % % % % % % % % % %
Strongly support 50.9 48.5 54.7 72.2 74.5 82.6 45.6 34.3 38.7 29.3 20.2 29.4
Somewhat support 24.7 27.4 28.4 15.8 15.2 11.8 19.4 44.0 31.8 34.9 36.7 43.8
Neither support. nor oppose 14.4 13.8 10.5 7.6 6.0 3.9 27.4 13.3 17.1 18.3 24.1 16.5
Somewhat oppose 2.5 1.9 2.2 1.0 0.4 0.2 1.4 1.9 2.7 4.7 4.0 4.6
Strongly oppose 3.9 5.0 2.4 0.1 0.7 0.8 1.9 1.1 2.0 8.8 11.7 4.5
DK/NA 3.6 3.4 1.8 3.3 3.1 0.7 4.2 5.4 7.8 4.0 3.3 1.3
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
TOTAL SUPPORT 75.6 75.9 83.0 88.0 89.7 94.4 65.0 78.3 70.5 64.2 56.9 73.2
Neither support nor oppose 14.4 13.8 10.5 7.6 6.0 3.9 27.4 13.3 17.1 18.3 24.1 16.5
TOTAL OPPOSE 6.4 7.0 4.6 1.2 1.1 1.1 3.4 3.0 4.6 13.5 15.7 9.1
DK/NA 3.6 3.4 1.8 3.3 3.1 0.7 4.2 5.4 7.8 4.0 3.3 1.3
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Table 6

All things considered, would you say that Bosnia and Herzegovina will benefit from membership of the European Union?
Sample Bosniakmajority Croatmajority Serbmajority Br koDistrict

Nov09 Nov09 Nov09 Nov09
% % % %
Yes 86.7 67.6 74.5 77.7
No 5.2 15.3 12.5 10.2
!&10 & & answer 8.1 17.0 12.9 12.1
TOTAL 100.0 100.0 100.0 100.0
Source: Public opinion polls & 1 by PRISM Research

Tabela 7
124

Generally speaking, is your image of the European Union strongly positive, generally positive, generally negative, or strongly
negative?
Sample Bosniakmajority Croatmajority Serbmajority Br koDistrict

Nov09 Nov09 Nov09 Nov09
% % % %
Strongly positive 70.0 37.5 26.3 47.8
Generally positive 22.8 41.0 52.9 50.1
Generally negative 2.1 6.6 9.9 0.3
Strongly negative 1.5 1.8 4.2
!&10 & & answer 3.6 13.0 6.7 1.9
TOTAL 100.0 100.0 100.0 100.0
Table 8

If a general election were held this week,what party would you be most likely to vote for, regardless of the level of government in
question?
Sample All
Bosniak majority
Croat majority
Serb majority
Sept
08
Nov
08
Nov
09
Sept
08
Nov
08
Nov
09
Sept
08
Nov
08
Nov
09
Sept
08
Nov
08
Nov
09
% % % % % % % % % % % %
DNZ BiH Demokratska narodna zajednica BiH 0.1 0.2 0.2 0.5 0.2
Stranka za Bosnu i Hercegovinu 4.3 3.2 1.2 9.4 6.8 1.7 2.8
SDA Stranka demokratske akcije 6.9 8.8 7.2 15.2 17.6 15.2 0.3 3.5
Stranka penzionera umirovljenika BiH 0.1 1.0 2.0 0.5
SPD Socijaldemokratska partija BiH Socijaldemokrati 7.1 11.9 9.2 13.7 23.6 18.9 0.6 1.0 0.7 0.2 0.5
Liberalno demokratska stranka Bosne i Hercegovine 0.0 0.1
Penzionerska stranka RS 0.1 0.2
DNS Demokratski narodni savez 1.3 0.9 0.1 3.2 2.4 0.2

1
Table 9
125

SDS Srpska demokratska stranka 4.6 4.1 1.7 0.3 10.8 10.1 3.6
Srpska radikalna stranka dr. Vojislav . . # 0.5 0.2 1.4 0.6
PDP RS Partija demokratskog progresa Republike Srpske 0.7 0.6 0.1 1.8 1.5 0.4
Savez nezavisnih socijaldemokrata SNSD Milorad Dodik 13.7 12.7 14.3 0.4 34.5 31.6 34.8
Socijalisti ka partija 0.6 1.4
Narodna stranka "Radomza boljitak" 0.3 1.1 0.7 0.3 1.7 0.6 1.1 3.1 3.7
HDZ Hrvatska demokratska zajednica BiH 4.1 4.3 3.9 0.7 31.6 33.0 28.7 0.2
SBBBiH Savez za bolju budu nost BiH Fahrudin
Radon i 1.2 2.6

u uemokraLska parLl[a uragan avl 0.9 2.2

Some oLher parLy 0.1 0.3 0.2 1.1 0.8 0.2
9/ 3voLe 16.3 16.3 13.2 12.3 31.7 20.2 12.3 19.6
none 9.8 23.0 22.3 14.0 28.3 29.7 6.8 36.3 23.8 6.7 16.2 14.6
94/ 38/ 9 6/ 3declde 13.3 7.0 19.4 18.1 6.1 16.3 10.8 6.2 17.7 13.6 8.8 24.3
no 6/ 4 7 9/ 3answer 10.4 17.2 0.2 8.0 11.7 0.4 9.4 7.6 0.2 13.8 27.9
nasa sLranka 0.4 0.0 0.7 0.8 0.3
Srpska radlkalna sLranka 8epubllke Srpske 0.1 0.2
Cra anska demokraLska sLranka 8osne l Percegovlne 0.1 0.1 0.3 0.3
8S 8osansko hercegova ka sLranka prava 0.1 0.1
Lvropska 89 9 86 sLranka L 3 0.0 0.1
PrvaLska sLranka prava 8osne l Percegovlne apl dr.
722 0.3 0.3 2.1 2.2
PrvaLska demokraLska za[ednlca 1990 0.7 0.6 0.1 3.1 4.8 1.0
nezavlsna demokraLska sLranka 0.0 0.1
narodna 9 / 16 ka sLranka 0.1 0.1
8CSS 8osanska sLranka 0.8 0.2 0.1 1.7 0.4 0.2
Suu 8lP Socl[aldemokraLska unl[a 8osne l Percegovlne 0.1 0.0 0.3
8S Sefer Palllovl 1.3 0.1 3.3 0.2
1C1AL 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Source: ubllc oplnlon polls conducLed by 8lSM 8esearch
126

How much do you agree or disagree with the following statements?

Sample

Bosniak majority
Croat majority
Serb majority

Sept
08
Nov
08
Nov
09
Sept
08
Nov
08
Nov
09
Sept
08
Nov
08
Nov
09
% % % % % % % % %
The parties currently in
government are relatively
successful at defining and
implementing key reforms

Strongly agree 3.5 2.6 1.5 1.3 1.3 1.1 11.4 9.3 4.3
Somewhat agree 6.7 2.7 1.4 7.0 9.8 6.5 28.9 33.1 30.3
Neither agree nor disagree 19.9 18.9 10.8 42.5 36.4 27.8 28.7 30.1 37.5
Absolutely disagree 61.2 68.3 83.2 35.3 24.8 51.2 21.7 19.1 24.7
DK/NA 8.7 7.5 3.1 14.0 27.7 13.5 9.4 8.3 3.2
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
TOTAL AGREE 10.2 5.3 2.9 8.3 11.1 7.6 40.3 42.4 34.5
TOTAL DISAGREE 61.2 68.3 83.2 35.3 24.8 51.2 21.7 19.1 24.7
DK/NA 8.7 7.5 3.1 14.0 27.7 13.5 9.4 8.3 3.2
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
government show a sufficient
sense of responsibility towards
the public

Strongly agree 2.3 1.3 0.4 1.1 1.9 0.9 9.3 7.0 4.3
Somewhat agree 5.9 3.3 0.5 6.8 8.1 3.9 22.3 22.8 22.9
DK/NA 8.3 7.5 2.2 14.0 27.7 12.3 9.4 9.5 3.8
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
TOTAL AGREE 8.2 4.6 0.9 7.8 9.9 4.8 31.5 29.8 27.2
TOTAL DISAGREE 61.2 67.6 90.2 39.8 27.8 56.1 30.0 28.9 32.7
DK/NA 8.3 7.5 2.2 14.0 27.7 12.3 9.4 9.5 3.8
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
government are capable of
meeting the conditions for
progress towards European
Strongly agree 3.2 1.0 0.4 0.4 1.3 0.6 10.6 8.6 4.8
Somewhat agree 5.6 3.2 0.5 5.0 8.7 3.9 25.3 24.7 24.3
Table 10
127

integration on time

DK/NA 8.4 7.5 2.2 14.0 28.0 13.8 10.0 9.4 3.5
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
TOTAL AGREE 8.7 4.1 0.9 5.4 10.1 4.6 35.9 33.2 29.2
TOTAL DISAGREE 62.5 67.2 87.6 39.3 26.8 54.5 23.8 20.7 24.2
DK/NA 8.4 7.5 2.2 14.0 28.0 13.8 10.0 9.4 3.5
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
government deserve to remain
in office

Strongly agree 3.3 1.4 0.6 1.2 1.3 3.2 12.4 9.3 9.2
Somewhat agree 4.3 1.4 1.7 5.4 9.4 4.0 21.3 25.9 20.5
DK/NA 8.2 8.3 2.4 14.0 27.7 14.0 10.7 9.3 3.8
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
TOTAL AGREE 7.6 2.8 2.2 6.6 10.7 7.2 33.7 35.2 29.6
TOTAL DISAGREE 61.3 68.8 89.4 40.4 27.2 51.6 24.0 19.8 21.3
DK/NA 8.2 8.3 2.4 14.0 27.7 14.0 10.7 9.3 3.8
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Replacing the parties currently
in government would help
accelerate the implementation
of reforms and the economic
recovery of the country

Strongly agree 34.2 45.7 49.7 19.8 12.4 20.2 9.3 6.5 6.7
Somewhat agree 21.4 14.1 16.0 15.8 14.3 24.6 15.9 15.0 13.6
DK/NA 9.3 8.6 5.5 15.2 30.4 15.2 13.5 11.4 6.8
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
TOTAL AGREE 55.6 59.8 65.6 35.5 26.7 44.8 25.1 21.5 20.3
TOTAL DISAGREE 16.6 15.6 16.7 13.8 9.5 17.8 20.7 25.3 26.7
DK/NA 9.3 8.6 5.5 15.2 30.4 15.2 13.5 11.4 6.8
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

e l p am S

e S
0

l l A
t p e
08
v o N
08
Nov
09

n Ge
M e al
t p e S
08
Nov
08
Nov
09

r e d
e al Fem
t p e S
08
Nov
08
Nov
09

e d si e Pr H i B
am i l Par H i B

y c n
Yes
No
l p ap t o N
a r e ith e N
A N / K D
l ta o T
y l b m e Ass y tar n e
Yes
No
l t N

%
38
39
le ab ic 1.
e v ro p ap is d r o n e v ro p ap 12
8.
100
37
40
l b i 1

% % %
.5 40.4 32.5
.7 39.1 50.2
4 1.5
.1 8.4 13.5
3 12.0 2.4
0.0 100.0 100.0 1
.6 41.2 31.3
.0 38.1 51.7
5 0 6

% % %
35.0 42.7 33.1
45.1 36.7 50.5
1.9 1.4
9.7 8.9 13.1
8.3 11.6 1.9
100.0 100.0 100.0
34.4 42.8 32.1
45.2 36.4 51.7
2 0 0 6

% % %
41.9 38.2 31.9
34.5 41.4 49.8
1.0 1.6
14.3 8.0 13.9
8.3 12.4 2.8
100.0 100.0 100.0
40.7 39.7 30.5
35.1 39.7 51.7
0 9 0 6

l i c n u o C H i B

l p ap t o N
a r e ith e N
A N / K D
l ta o T
s r ste i n i f M o
Yes
No
t o N l p ap
a r e ith e N
A N / K D
l ta o T

le ab ic 1.
9.
100
38
39
le ab ic 1.
8.
100

5 0.6
.8 8.5 13.8
0 12.2 2.6
0.0 100.0 100.0 1
.4 41.3 32.0
.9 38.2 50.6
4 0.8
.7 8.5 14.2
6 12.0 2.4
0 0 100 0 100 0 1

2.0 0.6
9.4 8.8 13.3
8.9 12.0 2.2
100.0 100.0 100.0
35.8 43.6 32.6
44.4 36.0 50.4
2.0 1.1
9.3 8.7 13.7
8.4 11.7 2.3
100 0 100 0 100 0

0.9 0.6
14.2 8.2 14.3
9.1 12.4 3.0
100.0 100.0 100.0
40.9 39.1 31.4
35.6 40.3 50.8
0.7 0.5
14.0 8.2 14.8
8.8 12.3 2.5
100 0 100 0 100 0

am i l Par H i FB
n r e v o G H i FB

l ta o T
t n e m
Yes
No
l p ap t o N
a r e ith e N
A N / K D
t o T al
t n e m n
Yes
No
l p ap t o N

100
37
39
le ab ic 2.
9.
100
36
40
le ab ic 2

0.0 100.0 100.0 1
.3 37.8 28.7
.9 41.0 53.4
0 0.6
.9 9.0 14.5
0 12.2 2.7
0.0 100.0 100.0 1
.3 39.1 29.5
.8 40.2 53.2
1 0 6

100.0 100.0 100.0
33.5 39.8 29.0
45.5 39.4 53.0
2.5 0.7
9.8 9.1 15.2
8.8 11.7 2.1
100.0 100.0 100.0
32.9 42.1 30.8
46.3 37.6 52.2
2 7 0 9

100.0 100.0 100.0
41.0 35.9 28.5
34.6 42.5 53.8
1.5 0.5
13.9 8.9 13.9
9.1 12.7 3.3
100.0 100.0 100.0
39.6 36.2 28.2
35.5 42.6 54.3
1 5 0 4

l p ap t o N
a r e ith e N
A N / K D
l ta o T

le ab ic 2.
9.
100

1 0.6
.6 8.7 13.8
2 12.0 2.8
0.0 100.0 100.0 1

2.7 0.9
9.3 8.8 14.3
8.8 11.6 1.9
100.0 100.0 100.0

1.5 0.4
13.9 8.7 13.3
9.6 12.4 3.7
100.0 100.0 100.0

128
Table 1
II. INSTITUTIONAL CONFIDENCE
Do you approve of the job being done by...?
129
RS National Assembly

Yes 37.8 40.2 32.4 36.2 44.6 35.0 39.4 36.1 29.8
No 38.7 39.7 52.8 41.8 35.0 51.3 35.7 44.1 54.3
Not applicable 1.5 0.4 2.2 0.4 0.9 0.5
Neither approve nor disapprove 11.3 8.2 11.7 9.4 9.7 11.1 13.1 6.8 12.4
DK/NA 10.7 11.9 2.6 10.4 10.7 2.2 11.0 13.0 3.0
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
RS Government

Yes 38.1 40.3 33.7 36.5 44.5 37.0 39.6 36.3 30.5
No 39.1 39.6 52.1 42.4 34.7 50.3 35.9 44.3 53.8
Not applicable 1.6 0.4 2.4 0.4 0.9 0.5
DK/NA 9.9 11.9 2.5 9.3 11.1 2.0 10.4 12.7 2.9
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Municipal authorities

Yes 46.5 55.5 39.1 43.5 59.0 41.2 49.4 52.2 37.1
No 32.2 25.0 45.3 36.7 21.1 43.1 27.8 28.7 47.4
Not applicable 1.6 0.2 2.4 0.3 0.9 0.2
DK/NA 8.7 12.3 2.4 8.6 12.2 2.5 8.9 12.4 2.4
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Cantonal authorities in FBiH

Yes 34.6 38.6 19.3 31.8 42.0 19.6 37.3 35.4 19.0
No 43.5 38.3 63.9 48.9 35.0 64.0 38.3 41.3 63.7
Not applicable 1.2 0.2 1.8 0.1 0.7 0.3
DK/NA 10.0 17.0 3.0 8.4 16.3 2.9 11.5 17.7 3.1
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

OSCE

Yes 44.1 48.0 51.0 41.8 52.2 49.6 46.3 43.9 52.4
No 32.4 26.3 29.9 36.3 24.3 30.8 28.7 28.1 29.1
Not applicable 1.6 0.6 1.7 0.6 1.5 0.5
DK/NA 10.7 15.4 3.7 10.8 13.7 3.9 10.5 16.9 3.6
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

130
OHR
Yes 42.9 45.6 51.3 40.5 47.7 49.6 45.2 43.6 53.0
No 33.4 29.6 31.6 37.2 28.9 32.9 29.8 30.4 30.4
Not applicable 1.5 0.8 1.7 1.0 1.3 0.5
DK/NA 11.0 13.6 3.5 10.8 13.0 4.0 11.1 14.1 3.0
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
UNDP
Yes 43.8 50.5 52.4 41.9 55.0 51.5 45.7 46.2 53.3
No 29.5 22.9 27.5 32.8 21.2 28.0 26.3 24.5 27.0
Not applicable 1.5 0.6 1.7 0.9 1.4 0.4
DK/NA 13.5 15.9 4.9 13.9 14.3 5.3 13.2 17.4 4.4
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
EUPM
Yes 42.1 47.2 53.8 39.9 49.8 51.7 44.2 44.7 55.7
No 32.9 27.5 28.5 35.9 27.1 30.2 30.0 28.0 26.8
Not applicable 1.4 0.6 1.7 0.7 1.1 0.4
DK/NA 12.5 14.6 4.0 12.8 13.3 4.9 12.1 15.9 3.2
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
EU
Yes 42.3 47.7 50.6 40.1 53.3 52.0 44.3 42.4 49.2
No 29.4 24.5 29.3 33.1 22.5 30.1 25.9 26.5 28.6
Not applicable 1.7 0.8 1.7 0.8 1.6 0.8
DK/NA 15.1 17.4 6.3 15.1 14.7 5.3 15.1 19.9 7.4
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
US
Yes 36.7 38.7 45.3 33.3 41.9 45.9 40.0 35.7 44.8
No 37.1 35.2 35.7 41.4 35.2 36.5 33.1 35.1 35.0
Not applicable 2.2 0.9 2.8 1.0 1.7 0.9
DK/NA 12.4 14.9 3.8 12.7 13.2 4.3 12.2 16.5 3.2
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Integration
Yes 42.1 47.7 48.5 40.0 53.2 50.2 44.1 42.5 46.8
No 30.1 23.4 28.2 34.0 21.3 28.8 26.4 25.4 27.6
Not applicable 1.6 0.7 1.7 0.9 1.5 0.6
DK/NA 14.9 18.0 7.6 15.0 15.7 7.0 14.8 20.2 8.2
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
*Source: Public opinion polls conducted for this project by PRISM Research
Sample Bosniak majority Croat majority Serb majority
Sept
08
Nov
08
Nov
09
Sept
08
Nov
08
Nov
09
Sept
08
Nov
08
Nov
09
% % % % % % % % %
BiH Presidency
Yes 31.8 31.4 14.8 32.4 34.5 34.1 45.7 49.5 48.9
No 50.7 52.1 68.9 33.4 22.6 40.6 30.3 30.8 33.8
Not applicable 1.0 2.7 3.2 1.4 1.4 0.2
DK/NA 7.8 11.5 1.5 12.8 26.2 6.5 7.9 9.1 2.1
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
BiH Parliamentary
Assembly
Yes 30.5 32.1 14.8 33.4 33.5 30.8 44.7 51.2 47.7
No 50.7 51.7 71.6 33.6 23.7 41.5 31.2 28.3 33.9
Not applicable 0.9 0.8 2.0 1.4 2.1 0.2
DK/NA 9.1 11.8 1.3 13.5 25.4 7.9 7.9 9.4 2.4
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
BiH Council of Ministers
Yes 30.8 31.4 15.3 35.0 33.2 31.0 45.9 52.4 49.2
No 51.8 52.5 69.3 32.0 23.8 42.0 30.1 27.4 33.2
Not applicable 0.9 1.2 2.0 1.4 1.8 0.2
DK/NA 7.8 11.8 1.3 13.5 24.7 7.5 8.4 9.1 2.0
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
FBiH Parliament
Yes 31.5 28.9 15.7 33.9 31.8 28.0 42.6 47.8 42.3
No 50.8 55.3 70.0 32.6 25.2 45.6 31.1 29.9 37.5
Not applicable 0.9 0.7 2.2 1.4 3.3 0.3
DK/NA 8.4 11.4 1.8 13.5 24.7 7.4 8.6 10.1 2.4
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
FBiH Government
Yes 29.8 30.5 14.6 33.4 32.4 26.9 42.0 48.8 45.1
No 53.1 54.2 71.3 33.1 25.0 46.9 30.6 29.2 35.6
Not applicable 0.9 0.7 2.2 1.2 3.6 0.5
DK/NA 8.1 11.4 1.6 13.5 23.6 7.2 9.5 9.9 2.9
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

131
Table 2
Do you approve of the job being done by...?
Yes 22.2 19.1 9.0 18.3 16.9 11.1 61.6 71.6 63.6
No 56.9 62.4 79.0 38.3 38.1 62.7 17.1 12.8 21.3
Not applicable 0.9 0.8 3.7 0.4 1.6 0.1
DK/NA 12.5 13.9 1.6 16.0 24.3 7.8 7.4 6.4 2.1
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
RS Government
Yes 23.2 18.9 9.0 16.9 17.3 12.3 61.6 71.9 66.7
No 57.7 63.0 78.9 39.7 37.4 61.6 16.7 12.1 19.8
Not applicable 0.9 0.8 3.7 0.4 1.9 0.1
DK/NA 10.7 13.4 1.8 16.0 25.5 7.8 7.4 6.7 1.6
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Yes 37.9 47.1 18.2 34.1 35.6 25.8 58.6 69.0 64.7
No 45.2 36.3 67.5 28.0 21.6 45.7 19.4 13.9 21.6
Not applicable 1.0 2.6 1.0 2.1 0.3
DK/NA 8.2 12.8 1.6 14.7 24.4 7.5 7.8 8.8 1.5
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Cantonal authorities in
FBiH
Yes 34.4 40.1 17.1 35.3 32.7 27.3
No 47.8 42.2 69.1 28.1 23.0 44.3
Not applicable 1.0 2.1 0.8
Neither approve nor disapprove 8.2 3.2 12.1 19.6 17.4 19.4
DK/NA 8.6 14.5 1.7 14.9 26.8 8.2
Total 100.0 100.0 100.0 100.0 100.0 100.0
OSCE
Yes 49.7 54.7 56.2 32.5 38.2 46.2 39.8 39.8 43.7
No 31.1 23.1 24.2 30.2 18.1 29.3 35.7 34.2 38.8
Not applicable 1.3 0.8 2.3 1.0 1.6 0.2
DK/NA 10.9 15.0 3.3 14.7 23.1 9.3 9.7 14.1 2.5
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
OHR
Yes 51.4 56.5 63.4 31.5 35.0 47.8 35.2 32.5 35.4
No 28.8 20.8 20.5 30.0 19.6 26.6 41.0 45.1 48.5
Not applicable 1.3 1.1 2.2 0.7 1.4 0.4
DK/NA 10.8 13.7 3.2 14.7 23.8 8.8 10.6 11.0 2.2
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
132
UNDP
Yes 49.9 58.4 60.9 35.1 37.8 44.2 38.2 41.8 42.3
No 26.1 17.9 19.3 26.3 17.8 29.3 35.4 31.9 38.3
Not applicable 1.3 0.9 2.0 1.0 1.6 0.2
DK/NA 15.4 16.3 5.1 15.1 25.3 11.1 11.6 13.4 2.8
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
EUPM
Yes 50.4 56.6 64.9 32.3 36.4 51.2 34.2 36.0 38.9
No 27.9 20.5 20.2 29.8 18.8 25.3 40.8 40.3 41.0
Not applicable 1.3 0.6 1.7 0.7 1.2 0.4
DK/NA 13.1 15.4 3.3 14.7 23.8 9.0 11.6 11.6 3.4
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
EU
Yes 46.7 53.8 59.5 35.9 37.1 49.5 37.6 40.6 37.9
No 27.4 19.0 21.0 24.7 17.8 25.4 34.2 34.7 42.1
Not applicable 1.4 1.4 2.0 0.7 1.8 0.2
DK/NA 17.1 19.8 7.3 17.1 25.7 10.2 12.9 12.9 4.2
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
US
Yes 42.7 46.7 53.3 32.2 34.4 43.8 29.4 27.2 33.4
No 33.6 29.3 28.2 27.9 19.0 28.9 45.6 48.9 48.7
Not applicable 2.9 1.7 1.4 0.8 1.6 0.2
DK/NA 12.9 16.1 3.5 16.8 25.0 8.6 11.1 11.1 2.7
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Integration
Yes 47.4 53.5 53.1 35.0 35.7 47.1 36.6 41.6 40.7
No 27.4 18.9 22.0 24.7 17.7 25.6 36.1 31.8 37.7
Not applicable 1.4 1.2 2.4 1.0 1.6 0.2
DK/NA 16.8 20.1 9.7 17.2 25.8 11.8 12.8 14.1 4.2
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
133
134
Table 5
Sept
08
Nov
08
Nov
09
Sept
08
Nov
08
Nov
09
Sept
08
Nov
08
Nov
09
% % % % % % % % %
BiH Presidency
Not at all 4.1 4.0 1.9 2.9 0.4 1.6 0.8 0.9 3.2
Not much 15.6 12.6 15.2 20.8 18.3 20.0 28.7 20.7 12.7
To some degree 11.6 12.8 18.1 27.2 14.8 26.2 17.0 15.1 12.9
Fairly 15.7 20.9 26.2 28.0 34.5 30.7 22.2 28.7 34.9
Very 53.0 49.7 38.6 21.2 32.1 21.5 31.3 34.7 36.3
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
BiH Parliamentary Assembly
Not at all 2.2 1.8 1.3 1.1 1.1 0.8 0.7 1.5
Not much 12.9 9.3 8.7 17.2 16.3 15.7 27.9 19.2 12.7
To some degree 11.8 13.4 10.8 30.7 16.2 29.0 16.4 15.6 14.1
Fairly 16.4 22.6 22.0 24.2 35.6 27.6 22.8 29.9 36.3
Very 56.8 52.8 58.5 26.6 30.7 26.6 32.1 34.7 35.4
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
BiH Council of Ministers
Not at all 1.9 1.8 0.8 1.9 0.4 0.5 0.8 0.7 1.2
Not much 12.5 7.6 6.8 15.0 11.3 16.0 27.6 19.5 12.2
To some degree 10.4 12.6 8.6 30.2 21.6 26.6 16.4 14.7 14.9
Fairly 18.4 22.8 20.5 28.1 34.2 30.5 22.4 30.6 35.7
Very 56.8 55.2 63.3 24.8 32.6 26.4 32.9 34.5 36.1
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
FBiH Parliament
Not at all 2.7 0.9 1.1 1.3 0.8 0.9 0.6 0.4 0.7
Not much 11.1 7.8 7.3 15.7 12.2 16.1 28.4 18.3 9.7
To some degree 11.0 10.7 8.8 27.3 19.9 25.2 16.7 16.5 14.2
Fairly 17.4 21.1 19.4 28.4 33.5 30.7 22.3 29.8 36.8
Very 57.8 59.5 63.4 27.3 33.7 27.2 31.9 35.0 38.6
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

How widespread do you think corruption, understood as bribery or abuse of oce for private gain is in the following institutions?
FBiH Government
Not at all 2.5 0.9 1.1 1.4 1.2 0.7 0.6 0.7 1.4
Not much 9.1 7.5 7.0 14.5 10.8 14.3 27.5 17.3 8.4
To some degree 11.3 11.1 7.8 28.0 22.3 26.4 17.3 17.4 13.4
Fairly 16.4 19.6 18.0 30.2 32.5 28.7 21.6 29.6 36.0
Very 60.8 60.9 66.1 25.9 33.2 29.8 33.0 35.0 40.9
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Not at all 2.3 0.5 1.1 1.4 0.8 0.5 3.0 2.2 6.5
Not much 5.1 6.6 2.8 14.2 6.3 9.3 30.3 19.3 11.4
To some degree 11.6 9.9 6.0 21.8 16.5 24.7 14.9 17.5 16.3
Fairly 18.0 18.4 16.0 31.3 34.9 35.1 20.6 31.3 34.1
Very 63.0 64.6 74.1 31.4 41.5 30.4 31.3 29.7 31.6
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
RS Government
Not at all 1.9 0.5 1.4 1.4 0.8 0.8 3.3 1.5 6.3
Not much 5.1 7.2 1.7 13.7 6.8 7.0 29.5 20.2 12.1
To some degree 9.1 9.6 5.5 23.9 15.1 24.2 13.7 16.8 16.6
Fairly 19.1 18.6 15.3 29.6 34.3 36.5 21.1 32.0 35.0
Very 64.8 64.1 76.2 31.4 43.0 31.6 32.5 29.5 30.1
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Not at all 3.5 1.0 2.0 2.2 0.4 0.7 2.3 1.8 4.4
Not much 8.9 10.6 2.7 14.1 8.6 11.8 23.9 19.7 11.7
To some degree 13.3 16.4 15.4 23.5 21.8 30.3 17.6 16.6 16.4
Fairly 17.6 21.4 21.5 29.0 36.1 29.2 25.0 30.5 36.7
Very 56.7 50.6 58.4 31.1 33.1 27.9 31.2 31.4 30.8
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
135
Gender
Sample All Male Female
Sept
08
Nov
08
Nov
09
Sept
08
Nov
08
Nov
09
Sept
08
Nov
08
Nov
09
% % % % % % % % %
Political reforms
Very positively 4.7 4.9 13.0 5.5 4.1 13.8 3.9 5.7 12.3
Generally positively 32.1 35.8 36.5 31.2 38.9 31.0 32.9 32.8 41.9
Generally negative 29.5 28.9 25.6 30.9 26.5 31.3 28.2 31.1 20.0
Very negatively 16.9 11.8 16.7 17.2 13.0 16.7 16.7 10.5 16.8
DK/NA 16.8 18.7 8.1 15.3 17.5 7.2 18.3 19.9 9.0
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Political reforms
TOTAL POSITIVE 36.7 40.6 49.5 36.7 42.9 44.8 36.8 38.4 54.2
TOTAL NEGATIVE 46.4 40.6 42.4 48.0 39.5 48.1 44.9 41.6 36.8
DK/NA 16.8 18.7 8.1 15.3 17.5 7.2 18.3 19.9 9.0
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Economic reforms
Very positively 4.5 4.1 11.3 4.8 3.5 11.2 4.2 4.7 11.4
Very negatively 16.9 12.3 16.6 17.5 13.8 17.1 16.4 10.8 16.0
DK/NA 16.2 19.1 8.5 14.7 17.9 8.0 17.6 20.1 8.9
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Economic reforms
TOTAL POSITIVE 34.0 36.9 48.6 33.4 37.6 44.4 34.7 36.2 52.8
TOTAL NEGATIVE 49.8 44.0 42.9 51.9 44.5 47.6 47.8 43.7 38.3
DK/NA 16.2 19.1 8.5 14.7 17.9 8.0 17.6 20.1 8.9
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Anti-corruption
Very positively 4.8 4.1 9.7 5.1 4.3 10.0 4.4 4.0 9.5
Very negatively 19.9 19.0 23.3 19.6 18.6 23.5 20.1 19.2 23.1
DK/NA 15.3 18.4 9.1 14.1 17.4 9.7 16.4 19.3 8.4
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
136
Table 6

How would you rate the measures taken by the Oce of the High Representative in the following areas?
Anti-corruption
TOTAL POSITIVE 31.8 33.7 39.2 31.6 34.5 34.7 32.0 33.0 43.7
TOTAL NEGATIVE 52.9 47.9 51.7 54.3 48.1 55.5 51.5 47.7 47.9
DK/NA 15.3 18.4 9.1 14.1 17.4 9.7 16.4 19.3 8.4
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Public administration reforms
Very positively 3.7 4.9 12.1 3.6 4.5 12.5 3.9 5.2 11.7
Very negatively 17.1 12.5 17.4 18.3 14.6 17.4 16.0 10.6 17.4
DK/NA 17.5 19.0 10.0 16.1 17.9 10.7 18.7 20.0 9.4
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Public administration reforms
TOTAL POSITIVE 36.7 41.7 49.6 34.7 41.3 45.2 38.6 42.2 54.0
TOTAL NEGATIVE 45.9 39.3 40.3 49.2 40.8 44.1 42.7 37.9 36.6
DK/NA 17.5 19.0 10.0 16.1 17.9 10.7 18.7 20.0 9.4
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
137
Sept
08
Nov
08
Nov
09
Sept
08
Nov
08
Nov
09
Sept
08
Nov
08
Nov
09
% % % % % % % % %
Political reforms
Very positively 9.2 8.2 23.2 0.7 3.4 9.2 1.1 0.6 2.3
Very negatively 12.4 8.4 7.8 14.0 5.0 14.4 23.7 18.4 28.8
DK/NA 15.2 13.1 4.7 22.7 32.9 19.7 17.7 22.4 8.9
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Political reforms
TOTAL POSITIVE 48.1 56.3 71.1 30.2 33.4 38.2 26.7 21.7 26.1
TOTAL NEGATIVE 36.7 30.6 24.2 47.1 33.6 42.0 55.6 55.9 64.9
DK/NA 15.2 13.1 4.7 22.7 32.9 19.7 17.7 22.4 8.9
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Economic reforms
Very positively 8.9 6.7 20.8 0.7 3.0 7.5 0.9 0.9 1.0
Very negatively 12.7 9.3 10.4 14.6 6.6 19.9 22.0 17.9 23.3
DK/NA 15.2 14.1 4.7 21.2 32.9 19.3 16.6 22.1 10.0
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Economic reforms
TOTAL POSITIVE 44.1 49.6 65.0 30.6 30.5 39.4 24.8 22.3 30.7
TOTAL NEGATIVE 40.8 36.3 30.3 48.1 36.6 41.3 58.6 55.7 59.3
DK/NA 15.2 14.1 4.7 21.2 32.9 19.3 16.6 22.1 10.0
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Anti-corruption
Very positively 6.8 6.7 17.6 1.5 2.8 7.2 3.7 0.9 0.7
Very negatively 14.0 15.9 21.5 24.0 15.0 24.7 24.4 23.5 25.8
DK/NA 15.3 13.1 6.5 19.0 32.4 19.6 15.0 21.6 9.4
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
138
Table 7

How would you rate the measures taken by the Oce of the High Representative in the following areas?
you think the High R p powers should be reduced , y the same?
Sample
Mar
08
Jun
08
Sept
08
Nov
08
Nov
09
Mar
08
Jun
08
Sept
08
Nov
08
Nov
09
Mar
08
Jun
08
Sept
08
Nov
08
Nov
09
% % % % % % % % % % % % % % %
Reduced 13.9 23.3 22.6 10.9 7.5 29.0 40.2 42.2 28.9 32.6 71.2 69.9 69.9 71.6 74.5
Increased 49.2 25.9 33.1 41.9 61.2 32.6 15.5 16.2 18.9 24.4 4.3 1.7 2.8 2.9 3.2
Stay the same 24.2 33.8 29.7 40.0 21.9 22.7 39.8 36.1 31.9 25.3 18.3 23.5 20.0 19.1 19.4
DK/NA 12.7 17.0 14.5 7.2 9.4 15.7 4.5 5.4 20.2 17.7 6.2 5.0 7.3 6.4 3.0
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
139
Table 9
Anti-corruption
TOTAL POSITIVE 36.6 43.8 48.0 26.5 27.3 30.7 29.7 23.0 29.8
TOTAL NEGATIVE 48.1 43.1 45.5 54.6 40.3 49.7 55.3 55.4 60.8
DK/NA 15.3 13.1 6.5 19.0 32.4 19.6 15.0 21.6 9.4
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Public administration
reforms
Very positively 6.9 7.4 20.3 0.9 3.3 7.6 1.2 1.6 3.2
Very negatively 14.1 9.0 13.6 16.1 8.2 19.3 20.0 16.9 21.6
DK/NA 15.4 13.4 6.3 21.6 32.9 23.6 19.4 22.7 10.8
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Public administration
reforms
TOTAL POSITIVE 44.5 56.4 63.1 28.0 27.8 34.6 32.3 28.0 37.6
TOTAL NEGATIVE 40.1 30.2 30.6 50.4 39.3 41.8 48.3 49.4 51.7
DK/NA 15.4 13.4 6.3 21.6 32.9 23.6 19.4 22.7 10.8
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Do you think the High Representative's powers should be reduced, increased, or stay the same?
Sept
08
Nov
08
Nov
09
Sept
08
Nov
08
Nov
09
Sept
08
Nov
08
Nov
09
% % % % % % % % %
Significantly improved 0,1 1,2 0,2 1,2 0,8 0,3 5,0 1,8 0,2
Somewhat improved 14,1 18,6 10,7 8,8 14,2 14,3 29,5 37,9 20,2
Stayed the same 48,2 45,0 41,0 59,0 43,3 50,9 47,9 45,7 46,9
Somewhat deteriorated 18,4 26,4 25,6 12,0 18,0 18,8 8,5 6,8 20,9
Significantly deteriorated 5,4 3,2 18,8 2,2 1,5 3,3 0,9 1,5 2,0
Don't know/Won't answer 13,9 5,7 3,8 16,9 22,1 12,4 8,2 6,2 9,9
Total 100,0 100,0 100,0 100,0 100,0 100,0 100,0 100,0 100,0
140
Table 10
Sept
08
Nov
08
Nov
09
Sept
08
Nov
08
Nov
09
Sept
08
Nov
08
Nov
09
% % % % % % % % %
Significantly improved 1.0 1.0 2.5 0.7 0.5 0.3 4.9 1.6 0.8
Somewhat improved 12.8 18.1 7.9 10.7 16.6 15.4 34.5 40.7 28.1
Stayed the same 55.3 51.7 41.5 56.9 47.4 48.6 44.2 43.7 45.8
Somewhat deteriorated 13.4 21.3 26.6 14.0 18.9 20.0 5.8 5.8 13.2
Significantly deteriorated 3.7 3.0 17.9 1.6 1.9 3.1 0.9 1.0 3.0
Don't know/Won't answer 13.8 5.0 3.6 16.1 14.7 12.6 9.6 7.2 9.2
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Table 11

Looking at the eectiveness of state-level institutions over the past ve years, has it signicantly improved, somewhat
improved, stayed the same, somewhat deteriorated, or signicantly deteriorated?

Looking at the eectiveness of entity-level institutions over the past ve years, has it
signicantly improved, somewhat improved,stayed the same, somewhat deteriorated,
or signicantly deteriorated?
141

The Economic Stability Index for Bosnia and Herzegovina
Survey Chain index Composite index
Feb05 96.83 61
Jun05 98.36 60
Sep05 96.67 58
Nov05 103.45 60
Apr06 101.67 61
Jun06 98.36 60
Sep06 101.67 61
Nov06 101.64 62
Apr07 98.39 61
Sep07 96.72 59
Nov07 96.61 57
Mar08 103.51 59
Jun08 100.00 59
Oct08 101.69 60
Nov08 100.00 60
Nov09 98.33 59
Source:PublicopinionpollconductedbyPRISMResearch. November2009. andthe
calculationsoftheEWSteam.

Index of the volume of industrial production in Bosnia and Herzegovina
Entity
1 12 2008
1 12 2007
Resultsachievedduring2009
11 2009
2008
1 11 2009
1 11 2008
Best
performing
sector
Worst
performing
sector
FederationofBiH
107.9 86.6 88.2
Tobacco
production
Carindustry
RepublikaSrpska
116.8 129.6 118.8
Petrol
production
Production
oftechnical
equipment
Source:FederalStatisticsOffice. Mjese nistatisti kipregled. No.12. YearXIII. December2009;
RepublicanStatistics Officeofthe RS. Mjese no ; 7* 8<0 <$No.219/09.Indeksiindustrijskeproizvodnje.December
2009

Table 1
Table 2
III. THE ECONOMIC SITUATION IN BOSNIA AND HERZEGOVINA
142

Expectations regarding prices changes over the coming half-year

BiH
Sep
2006
Dec
2006
April
2007
Sep
2007
Nov
2007
March
2008
June
2008
Sep
2008
Nov
2008
% % % % % % % % %
Fallingprices 5.0 6.8 2.2 4.1 6.7 4.7 2.5 9.8 8.7
Risingprices 54.7 62.8 60.2 87.6 87.5 83.8 81.1 71.8 74.9
Nochange 33.7 25.5 26.0 2.9 3.8 7.9 11.5 13.1 11.6
Noanswer 6.7 4.9 11.6 5.4 1.9 3.6 4.9 5.2 4.9
Source:PublicopinionpollsconductedbyPRISMResearch.November2009
Unemployment in Bosnia and Herzegovina

2007 2008 January

2009
October
2009
TotalunemploymentinBiH 520.432 480.313 488.496 503.979
UnemployedwomeninBiH 247.279 254.274
UnemployedmeninBiH 241.217 249.705
Unemployed Highly Skilled
BiH
12.516 16.083
Federation of BiH 342.174 351.444
Republika Srpska 134.798 143.305
Sources:BiHStatisticsAgency. Statement:RegistrirananezaposlenostuOktobru2009..
No.10.YearIII;FederalStatisticsOffice.Mjese nistatisti kipregledbroj12.YearXIII.
December2009;RepublikaSrpskaStatisticsOffice.www.zzrs.org.December2009.
Retail price index for Bosnia and Herzegovina
Retail price index

11 2009
0 2005
11 2009
11 2008
1 11 2009
1 11 2008
RetailpriceindexforBosniaandHerzegovina 116.0 99.3 99.6
RetailpriceindexfortheFederationofBosnia
andHerzegovina 116.2 98.9 99.7
RetailpriceindexfortheRepublikaSrpska 115.9 99.7 99.5
Source: Data for BiH: BiH Statistics Agency. Statement: Indeks 5! 4! : kih cijena u BiH u oktobru 2009.
YearIII.No.11.
Data for FBiH: Source: Federal Statistics Institute. Mjese ni statisti ki pregled broj 12. Year XIII.
December2009
Data for RS: Republic Statistics Institute. Monthly Statement: Indeks 5! 4! : kih cijena No.
217/09.December2009
Table 3 Table 4
Table 5
143

Foreign Currency Reserves of the Central Bank of BiH

Month
keserves
12 2003 2821
12 2004 3507
12 2005 4252
12 2006 5480
12 2007 6726
12 2008 6324
1 2009 6177
2 6094
3 6081
4 5954
5 5756
6 5715
7 6167
8 6547
9 6434
10 6434
11 2009 6089
Source: Central Bank of BiH. www.cbbh.gov.ba. November 2009. Data refer to
total CBBiH foreign currency assets.
The balance of foreign trade between Bosnia and Herzegovina and

abroad (millions of KM) for the periods of I-X, 2008/09
1 |n
Lxport
5.849 4.649 20.5 %
Import
13.598 9.984 26.6 %
Vo|ume
19.447 14.633 24.76

7.749 5.335 31.16
Import Lxport
|n
43.0 % 46.6 % + 8.26
Source: Foreign Trade Chamber of BiH. Pregled i analiza ostvarene razmjene za BiH za period 01. do 10.
mjesec 2008/09 godine. November 2009
Assessment of economic conditions during past year
8|n
March
2008
June
2008
Sep
2008
Nov
2008
Nov
2009
% % % % %
Better 13.5 14.0 15.5 10.8 45.9
Same 51.5 51.5 57.1 53.8 47.0
Worse 34.3 33.7 27.0 34.5 5.4
No answer 0.7 0.7 0.3 1.0
Source: Public opinion polls conducted by PRISM Research. November 2009.
Table 6
Table 7
Table 8
144

Assessment of economic situation in coming year
BiH
March
2008
June
2008
Sep
2008
Nov
2008
Nov
2009
% % % % %
Worse 20.2 22.5 16.1 24.5 29.1
Same 56.2 56.1 62.0 55.4 51.3
Better 20.0 17.2 17.2 15.0 15.6
No answer 3.6 4.3 4.7 5.1 5.1
Assessment of economic conditions during past year, by entity
FBiH RS DB
% % %
Better 4.7 5.4 20.2
Same 44.8 50.6 43.7
Worse 47.8 43.7 36.1
No answer 2.7 0.3

Table 9 Table 10
145

Compared to the same period last year, the economic situation in

BiH is...
Better The same Worse
(%) (%) (%)
February 2005 4 31 66
June 2005 4 39 57
September 2005 2 42 56
December 2005 5 51 44
March 2006 7 41 53
June 2006 7 39 54
September 2006 17 38 45
December 2006 13 40 47
April 2007 16 51 33
September 2007 22 34 43
December 2007 9 29 62
March 2008 12 35 53
July 2008 9 35 55
September 2008 12 35 53
December 2008 4 28 68
November 2009 48 46 6
Source: The Business Environment Survey conducted for the UNDP Early Warning System in BiH
project by PRISM Research. Business to Business Survey top 150. November 2009.
In your opinion, the economic situation in BiH in six
months will be....

Better The same
Worse
(%) (%) (%)
March 2006 15 52 33
June 2006 13 60 26
September 2006 16 62 21
December 2006 19 54 25
April 2007 21 55 23
September 2007 21 52 24
December 2007 18 29 62
March 2008 17 47 36
July 2008 15 58 26
September 2008 11 52 37
December 2008 3 35 62
November 2009 38 57 5
Source: The Business Environment Survey conducted for the UNDP Early Warning
System in BiH project by PRISM Research. Business to Business Survey top
150. November 2009.
Table 1 Table 2
IV. THE BUSINESS ENVIRONMENT IN BOSNIA AND HERZEGOVINA
146

Capacity utilisation at company

Survey Above At Below
% % %
Bosnia and
Herzegovina
December 2005 31 39 29
March 2006 5 51 43
June 2006 7 57 35
December 2006 9 42 48
April 2007 6 49 45
December 2007 8 42 51
March 2008 10 43 48
July 2008 10 43 47
December 2008 2 53 45
November 2009 52 45 3
FBiH
March 2006 4 50 45
June 2006 7 59 34
December 2006 11 42 45
April 2007 6 51 43
September 2007 11 54 35
December 2007 8 47 45
March 2008 12 42 46
July 2008 10 46 44
December 2008 1 53 46
November 2009 51 48 1
RS March 2006 7 54 39
June 2006 13 38 50
September 2006 38 62
December 2006 42 58
April 2007 6 44 50
September 2007 29 48 35
December 2007 6 24 71
March 2008 3 45 52
July 2008 10 21 47
December 2008 0 58 42
November 2009 56 31 13
Source: The Business Environment Survey conducted for the UNDP Early Warning System in BiH
project by PRISM Research. Business to Business Survey top 150. November 2009.
Table 3
147

Considering your companys operations as a whole, would you say that,

compared to the same period last year, from a financial perspective, your
situation now is...

Better The SAME
Worse
(%) (%) (%)
April 2007 43 36 21
September 2007 62 24 14
December 2007 46 34 20
March 2008 50 32 17
July 2008 35 41 24
September 2008 28 46 26
Decmber 2008 27 44 29
November 2009 73 27
Source: The Business Environment Survey conducted for the UNDP Early Warning System in BiH project by
PRISM Research. Business to Business Survey top 150. November 2009.
In six months, do you expect your companys operations, financially

speaking, to be...

Bosnia and Herzegovina Better The same
Worse
(%) (%) (%)
March 2008 50 36 14
July 2008 45 46 9
September 2008 31 48 21
December 2008 21 36 43
November 2009 73 27
FBiH
April 2007 55 41 4
December 2007 27 47 26
March 2008 49 32 18
July 2008 46 46 9
September 2008 31 47 22
December 2008 18 36 46
November 2009 73 27
RS
December 2005 23 52 26
April 2007 78 11 11
September 2007 58 29 10
December 2007 53 12 35
March 2008 52 45 3
July 2008 41 48 10
September 2008 27 55 18
December 2008 25 33 42
November 2009 75 25
Source: The Business Environment Survey conducted for the UNDP Early Warning System in BiH project by
PRISM Research. Business to Business Survey top 150. November 2009.
Table 4
Table 5
148

Compared to the same period last year, would you say your companys level of
debt is...?

Higher (%) The same (%) Lower (%) N.A. (%)

Sept
2008
Dec
2008
Nov
2009
Sept
2008
Dec
2008
Nov
2009
Sept
2008
Dec
2008
Nov
2009
Sept
2008
Dec
2008
Nov
2009
BiH 34 37 67 42 35 30.6 24 28 2
FBIH 31 35 68 43 38 29.3 26 27 2
RS 41 42 62 41 33 37.5 18 25
Source: The Business Environment Survey conducted for the UNDP Early Warning System in BiH project by PRISM
Research. Business to Business Survey top 150. November 2009.
During the first quarter of the year your company made a...

Profit
Loss
(%) (%)
March 2006 76 24
June 2006 77 23
December 2006 81 19
April 2007 79 18
December 2007 77 20
March 2008 78 18
July 2008 72 26
December 2008 69 31
November 2009 67 33
How helpful are the various levels of government to the business sector in dealing with
business problems?
Very helpful Generally

helpful
Neither helpful
nor unhelpful
Generally
unhelpful
Not at all
helpful
Sept
08
Dec
08
Nov
09
Sept
08
Dec
08
Nov
09
Sept
08
Dec
08
Nov
09
Sept
08
Dec
08
Nov
09
Sept
08
Dec
08
Nov
09
State level
1 3 30 11
5 56 29 26 14 22 27 19
29
Entity 2 2 16 16 11 60 26 20 22 21 26 1 19 28
Cantonal 1 2 8 22 19 53 19 13 38 22 26 1 19 25
Municipal 3 2 13 16 20 44 20 15 42 23 28 1 23 24
Source: The Business Environment Survey conducted for the UNDP Early Warning System in BiH project by PRISM Research. Business to
Business Survey top 150. November 2009.
Table 6
Table 7
Table 8

How great an obstacle are the following to the successful conduct of business
Very Somewhat Not much Not at all
Sept
08
Dec
08
Nov
09
Sept
08
Dec
08
Nov
09
Sept
08
Dec
08
Nov
09
Sept
08
Dec
08
Nov
09
Customs procedures 21 19 26 46 39 50 17 25 23 12 12 1
Tax rates 39 48 9 33 28 48 17 17 41 6 2 2
Unfair business practices 34 42 13 26 27 52 25 16 34 7 9 1
Corruption 37 42 13 25 26 45 20 12 39 5 6 3
How the courts work 43 45 22 22 26 36 20 16 38 5 3 4
Political instability 26 34 19 39 27 42 23 24 36 3 6 3
Labour market legislation 24 28 19 31 31 53 27 21 24 11 14 3
Tax administration 20 19 7 34 38 65 29 29 27 9 9 1
Work permit regulations 36 38 19 29 29 42 20 20 35 7 8 4
Environmental regulations 17 17 17 35 36 49 30 23 32 9 12 2
Safety regulations and
standards 11 14 18 28 30 53 36 31 27 13 15 2
Lack of qualified personnel 17 19 19 34 34 49 25 26 31 16 14 1
How well do the following institutions do their jobs?
Very well
Well enough Quite poorly Very poorly

Sep
08
Dec
08
Nov
09
Sep
08
Dec
08
Nov
09
Sep
08
Dec
08
Nov
09
Sep
08
Dec
08
Nov
09
Central Bank of BiH 24 30 29 43 39 53 7 4 17 6 6
Indirect Tax Authority 15 16 12 47 50 64 23 18 21 8 9 1
Entity tax
administrations 11 6 11 46 48 52 25 25 35 13 17 1
Legal system 4 3 10 18 17 46 39 36 34 30 35 1
Directorate for
European Integration 7 7 20 22 18 40 26 20 37 11 10 2
FIPA 4 3 15 29 19 55 18 18 28 20 19 1
Privatisation agencies 1 2 13 20 14 54 28 22 32 25 28
Banking agencies 7 5 11 28 32 53 29 20 30 8 7 5
Employment bureaux 3 3 16 31 36 50 34 24 27 16 17 6
Foreign Trade
Chamber of BiH 7 4 17 28 29 44 32 30 35 20 18 1
Entity chambers of
commerce 9 11 19 28 28 46 31 27 31 20 19 3
Social funds 20 2 17 9 10 50 33 26 28 33 37 4
Table 9
Table 10
149

Please estimate how much you use various informal connections and contacts
like family, friends, colleagues, etc.. in your day-to-day business...

March 08 Jul 08 Sept 08 Dec 08
Nov 09
Very much 3 8 9 11 28
Somewhat 28 26 31 27 61
Not much 32 31 32 28 10
Not at all 29 22 19 24 1
Won t answer 8 13 8 10
Table 11

Please estimate how much you use various ''unwritten rules'' like customs,
different business practices, codes of behaviour, etc. in your day-to-day
business...

Nov 09
Very much 7 4 8 9 22
Somewhat 38 26 39 37 66
Not much 24 29 33 26 11
Not at all 19 21 11 17
Won t answer 12 20 8 12
Table 12

How much do you think the current institutional framework in BiH, that is the
way in which government is organised and functions, affects your business
operations in terms of cash payments you have to make
Nov 09
Much more than necessary 32 42 39 39 35
Somewhat more than necessary 24 24 31 24 54
Just right 14 10 11 10 10
Somewhat less 7 2 3 2 2
A lot less than necessary 6 3 4 7
No answer 17 18 12 18
Table 13
150

How much do you think the current institutional framework in BiH, that is the
way in which government is organised and functions, affects your business
operations in terms of time spent (time-intensive procedures, activities...)
Nov 09
Much more than necessary 36 42 44 40 32
Somewhat more than necessary 26 21 19 18 55
Just right 7 9 16 11 12
Somewhat less 6 5 3
A lot less than necessary 5 4 4 7
No answer 20 3 12 21
Table 14

In looking at institutions in BiH, can you estimate how much higher your total
business costs are because of direct cash payments to state institutions?
Sept 08 Dec 08 Nov 09
March 08 BIH FBIH RS BIH FBIH RS BIH FBIH RS
0 5 % 13 13 14 14 17 13 47 46 50
5 10 % 29 35 9 20 21 17 41 40 44
10 20 % 22 20 32 28 26 29 9 11
20 30 % 13 14 5 13 14 8 2 1 6
30 40 % 5 4 3 4 4 4
40 50 % 1 5 0 0 0
50 60 % 3 4 0 4 4 4
> 60 % 1 1 5 7 0
n.a. 13 9 27 13 7 25 1 1
Table 15

In looking at institutions in BiH, can you estimate how much higher your total
business costs are because of indirect costs associated with state institutions?
Sept 08 Dec 08 Nov 09
March 08 BIH FBIH RS BIH FBIH RS BIH FBIH RS
0 5 % 10 13 15 18 13 34 32 44
5 10 % 27 27 23 25 21 29 39 40 31
10 20 % 26 33 5 21 24 13 26 26 25
20 30 % 9 7 18 10 10 13 1 1
30 40 % 4 4 5 3 4 0
40 50 % 7 4 18 3 3 4
50 60 % 1 1 2 3 0
> 60 % 3 1 9 7 6 8
n.a. 13 10 23 14 13 21 1 1
Table 16
151
152
PIease state how the effectiveness/efficiency of domestic
institutions of reIevance to your business has changed
over the past 5 years

Nov 09 Nov 09
S1A1L-LLVLL INS1I1U1ICNS LN1I1 INS1I1U1ICNS
8In I8In kS 8In I8In kS
Much worse 26 26 23 20 20 23
SomewhaL worse 37 37 38 33 33 31
1he same 38 38 38 46 46 44
SomewhaL beLLer 1 1
Much beLLer
Source: 1he 8uslness LnvlronmenL Survey conducLed for Lhe unu Larly Warnlng SysLem ln 8lP pro[ecL by 8lSM
8esearch. 8uslness Lo 8uslness Survey - Lop 130. november 2009.
Table 17

Monthly household income, including the wages and earnings of all household
members, child allowance, pensions, and other sources of income (in %)

FBiH RS Br koDistrict

Sept
08
Nov
08
Nov
09
Sept
08
Nov
08
Nov
09
Sept
08
Nov
08
Nov
09
No income 1.0 2.4 4.6 0.8 4.5 3.9 4.2 9.2 10.6
< 100 KM 1.0 1.3 2.0 5.6 3.1 4.5 7.8 5.3 1.6
101 200 2.2 4.3 7.0 6.7 5.6 14.9 13.5 8.7 34.5
201 300 15.3 5.8 8.1 15.4 10.4 6.0 38.1 19.0 7.2
301 400 15.7 12.8 13.0 17.7 12.5 6.8 18.9 20.4 17.6
401 500 11.7 1.5 2.9 13.2 2.0 2.6 3.8 3.8
501 600 9.5 8.7 11.8 6.7 6.2 19.0 3.9 14.1 7.7
601 700 6.7 3.5 3.5 4.6 5.2 1.0 4.1 4.8
701 800 5.5 9.4 4.3 2.3 8.2 7.9 5.9 9.6
801 900 5.9 1.4 2.5 2.7 1.8
901 1000 3.3 6.3 4.3 1.6 3.4 6.5 0.5 1.9
1001 1100 0.9 2.0 3.1 4.1
1101 1200 0.1 4.5 2.7 0.3 3.4 4.0 1.0 0.5
1201 1300 0.2 1.4 2.4 0.3 1.0
1301 1400 4.0 1.1 1.2 2.9
1401 1500 1.6 2.3 1.0
1501 1600 0.3 1.2
1601 1700 0.3 0.2 0.2 0.8 0.6
1701 1800 1.1 0.9 0.6
1801 1900 0.6 0.7 0.1 0.7
1901 2000 1.1 0.1 1.1

>2000 KM/DM 2.1 2.1 0.4 0.9
No answer/Refusal 20.5 23.7 19.1 22.1 24.0 17.3 5.1 12.6 4.1
100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

June
08
Sept
08
Nov
08
June
08
Sept
08
Nov
08
June
08
Sept
08
Nov
08
No income 1.0 2.4 4.6 0.8 4.5 3.9 4.2 9.2 10.6
< 100 KM 1.0 1.3 2.0 5.6 3.1 4.5 7.8 5.3 1.6
101 200 2.2 4.3 7.0 6.7 5.6 14.9 13.5 8.7 34.5
201 300 15.3 5.8 8.1 15.4 10.4 6.0 38.1 19.0 7.2
301 400 15.7 12.8 13.0 17.7 12.5 6.8 18.9 20.4 17.6
401 500 11.7 1.5 2.9 13.2 2.0 2.6 3.8 3.8
SUBTOTAL to 500 47.0 28.1 37.6 59.4 38.1 38.6 86.3 66.5 71.4

June
08
Sept
08
Nov
08
June
08
Sept
08
Nov
08
June
08
Sept
08
Nov
08
1501 1600 0.3 1.2
1601 1700 0.3 0.2 0.2 0.8 0.6
1701 1800 1.1 0.9 0.6
1801 1900 0.6 0.7 0.1 0.7
1901 2000 1.1 0.1 1.1
>2000 KM/DM 2.1 2.1 0.4 0.9
SUBTOTAL > 1500 0.3 5.4 5.2 0.0 2.4 2.8 0.0 0.0 0.0
Table 1
V. INCOMES AND THE SOCIAL PROTECTION SYSTEM
153

No income 1.0 3.4 4.5
< 100 KM 3.0 2.1 2.9
101 200 4.2 4.9 10.9
201 300 15.9 7.9 7.2
301 400 16.6 12.9 10.7
401 500 12.1 1.8 2.7
SUBTOTAL to 500 52.8 33.0 38.9
Table 1a

Income in KM Bosniak majority
areas (BMA)
Croat majority
areas (CMA)
Serb majority areas
(SMA)
Quarter
Sept
08
Nov
08
Nov
09
Sept
08
Nov
08
Nov
09
Sept
08
Nov
08
Nov
09
No income 0.7 2.6 5.7 2.1 1.5 0.7 0.8 4.5 3.9
< 100 1.3 1.2 2.1 0.1 1.6 1.3 5.6 3.1 4.5
101 200 2.0 5.4 7.9 2.8 3.7 6.7 5.6 14.9
201 300 17.2 6.0 7.3 8.7 5.0 10.8 15.4 10.4 6.0
301 400 18.8 14.4 14.0 5.1 6.5 9.4 17.7 12.5 6.8
401 500 12.2 1.6 3.3 10.0 1.2 1.3 13.2 2.0 2.6
Subtotal to 500 52.2 31.3 40.4 28.9 15.7 27.2 59.4 38.1 38.6

Income in KM Minorities in BMA Minorities in CMA
Minorities in SMA
Quarter
Sept
08
Nov
08
Nov
09
Sept
08
Nov
08
Nov
09
Sept
08
Nov
08
Nov
09
No income 2.0 4.3 2.0 1.0 2.6 1.2 0.9 4.6 16.1
< 100 2.0 6.2 2.5 1.6 5.2 3.8 8.6
101 200 2.0 9.3 9.1 1.9 6.6 6.7 11.8 7.7 11.7
201 300 15.4 20.5 14.2 11.4 8.8 10.3 25.9 13.9 4.9
301 400 24.5 13.7 17.2 10.8 9.4 8.0 16.8 23.3 10.2
401 500 10.6 3.8 7.0 14.4 1.2 9.5 2.7 7.7
Subtotal to 500 56.5 57.7 49.5 39.3 29.9 29.0 70.1 56.0 59.2
Table 2
154
155

Monthly household income, including the wages and earnings of all household members, child
allowance, pensions, and other sources of income (in %)
Area Gender Agegroup
IncomeinKM Urban Rural Male Female 18 35 36 50 51+

Nov
08
Nov
09
Nov
08
Nov
09
Nov
08
Nov
09
Nov
08
Nov
09
Nov
08
Nov
09
Nov
08
Nov
09
Nov
08
Nov
09
No income 2.0 3.9 4.4 5.0 2.8 5.7 3.9 3.4 3.3 4.7 2.9 4.7 3.8 4.3
< 100 1.3 1.9 2.7 3.7 1.9 3.0 2.3 2.9 0.9 2.0 0.5 2.5 4.4 3.9
101 200 2.4 8.6 6.8 12.6 4.6 9.5 5.3 12.2 0.6 3.4 4.4 4.5 9.8 20.0
201 300 6.6 5.5 8.9 8.6 6.9 6.4 8.8 8.1 2.0 4.8 5.5 2.1 15.6 11.7
301 400 10.7 10.3 14.5 11.1 13.9 10.9 11.9 10.5 9.4 9.2 12.5 14.5 16.8 10.1
401 500 2.3 2.7 1.4 2.7 1.6 2.3 2.0 3.1 1.0 2.6 1.4 3.5 2.8 2.3
SUBTOTAL TO 500 25.3 32.8 38.6 43.7 31.7 37.8 34.1 40.1 17.1 26.7 27.2 31.8 53.2 52.3
Table 3

Have your familys economic circumstances changed over the past year (in %)?
BiH FBiH RS Br koDistrict

Bosniak
majority
areas
(BMA)
Croat
majority
areas
(CMA)
Serb
majority
areas
(SMA)
Survey
Nov
08
Nov
09
Nov
08
Nov
09
Nov
08
Nov
09
Nov
08
Nov
09
Nov
09
Nov
09
Nov
09
TOTAL BETTER 10.76 5.43 10.24 4.72 9.39 5.40 43.77 20.17 4.3 6.2 5.4
The same 53.78 47.00 51.95 44.77 58.24 50.58 28.00 43.73 44.8 44.5 50.6
TOTAL WORSE 34.46 45.86 36.73 47.77 31.63 43.73 25.41 36.10 49.9 39.8 43.7
DK/NA 0.99 1.71 1.09 2.74 0.74 0.29 2.82 0.9 9.5 0.3
Total 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.0 100.0 100.0

Table 4
156

Do you expect the economic situation over the next year to be....(in %)

Part of the Federation of

BiH with a Bosniak
majority (only for
respondents from the
FBiH Bosniak majority
areas)
Part of the Federation of
BiH with a Croat majority
(only for respondents
from the FBiH Croat
majority areas
Republika Srpska (only for
respondents from the RS)
Nov08 Nov09 Nov08 Nov09 Nov08 Nov09
Much WORSE 0.1 14.4 5.5 8.9 3.7 5.6
Generally WORSE 39.6 36.9 17.1 25.8 23.7 35.1
The same 38.9 34.5 57.1 38.9 48.8 41.7
Generally BETTER 4.0 2.4 15.9 7.6 19.1 15.3
Much BETTER 13.3 0.2 0.2 1.0
DK/NA 4.1 11.5 4.2 17.8 4.7 2.3
Total 100.0 100.0 100.0 100.0 100.0 100.0
TOTAL WORSE 39.7 51.3 22.6 34.7 27.3 40.7
The same 38.9 34.5 57.1 38.9 48.8 41.7
TOTAL BETTER 17.2 2.7 16.1 8.6 19.1 15.3
DK/NA 4.1 11.5 4.2 17.8 4.7 2.3
Total 100.0 100.0 100.0 100.0 100.0 100.0

N

Expect continuation of the privatisation process to affect their familys economic circumstances (%)

FBiH RS
Br ko
District
Bosniak
majority
areas(BMA)
Croat
majority
areas(CMA)
Serb
majority
areas(SMA)
Quarter
Nov
08
Nov
09
Nov
08
Nov
09
Nov
08
Nov
09
Nov
08
Nov
09
Nov
08
Nov
09
Nov
08
Nov
09
TOTAL NEGATIVE 66.4 67.4 53.5 57.9 33.6 44.1 68.8 71.3 56.9 52.9 53.5 57.9
TOTAL POSITIVE 10.1 7.0 11.3 17.7 40.1 16.0 7.9 5.2 18.9 13.7 11.3 17.7
DK/NA 23.5 25.6 35.2 24.4 26.3 39.9 23.3 23.5 24.3 33.4 35.2 24.4
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Table 5
Table 6
157

Do you expect any change in the level of your household cash income over the next six months (in %)?

FBiH RS
Bosniak
majority
areas
Croat
majority
areas
Serb
majority
areas
18 35 36 50 51+
Quarter
Nov
08
Nov
09
Nov
08
Nov
09
Nov
08
Nov
09
Nov
08
Nov
09
Nov
08
Nov
09
Nov
08
Nov
09
Nov
08
Nov
09
Nov
08
Nov
09
TOTAL REDUCE 14.2 22.2 8.9 18.0 13.6 23.5 16.6 17.2 8.9 18.0 13.4 17.7 9.0 22.1 12.3 20.9
TOTAL INCREASE 18.4 17.1 25.6 28.7 14.6 14.8 33.3 25.5 25.6 28.7 24.1 24.4 18.6 23.1 19.4 17.6
No change 62.8 56.8 60.6 46.4 67.7 59.3 43.4 47.5 60.6 46.4 57.2 54.9 68.2 50.0 64.1 54.6
DK/NA 4.6 3.9 4.9 6.9 4.1 2.4 6.8 9.7 4.9 6.9 5.3 3.1 4.2 4.8 4.2 6.9
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Table 7

Will prices rise over the next six months (in %)

Nov
07
June
08
Nov
08
Nov
09
Nov
07
June
08
Nov
08
Nov
09
Nov
07
June
08
Nov
08
Nov
09
TOTAL FALL 6.48 2.40 7.40 8.28 7.48 2.46 8.88 17.87 4.18 35.56 6.73
TOTAL RISE 89.51 76.32 78.08 71.58 83.87 89.28 74.92 54.43 100.00 59.62 0.43 6.00
No change in prices 2.08 15.01 9.31 14.36 6.62 5.30 11.67 23.68 33.33 61.96 85.63
DK/NA 1.93 6.27 5.22 5.78 2.03 2.96 4.53 4.01 2.87 2.05 1.64
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Table 8
158

Do you expect your household cash income to change in the next six months (in%)?
Urban Rural
Nov
07
June
08
Nov
08
Nov
09
Nov
07
June
08
Nov
08
Nov
09
TOTAL FALL 20.40 11.53 13.62 21.63 14.24 10.80 10.53 18.77
TOTAL RISE 16.44 18.22 20.67 20.16 18.94 18.79 21.14 21.89
No change 56.71 61.93 60.20 54.45 58.92 63.83 64.36 53.17
DK/NA 6.45 8.32 5.52 3.76 7.90 6.58 3.97 6.17
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Expect to be jobless during the next three months (in %)

FBiH RS Br koDistrict 18 35 36 50 51+
Sept
08
Nov
08
Nov
09
Sept
08
Nov
08
Nov
09
Sept
08
Nov
08
Nov
09
Nov
08
Nov
09
Nov
08
Nov
09
Nov
08
Nov
09
14.97 15.41 17.09 8.98 22.28 12.91 11.39 0.00 0.00 22.62 19.90 14.46 11.56 12.63 13.84
Table 8a
Table 9
159

Support the holding of public protests, strikes, or demonstrations related to(in %)
FBiH RS Br koDistrict Urban Rural 18

35
36
50
51+
Survey
Sept
08
Nov
08
Nov
09
Sept
08
Nov
08
Nov
09
Sept
08
Nov
08
Nov
09
Sept
08
Nov
08
Nov
09
Sept
08
Nov
08
Nov
09
Nov
09
Nov
09
Nov
09
Loss of employment 53.5 61.3 67.4 45.6 35.1 39.9 33.4 33.7 48.4 55.1 49.7 58.1 46.0 50.9 54.7 61.6 63.1 48.3
Inability to find a
job 50.9 58.2 61.8 44.8 35.3 38.2 33.4 31.6 48.7 52.9 48.4 54.5 44.5 48.8 50.5 59.4 59.9 42.6
Against entity
government policy 45.0 51.6 55.2 40.2 32.5 35.8 27.6 2.9 49.5 45.7 42.9 49.3 40.4 43.0 46.1 54.2 55.9 37.9
Low
salaries/pensions 51.9 60.8 65.9 45.4 37.7 41.6 45.2 38.8 54.9 54.5 50.9 59.1 45.2 51.6 53.8 59.5 62.9 50.1
Threats to ethnic or
civil rights 50.8 56.4 61.3 47.3 39.0 39.8 30.6 5.5 48.4 53.7 47.1 55.1 45.4 49.3 50.6 58.0 60.6 44.2
The conduct of the
international
community 43.2 49.8 53.7 43.8 39.9 36.5 25.2 4.2 49.3 46.0 43.3 48.8 40.8 46.0 45.5 53.4 55.9 37.2
The recovery of
property 50.3 54.6 60.3 46.9 41.9 36.3 28.3 33.1 51.0 52.2 46.4 51.8 45.7 51.2 49.7 56.0 58.8 42.4
Table 10
160

Would leave BiH if opportunity arose (in %) - November 2007, 2008 and 2009
BiH FBiH RS 18 35 36 50 51+
Nov 07 45.58 46.41 44.21 65.90 56.42 19.54
Nov 08 40.36 40.08 41.56 63.29 39.38 17.57
Nov 09 44.02 52.10 32.69 66.54 51.92 22.22
Trends in the average salary and the consumer price indices in the RS and FBiH (2009)
RS
Month 01/09 02/09 03/09 04/09 05/09 06/09 07/09 08/09 09/09 10/09
Average salary (in KM) 771.00 813.00 781.00 786.00 773.00 794.00 792.00 790.00 786.00 789.00
FBiH
Month 01/09 02/09 03/09 04/09 05/09 06/09 07/09 08/09 09/09 10/09
Average salary (in KM) 790.55 785.21 795.20 797.97 792.26 792.88 792.94 782.76 784.86 789.83
Source: Entity Statistics Offices
Pension data for the RS and FBiH for November 2008 and 2009
FBiH RS
Nov 08 Nov 09 Nov 08 Nov 09
Maximum pension 296.36 296.36 160.00 160.00
Minimum pension 1393.48 1977.00 1408.88 1564.56
Average pension 368.42 343.00 319.41 316.22
Source: RS and FBIH Pension Funds
Table 11
Table 12
Table 12a
161

Data on average salaries by sector for the RS and the FBiH for December 2007, October 2008, and September 2009

RS FBiH

December
2007
October
2008
September
2009
Salary
growth
(Sep 09/
Oct 08)
December
2007
October
2008
September
2009
Salary
growth
(Sep 09/
Oct 08)
Agriculture 537.00 659.00 573.00 13.05% 607.03 727.30 680.05 6.50%
Fisheries 555.00 683.00 609.00 10.83% 423.56 483.66 551.84 14.10%
Mining and quarries 672.00 903.00 922.00 2.10% 645.98 751.05 758.40 0.98%
Manufacturing 446.00 510.00 518.00 1.57% 507.04 562.18 560.77 0.25%
Electricity. gas. and water 697.00 871.00 922.00 5.86% 1082.41 1235.22 1230.64 0.37%
Construction 533.00 567.00 551.00 2.82% 450.95 516.36 508.90 1.44%
Wholesale and retail. motor vehicle repairs. and
personal or household goods
442.00 536.00 546.00 1.87% 482.09 522.85 539.48 3.18%
Hotels and restaurants 400.00 450.00 475.00 5.56% 460.88 517.32 528.32 2.13%
Transport. warehousing. and communications 763.00 752.00 833.00 10.77% 871.36 977.26 957.58 2.01%
Financial mediation 1269.00 1204.00 1256.00 4.32% 1254.25 1257.11 1210.46 3.71%
Activities related to property. renting. and
business activities
688.00 676.00 625.00 7.54% 693.70 757.62 769.86 1.62%
Government administration. defence.
mandatory social insurance
910.00 1059.00 1071.00 1.13% 951.99 1099.49 1100.02 0.05%
Education 552.00 890.00 895.00 0.56% 740.23 820.20 809.16 1.35%
Healthcare and social work 664.00 1143.00 993.00 13.12% 827.28 971.48 972.09 0.06%
Other communal. social. or personal services 530.00 620.00 632.00 1.94% 702.45 744.77 761.56 2.25%
TOTAL average 628.00 783.00 786.00 0.38% 696.74 780.51 784.86 0.56%
Table 12b

Consumer Price Index (CPI) by category (October 2009)
RS FBiH
1 10 2009/
1 10 2008
10 2009 /
10 2008
1 10 2009/
1 10 2008
10 2009 /
10 2008
Total 99.50 98.90 99.80 98.20
Food and non alcoholic beverages 98.60 96.40 100.50 96.50
Alcohol and tobacco 109.30 119.50 106.80 114.60
Clothes and footware 97.10 96.40 95.30 95.30
Accommodation. water. electricity.
gas. and other fuels
104.70 103.60 104.40 101.20
Furniture. household goods. and
regular maintenance
101.10 99.10 101.10 99.10
Health 100.80 101.90 100.40 100.90
Transport 88.60 89.60 88.30 90.50
Communication 102.60 102.60 100.80 99.70
Recreation and culture 102.40 101.00 104.50 101.70
Education 100.80 100.40 98.40 100.80
Restaurants and hotels 104.00 101.70 106.50 105.80
Other goods and services 103.10 102.30 101.90 100.30
Table 13

Average household costs, itemised (in %)
FBiH RS
Quarter
Nov
07
Nov
08
Nov
09
Nov
07
Nov
08
Nov
09
Food (including coffee and drinks) 29.8 40.2 37.6 33.0 36.7 42.7
Clothes and footwear 6.4 5.5 6.3 7.1 6.8 7.6
Cigarettes / tobacco 5.3 4.0 4.3 5.1 3.8 4.0
Personal Hygiene Items 6.2 6.0 7.2 6.4 6.4 6.5
Fuel and car maintenance 6.1 5.5 7.1 5.9 6.2 3.5
Public transport bus and tram 2.6 1.4 1.6 1.7 1.6 1.3
Kindergarten / child care 1.3 0.2 0.2 0.6 0.1 0.0
Debt repayment 4.2 5.9 3.0 4.0 3.7 2.5
Works and house repairs 3.3 1.9 2.5 2.8 2.4 0.9
Medicine and treatment 7.0 5.0 6.0 6.3 4.9 4.1
Recreation 3.4 2.4 1.9 4.2 2.8 1.6
Children s education 4.6 3.0 4.9 4.7 3.4 1.8
Power 8.6 6.3 7.7 9.8 7.8 6.9
Water 3.6 2.0 3.0 2.4 1.5 2.0
Telephone 6.1 4.3 4.1 5.1 4.7 4.1
Gas 1.5 0.2 0.3 0.8 0.6 0.1
Table 14
162
163

H i B F
v o N v o N v o N

RS
v o N v o N v o N

n o h p e l e T
h p e l i b o M
l a i D - c a p u
r a C
b u P : e c r u o S

e
e n o h
e m o h t a t e n r e t n i e h t o t s s e c c
M S I R P y b d e t c u d n o c s l l o p n o i n i p o c i l b

v o N
07
v o N
08
v o N
09
7 4 . 1 8 5 8 . 3 6 5 8 . 3 6
5 6 . 3 6 5 8 . 4 6 5 8 . 4 6
8 2 . 5 1 7 6 . 8 7 6 . 8
6 8 . 0 5 2 7 . 8 4 2 7 . 8 4
h c r a e s e R M

v o N
07
v o N
08
v o N
09
5 8 . 3 6 1 4 . 1 7 6 5 . 5 6
5 8 . 4 6 3 2 . 5 6 73 6 6 .
7 6 . 8 2 2 . 4 1 8 2 . 3 1
2 7 . 8 4 9 5 . 4 5 5 6 . 8 4

Table 15

g n i v i v r u s y l e r a B
g a r e v a w o l e b l l e W
g a r e v a w o l e b t i b A
r e v a w o l e b L A T O T
n o i n i p o c i l b u P : e c r u o S

H i B
t p e S
08
v o N
08
v o N
09
9.5 8.1 14.9
e g 14.0 11.4 12.1
e g 19.7 24.3 22.0
e g a 43.2 43.8 49.0
h c r a e s e R M S I R P y b d e t c u d n o c s l l o p

H i B F R
t p e S
08
v o N
08
v o N
09
t p e S
08
N
0
7.7 5.1 8.3 11.7 1
12.0 9.2 11.6 15.4 1
17.5 24.4 25.1 23.1 2
37.2 38.7 45.0 50.2 4

RS
v o N
08
v o N
09
t p e S
08
v o N
08
o N
0
1.5 23.7 13.7 25.7 28
4.3 11.6 44.4 17.3 27
4.1 17.7 19.7 24.4 17
49.9 53.0 77.8 67.4 73

v o
9
8.5
7.7
7.6
.7

n o i n i p o c i l b u P : e c r u o S

h c r a e s e R M S I R P y b d e t c u d n o c s l l o p

Table 16
Number of households with durable consumer goods (in %)

Household status - self-described (%)

The Social Stability Index for BiH
Survey Chain index Composite index
Feb 05 92.00 46
Jun 05 97.83 45
Sep 05 93.33 42
Nov 05 102.38 43
Apr 06 104.65 45
Jun 06 102.22 46
Sep 06 100.00 46
Nov 06 102.17 47
Apr 07 104.26 49
Sep 07 91.84 45
Nov 07 95.56 43
Mar 08 106.98 46
Jun 08 97.83 45
Oct 08 102.22 46
Nov 08 100.00 46
Nov 09 100.00 46
Source: Public opinion polls conducted by PRISM Research.
Table 18
164
Table 17
165

Think might lose job in next three months (in %)
Sept 08 Nov 08 Nov 09 Sept 08 Nov 08 Nov 09 Sept 08 Nov 08 Nov 09
14.97 15.41 17.09 8.98 22.28 12.91 11.39 0.00 0.00

Monthly household income, including all household salaries and receipts, child allowance,
pensions, and any other sources of income (in %)
BiH
Urban Rural Male Female 18 35 36 50 51+

Nov
08
Nov
09
Nov
08
Nov
09
Nov
08
Nov
09
Nov
08
Nov
09
Nov
08
Nov
09
Nov
08
Nov
09
Nov
08
Nov
09
No income 2.0 3.9 4.4 5.0 2.8 5.7 3.9 3.4 3.3 4.7 2.9 4.7 3.8 4.3
< 100 1.3 1.9 2.7 3.7 1.9 3.0 2.3 2.9 0.9 2.0 0.5 2.5 4.4 3.9
101 200 2.4 8.6 6.8 12.6 4.6 9.5 5.3 12.2 0.6 3.4 4.4 4.5 9.8 20.0
201 300 6.6 5.5 8.9 8.6 6.9 6.4 8.8 8.1 2.0 4.8 5.5 2.1 15.6 11.7
301 400 10.7 10.3 14.5 11.1 13.9 10.9 11.9 10.5 9.4 9.2 12.5 14.5 16.8 10.1
401 500 2.3 2.7 1.4 2.7 1.6 2.3 2.0 3.1 1.0 2.6 1.4 3.5 2.8 2.3
Number of low
income
households 25.3 32.8 38.6 43.7 31.7 37.8 34.1 40.1 17.1 26.7 27.2 31.8 53.2 52.3

Table 1
Table 2
VI. SOCIAL INCLUSION
166

Would leave BiH if opportunity arose (in %) - November 2007, 2008, and 2009
BiH FBiH RS 18 35 36 50 51+
Nov 07 45.58 46.41 44.21 65.90 56.42 19.54
Nov 08 40.36 40.08 41.56 63.29 39.38 17.57
Nov 09 44.02 52.10 32.69 66.54 51.92 22.22
Monthly household income, including all household salaries and receipts, child allowance, pensions, and any other sources of income (in %)

18 35 36 50 51+
No income 3.3 4.7 2.9 4.7 3.8 4.3
< 100 0.9 2.0 0.5 2.5 4.4 3.9
101 200 0.6 3.4 4.4 4.5 9.8 20.0
201 300 2.0 4.8 5.5 2.1 15.6 11.7
301 400 9.4 9.2 12.5 14.5 16.8 10.1
401 500 1.0 2.6 1.4 3.5 2.8 2.3
Number of households 17.1 26.7 27.2 31.8 53.2 52.3
Table 3
Table 4
167

Monthly household income, including all household salaries and receipts, child allowance, pensions, and any other sources of income (in %)
Income in KM Bosniak majority areas (BMA) Croat majority areas (CMA) Serb majority areas (CMA)
No income 2.6 5.7 1.5 0.7 4.5 3.9
< 100 1.2 2.1 1.6 1.3 3.1 4.5
101 200 5.4 7.9 3.7 5.6 14.9
201 300 6.0 7.3 5.0 10.8 10.4 6.0
301 400 14.4 14.0 6.5 9.4 12.5 6.8
401 500 1.6 3.3 1.2 1.3 2.0 2.6
Subtotal to 500 31.3 40.4 15.7 27.2 38.1 38.6
Income in KM

No income 4.3 2.0 2.6 1.2 4.6 16.1
< 100 6.2 2.5 1.6 3.8 8.6
101 200 9.3 9.1 6.6 6.7 7.7 11.7
201 300 20.5 14.2 8.8 10.3 13.9 4.9
301 400 13.7 17.2 9.4 8.0 23.3 10.2
401 500 3.8 7.0 1.2 2.7 7.7
Subtotal to 500 57.7 49.5 29.9 29.0 56.0 59.2
Table 5

Possession of durable consumer goods

Bosniaks majority Croats majority Serbs majority

Nov
07
Nov
08
Nov
09
Nov
07
Nov
08
Nov
09
Nov
07
Nov
08
Nov
09
Telephone 83.3 85.7 80.7 75.1 73.4 73.2 63.8 71.4 65.9
Mobile phone 64.3 74.6 79.1 61.2 73.1 66.0 64.9 65.2 74.9
Car 47.9 49.2 49.9 61.4 68.2 61.8 48.7 54.6 46.5

Minorities in BMA
Minorities in CMA Minorities in SMA

Nov
07
Nov
08
Nov
09
Nov
07
Nov
08
Nov
09
Nov
07
Nov
08
Nov
09
Telephone 84.5 80.5 58.2 76.5 62.5 76.1 63.8 51.2 76.4
Mobile phone 60.5 47.6 67.5 56.3 53.1 71.3 64.9 62.2 64.9
Car 28.3 31.3 40.4 54.3 36.9 52.1 48.7 24.5 34.3
Table 6

Expectations of change in household economic circumstances over coming year (in %)

Bosniak majority
areas (BMA)
Croat majority
areas (CMA)
Serb majority
areas (SMA)
TOTAL WORSE 30.2 30.4 15.0 14.5 21.8 33.7
The same 56.7 55.5 65.8 54.4 52.2 45.1
TOTAL BETTER 8.2 11.0 14.7 18.8 20.2 18.2
DK/NA 4.8 3.0 4.5 12.4 5.8 3.0
Total 100.0 100.0 100.0 100.0 100.0 100.0

TOTAL WORSE 26.7 31.1 20.7 17.1 24.1 22.9
The same 64.5 47.5 59.9 51.9 60.5 61.3
TOTAL BETTER 8.1 15.3 18.6 17.0 13.0 14.0
DK/NA 0.7 6.0 0.7 14.0 2.4 1.8
Total 100.0 100.0 100.0 100.0 100.0 100.0
Table 7
168
169

Think that the legal system will support them regarding contractual and property rights (in %)
Bosniaks
Croats Serbs
Majority Minority Majority Minority Majority Minority Majority Minority Majority Minority Majority Minority
Strongly agree 13.63 17.27 25.36 27.53 7.81 19.25 13.58 17.65 10.42 23.88 12.59 12.20
Somewhat agree 44.12 16.99 26.64 30.13 24.21 21.63 29.30 22.62 46.87 42.32 39.46 41.97
Somewhat disagree 11.04 23.68 8.87 10.73 22.11 17.35 7.52 10.77 12.75 6.27 4.57 3.07
Absolutely disagree 21.61 36.47 35.75 23.17 19.66 18.47 37.21 37.74 22.02 15.52 28.60 30.56
DK/NA 9.60 5.59 3.38 8.44 26.21 23.30 12.39 11.23 7.93 12.02 14.78 12.20
Total 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Table 8

Assessment of political trends in BiH (%)

Bosniaks Croats Serbs
Deteriorating 79.7 82.1 89.6 81.1 52.9 47.4 71.4 75.9 50.3 41.2 64.0 46.6
Improving 13.5 14.7 6.8 13.3 24.7 48.2 15.8 16.8 34.6 51.7 25.2 38.2
DK/NA 6.8 3.1 3.7 5.5 22.4 4.4 12.8 7.2 15.1 7.1 10.8 15.1
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Table 9
170

Number of people who approve of the performance of various institutions in BiH (in %) -
November 2009
BiH Presidency 15.7 21.4 32.2 33.3 49.5 56.0
BiH Parliamentary Assemby 16.0 18.2 30.8 36.2 51.2 55.2
BiH Council of Ministers 16.6 19.7 30.8 31.6 52.4 51.8
Parliament of FBiH 16.9 21.3 28.8 28.8 47.8 50.6
FBiH Government 15.8 18.4 27.5 28.0 48.8 51.3
RS National Assembly 9.3 16.6 10.0 13.3 71.6 53.1
RS Government 9.2 19.0 11.6 13.5 71.9 52.6
Municipal Authorities 19.0 22.1 28.4 25.6 69.0 54.2
Cantonal Governments 18.1 19.5 29.4 24.1
Table 11

Attitudes regarding the powers of the High Representative in BiH (%)


Reduce 10.9 12.8 7.4 30.5 28.9 12.0 31.6 21.7 71.6 17.6 73.6 34.2
Increase 41.9 26.9 61.9 34.9 18.9 30.5 27.3 32.7 2.9 28.2 3.3 29.7
Leave alone 40.0 56.4 21.7 14.2 31.9 54.2 23.4 22.9 19.1 42.2 20.6 32.5
DK/NA 7.2 3.9 9.1 20.4 20.2 3.4 17.7 22.7 6.4 12.0 2.5 3.7
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Table10
171

Pride in being a citizen of BiH (%)

Very proud 80.7 87.0 61.7 52.4 32.5 75.4 52.4 69.3 23.7 72.9 17.9 46.4
Somewhat 11.2 8.7 18.7 17.4 33.8 12.5 25.1 13.6 20.1 9.8 16.5 16.7
Not much 5.4 2.7 6.5 12.3 13.8 3.0 7.7 1.3 15.7 1.1 22.7 21.6
Not at all 0.4 8.5 9.6 4.7 1.1 6.5 7.1 20.8 5.3 20.7 3.0
Of no importance 0.8 3.3 3.2 14.0 6.7 6.7 6.5 17.7 10.2 18.0 8.0
0+ - +0 2+ -
decide 0.9 0.8 1.0 2.0 0.3 0.7 1.2 1.0
DK/NA 0.6 0.8 0.2 3.2 0.9 1.4 0.9 2.2 0.9 0.7 3.2 4.3
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Table 13

Pride in belonging to ones own ethnic group/people (%) - November 2009
Very proud 73.4 65.5 82.4 79.2 72.3 75.1
Somewhat 14.4 18.4 11.5 10.8 13.0 12.9
Not very 4.3 5.2 1.6 0.9 7.7 5.7
Not at all 3.3 5.1 0.2 1.4 4.3
Of no importance 3.6 3.0 2.2 6.3 2.4 4.9
0+ - +0 2+ -decide 1.0 2.0 0.7 0.1
DK/NA 0.8 1.3 1.4 0.3 1.5
Total 100.0 100.0 100.0 100.0 100.0 100.0
Table 12
172

Number of individuals vis-a-vis confidence in other people (in %)

BMA CMA SMA
Cautious with others (RESPONSES on
a scale of 1 5) 82.66 80.44 81.36 77.26 87.10 93.12
Trustful of others (RESPONSES on a
scale of 6 10) 16.40 18.38 17.98 20.50 12.90 6.88
/ * ,know/No response 0.94 1.18 0.66 2.24 0.00 0.00
Total 100.00 100.00 100.00 100.00 100.00 100.00
Table 15

Expect things to get worse in BiH as regards the political situation (%)
Nov 07 79.4 90.7 80.2 60.3 82.4 82.5
Nov 08 79.7 82.1 52.9 47.4 50.3 41.2
Nov 09 89.6 81.1 71.4 75.9 64.0 46.6
Table 14

110
100
I
n
t
e
r
e
t
h
n
i
c

S
t
a
b
i
l
i
t
y

I
n
d
e
x
Chain index
Composite index
90
80
70
60
May
00
Feb
04
103
76
Apr
02
99
75
Apr
06
101
76
Jan
01
101
73
Feb
05
100
77
Jan
03
99
75
Apr
07
96
76
Jun
08
J105
78
Jan
01
106
73
Sep
04
101
76
Aug
02
100
75
Sep
06
100
76
Dec
01
103
76
Sep
05
97
72
Sep
03
100
76
Nov
07
94
72
Nov
08
99
77
Aug
00
95
69 73
Jun
04
99
75
Jun
02
100
75
Jun
06
100
76
Aug
01
101
74
Jun
05
96
74
Jul
03
101
76
Sep
07
101
77
Oct
08
100
78
Apr
01
99
72
Nov
04
101
77
Oct
02
101
76
Nov
06
104
79
Mar
02
100
76
Nov
05
104
75
Nov
03
97
74
Mar
08
103
74
Nov
09
96
74
The Interethnic Stability Index for Bosnia and Herzegovina

Have you or anyone you live with been subjected to verbal harassment or physical attack
solely due to your ethnicity/nationality over the past year?
BiH FBiH RS
Sep
2008
Nov
2008
Nov
2009
Sep
2008
Nov
2008
Nov
2009
Sep
2008
Nov
2008
Nov
2009
% % % % % % % % %
No 2 Never 93 95 90 91 93 88 98 97 94
Yes 2 Once 2 2 3 3 2 5 1 0 1
Yes 2 On a number of
occasions 2 1 2 3 2 2 1 1 1
Yes 2 Often 1 1 1 1 1 2 1 1 1
DK/NA 2 1 3 2 1 2 0 1 3
TOTAL 100 100 100 100 100 100 100 100 100
Source: Business environment survey for the UNDP Early Warning System in BiH project. conducted by PRISM Research.
November 2009.
who lived in this

m

Table 1a
VII. ETHNIC RELATIONS
173
174

Have you or anyone you live with been subjected to verbal harassment or physical
attack solely due to your ethnicity/nationality over the past year?
Nov2009
% % % % % %
No 2 Never 92 90 86 79 95 92
Yes 2 Once 4 3 6 9 1 1
Yes 2 On a number of
occasions 1 2 3 6 1 1
Yes 2 Often 1 3 3 2 0 2
DK/NA 3 2 2 3 3 4
TOTAL 100 100 100 100 100 100
November 2009..
To what extent do you agree/disagree that members of minority peoples, who lived in this
municipality before the war, should return to their homes?
BiH FBiH RS Br koDistrict Bosniaks Croats Serbs

Nov2009
% % % % % % %
Disagree 11 12 11 0 9 14 11
Agree 84 83 86 98 88 77 86
DK/NA 5 6 3 2 3 8 3
Total 100 100 100 100 100 100 100
Source: Business environment survey for the UNDP Early Warning System in BiH project. conducted by PRISM Research. November 2009.
Table 1c
Table 2a
175

To what extent do you agree/disagree that members of minority peoples, who lived in this
municipality before the war, should return to their homes?
Type Gender Agegroup

Urban Rural Male Female 18 35 36 50 50+
Nov2009
% % % % % % %
Agree 11 11 12 10 10 12 11
Disagree 84 84 83 85 84 84 85
DK/NA 5 4 5 5 6 4 4
Total 100 100 100 100 100 100 100
Table 2b

Into which category does your household fall?

Nov2009
BiH FBiH RS Bosniaks Croats Serbs
% % % % % %
Locals 68 70 70 78 61 70
Displaced 9 6 15 4 7 15
Refugees from another country 2 2 1 4 1
Returnee 15 16 10 11 21 10
Moved here after the war 5 5 4 6 4 4
DK/NA 2 2 1 1 3 1
TOTAL 100 100 100 100 100 100

Table 3a

Would you move to a town where the majority were of an

ethnic group you do not belong to for better job prospects?
BiH FBiH RS Br koDistrict
Nov2009
% % % %
Yes 42 47 33 28
No 49 43 59 69
DK/NA 9 10 9 4
Total 100 100 100 100
Source: Business environment survey for the UNDP Early Warning System in BiH
project. conducted by PRISM Research. November 2009.

Table 7

BiH FBiH RS
Nov 2009
% % %
Very proud 76 77 73
Somewhat 13 13 13
Not very 4 3 7
Not at all 2 2 4
Not important 3 3 3
Don t know/Can t decide 1 1 0
No answer/Won t answer 1 1 0
Total 100 100 100
Table 8


Nov 2009
% % %
Very proud 72 82 73
Somewhat 15 11 13
Not very 4 2 7
Not at all 4 0 4
Not important 3 3 3
Total 100 100 100
Table 8a
176

How proud are you of being a citizen of Bosnia and

Herzegovina?
Sep 2008 Nov 2008 Nov 2009
% % %
Very proud 52 54 47
Somewhat 21 18 20
Not very 11 9 12
Not at all 6 7 11
Not important 7 9 8
Total 100 100 100
Table 9


FBiH RS
Sep
2008
Nov
2008
Nov
2009
Sep
2008
Nov
2008
Nov
2009
% % % % % %
Very proud 61 62 58 31 37 23
Somewhat 19 20 21 27 17 17
Not very 9 8 7 17 12 23
Not at all 4 2 8 11 17 18
Not important 5 6 5 11 16 16
Don t know/Can t decide 1 1 1 1 1 1
No answer/Won t answer 2 1 1 2 1 3
Total 100 100 100 100 100 100
November 2009.
Table 9a


Sep
2008
Nov
2008
Nov
2009
Sep
2008
Nov
2008
Nov
2009
Sep
2008
Nov
2008
Nov
2009
% % % % % % % % %
Very proud 80 82 60 42 40 55 31 37 23
Somewhat 12 11 18 26 30 23 27 17 17
Not very 5 5 7 13 12 7 17 12 23
Not at all 1 0 9 6 4 7 11 17 18
Not important 2 1 3 8 13 7 11 16 16
Don t know/Can t decide 0 1 1 1 0 1 1 1 1
No answer/Won t answer 0 1 1 3 1 1 2 1 3
Total 100 100 100 100 100 100 100 100 100
Source: Business environment survey for the UNDP Early Warning System in BiH project. conducted by PRISM Research. November
2009.
Table 9b
177


Sep 2008 Nov 2008 Nov 2009
% % %
Yes 17 22 25
No 71 66 64
DK/NA 12 13 11
Total 100 100 100
Source: Business environment survey for the UNDP Early Warning System in BiH project. conducted by
PRISM Research. November 2009.
Table 10


FBiH RS
Sep
2008
Nov
2008
Nov
2009
Sep
2008
Nov
2008
Nov
2009
% % % % % %
Yes 20 24 27 12 20 21
No 67 61 60 77 69 72
DK/NA 13 15 14 11 10 7
Total 100 100 100 100 100 100
Table 10a


Sep
2008
Nov
2008
Nov
2009
Sep
2008
Nov
2008
Nov
2009
Sep
2008
Nov
2008
Nov
2009
% % % % % % % % %
Yes 24 27 35 16 20 19 12 20 21
No 60 64 53 74 59 66 77 69 72
DK/NA 16 9 12 10 21 15 11 10 7
Total 100 100 100 100 100 100 100 100 100
Table 10b

Would you support/participate in public protests, strikes, or

demonstrations over... ?
Sep 2008 Nov 2008 Nov 2009
Ethnic and civil rights % % %
Yes 49 47 49
No 43 46 43
DK/NA 9 7 8
Total 100 100 100
Table 12
178

Would you support/participate in public protests, strikes, or demonstrations
over... ?
FBiH RS

Sep
2008
Nov
2008
Nov
2009
Sep
2008
Nov
2008
Nov
2009
% % % % % %
Ethnic and civil rights Yes 50 55 53 47 38 40
No 40 37 37 47 58 55
DK/NA 10 8 10 6 5 5
Total 100 100 100 100 100 100
Source: Business environment survey for the UNDP Early Warning System in BiH project. conducted by PRISM
Research. November 2009.
Table 12a

How much influence do you think the religious

communities/churches in BiH have on actual
political events?
Sep 2008 Nov 2008 Nov 2009
% % %
None 14 13 7
Not much 22 20 23
Some 30 29 30
A lot 25 29 34
DK/NA 8 9 7
Total 100 100 100
TOTAL NOT MUCH 36 33 29
TOTAL A LOT 56 58 64
DK/NA 8 9 7
Total 100 100 100
Source: Business environment survey for the UNDP Early Warning System
in BiH project. conducted by PRISM Research. November 2009.
Table 13

How much influence do you think the religious communities/churches in BiH

have on actual political events?
FBiH RS
Sep
2008
Nov
2008
Nov
2009
Sep
2008
Nov
2008
Nov
2009
% % % % % %
None 8 4 4 23 23 13
Not much 19 17 15 30 24 38
Some 34 31 30 23 28 29
A lot 32 39 43 15 16 15
DK/NA 8 9 8 9 9 5
Total 100 100 100 100 100 100
Table 13a
179

How much influence do you think the religious
communities/churches in BiH have on actual political events?

Sep
2008
Nov
2008
Nov
2009
Sep
2008
Nov
2008
Nov
2009
Sep
2008
Nov
2008
Nov
2009
% % % % % % % % %
None 7 3 3 9 6 5 23 23 13
Not much 12 17 10 25 16 20 30 24 38
Some 31 30 21 37 32 39 23 28 29
A lot 44 48 59 20 29 27 15 16 15
DK/NA 7 3 7 9 17 9 9 9 5
Total 100 100 100 100 100 100 100 100 100
Source: Business environment survey for the UNDP Early Warning System in BiH project.
conducted by PRISM Research. November 2009.
Table 13b

Some people say that only the ethnic or ethnically affiliated parties in BiH
can protect the vital ethnic/national interests of the ethnic group/people
they represent. To what extent do you agree or disagree with this opinion?
BiH FBiH RS
Nov 2009
% % %
Absolutely disagree 44 46 39
Generally disagree 28 24 34
Generally agree 15 15 17
Absolutely agree 4 4 4
DK/NA 9 11 6
Total 100 100 100
Table 14

Some people say that only the ethnic or ethnically affiliated parties in BiH
can protect the vital ethnic/national interests of the ethnic group/people
they represent. To what extent do you agree or disagree with this opinion?
Nov 2009
% % %
Absolutely disagree 62 30 39
Generally disagree 20 28 34
Generally agree 9 21 17
Absolutely agree 4 5 4
DK/NA 5 17 6
Total 100 100 100
Table 14a
180

Please state in what direction you think BiH is headed, as regards the political
situation?
BiH FBiH RS
Sep
2008
Nov
2008
Nov
2009
Sep
2008
Nov
2008
Nov
2009
Sep
2008
Nov
2008
Nov
2009
% % % % % % % % %
Worse 53 58 72 60 67 80 43 48 61
Better 33 30 19 27 21 12 41 39 27
DK/NA 14 12 9 13 12 8 16 13 12
Total 100 100 100 100 100 100 100 100 100
November 2009.
Table 15
181
182

110
100
90
80
The Security Stability Index for Bosnia and Herzegovina
S
e
c
u
r
i
t
y

S
t
a
b
i
l
i
t
y

I
n
d
e
x
May
00
Feb
04
101.2
87
Apr
02
102.3
89
Apr
06
100
86
Jan
01
100
88
Feb
05
101.1
88
Jan
03
100
88
Apr
07
102.3
88
Jun
08
101.2
86
Jan
01
100
89
Sep
04
97.73
86
Aug
02
98.86
87
Sep
06
103.5
88
Dec
01
98.88
88
Sep
05
101.2
87
Sep
03
97.73
86
Nov
07
102.3
88
Nov
08
100
88
Aug
00
100
89 89
Jun
04
101.1
88
Jun
02
98.88
88
Jun
06
98.84
85
Aug
01
101.1
89
Jun
05
97.73
86
Jul
03
100
88
Sep
07
97.73
86
Oct
08
102.3
88
Apr
01
98.88
88
Nov
04
101.2
87
Oct
02
101.1
88
Nov
06
97.73
86
Mar
02
98.86
87
Nov
05
98.85
86
Nov
03
100
86
Mar
08
96.59
85
Nov
09
98.86
87
Chain index
Composite index
1

During the past three months have you, a family member or your family as a whole suffered...
Sep 2008 Nov 2008 Nov 2009
% % %
A Burglary at home Yes 2 1 3
No 95 98 97
DK/NA 2 1 1
A Burglary at a business premises Yes 1 1 1
No 97 98 99
DK/NA 2 1 1
Wallet been stolen Yes 3 2 3
No 95 97 97
DK/NA 2 1 1

Table 1
VIII. PUBLIC SAFETY
183

During the past three months have you, a family member or your family as a whole suffered...
FBIH
Sep 2008 Nov 2008 Nov 2009
% % %
A burglary at home Yes 3 2 3
No 94 97 96
DK/NA 3 1 1
A burglary at a business premises Yes 1 1 1
No 95 98 98
DK/NA 3 1 1
No 94 96 96
DK/NA 3 1 1
Car theft Yes 1 1 2
No 96 98 97
DK/NA 3 1 1
Theft of other valuables... Yes 2 2 4
No 95 97 95
DK/NA 3 1 1
Table 1a

%

Car theft Yes 1 1 2
No 97 99 98
DK/NA 2 1 1
Theft of other valuables Yes 2 2 3
No 96 97 96
DK/NA 2 1 1
184

During the past three months have you, a family member or your family as a whole
suffered...
RS

Sep
2008
Nov
2008
Nov
2009
% % %
A burglary at home Yes 1 0 2
No 98 100 98
DK/NA 0 0
A burglary at a business premises Yes 1 0 0
No 99 99 100
DK/NA 0 0 0
No 97 99 98
DK/NA 0 0
Car theft Yes 1 2
No 99 100 98
DK/NA 0 0 0
Theft of other valuables Yes 2 1 1
No 98 99 99
DK/NA 0 0
Table 1b

During the past three months, have you, or a member of

your close family sought police assistance for any reason?
Sep 2008 Nov 2008 Nov 09
% % %
Yes 5 4 9
No 93 95 90
DK/NA 2 1 1
TOTAL 100 100 100
Table 2


FBiH
Sep 2008 Nov 2008 Nov 2009
% % %
5 5 10
92 94 88
3 2 2
100 100 100
Table 2a


RS
Sep 2008 Nov 2008 Nov 2009
% % %
4 3 6
95 97 94
1 0
100 100 100
Table 2b
185
186

How satisfied or unsatisfied were you with what the police did?
Sep 2008 Nov 2008 Nov 2009
% % %
Not at all satisfied 15 19 23
Quite dissatisfied 41 29 31
Quite satisfied 35 38 28
Entirely satisfied 9 9 13
DK/NA 5 6
TOTAL 100 100 100
Table 3

How satisfied or unsatisfied were you with what the police did?
FBiH RS
Sep 2008 Nov 2008 Nov 2009 Sep 2008 Nov 2008 Nov 2009
% % % % % %
Not at all satisfied 12 23 14 21 3 55
Quite dissatisfied 46 35 34 31 15 20
Quite satisfied 34 26 31 36 70 18
Entirely satisfied 8 9 13 12 12 7
DK/NA 7 8
TOTAL 100 100 100 100 100 100

Table 3a

During the past three months have you or a close family member
been taken to the police station without a warrant?
Sep 2008 Nov 2008 Nov 2009
% % %
Yes 1 2 2
No 98 95 96
DK/NA 1 3 2
TOTAL 100 100 100

Table 4

During the past three months have you or a close family member
been taken to the police station without a warrant?
FBiH RS
Sep
2008
Nov
2008
Nov
2009
Sep
2008
Nov
2008
Nov
2009
% % % % % %
Yes 1 3 2 1 0
No 98 94 95 99 97 99
DK/NA 1 3 3 0 3 1
TOTAL 100 100 100 100 100 100

Table 4a

During the past six months have you experienced or witnessed a situation where the
police clearly abused their authorities (eg. Dealing with traffic, regulating public
protests, in an investigation etc.)
Sep 2008 Nov 2008 Nov 2009
% % %
Yes 7 8 12
No 90 91 83
DK/NA 3 1 5
TOTAL 100 100 100
Table 5
187

During the past six months have you experienced or witnessed a situation where the
police clearly abused their authorities (eg. Dealing with traffic, regulating public
protests, in an investigation etc.)
FBiH RS
% % % % % %
Yes 7 8 11 7 7 16
No 89 90 85 91 92 76
DK/NA 3 2 4 2 1 8
TOTAL 100 100 100 100 100 100
Table 5a

Do you approve or not approve the work of... ?

Sep 2008 Nov 2008 Nov 2009
% % %
The police Yes 52 61 53
No 27 20 33
No applicable 1 1
Neither approve nor

disapprove 11 8 10
DK/NA 10 11 4
Total 100 100 100

The courts Yes 47 54 48
No 31 25 36
No applicable 1 0
Neither approve nor

disapprove 11 9 11
DK/NA 9 11 4
Total 100 100 100
Table 6
188

Do you approve or not approve the work of... ?

FBiH RS
% % % % % %
The police Yes 42 50 41 69 76 73
No 34 26 43 13 11 17
No applicable 1 1 1 0
Neither approve nor

disapprove 12 10 12 10 5 8
DK/NA 11 14 5 7 8 2
Total 100 100 100 100 100 100

The courts Yes 38 46 39 62 65 63
No 37 30 43 20 20 26
No applicable 1 0 1 0
Neither approve nor

disapprove 12 11 13 10 7 9
DK/NA 11 14 5 7 8 2
Total 100 100 100 100 100 100
Table 6a

How widespread do you think corruption, that is bribery or abuse of office for
private purposes, is in these institutions?
Sep 2008 Nov 2008 Nov 2009
% % %
The police Not at all 2 2 3
Not much 16 17 16
To some
degree 20 18 20
Fairly 23 26 27
Very 39 37 34
TOTAL 100 100 100
Table 7
189

How widespread do you think corruption, that is bribery or abuse of office for
private purposes, is in these institutions?
FBiH RS
% % % % % %
The police Not at all 2 3 1 2 0 5
Not much 10 11 16 26 22 12
To some
degree 17 17 19 24 21 22
Fairly 24 26 25 22 28 34
Very 47 43 39 26 29 28
TOTAL 100 100 100 100 100 100
Table 7a

Would you personally participate in public protests, strikes, demonstrations

related to...?

Sep
2008
Nov
2008
Nov
2009
% % %
Loss of employment Yes 48 48 53
No 44 46 40
DK/NA 8 7 7
Total 100 100 100
Inability to find a job Yes 46 47 48
No 46 46 44
DK/NA 8 7 7
Total 100 100 100
Against entity government policy Yes 41 41 43
No 49 52 49
DK/NA 10 7 8
Total 100 100 100
Low salaries/pensions Yes 47 50 52
No 44 44 41
DK/NA 9 6 7
Total 100 100 100
Ethnic and civil rights Yes 49 47 49
No 43 46 43
DK/NA 9 7 8
Total 100 100 100
The conduct of the international community Yes 42 43 44
No 48 50 48
DK/NA 10 7 9
Total 100 100 100
The recovery of property Yes 47 48 48
No 44 45 43
DK/NA 9 7 8
Total 100 100 100
Table 8
190

Would you personally participate in public protests, strikes, demonstrations related to...?
FBiH RS
% % % % % %
Loss of employment 50 57 60 45 33 38
40 35 32 51 62 57
10 8 8 5 5 5
Total 100 100 100 100 100 100
Inability to find a job 48 55 54 44 35 37
42 37 38 51 60 58
0
Total 11 8 9 5 5 5
Against entity government policy 100 100 100 100 100 100
42 49 47 39 31 34
46 43 43 53 64 60
Total 12 8 10 7 5 5
Low salaries/pensions 100 100 100 100 100 100
49 58 57 44 37 40
41 35 34 49 58 55
Total 11 8 9 7 5 5
Ethnic or civil rights 100 100 100 100 100 100
50 55 53 47 38 40
40 37 37 47 58 55
Total 10 8 10 6 5 5
The conduct of the international
community 100 100 100 100 100 100
42 48 47 42 37 36
45 43 42 51 59 58
Total 12 9 10 6 5 6
The recovery of property 100 100 100 100 100 100
49 54 54 46 40 38
41 38 36 47 54 57
Total 10 9 10 7 5 5
100 100 100 100 100 100
Table 8a
191

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Bosniak majority Croat majority Serb majority Brko district

Sample All Bosniak majority Croat majority Serb majority

Sample Bosniakmajority Croatmajority Serbmajority Br koDistrict

Sample Bosniakmajority Croatmajority Serbmajority Br koDistrict

u uemokraLska parLl[a uragan avl 0.9 2.2

How much do you agree or disagree with the following statements?

Index of the volume of industrial production in Bosnia and Herzegovina

Expectations regarding prices changes over the coming half-year

Unemployment in Bosnia and Herzegovina

2007 2008 January

Retail price index

Foreign Currency Reserves of the Central Bank of BiH

The balance of foreign trade between Bosnia and Herzegovina and

Assessment of economic situation in coming year

Better 4.7 5.4 20.2

Same 44.8 50.6 43.7

Worse 47.8 43.7 36.1

No answer 2.7 0.3

Compared to the same period last year, the economic situation in

Capacity utilisation at company

Considering your companys operations as a whole, would you say that,

In six months, do you expect your companys operations, financially

Higher (%) The same (%) Lower (%) N.A. (%)

Very helpful Generally

Very Somewhat Not much Not at all

How well do the following institutions do their jobs?

Well enough Quite poorly Very poorly

March 08 Jul 08 Sept 08 Dec 08

March 08 Jul 08 Sept 08 Dec 08

March 08 Jul 08 Sept 08 Dec 08

March 08 Jul 08 Sept 08 Dec 08

BiH FBiH RS Br koDistrict

Part of the Federation of

Expect to be jobless during the next three months (in %)

FBiH RS Br koDistrict Urban Rural 18

Minorities in BMA Minorities in CMA Minorities in SMA

Bosniaks majority Croats majority Serbs majority

Assessment of political trends in BiH (%)

Attitudes regarding the powers of the High Representative in BiH (%)

Bosniaks Croats Serbs

Pride in being a citizen of BiH (%)

Number of individuals vis-a-vis confidence in other people (in %)

who lived in this

BiH FBiH RS Br koDistrict Bosniaks Croats Serbs

Type Gender Agegroup

Into which category does your household fall?

Would you move to a town where the majority were of an

How proud are you of belonging to your ethnic group?

How proud are you of belonging to your ethnic group?

How proud are you of being a citizen of Bosnia and

How proud are you of being a citizen of Bosnia and Herzegovina?

How proud are you of being a citizen of Bosnia and Herzegovina?

Bosnia and Herzegovina

Do you think war might break out if EUFOR withdraw?

Do you think war might break out if EUFOR withdraw?

Would you support/participate in public protests, strikes, or

How much influence do you think the religious

How much influence do you think the religious communities/churches in BiH

Bosniaks Croats Serbs

During the past three months, have you, or a member of

During the past three months, have you, or a member of

During the past three months, have you, or a member of

Do you approve or not approve the work of... ?