Bosnia and Herzegovina: Early Warning Report 2009

EarlyWarning

System2009

The UNDP is the global development network of the UN, an organisation advocating for change and connectingcountries through knowledge, experience and resources to help people build a better life. The UNDP is on the groundin 166 countries, working with them on their own solutions to global and national development challenges. As thesecountries 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 MaršalaTita, 71000, Sarajevo.

Supervisor: Armin SIRČO Project Manager & Editor: Nicola NIXONProject Associate: Mersiha ĆURČIĆReviewed by: Yuri AFANASIEV, UN Resident Coordinator; Peter Van RUYSSEVELDT, Deputy Resident Representative;Armin SIRČO, Assistant Resident Representative; Amna BERBIĆ, Human Security and Justice Cluster Coordinator;Asja ČENGIĆ, Communications Analyst; Klelija BALTA, Democratic Governance Cluster Coordinator a.i./Gender Ad-visor; Lucia DESIGIS, Programme Analyst; Marta NOVOVIĆ-MLINARIĆ, Communications AssociateTeam Leader: Adnan EFENDIĆAuthors: Dina DURAKOVIĆ, Adnan EFENDIĆ, Aleksandar DRAGANIĆ, Eldar SARAJLIĆ, Edin ŠABANOVIĆ and Igor PA-LANDŽIĆTranslation: Desmond MAURERCover design: Vedran MUJAGIĆDTP & layout: Lana NOGO

ISSN: 1986-5678

The views expressed in this report are those of the authors and do not necessarily reflect the views of the United NationsDevelopment Programme.

Foreword

With 2009 closed behind us and the Early Warning System (EWS) finishing its ninth year of monitoring publicopinion in the key areas of politics, economy, social security, ethnic relations and public safety, the UNDPis 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 wasand 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 beacceptable to the representatives of three constitutive peoples, while at the same time guaranteeing political and institutional stability through effective 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 benefited from an economic cushion, over recentyears; however, at the same time, it warned that this could not be expected to remain the case for muchlonger. The situation is now clearly different, especially given the impact of the global financial crisis during2009. Throughout the year the structural incapacity of the political system in Bosnia and Herzegovina todeal with the economic crisis became increasingly evident. We entered 2010 following a year that was alsocharacterised by failed or stalled political negotiations and a distinct lack of progress on the road to theEuropean Union. With an October election on the horizon, it is unlikely that any significant improvementin these areas will occur.

Yuri AfanasievUN 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 affected different areas of life. This did not justaffect 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 providesexplicit evidence that the country passed through a recessionary phase in its economic development, encountereda series of political and institutional obstacles that hindered accelerated progress towards the European Union andthe 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 natureof 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 during2009, which is worrying in itself. One might cite a number of reasons for this situation for each individual area underobservation, but there are also a large number of factors that are endogenously interwoven in more than one areaat the same time. One of the basic aims of this report is to identify systemic problems in BiH and to provide earlywarning to stakeholders in each of the areas covered by the analyses. Accordingly, in the following

110

100

90

80

70

60

50

Sta

bil

ity

In

de

x f

or

Bo

snia

an

d H

erz

eg

ovin

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

5961

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

May00

Feb04

Apr02

Apr06

Jun01

Feb05

Jan03

Apr07

Jun08

Jan01

Sep04

Aug02

Sep06

Dec01

Sep05

Sep03

Nov07

Nov08

Aug00

Jun04

Jun02

Jun06

Aug01

Jun05

Jul03

Sep07

Oct08

Apr01

Nov04

Oct02

Nov06

Mar02

Nov05

Nov03

Mar08

Nov09

1 Source: research opinion poll conducted by Prism Research for this project in November 2009.


Graph 1: The Stability Index for BiH1

4

text a brief summary of the key findings from the various sections is provided, with more detail available in the indi-vidual sections. The first section reviews the political environment in BiH. On the basis of the results of the public opinion poll, heldin November, it has been concluded that there have been very few positive developments in BiH in terms of politicallife and in how the domestic political process is unfolding (I. POLITICAL STABILITY). In actual fact the opposite is thecase as the political crisis has deepened further. As a result of these events BiH has fallen even further behind theother countries in the region, which is confirmed by the fact that BiH is significantly behind the other former Yugoslavstates 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 futureof the state. Unfortunately, given the way in which the polity of BiH was conceived, the question of responsibility forthe current situation has become a very complex problem with multiple dimensions.

To cap a series of political problems, the perception of confidence in government institutions reached dramatic pro-portions in 2009 (II. CONFIDENCE IN GOVERNMENT INSTITUTIONS). This may well be a consequence of the situationin 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 differences in the views held by the respondents of different ethnicities and howthey rated the performance of government and the international institutions. Unfortunately, it would appear thatthese differences are increasing, in line with the views of the respective political elites. This divergence of opinion isan indicator of deep political and institutional as well as social crisis where the main form of identification would stillappear to be nationality.

Moving on to the economic environment in BiH, the first thing worth noting is that the global financial and economiccrisis did not spare the local economy over the past year (III. ECONOMIC SITUATION IN BiH). Consequently, industrialproduction fell by 12% in the Federation of Bosnia and Herzegovina (FBiH) during the first eleven months of 2009,while, somewhat unexpectedly, rising by 18% in Republika Srpska (RS)2. The rather high value of the index for theoil producing sector, thanks to production starting at the Bosanski Brod refinery, throws considerable light on thereasons for the disproportional results in RS when compared to the FBiH.

While the trends of the Index of Industrial Production differed by entity, unemployment rose in both of the entitiesof BiH. Compared to 2008 the figure grew by 23,000 people (approximately 5 %)3. It is interesting that unemploymentgrew more in RS (6.3 %) than in the FBiH (2.7 %) during the first ten months of 20094.

Retail prices in BiH fell moderately in both entities when compared to the same period in 2008, which is one of thesigns of recession5. In the monetary field, the Central Bank of BiH reported a fall in foreign currency reserves duringboth 2008 and the first six months of 2009. However, during the second half of 2009 there was a moderate rise intheir level, which is a positive sign.

2 Federal Statistics Office Mjesečni statistički pregled No. 12, Year XIII, December 2009; Republika Srpska Statistics Office Mjesečno saopštenjeNo. 219/09: Indeksi industrijske proizvodnje December 2009.

3 BiH Statistics Agency Statement: Registrirana nezaposlenost u Oktobru 2009, No. 10, Year III; Federal Statistics Office Mjesečni statistički pregled broj 12, Year XIII, December 2009; Republika Srpska Statistics Office (www.zzrs.org), December 2009.

4 Statistics Agency of BiH Statement: Registrirana nezaposlenost u Oktobru 2009, No. 10, Year III; Federal Statistics Office Mjesečni statistički pregled broj 12, Year XIII, December 2009; Republika Srpska Statistics Office (www.zzrs.org), December 2009.

5 Data for BiH: Statistics Agency of BiH Statement: Indeks potrošačkih 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 highestpercentage of the sample describing the economic situation as having deteriorated. Nearly 50% of the sample saidthat the economic situation has deteriorated, which appears to be an accurate reflection of the actual conditionsand the trends shown by the official 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 different response tothe situation (IV. THE BUSINESS ENVIRONMENT IN BiH). In fact, the November poll showed a significant positive turn-around in terms of the assessment of the economic situation in comparison to the year before. However, while theanswers received suggest that the economic situation in BiH has improved this should be interpreted as the businesssector saying that the situation is better than in 2008, but certainly not that there has been any major improvementin the economy. Therefore, if exactly a year ago the greatest deterioration in economic confidence in recent yearswas 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 official indicators (e.g., the condition of the foreign currency reserves of theCentral Bank of BiH), perhaps the worst of the recession in BiH has passed.

Despite the fact that most businesses described the economic situation as better6 the survey noted a sharp rise inthe level of corporate debt. It was assumed that during the recession that gripped the BiH economy in 2008 and2009 many companies decided to increase their level of debt in order to overcome the stagnation. Given such acourse of events it is no surprise that the percentage of business people who said they had made a loss was up onthe previous year.

In the section that analyses income and the social welfare system in BiH the data presented continues to illustratethe very poor socio-economic circumstances of the average household in BiH (V. INCOME AND SOCIAL WELFARE).Whereas official statistical data does not show a fall in living standards or purchasing power the results receivedthrough the poll show a clear reduction in spending within the framework of the household budget. The proportionof the household budget allocated for food has increased, which has left insufficient room for the other needs to bemet. The number of households in BiH living on an income of less than 500 BAM monthly has increased7. The reasonsfor these trends may well lie among the consequences of the economic crisis: job losses may have reduced the incomeof individual household members along with lower salaries in certain areas or branches of industry and a reductionin pensions and benefit 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 months8. Thecurrent situation and an uncertain future have increased the number of respondents who would support publicprotests, strikes and demonstrations. The situation is particularly worrying in the FBiH, where almost two-thirds ofrespondents 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 excludedon some grounds (VI. SOCIAL INCLUSION). This impression received confirmation through the fact that work on theSocial 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 ofthe 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 socialexclusion, although the economic crisis has increased the number of people excluded on the basis of unemployment.The current unemployment insurance system allows for benefit payments to only 2% of the unemployed, while thebasic role of the employment bureau has been reduced to securing the right to healthcare. Generally speaking, theeconomic 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 situationis similar when the sample is examined from a gender perspective, where the levels of cash income favour men andother disparities can be found in the enjoyment of legally guaranteed employment-related rights. The failure of thesepolicies to provide enough support for a decent standard of living is most likely a contributing factor behind thedesire 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 certainareas of BiH is 'partly' responsible for denying certain groups equal participation in formal institutions and otherspheres 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 previousreporting 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 tothis 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 (particularlybetween 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 particularlymarked 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 donot believe that the ethnic nationalist parties are the answer to their political problems, as has been the trend forsome 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 affiliation was somewhat stronger, as can be seen fromthe continued support of Croat respondents for the HDZ and the support of Serb respondents for the SNSD9. Yet inthe poll results most people seemed largely apolitical, at least with regard to support for political parties. A certainnumber of respondents either expressed no desire to vote or were unsure as to which of the parties on offer to givetheir vote. As a result of poor political relations in BiH the people's identification with both their ethnic communityand the State may have declined to some degree. This is mostly true of the Bosniaks respondents, whose level ofpride in both their ethnicity and the State has fallen more significantly during the recent reporting period than hasbeen the case for those who identified 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 theSecurity Stability Index (VIII. PUBLIC AND PERSONAL SECURITY). The reasons behind this modest fall can be attributedto the recorded increase in break-ins at privately owned buildings as well as the number of serious crimes in bothentities of BiH, namely murder. Public attitudes are most likely still influenced by last year's debates over public safetyand a number of unfortunate events that involved minors. In addition to the poor general sense of public safety, asreflected in the poll results, public perception in this regard may well have been influenced by the effects of theglobal financial crisis. This is also likely to be connected to the prospect of social unrest and dissatisfaction amongcertain 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 financial causes of public dissatisfaction that are likely to causepublic unrest are more important, at least to a certain degree, than the political, namely ethnic, factors which arenormally considered as playing the dominant role within BiH society. The percentage of the public who would taketo the streets over their national rights was considerably smaller than the percentage that would do so over joblosses. The data from the reporting period thus suggests the primacy for the individual of social/financial status overethnic/national rights in BiH. Similarly, there is interesting data which indicates that the age group most ready toprotest is for those between 36 and 50 years of age; one might have expected, as a general principle, that the youngergeneration 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 dissatisfactionwith the level of police assistance received. In RS, on the contrary, there has been a significant change in public dis-approval of special police actions. Similarly, more than half of the sample said that they thought corruption was afactor 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, reflects the political context in which the police operate; the force's approval rating is higher inRS than in the FBiH, in spite of the high level of dissatisfaction with the actual police assistance received in RS and ofthe level of perceived corruption within the force. Like the police, the courts' public approval rating is also in decline.

Following the key findings of the previous summary it may be imagined that the life satisfaction of respondentscould be affected by many of the social, economic, political and other problems discussed in the report. In the lastpoll we included a question that asked respondents about their life satisfaction; a question that was replicated fromthe European Quality of Life Survey (EQLS). According to the results of the EQLS, residents of the EU are generallysatisfied and happy with their lives10 and report their life satisfaction to be at an average of 7 out of 10. Yet the situ-ation in BiH is quite different; the average value of life satisfaction was only 5.6 out of 10. If this result is comparedwith 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 highestlevel of life satisfaction was evident in Denmark at 8.5. Yet it cannot be said that the situation in BiH is necessarilyworse than in other countries in South East Europe, especially having in mind that life satisfaction in BiH appears tobe the same as in Hungary and slightly “better” than in Bulgaria and Macedonia. All in all, many problems discussedin 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, first findings, p. 2.

8

ContentsForeword....................................................................................................................................................................................... 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 Confidence in Government Institutions ...................................................................................................................... 24

1. The Reporting Period at a Glance ....................................................................................................................... 25

2. Different Ethnic Groups' Confidence in Institutions Vary Greatly ........................................................... 27

3. Support is Up for the Office 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 Differ 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 affects 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 Government’s 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 Affect .................................................................................... 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. Confidence 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 Representative s 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 .07

59.4

86.3

28.1

38.1

66.5 71.4

38.637.6

30.0

20.0

10.0

0.0Sept 08

FBiH

RS

Brčko 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. 00

2 40. 0

13.62

21.63

18.77

14 24.

10.80 10.53

11.53

Nov 08Nov 07 Nov 09Jun 80

Urban

Rural

No. of people who think they may lose their job duringnext three months (in %)

0. 00 10. 00 20. 00

17. 90

15.41

12.91

22.28

30. 00

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

0XII

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

32.730

20

10

0April

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 BiHare getting worse

100

Tota

l sa

mp

le %

90

80

70

60

50

40

67.0%

50.0% 50.9%

63.4%

75.0%

30

20

10

0March 08 June 08 Sept 08 Nov 08 Nov 09

All things considered, would you say that Bosnia andHerzegovina 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 Brčko district

11

Some people say that only the ethnic or ethnically affiliated partiesin BiH can protect the vital ethnic/national interests of the ethnicgroup 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 CroatsBrcko

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 EUFOR’s withrawal from BiH theremight be an another war?

Don’t know

No

Yes

64%

11%25%

No. of people who have confidence in others - November 2009 (in %)

25.0

18.3816.40

20.50

17.98

6.88

12.90

10.0

20.0

5 0. 0

15.0

0. 00

Minorities

Majorities

Bosniak majority areas Croatian majority areas Serbian majority areas

% who expect deterioration in BiH due to the current politicalsituation - 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

0Nov 07 Nov 08 Nov 09

Minority in BMA Minority in CMA Minority in SMA

% who expect deterioration in BiH due to the current politicalsituation

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

0.0Nov 07 Nov 08 Nov 09

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

800791

785771 781 786773

794

792

790 786

789

813795 798 792

793

793

783 785

790

01/09 03/09 05/09 07/09 09/0902/09 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

22.22Trends 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 09/0902/09 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 Duraković

1. The Political Stability Index2. The Reporting Period at a Glance

3. Public Pessimism at a Dramatic Level4. Support for the European Integration Process is High

5. More than Half will Not Vote for the Current Political Parties6. Conclusion

1. The Political Stability Index

15

The level of the Political Stability Index for 2009 was the lowest since our surveys began and is an urgent indicator ofpolitical conditions in Bosnia and Herzegovina. In a year that many consider to have be the least stable politicallysince the Dayton Agreement was signed negative trends have dominated not only political life at the state level andthe work of all state level institutions, but also lower level institutions. The economic crisis showed its teeth during2009; however, dealing with it has hardly been at the forefront of politicians' attention, no more than it has been apriority 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 clearsigns of declining interest and influence over political events within the country. Unfortunately, this process was notaccompanied by any improvement in the performance of the state level institutions during 2009, no more so than ithad been earlier.

Graph 1: The Political Stability Index11

110

100

90

80

70

60

50

40

Polit

ical

Sta

bilit

y In

dex

Chain index

Composite index

May00

Feb04

100

56

Apr02

101

56

Apr06

100

54

Jun01

96

56

Feb05

100

54

Jan03

96

57

Apr07

92

52

Jun08

90

48

Jan01

103

56

Sep04

100

53

Aug02

103

57

Sep06

96

52

Dec01

98

57

Sep05

94

49

Sep03

94

55

Nov07

96

52

Nov08

102

51

Aug00

96

5456

Jun04

94

53

Jun02

98

55

Jun06

100

54

Aug01

103

58

Jun05

96

52

Jul03

101

58

Sep07

103

54

Oct08

104

50

Apr01

103

58

Nov04

101

54

Oct02

103

59

Nov06

107

56

Mar02

96

55

Nov05

110

54

Nov03

101

56

Mar08

101

53

Nov09

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

2. The Reporting Period at a Glance

The negative political trends of 2008 continued and worsened during 2009, as the depth of the crisis affecting politicalprocesses in Bosnia and Herzegovina became clear. It would not be going too far to say that the State as a wholefounds 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 ofstate owned property, the status of Brčko district and a census. This was an attempt to kick-start the political processout of the dead calm that it had fallen into during the second half of that year. Yet it immediately became obviousthat the parties to the agreement held such different 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 theprocess 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 rulingcoalition a coalition in name only. Throughout the year increasingly aggressive signals were sent by the governingSNSD 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 otherhand, the Federation of Bosnia and Herzegovina was suffering from internal problems and increasingly poor relationsbetween the ruling SDA and HDZ BiH. Representatives of the Croat parties became increasingly vocal about howdysfunctional 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 offering any concrete plans for dealing with the crisis. As mentioned above, the performanceof 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 significant 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 hadnot met the conditions specified. 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, theEuropean Commission reported that Bosnia and Herzegovina had not made satisfactory progress in the EU accessionprocess, issuing its most negative progress report to date in mid-October 12. It is stated in the report that progresstowards EU accession has been negligible, that the political climate has significantly worsened, that only a smallnumber of the laws whose passage is required by the process have actually been passed and that the implementationof reforms continues to go slowly because of the absence of political consensus.13

By contrast, there has been significant progress on the path to European integration in the region. In early NovemberCroatia and Slovenia reached agreement over international arbitration to deal with the long-running border disputethat 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, athttp://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 effect as of 19December and means that the citizens of these countries can now travel to European Union countries (except GreatBritain and Ireland) without visas. At the same time, a clear message was sent to Bosnia and Herzegovina from theinstitutions of the European Union and the NATO alliance that there would be no relaxation of conditions and thatthe country would have to begin to meet its obligations.

The relationship of local officials to the international community also remained conflicted. While representatives ofparties from RS took a very clear stand on this issue by claiming that the international community was part of theproblem 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 theUnited States and the European Union. The former High Representative, Carl Bildt, together with US Deputy Secretaryof 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, amongstother things, reinforced the House of Representatives by increasing the number of deputies, increased the numberof deputies in the House of the Peoples, restrained abuse of the principle of the protection of vital national interestsand strengthened the role of the Chair of the Council of Ministers, but would have retained entity voting. The packagecontained changes which, in the view of many, seemed relatively modest and insufficient. The so-called ButmirProcess lasted a relatively short period of time, because after only a few rounds of negotiation and revision of theinitially proposed changes the final 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 Lajčak left to take up the position of Foreign Ministerof 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 facedwith a multitude of problems. One of his first decrees, intended to ensure the continued operation of the state ownedelectricity transmission company, “Elektroprenos BiH” 14, met with an exceptionally strong reaction from RS, whosePremier announced that it would be the last such decree and that any attempt to impose decisions in the futurewould 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 andHerzegovina. 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 extendingtheir mandate.

A decision was finally brought by the High Representative on 14 December when he issued a decree ensuring thatforeign 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 dissatisfied that the decree did not relate to foreign judges and prosecutors in all departmentsand in particular the Department for the Fight against Organised Crime and Corruption. On the other hand, the partiesfrom RS, led by the SNSD, refused to recognise the High Representative's decision as valid, calling an extraordinarysession of the RS National Assembly over the issue and even threatening to hold a referendum. A rare positive eventin the political life of BiH in 2009 was the country’s 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 flurry of diplomacy. Membershipof the Security Council is considered to be Bosnia and Herzegovina's greatest foreign policy success since the end ofthe war, though one must stress that the real challenges lies ahead. Given the domestic political climate and the diffi-culty of reaching consensus on issues where the country must have a single position, there is justified concern as tohow 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 wenoted 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 thatthings 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 Bosniaand Herzegovina was moving in the wrong direction. Pessimism was also at very high levels for the samples fromthe other two groups, though not as high: 71% of the Croat sample and 63% of the Serb sample shared the view thatthe State is headed in the wrong direction politically. It is important to note that there was a significant increase inpessimism amongst all three groups in late 2009 when compared to the same period in 2008, with pessimism up 11points 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% ofthe 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” was44%, a modest increase on the previous year, while the 18 to 35 age group continued to stand out in regard to thisopinion. The main change that we noticed relates to the 36 to 50 age group. In this group some 13% more of thesample (giving a total of 52%) stated that they would be prepared to leave Bosnia and Herzegovina to live in anothercountry. 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 offered the opportunity todo 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

Tota

l sa

mp

le %

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 7points, 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 ethnicgroups their views on the European Union itself differed considerably. As much as 70% of the Bosniak sample had avery 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 Serbrespondents 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 ofthe total sample thought that Bosnia and Herzegovina would benefit 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 benefit 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%

Brčko district

NoYes Don't know / don't answer

All things considered, would you say that Bosnia and Herzegovina will benefit frommembership of the European Union?


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 defined attitudes regarding how the parties are doing, as aconsiderably smaller number of individuals from this ethnic group, compared to the two others, failed to express anopinion 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 defining and implementing key reforms, while 90% described them asbeing insufficiently responsible and or accountable to the public and 89% took the view that they do not deserve toremain 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 itmight. This certainly suggests a considerable lack of confidence in the parties that represent the alternative to thecurrent Government, but nonetheless more than half of this ethnic sample believed that a change would bring animprovement.

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 partiesto be relatively successful in defining and implementing key reforms 35% said that they did, 25% said they did notand 38% were unwilling to answer the question. The response to other questions was similar: 27% of the Serb samplesaid the ruling parties showed sufficient responsibility towards the public, 33% said they did not, while 36% wereundecided. Some 30% of this group said that the ruling parties deserved to remain in power, but 20% said a changein the parties at the top would bring an improvement with regard to the implementation of key reforms and economicrecovery.

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 sufficient responsibility towardsthe 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 Table10 in annex).

It is also interesting to review the responses of the public when asked “What party they would vote for if generalelections were held now?” The first thing to notice is that more than half of all groups would not choose any of thepolitical parties currently on offer, while some 17% said that they had no intention of voting, 23% that they wouldnot vote for any particular party and 19% refused to answer the question as to whom they would vote for. The mostpopular of the political options on offer 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 levelof support the party enjoys with the Serb sample, 35% of whom said that they would vote for the SNSD. The partyhas practically no support amongst the other two ethnic groups. Serb sample support for the SDS fell visibly during2009 with just 4% saying that they would vote for the party right now, which is down by 7 points on the final quarterof 2008. One of the reasons for this may well be the appearance of a new party on the political scene in the smallerentity of Bosnia and Herzegovina, led by the former senior SDS party official Dragan Čavić. Approximately 2% of theSerb 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 respondentsfrom this group saying that, if elections were held at the time, they would vote for the HDZ. They are followed by theNarodna stranka Radom za boljitak at 4%, while support for the HDZ 1990 has collapsed with just 1% of the Croatsample ready to vote for this party, which is down 4 points on the final quarter of 2008. With the Bosniak sample, theSDP enjoyed the greater support (19%) then the ruling SDA (15%), although both parties saw their support declinein 2009. There was a significant drop in support for the Stranka za BiH during the reporting period, with just 2% ofBosniak respondents saying that they would vote for this party at present, down five points on the previous reportingperiod (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 thedomestic 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 falleneven further behind the other countries of the region, as confirmed by the fact that Bosnia and Herzegovina is theonly one (alongside Albania) whose citizens have not been granted a liberal visa regime by the EU, as well as the onlyone not to have made significant progress in the process of Euro-Atlantic integration. Our survey results well illustratethe general atmosphere of pessimism afflicting the country. It is particularly worrying that as much as 75% of thepublic 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 involvedto any significant extent in a political process for which it is, nonetheless, still an unavoidable element. The fact thateach 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 Office of the High Representative that depends on the agreement of states with verydifferent interests and positions, the question of responsibility for the current situation becomes a very complexproblem with multiple aspects. This creates a situation with no obvious way out, in which institutional responsibilityis a fluid category and the prospects for resolving the political crises are ever diminishing.

6. Conclusion

II. Confidence in

Government Institutions

By Dina Duraković

1. The Reporting Period at a Glance2. Different Ethnic Groups' Confidence in Institutions Vary Greatly

3. Support is Up for the Office of the High Representative4. 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 hashad a very serious impact on the performance of lower level authorities. In state level institutions it is already usualfor political crises to produce serious problems in their day-to-day operations, which in 2009 resulted in the failureto meet the conditions for progress towards Euro-Atlantic integration and the liberalisation of the visa regime. Infact, it was the failure of the state level Parliament to pass the required legislation that was the main reason for Bosniaand Herzegovina being left off the list of countries that are no longer subject to visa requirements by European Unionmember states, being denied inclusion in the NATO Membership Action Plan and receiving the worst progress reportto date in the EU accession process.17 The main aspects of state level institutional functionality remain much as inthe previous year with extreme politicisation of the political decision making processes, outvoting on an ethnic basisand a lack of compromise. In the absence of institutional mechanisms, which might help to mitigate these negativeaspects, state level institutions find 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 thedepth of the political crisis in the Federation is the fact that Mostar, a city whose Council is dominated by the SDAand the HDZ BiH, had no mayor for more than 14 months, because the two parties were incapable of agreeing onwhom to select. This resulted in complete gridlock in the City Hall, where it proved impossible to pass the city budgetand to finance 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 statuteswhich allowed a mayor to be elected by a simple majority in the third round of voting. Following this the sittingmayor, 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 institutionsfunction.

The difficulties that the Office of the High Representative has faced in its attempt to have a stabilising effect on do-mestic political processes are due to the fact that the representatives of the different ethnic groups have very differentviews on the work (and even the continued existence) of this institution, as can clearly be seen through our surveyresults. 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 significantly over the modus operandi of the Officeof the High Representative in Bosnia and Herzegovina. The new High Representative’s use of the Bonn authoritiescaused a powerful reaction in RS. Following his most recent decision, in December 2009, to impose a ruling on theextension of the mandates of foreign judges and prosecutors in state level judicial institutions, the Government ofRS 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 entitypopulation, given the failure to reach agreement over a countrywide census.

1. The Reporting Period at a Glance

17 European Commission 2009: Progress Report for 2009, available at http://www.delbih.ec.europa.eu/docs/ProgressReport20092.pdf.

Confidence in Government Institutions

26

The High Representative and a number of other international officials 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 theinternational community will take serious action should the RS institutions actually carry out what they have an-nounced.

27

2. Different Ethnic Groups' Confidence in Institutions Vary Greatly

The differences between how the various ethnic samples rate the institutions of government widened even moresignificantly during 2009. On the one side there are the Bosniak respondents, whose distrust of institutions at alllevels increased dramatically throughout 2009. Consequently, only some 15% of respondents from this group nowapprove of the job being done by state level and federal institutions, while as few as 9% expressed approval of thejob 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 growingapproval of the international institutions active in Bosnia and Herzegovina, so that 65% of Bosniak respondents ex-pressed confidence in the work of the EUPM (an increase of around 8%), while some 60% approved of the job beingdone by the European Union (up 6%) and 53% expressed their approval of the work being done by the institutionsrepresenting 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 nochange was noted, there has been an increase in the sample’s 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% ofthe Bosniak sample believed corruption to be very widespread in the Government of the Federation of Bosnia andHerzegovina, 63% considered this to be the case with regard to the Parliament of the FBiH, 76% with regard to theGovernment of RS (representing an increase of 12 percentage points) and 74% with regard to the National Assemblyof RS (an increase of 10 percentage points). If one adds to this the significant number of respondents who believedthat 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 groupbelieved that corruption is either "very widespread" or "present to some degree" within state level institutions andin the institutions of the Federation, while more than 90% believed the same to be true of the institutions in RS (seeTable 5 in annex).

In contrast, the views of Serb respondents were practically the reverse. This group approved, to a very significant de-gree, of the job being done by institutions at all levels of government. Some 49% expressed their approval of theperformance of state level institutions, while more than 40% did so for the institutions of the Federation. When itcame to approval for the job being done by the institutions of RS we noted, despite a decline compared to the endof 2008, that this group of respondents was still more likely than not to express its approval of the Government andthe National Assembly of RS. Thus, 67% supported the Government of RS (five points down on the previous reportingperiod) and 64% did so for the National Assembly of RS (down eight points). Compared with the previous reportingperiod there were no major changes in regard to international institutions in Bosnia and Herzegovina, with the levelof confidence found amongst this group varying from 33% for institutions which represent the United States 18 to44% for the OSCE (see Table 2 in annex). This group of respondents was, however, more convinced than in the previousreporting period that corruption is widespread. Thus, more than 70% of the respondents from this group believedthat corruption is "present to some degree" or "very widespread" in state-level institutions, although the percentageof 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 corruptionis 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 andSerb respondents. No change in opinion was noted with regard to state level institutions with 34% expressing theirsupport for the Presidency of Bosnia and Herzegovina and around 31% doing so for the Parliamentary Assembly andthe Council of Ministers of BiH. There was a moderate decline when it came to the entity institutions with between27% 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 supportfor municipal institutions of around 10 points (now at 26%). We noted a significant increase during the course of thisreporting 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 beliefthat 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 cameto 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 effec-tiveness of the state level and entity institutions had improved or deteriorated over the past five years. Thus, 51% ofCroat respondents, 47% of Serb respondents and 41% of Bosniak respondents believed that there has been no changein the effectiveness of state level institutions over the past five years, while 26% of Bosniak respondents, 21% of Serbrespondents and 19% Croat respondents believed that it has deteriorated (see Table 10 in annex). The picture wasvery similar with regard to the effectiveness of entity level institutions, with the exception that 28% of Serb respon-dents believed that the effectiveness of entity institutions has improved over the past five years, which is no doubtlinked to the significantly greater level of general approval accorded to the performance of entity institutions bymembers of this ethnic group (see Table 11 in annex).

Graph 1: Approval ratings for institutions 19

Nov 09Nov 08

0

10

20

30

40

50

60

Presidency BiHParliament

Council ofMinisters

FBiHParliament

FBiHGovernment

RS NationalAssembly

RSGovernment

MunicipialAuthorities

FBiHCantonal

Authorities

49

41 41 38 39 40 40

56

3934

322929

3231

32

39

19

%

I approve of the job being done by...



29

We noted a moderate increase in the approval rating for the Office 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 reflects 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 Office of the High Representative. The approval rating of the Serb respondents was35%, 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 beingimplemented by the Office of the High Representative. Looking at all of the groups combined just under 50% tooka positive view of the effectiveness of political, economic and public administration reform measures, while anticor-ruption measures were given a positive rating of 39%. The Office of the High Representative continued to receive byfar the best rating from Bosniak respondents, 71% of whom gave positive marks for the political reforms (up 15 pointson 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 themwe noted a modest increase in support for all of the Office of the High Representative's reforms during this reportingperiod: 26% had a positive view of the Office of the High Representative's measures in the area of political reform, asdid some 30% with regard to economic reforms and anticorruption measures. The level of support amongst Croatrespondents was around 39% for economic and political reform and around 31% for anticorruption measures (seetables 6 and 7 in annex).

Very significant differences 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 respondentswho believe that the High Representative's powers should be reduced (now 75%), while just 3% believed that theyshould be increased. The attitude of Bosniak respondents was entirely the opposite with 61% of this group (that is19 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 shouldbe reduced. At the same time, almost the same percentage of women was unable to answer this question (see Table9 in annex).

3. Support is Up for the Office 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 same22

9

61

33

24 2518

3 3

19

74

Don't know / don't wish

to answer

%

Are you in favour of the High Representative in BiH's powers beingreduced, increased or staying as the are?



31

4. Conclusion

The crisis in how government institutions function reached dramatic proportions in 2009. This was a consequenceof the absolute absence of institutional mechanisms which might be used to remove or at least mitigate the negativeimpact 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 theinternational community will solve the internal problems have not only been proven to be obviously unfounded,but actually presented an obstacle to finding solutions where they must originate from, namely the domestic politicalprocess. On the other hand, the calls from the representatives of RS for the full exclusion of international factor fromthe political process combined with obstruction within state level institutions left little room for optimism over whatmay be expected should that actually happen. Whatever the ultimate outcome of these various tendencies it is clearthat 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. Differences between the views held by the re-spondents of the different 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 opinionis an indicator of a deep political and institutional as well as social crisis.

III. The

Economic Situation in

BiH

By Adnan Efendić

1. The Economic Stability Index Falls2. Results for Industrial Production Differ by Entity

3. Increased Unemployment Still a Major Macroeconomic Problem4. Retail Prices and Central Bank Foreign Currency Reserves both Modestly Down

5. Balance of Foreign Trade Moderately Improved6. Public Opinion on the Economic Situation further Worsens

7. Conclusion

33

1. The Political Stability Index

The Economic Stability Index has seen a downward trend over the last three waves of polling. More precisely, therehas 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 confirmed for the umpteenthtime that public opinion in the country is of considerable relevance when looking at economic trends here. Thedownward trend in the Economic Stability Index held for both the chain and the composite indices. We would notbe surprised if this negative movement of the index were to continue in future surveys, as the impact of the recessionin Bosnia and Herzegovina is still noteworthy. There will be more on this when we deal with official statistics later inthe 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

May00

Feb04

Apr02

Apr06

Jun01

Feb05

Jan03

Apr07

Jun08

Jan01

Sep04

Aug02

Sep06

Dec01

Sep05

Sep03

Nov07

Nov08

Aug00

Jun04

Jun02

Jun06

Aug01

Jun05

Jul03

Sep07

Oct08

Apr01

Nov04

Oct02

Nov06

Mar02

Nov05

Nov03

Mar08

Nov09

Economic stability index for Bosnia and Herzegovina


In recent years industrial production has regularly recorded significant rates of increased production, both with regardto the economy of Bosnian and Herzegovinian as a whole and at the entity level; however, the impact of the globaleconomic crisis during the reporting year of 2009 did not pass BiH industry by. Consequently, industrial productionin the Federation of Bosnia and Herzegovina was down some 12% in the first nine months of 2009 compared to thesame 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 fewnegative consequences of the global crisis, which was primarily due to increased production of coke and petroleumderivatives 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 first 11 monthsof 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 significant reductionthe following three sectors suffered the greatest negative consequences of the economic crisis: the production ofmotorised vehicles, trailers and semi-trailers (-73%); the production of office machinery and computers (-59%) andrecycling (-36%).23 Clearly it was those sectors closely related to the automobile industry that recorded the highestrelative 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 hasbeen a modest improvement in automobile industry-related production at the level of the world economy we expectthe condition of this indicator to be somewhat better in the coming year.

22 Source: Federal Statistics Office Mjesečni statistički pregled No. 12, Year XIII, December 2009.23 Source: Ibid.

34

2. Results for Industrial Production Differ 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 No. 12, Year XIII, December 2009; Republika Srpska Statistics Office 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 some3,000% compared to the same period in 2008, which can be safely attributed to the start of operations at the BosanskiBrod oil refinery. Impressive rates of this sort are actually possible under conditions where production which waspreviously non-existent or producing minimal results is being started up. In any case, this impressive indicator, atleast in relative terms, did result in good average figures for industrial production in RS, which helps to explain thedifference between the entities with regard to their success in terms of industrial production. The least successfulsectors 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 forthe three sectors shows production of approximately 50% of the levels in 2008. 25

24 Source: Statistics Office of RS Monthly Statement No. 219/09, Indeksi industrijske proizvodnje, December 2009.25 Source: Statistics Office 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'sgreatest macroeconomic problems. It is true that the increase in the number of the registered unemployednoted over recent years came to a halt during 2008 and that the number of unemployed had begun togradually reduce during the year. Unfortunately, in 2009 we again saw an increase in the number of theunemployed in Bosnia and Herzegovina compared to the previous year, no doubt as a consequence ofglobal 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 levelin 2008. We also noted that women made up a higher percentage of the unemployed than men: 50.5% compared to49.5% respectively. If we look at the breakdown in terms of qualifications we find that the unemployed are mostlikely to have VKV or KV (craftsman and master craftsman) qualifications (183,325) followed by the NK (semiskilled orunskilled 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 first10 months of 2009 with 2.7% in the Federation and 6.3% in RS. It is worth noting that the percentage increase in thenumber of unemployed during 2009 was higher in RS than in the Federation, which is in sharp contrast to the resultsfor industrial production in the entities. In other words, while industrial production in RS experienced growth over2009 unemployment rose; this confirms our conclusions from the previous section that this was a matter of steeprelative growth in production only in certain sectors which did not generate sufficient new jobs during 2009 to reduceunemployment or even maintain it at the then current levels. In any case, unemployment remains a major macro-economic problem for Bosnia and Herzegovina and affects both entities; we may expect a further increase in thenumber of unemployed by the end of the year.

3. Increased Unemployment still a Major Macroeconomic Problem

Table 3.Unemployment in Bosnia and Herzegovina

Bosnia and Herzegovina 2007 2008 January2009

October2009

Total Unemployment in BiH 520,432 480,313 488,496 503,979

Unemployed Women in BiH 247,279 254,274

Unemployed Men in BiH 241,217 249,705

Unemployed Highly Skilled inBiH

12,516 16,083

Federation of BiH 342,174 351,444

Republika Srpska 134,798 143,305

Sources: Statistics Agency of BiH Statement: Registrirana nezaposlenost u Oktobru2009, No. 10, Year III; Federal Statistics OfficeMjese ni statisti ki pregled broj 12, Year

XIII, December 2009; Statistics Office of Republika Srpska, (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, particularlyfollowing the introduction of VAT in 2006, it would seem that 2009 brought a structural change. There was no increasein prices during the first 11 months of 2009, compared to the same period for the previous year. In fact, a modest fallin 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 confirmed that the economy experienced re-cessionary tendencies during that year. That is to say that just as the essential characteristic of an economic expansionis a gradual increase in prices, so that expansion and rising prices are trends that go hand-in-hand, prices often fallduring a recession. This is exactly what we are seeing in Bosnia and Herzegovina. While major price rises are not goodfor the economy the same applies to falling prices. However welcome they may be to the individual they are not anindicator 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 financing the budget, etc.Given that the Bosnian and Herzegovinian economy suffered all of the above during 2009 it is more than clear thatBosnia and Herzegovina was affected by the global recession during 2009 and that the modest fall in prices was sim-ply additional confirmation 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 inboth Bosnian and Herzegovinian entities. Thus, at the level of Bosnia and Herzegovina retail prices in the transportsector 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 casein both entities. Higher alcohol and tobacco prices were certainly due to the introduction of additional excise dutieson tobacco products, which occurred during the current year28 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 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 potrošačkih cijena u BiH u oktobru 2009, Year III, No. 11.28 Data for the FBiH: Federal Statistics Office Mjesečni statistički pregled broj 12, Year XIII, December 2009; Data for RS:

Statistics Office of RS Monthly Statement: Indeks potrošačkih cijena, No. 217/09, December 2009.

38

And finally, 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 atthe annual level, with a total value reaching 6.7 billion BAM in December 2007. However, as previously noted, therewas a reduction in the foreign currency reserves during 2008 and in the final month of the year it was some 400million 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 first six months, practicallyfrom month to month, but also that their level began to rise modestly in July 2009 and by October 2009 it was alreadya little higher than it had been in December 2008. There was a further modest fall in the value of the foreign currencyreserves 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: Predicting retail price trends in Bosnia and Herzegovina, 2006-2009 29

39

In any event, it is not difficult to surmise the reason for the reduction recorded during and in particular at the end of2008. The global financial crisis indirectly resulted in the withdrawal of deposits from the Bosnian and Herzegovinianbanking system and this caused the foreign currency reserves of the Central Bank of BiH to be reduced. In our lastEarly

Warning System annual report (2008), with regard to the reduction in the foreign currency reserves, we stated thatit was a matter of a short-term reduction in deposits and that consequently there was no need to panic, as we didnot expect any such fall to jeopardise the functions of the Central Bank's Currency Board. Trends throughout 2009confirmed this, as the outflow of foreign currency reserves was effectively staunched and it can be expected that bythe end of 2009 the foreign currency reserves will be at a level similar to that of late 2008.

In any event, the global financial 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 maywell have passed and that positive developments are to be expected in the coming period, if not of the intensitythat we saw in previous years, and that there should certainly be no major negative trends regarding the level of theforeign currency reserves for this institution at the annual level.

Graph 3: Central Bank of Bosnia and Herzegovina foreign currency reserves in 2009 31


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 deficit on the other. During 2008 Bosnia and Herzegovinagenerated a deficit in foreign trade of more than 9.5 billion BAM, with an import-export ratio of 41%.32 In contrast tothese 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 oftrade, which affected imports, exports and the overall deficit. The total volume of Bosnia and Herzegovina's tradeduring the first 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

Table 7.The balance of foreign trade between Bosnia and Herzegovina and abroad(millions of BAM) for the periods of I X for 2008/09.

Jan Oct 2008 Jan Oct 2009 Change in %

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

Import Exportratio in %

43.0 % 46.6 % + 8.26

Source: Foreign Trade Chamber of BiH Pregled i analiza ostvarene razmjene za BiH for the period 01 to 102008/09, November 2009

4.6 billion BAM for exports. The resulting ratio of imports to exports produced a foreign trade deficit worth 5.3 billionBAM; the coverage of imports by exports was 47% (see Table 7). Comparing these indicators to those for the sameperiod 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 first 10months of 2008 to 46.6% for the same period in 2009. While the modest growth in the import-export ratio suggestsimproving trade conditions all of these changes may certainly be attributed to recessionary tendencies and reducedpurchasing power, both on the part of consumers within Bosnia and Herzegovina and in other markets. In otherwords, the modest increase in the import-export ratio, in combination with a significant reduction in the volume oftrade, can hardly be described as a positive development for the external sector of the Bosnian and Herzegovinianeconomy.

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 tradedeficit is Croatia: the deficit 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 allforeign 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 stilldominates imports, followed by fossil fuels. On the other hand, products from the ores, metals and related productssector lead when it comes to exports. Yet this sector was also the one to see the greatest relative fall in both exportsand imports. 34


34 Source: Ibid.

42

Following an analysis of the statistical indicators of the condition of the Bosnian and Herzegovinian economy weregularly 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 reflectthe actual economic changes and to a certain extent gain the public's prognosis of what the future holds. Withoutgoing into detail, we think that in previous surveys public opinion has proven highly consistent with what has actuallybeen 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 ofthe year before. Unfortunately, approximately one-third of the sample felt that the economic situation in the countryhad deteriorated, although answers in the third quarter of 2008 were somewhat more positive. Answers in the finalquarter were amongst the worst, with the largest percentage of the respondent group describing a deterioratingeconomic 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 inthe economy had worsened, while the percentage describing it as having improved was the lowest to date (5%) (seeGraph 4). Naturally, keeping in mind the global events and the series of economic, financial, banking, social and othercrises as well as the statistical indicators analysed in the first part of the report, there is little wonder that this was theresponse.

6. Public Opinion on the Economic Situation Further Worsens


Graph 4: How the public viewed the economic situation 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

51.551.5

57.1

15.5

27.0

10.8

34.5

5.4

45.947.0

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 weremore pessimistic, with a greater number of prognoses of economic deterioration. To be more precise, 48% of thesample 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 Brčko District. Moreover, the prognosesfor the coming period were also not optimistic and were generally worse than the projections we received during2008.

As usual, the most common response from the sample during all of the surveys in 2008, as well as the Novembersurvey of 2009, was that the economic situation in the coming year would not change significantly. Yet in earlier sur-veys the number that predicted deterioration was normally insignificantly larger than those predicting an improve-ment in the economic situation. In this survey we found twice as many respondents giving pessimistic estimates asthose 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 Bosniaand Herzegovina (see Graph 5). We did not identify any significant 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 situation in the coming year 37

74.9

63.071.8

81.183.887.587.6

60.262.8

54.7

40.0

50.0

60.0

70.0

80.0

90.0

100.0

Sep2006

Dec2006

April2007

Sep2007

Nov2007

Maz2008

Jun2008

Sep2008

Nov2008

Nov2009

%

Responses forecasting further price rises in BiH (as % of all responses)

36 Source: Table 9 in annex.37 Source: Table 10 in annex.

44

Industrial production fell by 12 % in the Federation during the first 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 atthe Bosanski Brod refinery, throws considerable light on the reasons for the results in RS. The main percentage increasein the Federation was in the production of tobacco products.

While the trends in the Index of Industrial Production differed by entity unemployment rose in both of the entities.The figure was up by some 23,000 in 2008, approximately 5 %. Unemployment grew more in RS (6.3 %) than in theFederation (2.7 %) during the first three quarters of 2009.

Retail prices in Bosnia and Herzegovina fell moderately in both entities of the country during the first nine monthsof 2009 when compared to the same period in 2008. Such a result represents a structural change compared to theresults for previous years, when we regularly recorded moderately rising retail prices. The cause of such trends wascertainly the reduction in consumption caused by the global recession, which did not pass Bosnia and Herzegovinaby. A fall in demand for goods and services as a rule leads to a fall in prices, such as has obviously happened in theBosnian 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 negativeimpact of the global economic and financial crisis. The reason for stating this is the reduction in the foreign currencyreserves during 2008 and the modest fall during the first six months of 2009. Yet during the second half of 2009 therewas a moderate rise in the level of the foreign currency reserves at the Central Bank and we hoped that by the endof the year this trend would have generated a value of reserves at a level a little higher than the balance at the endof 2008.

Looking at how the public viewed the economic situation over the past year, in our November poll we noted thehighest 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” reflectionof the actual conditions and the trends shown by the official indicators. When comparing the answers to this questionbetween the entities the results from the Federation were less positive. Looking at the coming period most respon-dents did not expect significant changes, while just 15% thought that the economic situation in the country mightimprove.

7. Conclusion

IV.The Business

Enviroment in BiH

By Adnan Efendić

1. The Economic Situation in 2009 Better than the Previous Year2. Increase in Bosnian and Herzegovinian Company Debt

3. Institutional Problems Hinder Business Sector Development4. 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 surveyswe found that the best relative results were for the third quarter, the worst being for the final quarter of the year. Inthe diagram (Graph 1) we see that nearly 70% of the sample in the final 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 industrialistsin Bosnia and Herzegovina were encountering for the first 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 answersfrom the very end of the year (November 2009) to analyse. But when we did analyse the results received in responseto the question on the economic situation in Bosnia and Herzegovina in November 2009 we were positively surprised.What we found was a significant positive shift in business opinion, with nearly half the sample from the businesssector taking the view that the economic situation had improved compared to the previous year. While this resultwas 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 betterthan it was a year ago. This shift can only be interpreted as an announcement of better days ahead for the Bosnianand Herzegovinian economy, given that exactly a year ago we recorded the largest drop in confidence in the eco-nomic situation in the country to date.

1. The Economic Situation in 2009 Better than the Previous Year

Graph 1 Expectations regarding the economic situation 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

%

BetterThe sameWorse

The economic situation compared to the previous year


47

When we turn to look at our business sample's expectations for the coming six months we should remember fromour previous report that expectations for the first six months of 2009 were quite poor. If we look at the official statis-tical indicators for the first half of 2009 it seems that they were justified, confirming for the umpteenth time the fore-casts of our business sample. However, it appears that the deterioration of economic conditions that did take placeduring the first half of 2009 was less evident during the second half and, as we concluded in the economic sectionof this report, there may even be modest signs of recovery. Finally, when we came to business sector expectationsfor the first half of 2010, as with the previous question, we were again surprised by the positive shift which appearedin the answers to this question. It is true that the majority of the sample (57%) felt that the situation would be similarto what it was during 2009; however, given that in the final 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 expectthe economic situation in the country to deteriorate in the immediate future, which under the circumstances wemay certainly consider as a positive development. Moreover, a considerable percentage (38%) of the sample actuallyexpected 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 inBosnia and Herzegovina is behind us and that recessionary tendencies should not be expected in the coming period.

The Business Environment in BiH


48

2. Increase in Bosnian and Herzegovinian Company Debt

Business people in Bosnia and Herzegovina characterised the economic situation during 2009 as having improvedin comparison to the previous year. With business people we can be sure that their opinion is largely based on thefinancial performance of the companies surveyed. In other words, we may expect some improvement in their financialperformance, as the responses to our most recent survey confirms. Thus, an absolute majority of the sample (73%)40

said that they were, financially speaking, in a better position than the previous year, a response consistent with thoseof the previous section. Similarly, in the most recent survey we noted a considerably larger number of companiesmaking full use of their production capacity than was the case in 2008.41 Here one should perhaps keep in mind thatthe sample's responses relate to a comparison of current economic conditions with those of a year ago, so that therelative improvement we are registering does not de facto have to mean that the state of the economy is good. Wemay recall that the responses at the end of 2008 on the financial performance of companies were the worst we hadever received. Accordingly, all we can conclude is that companies in Bosnia and Herzegovina were in a better financialposition in November 2009 than they were at the end of 2008, which was the worst of the last several years duringwhich we have been monitoring the business sector.

Moving on to forecasts for 2010 we found that business people expected their financial situation to improve further,which is to say that they anticipated expansionary tendencies within the economy. According to the results of ourNovember poll a high percentage (73%) 42 of the sample expected their companies' financial position to improve,which is certainly a noteworthy level of optimism. There were no major differences between the entities in this re-gard.While most of the respondents took the view that their financial position had improved their answers regardingchanges to debt levels suggested that things are perhaps not as simple as they might seem. In fact, we have alreadymentioned that a relative improvement in their financial position in comparison to the previous year does not haveto 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 Source: Table 3 in annex.41 Source: Table 3 in annex. 42 Source: Table 5 in annex.

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 Business Survey - top 150, November 2009.

49

The sharp increase in debt for the absolute majority of companies in Bosnia and Herzegovina (67%) resulted in a verysimilar pattern of answers in both entities, which is sufficient indication of how business people have tried to mitigatethe impact of the global economic crisis. Thus, the impact of the economic crisis last year, which resulted in a fall inproduction for both domestic and foreign markets, as we saw in the economic section of this report, was certainlyone of the reasons why companies have sought a way out through increased debt. Of course, this increase in debt isalso partly due to increased investment; however, the steepness of the increase is certainly not due to a sharp increasein capital investment at a time when production and consumption were falling; rather it represents an alternativesource of business finance under conditions of economic stagnation.

Finally, we may find some confirmation of our earlier comments in the sample's response as to how their companiesperformed during the second half of 2009. As can be seen from Graph 2, while a plurality of companies was still ableto 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 off our analysis we may conclude that the financial position of most companies did in fact deteriorate, dueto increased debt and negative trading, but that when compared to the end of 2008 the financial 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

6967.3

32.731

2626

182016

18

Company trading in BiH


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 ourmost recent survey showed that a majority of companies held the view that the authorities provide at least somehelp in dealing with business problems. We may interpret this change in mood as a reflection of an attempt at thedifferent levels of government to take measures to mitigate the economic crisis and in particular the commitmentof 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 ourinterpretation 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 loweri.e., cantonal and municipal levels of government that received the worst rating.

As well as our analysis of the Government's effectiveness in providing support to business people in Bosnia andHerzegovina, 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 thelast 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


44 Source: Table 8 in annex.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 identified high taxation rates, unfair competition, po-litical instability and the courts as the main problems facing business. In our last survey, conducted in November2009, 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 first 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. Yetif we take an average of the results for the last three years we find that the main obstacles have been unfair compe-tition and corruption. These were identified as obstacles by an average of 70% of the business sector, which is a clearindicator of what the main barriers to business in Bosnia and Herzegovina are as well as what should be the prioritywhen 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


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 efficiency of the "relevant" institutions inBosnia and Herzegovina from the beginning of 2008. Having identified the key economic and non-market institutions(or state organisations) of relevance for business performance, in the hunt for economic growth, we then wanted tosee 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 thebusiness sector and economic growth, in November 2009 companies in Bosnia and Herzegovina ranked the followingas the least effective: the legal system, the entity tax administrations, the Directorate for European Integration, thebanking agencies and the Foreign Trade Chamber of Bosnia and Herzegovina. While the legal system was regularlyranked very poorly in previous surveys, our most recent research is interesting primarily because of the poor showingof 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 Europeanintegration. How far Bosnia and Herzegovina is lagging behind its neighbouring countries on the path towards Eu-ropean integration must certainly have influenced this climate of opinion. Let us not forget either the series of recentproblems related to filling 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 thatone of the possible reasons for this view is the uncertainty in the banking sector (e.g., the increase in interest ratesand credit conditions) that followed the global financial 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 effective institutions.They are the key state level institutions responsible for macroeconomic stability in the country and thus for monetaryand fiscal 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) andday-to-day business. This is why we regularly monitor the answers to a question on how much people in the businesssector use informal institutions.

certainly have influenced this climate of opinion. Let us not forget either the series of recent problems related tofilling the most senior positions in this institution. Moreover, the banks, which had previously received relatively goodmarks, 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 financial 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 effective institutions.They are the key state level institutions responsible for macroeconomic stability in the country and thus for monetaryand fiscal 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) andday-to-day business. This is why we regularly monitor the answers to a question on how much people in the businesssector 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


54

It is interesting to note that the results for all the quarterly polls in 2008 indicated that informal institutions are usedextensively in Bosnia and Herzegovina. Informal connections and contacts are used to a greater or lesser extent byclose to 70% of companies, a percentage that increased significantly in the November survey. 46 Thus, in the mostrecent survey more than 20% of the sample used informal institutions to a great extent, while more than 60% usedinformal connections and rules of behaviour to a somewhat lesser degree (see Table 11 and Table 12 in annex). Thevast majority of the business sector sample used alternative informal institutions on an everyday basis and we noteda modest relative increase in the number of respondents that held this view in the last few surveys, most particularlyin our most recent quarterly poll.

Lastly, the efficacy 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 costsand 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 ofthe November survey, an absolute majority of the sample (more than 80%)47 thought that they face higher transactioncosts 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, whichis certainly given little attention in official statistics, in spite of the clear hindrance this represents to local companiesin 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 identified by the business sector as a majorproblem for the success of their business activities. According to the results of our November poll, direct paymentsto 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 difference between the entities in the results.49 With regardto indirect or opportunity costs incurred by the business sector, our attention was drawn to how high the estimatesof these costs were, as can be seen in Table 6.

In 40% of companies the indirect costs of the business sector were between five and ten percent higher due to poorinstitutional performance, regardless of whether we were looking at the sample for Bosnia and Herzegovina or atthe entity samples (the estimate for Republika Srpska was slightly lower). There were also a large number of forecastsin the 10 to 20% range (26% of companies), which is an exceptionally high level of costs. All in all, the estimates forinstitutional 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 official 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 Source: Table 15 in annex.

55

And finally, amongst the results of our November poll we have estimates as to how the efficiency/efficacy of statelevel and entity institutions may have changed over the previous five year period. Even though Bosnia and Herze-govina's progress towards the European Union and towards Euro-Atlantic integration is primarily dependent uponprogress in institutional terms it is equally interesting to approach these questions from the perspective of businesspeople, who provide a qualitative assessment of any change in efficiency.

As may be seen from the results for the responses to this question (Table 17), an absolute majority of the businesspeople surveyed held the view that institutions in Bosnia and Herzegovina, both at the state level and at the entitylevel, were less functional than previously. Thus, 63% of the sample said that state institutions have become lesseffective, while 53% said the same for entity level institutions. The answers we received did not differ significantlybetween the entities. In any event, not one response was recorded to the effect that state level institutions had im-proved their performance, as was also the case for the responses for entity institutions. Such a pattern of responsesmust surely be of concern and not just because institutional efficiency in Bosnia and Herzegovina has not improvedat 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 Source: The Business Environment Survey conducted for the UNDP Early Warning System by Prism Research: Business to Business Survey - top 150, November 2009.

56

In the surveys conducted during 2008 the economic situation in Bosnia and Herzegovina was assessed as deterio-rating. Yet we saw a significant positive turnaround in our recent November poll assessment of the economic situationcompared 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 greatestdeterioration in economic confidence 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 Bosniaand Herzegovina has passed. In addition to this assessment of the current state of business there have also beenmore optimistic prognoses for the coming period, in so far as a large percentage of companies said that they expectthe economic situation in the country to improve along with their own financial results.

Despite the fact that most businesses described the economic situation as better, we noted a sharp rise in our surveyin the level of corporate debt. We assume that during the recession that gripped the economy in 2008 and which weare monitoring to some extent in 2009 most companies sought a “way out” of the temporary pressures that lead tostagnation by increasing their levels of debt. Given such a course of events, it is no wonder that the percentage ofbusiness 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 financial position of most companies has in reality deteriorated as a result ofhigher debt levels and negative trading, but also that the business sector’s financial position is nonetheless still betterrelative to late 2008.

In assessing the effectiveness of the various levels of government in Bosnia and Herzegovina we have noted someprogress, particularly at the state-level. We interpret these responses in light of the fact that the business sector wouldseem to have recognised the Government’s efforts to help overcome the current economic problems that are facingthe 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 fiscal policy, which are the Central Bank of Bosnia and Herzegovina and the Indirect TaxationAuthority, to receive the best ratings. They have now been joined by the Foreign Investment Promotion Agency. Theworst 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 receivedby the Directorate for European Integration; we assume that this is due to Bosnia and Herzegovina’s regression onthe road to Europe, which has been evident for some time. We believe that the banking agencies received such alow rating because of a series of problems in the banking sector of Bosnia and Herzegovina, particularly related toquestionable interest rate hikes and credit conditions at a time of global financial 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 aresult of the institutions’ poor efficiency. Institutional effectiveness is not merely rated as low, but an absolute majorityof the respondents thought that it has declined over the past five years, particularly at the state level. Under suchcircumstances 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 informalinstitutions.

5. Conclusion

V. Income and

Social Welfare

By Aleksandar Draganić

1. The Social Stability Index for Bosnia and Herzegovina2. Number of Low-income Households Increasing

3. Crisis affects Public Expectations4. Purchasing Power and Living Standards in Moderate Decline

5. Minimum Living Standards and Social Protection Require more Attention6. 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 thefact that 2009 was a year of economic crisis. In November 2009 the Social Stability Index was at 46 points above itslowest level. Graph 1 shows the movement of the Index by quarters since the beginning of 2005. Reasons for thislack of change since the previous period may be sought in the similar number of low income households and thepublic's unchanged expectations and purchasing power. The condition of the Social Stability Index is certainly alsorelated 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 indicesthe 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

So

cia

l S

tab

ilit

y I

nd

ex

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 Source: Table 18 in annex. 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 significant link between the two indices.

Income and Social Welfare

59

In the final quarter of 2009 the number of households with less than 500 BAM in income rose in both entities and inBrčko District. The only group for which this trend did not hold true was the "minority" populations in Bosniak andCroat majority areas. For all other demographic categories (urban/rural, male/female, etc.) covered by our survey wefound an upward trend in the number of low-income households (income of less than 500 BAM monthly). It shouldbe mentioned that there was an increase in the number of households without income in November 2009 whencompared to November 2008, which not only reflects the consequences of the crisis but also the ineffectiveness ofthe 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 toworsen even further over the coming year, while some 40% expected household income to reduce and 15% of theemployed 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 notimmediately obvious from the official statistical data, as there was no change during 2009 in the average wage orprice levels. According to the response to our public opinion poll, one may deduce a reduction in purchasing powerfrom the fact that average household costs in November 2009 amounted to 767.5 BAM compared to 907.79 BAM inNovember 2008. This situation means that a given household is now allocating a higher percentage of its resourcesto food, clothing and footwear, while either reducing spending on other needs or simply doing without. At the sametime, official statistics show no change in the average wage in either entity. 53

At the same time, when we look at the official statistical data 2009 appears to have been a period during which theConsumer Price Index fell overall, regardless of the trends with regard to individual goods and services. If we look atthe data by the form of consumption for the first 10 months of 2009, in comparison with the first 10 months of 2008,we find that prices in Republika Srpska (RS) rose most for alcoholic beverages and tobacco, housing, fuel, restaurantsand 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

14.2411.53

10.5310.80

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 Source: Table 12 in annex.

60

the Federation of Bosnia and Herzegovina rose most for alcoholic beverages and tobacco, restaurants and hotelsand 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 (healthinsurance, child protection, pension and disability insurance and unemployment insurance) on the income andsalaries of the employed population. As 2009 saw the number of those employed fall, along with salaries in certainbranches, there was a reduction in the funds' income, with a concomitant increase in pressure on the resources avail-able to the funds from new beneficiaries. 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 ineffectual nature of the currentsystem and its capacity. With regard to the pension funds it was evident on the threshold of 2010 that the authoritieswere aware of the problems that lay ahead. The Government of RS draft budget for 2010 revealed their fear of abreakdown and an attempt to overcome the problems by increasing government transfers to the RS Pension andDisability 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. Itwill be very interesting to see how the authorities deal with the demands and needs of the beneficiaries of existingpublic funds, given the upcoming elections. 54



61

According to our poll results for November 2009 the number of low-income households (less than 500 BAM permonth) 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% to39% in RS and from 66.5% to 71% in Brčko District. It should be noted that the number of households with a monthlyincome above 1,500 BAM was similar at the end of 2009 to what it had been at the end of 2008 (around 5% in theFederation and around 2.5% in RS). Generally speaking, salaries were highest in the financial sector, followed bypublic institutions and companies.

With regard to income in what our methodology classifies as the majority areas the results of our poll in November2009 revealed an increase in comparison to November 2008 in the number of households with less than 500 BAMper month income in Bosniak majority areas (from 31% to 40%) and in Croat majority areas (from 16% to 27%). Thesetrends did not hold true for the "minority populations" in the areas where one of the constitutive peoples was in themajority. In fact, the number of low-income households amongst the minority populations actually fell in Bosniakmajority areas (from 50% to 49.5%) and in Croat majority areas (from 30% to 29%), although in contrast the numberof low-income households grew amongst the minority populations in Serb majority areas (from 56% to 59%). (Formore detail see Table 2 in annex.)

According to our November 2009 poll results there has been an increase in the number of low-income householdscompared to November of the previous year, both in urban areas (from 25% to 33%) and in rural areas (from 39% to44%). The number of low-income households also increased regardless of whether one took gender or age as thecriterion, 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

Brčko District


62

Before moving on, let us review the data from Table 1, which makes clear the increase in the number of householdswith no income whatsoever. Regardless of whether they lived in urban or rural areas or if the respondents belongedto 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 playeda 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, layoffs, civic protests and disturbances,social tension and the perception of an uncertain future. While domestic authorities are were looking for an answerto the question as to how the crisis was likely to affect 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 thataction be taken to meet the International Monetary Fund's conditions and the obligations under the Stand-byArrangement. Ad-hoc measures, an inflexible system and individual and institutional irresponsibility have aided theeconomic situation caused by the crisis to deepen even further, as could be seen from the daily media reports onlayoffs, 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 wereof 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 household’s economic circumstances had improved over the pastyear, were registered in our research in both entities as well as in Brčko District (see Table 2).

In regard to the expectations for the future, the number of optimists, that is the number of people who expectedthe 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 thecountry (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 isinteresting, especially at a time when salary cuts were announced in the public sector and difficulties were presentin the other sectors. At the same time, in both entities there was an increased number of people who expected theirhousehold cash income to decrease over the coming six months, namely from 14% to 22% in the Federation andfrom 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 affects 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 expectingtheir cash income to be reduced. If we take respondent age as our criterion then one can note an increase in thenumber 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 lastyear (2009) proved to be a year in which the economic crisis found expression through a levelling off of prices, theirstability and a modest fall through the year. When comparing the results of our November 2009 public opinion poll withthose of November 2007 and November 2008 we noted a fall in both entities as well as in Brčko District in the number ofindividuals who expected prices to continue to rise. Yet the announcement by the Bosnian and Herzegovinian telecomoperators of price corrections at the beginning of 2010 and the perceived moderate increase in the price of fuel and elec-tricity have probably affected 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 Brčko District who expected prices to rise remained low, at just 6% (seeTable 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

Nov 07 Nov 08 Nov 09

No of people who expect prices to rise (in %)

RS

FBiH

Brcko District

89.5183.87

100.00

78.08

74.9271.58

0.43

54.43

6.00


65

When comparing the data from our November 2009 public opinion survey to that of November 2008 the number ofpeople who thought that they might lose their job increased in the Federation, reduced in RS and remained un-changed in Brčko District (see Table 4). In November 2009 17% of the sample from the Federation and 13% of the RSsample 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 problematicstatus of a large number of employees in the private sector, particularly younger ones, in the absence of unions orunion organisation.

At the end of this section we will turn our attention to the number of people that supported the holding of publicprotests, 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 importantof these were protests by war veterans, servicemen and the disabled in Sarajevo; teaching staff in the Una-Sana Can-ton, public sector employees in the Herzegovina-Neretva Canton, the employees of the company “Vranica”, etc. Bycomparing the November 2009 public opinion poll to that of November 2008, as discussed in Chapter 1, we foundthat the number of individuals that supported the holding of public protests, strikes and demonstrations had in-creased in both entities as well as in Brčko 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 find 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 Brčko District (Graph 5);

• urban populations were more likely than rural populations to offer 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 proteststhan 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 find 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 affect their lives at the expense of the political and institutional issues that were previously dominant;

• in Brčko 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

Source: Public opinion polls conducted for this project by Prism Research

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 offices’ data on the movement of average salaries and the retail price indices allows usto conclude that there were no significant 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 ofthe data for the first 10 months of 2009 it was evident that there were no significant changes in the level of theaverage wage. By comparing data for September 2009 and October 2008 we found that the average wage in RS hadincreased by just 0.38% and that the average wage in the Federation had increased by just 0.56% (for more detailsee 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 CPI (Consumer Price Index) 99.90 100.10 99.90 99.00 99.90 100.00 100.30 99.90 99.90 100.60 Source: the entity statistics offices

Table 6Data on the average wage by sector for RS and the FBiH for December 2007, October 2008 and September 2009

RS FBiH

December2007

October2008

September2009

Wagegrowth(Sep09/

Oct 08)

December2007

October2008

September2009

Wagegrowth(Sep09/

Oct 08)Agriculture 537.00 659.00 573.00

13.05%607.03 727.30 680.05 6.50%

Fisheries555.00 683.00 609.00

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 vehiclerepairs and personal or householdgoods

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 andcommunications

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, rentaland business activities

688.00 676.00 625.00 7.54% 693.70 757.62 769.86 1.62%

Government administration, defenceand 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 work664.00 1143.00 993.00

13.12%827.28 971.48 972.09 0.06%

Other communal, social or personalservices

530.00 620.00 632.00 1.94% 702.45 744.77 761.56 2.25%

TOTAL on average 628.00 783.00 786.00 0.38% 696.74 780.51 784.86 0.56%

Source: the entity statistics offices

68

Comparing the data for September 2009 to that of October 2008 we saw that in RS employee wages had increasedthe 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 fisheries, retailand wholesale trade and the provision of personal and communal services. Certain activities experienced a fall inwages, for example agriculture, fisheries and healthcare in RS and in agriculture, financial mediation, transport, ware-housing, etc in the Federation. It is an interesting fact that in most cases, with the exception of financial mediation,the highest wages were in the public sector (administration, government offices, utilities, healthcare, etc).

During 2009 the level of the average pension and the lowest pensions in both entities stagnated, but there was asurprising increase in the maximum pension. According to the data of the entity pension and disability insurancefunds the average pensions paid out in November 2009 were 343 BAM in the Federation and 316 BAM in RS. Thisshows a decline of 6% in the Federation and of 1% in RS, compared to the average pension for November 2008. Atthe 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 (seeTable 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 stagnatedduring 2009 and even recorded modest deflation and a reduction in the cost of products and services. The entitystatistics offices’ data shows that the Consumer Price Index for October 2009 was around 1.1%, down on the indexfor October 2008 in RS and about 1.8% down in the Federation (see Table 7). If we compare the data for the first ninemonths of 2009 with that for the first nine months of 2008 we also find that average prices for goods and serviceswere about 0.5% down in RS and 0.2% down in the Federation.


Graph 6: Average, minimum and maximum pensions by entity 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

FBiH

RS

Max. pensionMin. pensionAver. Pension

58 Source: Table 12a in annex.

69

What is particularly worrying here is the increase in prices for communications services and for accommodation andfuel. While there was, by definition, 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 offering these products and services, with the knock-on effect on purchasing power and livingstandards. The November 2009 public opinion poll, in comparison to the November 2008 and November 2007 polls, reveals arelative increase in the amount of the household budget being spent on food (including coffee and drinks), as maybe 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 Source: Public opinion polls conducted for this project by Prism Research

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 official statistics, whichis the data on the Consumer Price Index, where the prices for these items have been reduced. It is also interesting tonote that households in both entities were allocating less to repay debts, for works around the house and for recreationand childcare. The explanation for this is no doubt hidden in the reduced purchasing power of the average Bosnianand 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 inNovember 2008, but just 767 BAM in November 2009 (which in any case is not sufficient to satisfy all of the needs ofthe average household in Bosnian and Herzegovina. 59 On the basis of this data, we may more comfortably assert thatabsolute 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 November2009 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 averageper 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

GASNov 09

Nov 08

59 It should be mentioned that the unions in Bosnia and Herzegovina have published the amount required to cover theunions’ consumer basket, which in October was around 1,600 BAM for a four member family, or twice the level of theannual salary/ average wage in either the Federation of Bosnia and Herzegovina or Republika Srpska.

60 Source: Table 14a in annex.

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 tochange 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 waspaid to the process of approving the right to make increased payments to the disabled veteran population, whichput 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 increasein 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 Brčko District described them-selves as being below the average with regard to their household economic situation. This pattern of opinion wasprobably to the result of the then current socio-economic position of almost of half the population in terms of theimpact 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 fromthe wages of the employed are used to pay pensions. The system has proved unsustainable, because it allows onlybasic social security to be covered. Yet, given the situation and trends in Bosnia and Herzegovina, the situation ischaracterised 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 theyounger generation. The system is financed on the basis of compulsory contributions for social insurance, which areproportional 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 currentsystem of financing and related legal and institutional problems.

Coverage for the unemployed by some form of unemployment benefit 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) confirms,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 benefits are based on other legal provisions) have the right to such benefits. .

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 Source: Public opinion polls conducted for this project by Prism Research


72

Herzegovina receive benefits, with minor differences by entity (2.2% in RS and 1.5% in the Federation).62 The socialwelfare system is considered ineffectual and in no condition to ensure minimum social protection for the unem-ployed. Unemployment benefits are regulated differently in the two entities (the right to unemployment benefitlasts 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 20million BAM is allocated annually in the Federation to finance health insurance for 200,000 beneficiaries 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 basedon contributions. 63 With such a large part of GDP going on cash payments Bosnia and Herzegovina allocates morepublic spending for this purpose than most other countries in Europe or Central Asia: expenditures are far higherthan 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 programmesthat are not based on contributions is fiscally very difficult to sustain, particularly given the looming impact of theglobal financial and economic crisis on the national revenue. According to a World Bank analysis, in spite of this sig-nificant fiscal allocation for cash-based social protection payments, which are not based on contributions, the worstoff amongst the population are still very poorly covered. One fact that is cited is that the lion's share of spending onthis type of benefit is transferred to individuals who are, statistically speaking, amongst the wealthiest fifth of thepopulation of Bosnia and Herzegovina. In contrast, those from the poorest quintile only receive 18% of all cash pay-ments for social protection (not financed from contributions), which means that this covers less than their percentagein 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), Bilješke o politici - socijalna davanja u Bosni i Hercegovini: kreiranje održivog sistema socijalne

zaštite zasnovanog na stvarnim potrebama, Sarajevo, Pp. 3-8.

73

Our November 2009 public opinion poll survey continues to indicate the very poor socio-economic circumstancesin which the average household in the country lives. While the official statistical data does not show a fall in livingstandards 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 spendingon food has increased, which leaves insufficient 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 Brčko Districtliving 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 salariesin certain areas or branches of industry and a reduction in pensions and benefit payments for certain categories ofthe 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, whilethe number of those in employment who felt that they might lose their job over the subsequent three months alsoincreased to 15%. The current situation and the uncertain future have moved large numbers to support publicprotests, strikes and demonstrations. The situation is particularly worrying in the Federation, where almost two-thirdsof the citizen body are prepared to protest.

Given how economic trends have resulted in reduced personal income and individual household consumption it ishardly 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 benefits and child and maternity benefits, which are entirelydependent upon salaries and wages paid within Bosnia and Herzegovina. To avoid the collapse of the current budgetsystem and the funds, in July 2009, Bosnia and Herzegovina activated a Stand-by Arrangement with the IMF: drawingdown 1.057 billion US Dollars. This "injection" by the IMF allowed for a temporary bridging of the problem, but thefundamental challenges remain to be faced, especially given the need to reduce public expenditure, reform the socialinsurance system and prevent a further deterioration of the social protection system.

6. Conclusion

VI. Social

Inclusion

By Aleksandar Draganić

1. Social Inclusion: How High is it on the Government’s Agenda?2. At the Last Count, more than Half the Population were Socially Excluded

3. Social Inclusion and Ethnic Division4. Consociational Democracy: Cause or Consequence of Social Exclusion

5. Conclusion

75

1. Social Inclusion: How High is it on the Government’s 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 beena focus on social inclusion/exclusion issues over the past couple of years. Nonetheless, the concept has still not foundits 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 confirmed by the fact that work has been ongoing on the SocialInclusion 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 BiHRomany Inclusion Strategy, passed in 2005, are obvious examples in support of this claim. The fact that certain typesof documents (policies, strategies, plans, etc.) are being adopted in Bosnia and Herzegovina without the appropriateplanning of resources to implement them is of particular concern. A glance at the state and entity draft budgets for2010 clearly shows that there has been no increase in the resources allocated for the realisation of these strategicdocuments against 2009.

Generally speaking, to be socially excluded means to be left out of the social mainstream and to be denied particulareconomic, 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 thewar and that were institutionalised after the corresponding separation of the "minorities" from the "majorities", whichled to the creation of approximately 30 new local government units. The war, which ended in 1995, institutionalisedthese ethnic differences within the framework of the administrative organisation of the country. If it is the governmentinstitutions, within the framework of the current administrative boundaries, that bear the burden of responsibilityfor social policy within the territories that they cover then it is fair to identify them as generally responsible for thepolicy of social inclusion. The inequality that has appeared in certain areas of Bosnia and Herzegovina, behind whichlies an ethnic background, continues to deny certain groups equal participation in social institutions and otherspheres of social life. 64

Another source of exclusion is the fact that some individuals and groups live in poorly developed areas with “fewprospects”. 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 ofthe fact that normally the geographical distribution of the population is the opposite. 65 The situation regardinghigher level decision makers is similar and therefore the policies intended to improve the quality of life for the ruralpopulation tend to be ad-hoc and even bereft of any real intention to actually do something in these areas. It hasbeen recognised that artificial barriers are created in backward areas and that these barriers limit the prospects forthe inhabitants to fully participate in the social mainstream and reduces their inclusion within the broader communityand the dominant system of values. In fact, individuals and or groups from backward regions are less likely to entereducational institutions (young people from such areas are less likely to attend school and tend to leave school ear-lier), suffer high unemployment and low-incomes, while part-time or temporary employment is the norm, as opposedto permanent employment.

76

Rural areas in Bosnia and Herzegovina also tend to suffer 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 easilyaccessible nor of an acceptable standard, while public transport is either not available or insufficient 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 findsher/himself. Some phases of life certainly render an individual more vulnerable or more exposed to social exclusiondue to circumstances, disease, disability or simply age. In this regard it is usual to mention two categories, namelythe young and pensioners, although the group also comprises single parents and the disabled. On the basis of recentresearch, 67 one can note that youth unemployment is approximately twice the average rate for the country. Pensionerincome is also many times lower, even though this group's costs can be many times higher due to their need fortreatment and care. In the absence of appropriate policy in the areas of employment, healthcare and social protectionmany 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 Bosnianand Herzegovinian society since the beginning of the 1990s. Changes to the social system, the introduction of marketprinciples 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 appearanceof a large number of socially excluded individuals is the economy and its collapse during the 1990s. Major structuralchanges have resulted in many people being unable to find a proper place in the labour market or to find employ-ment after losing their jobs in the great conglomerates. While many analysts and theoreticians talk of the need toimprove the education system so that Bosnia and Herzegovina can participate properly in the international divisionof labour, on the basis of competition, there has been little change conducive to this end in real life. These claims arebacked 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 itwas stated that more than half of the population of Bosnia and Herzegovina could be considered as socially excludedon one or other grounds. In fact, the General Social Exclusion Index, which measures the interdependence of livingstandards, health, education, inclusion in the social mainstream and access, showed that 50.32% of the populationwas socially excluded on some basis. In the meantime, there have been no major changes in social policy that mightreduce this disheartening data, but there are indications that the crisis which marked 2009 may in fact have led toeven more people becoming socially excluded.

Comparison of the November 2009 and November 2008 opinion polls revealed no significant changes with regardto social exclusion; however, the economic crisis has increased the number of people who may, on the grounds ofunemployment, be slowly becoming socially excluded individuals. While our surveys generally analyse the sample'sexpectations of job-losses, official statistics show that several tens of thousands of workers did in fact lose their jobsduring 2009, which is discussed in more detail in the economic section of this report. For data on expectations relatedto losing one's job sometime in the coming three months by entity (see Table 1).

Different education levels can contribute to the level of exclusion. One of the main causes of unemployment in Bosniaand Herzegovina is the general level of education. According to official statistical data69 the number of illiteratepeople in Bosnia and Herzegovina is somewhere around 5.5%, while the number of people who did not finish primaryschool is around 12%. Around 31% of the population went no further than primary school, while only just over halfhave finished secondary school. Just 8% of the population make up the group of individuals with some form oftertiary education.

While it is estimated that Bosnia and Herzegovina has more rural than urban inhabitants,70 development in recentdecades has left its mark on the situation and population in rural areas. According to economic indicators, confirmedby our survey results,71 household income and the general economic conditions are much worse in rural areas thanin urban ones (see Graph 1). The number of low-income households (income less than 500 BAM) increased during2009 in both rural areas and towns. According to our November 2009 public opinion poll, the number of householdswith 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 disabilityinsurance policies for farmers and farm labourers and the low level of participation in decision making mean that alarge 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

Source: Public opinion polls conducted by Prism Research

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 Incomeand 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 labourrelations, 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 arethe most vulnerable with regard to employment, as is evident from the Labour Force Survey data, which shows youthunemployment (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

Urb

an

Ru

ral

Nov 09

Nov 08

Nov 09

Nov 08

43.7

38.6

32.8

25.3

72 Source: Table 2 in annex. 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 thanthe rest when it comes to cash income. This group includes a lot of pensioners as well as people who lost their jobsduring the privatisation process and the restructuring of the former major conglomerates, as well as any hope offinding employment due to their declining physical abilities and obsolete education (qualifications and skills).

It is an interesting fact that as many as 28% of the people who belong to the 51+ age group have incomes below200 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 peopleliving without any income at all. The older population (65+) comprise around 15% of the overall population in Bosniaand Herzegovina. On the basis of their income levels, health and participation in the community many of them maybe 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+

Table 2Monthly household income, including all salaries and payments received by all household members: childallowance, pensions and any other source of income (in %)

18 35 36 50 51+Nov 08 Nov 09 Nov 08 Nov 09 Nov 08 Nov 09

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 3.9101 200 0.6 3.4 4.4 4.5 9.8 20.0201 300 2.0 4.8 5.5 2.1 15.6 11.7301 400 9.4 9.2 12.5 14.5 16.8 10.1401 500 1.0 2.6 1.4 3.5 2.8 2.3No. of households 17.1 26.7 27.2 31.8 53.2 52.3

Source: Public opinion polls conducted for the needs of this product by PRISM Research


80

and 13.3% of the Federation of Bosnia and Herzegovina75 (FBiH). Structural demographic indicators indicate that RSis one of the geographical areas with the oldest population profile, 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 populationand pensioners combined with a falling or, at best, unchanging number of employed places constant pressure onthe existing pension and disability insurance systems and funds, straining their sustainability. In times of crisis, suchas Bosnia and Herzegovina currently finds 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 arethree ways in which this is the case. The effects 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 mostnoticeable socially excluded groups. This can be seen not only through their limited political participation and accessto 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 November2009 (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 peoplesformed 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 classified them-selves as a minority in one or more of the territories was 49.5% in Bosniak majority areas (BMA), 29% in Croat majorityareas (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 importantdata contained in the table relates to the number of households that classified themselves as a minority and withoutincome over the previous three months. In November 2009 the number of such households in Serb majority areaswas 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 find temporary or part-time work, of the sortnormally done by this category of the population, has had a major impact on incomes themselves, particularly giventhe 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 financial 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 themajority populations in Bosniak or Serb majority areas, just as a smaller number of minority population householdswere in possession of telephone connections or cars (see Table 6). The reasons can certainly to be sought in terms ofthe difficulties experienced by returnees in integrating, the prejudices that certain majority populations have againstminorities and the corresponding reduction in opportunities for finding 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 futureprospects are poor.77 That the minorities are "more sceptical" than the majorities in Bosnia and Herzegovina is clearfrom the data on the sample's expectations in regard to their household economic circumstances over the comingyear. 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 Minority populations in

CMA Minority populations in

SMA Quarter Nov 08 Nov 09 Nov 08 Nov 09 Nov 08 Nov 09 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 Source: Public opinion polls conducted by Prism Research

Social Inclusion

77 Šporer, Željka, 2003: “Koncept društvene isključenosti”, Časopis “Društvena istraživanja”, No. 69-70, 2004, Zagreb, Institut društvenih znanosti. .

83

their economic situation to deteriorate was larger amongst the minority populations in Bosniak and Croat majorityareas. At the same time, the number of individuals that expected their economic circumstances to deteriorate wasless amongst the minority populations in Serb majority areas. The reason for such a situation is certainly not thatthere are a larger number of optimists amongst the minority groups in Serb majority areas, but because a greaternumber 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 different social and cultural activities. Regardless of the differences,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 remainingexcluded 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 noor only difficult access to the services that society provides then they are marginalised in the least certain parts ofthe 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 worldfor football teams to be supported regardless of differences over individual players or the clubs they come from thedivisions in Bosnia and Herzegovina go so deep that they affect this area of life. Thus, given the large numbers ofmembers of the Serb and Croat populations who identify themselves with the corps nationaux of their patron statesof 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 orcommunity from that of taking action within social institutions. The low level of participation in social institutionsdiffers 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 isa lack of harmony in Bosnia and Herzegovina when it comes to group and civic identity, as a reflection of participationwithin 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 andHerzegovina is a country where the linking of social capital predominates, but there is a low level of bridging and connecting of social capital, which confirms 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 theCroat 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 asimilarly strong sense of pride in belonging to their respective peoples. If we looked at the minority populations inthose areas where one of the constitutive peoples was in the majority then we found little or no difference in thenumber 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 majorityareas 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 Herzegovinamade 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 Herzegovinawe are led to reiterate our earlier conclusion, namely that Bosniak respondents tended to equate identity based onmembership 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 intheir 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 expresseda strong pride in their citizenship of Bosnia and Herzegovina had declined for the populations living in both Bosniakand Serb majority areas, while the number actually rose in Croat majority areas. These trends also held true for theminority populations in those areas where one of the constituent peoples was in the majority. An explanation forthis decline in the number of the “very proud” may be sought in the current economic and political situation, as wellas in the unfulfilled 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

Majority

Minority

Majority

Minority

Majority

Minority

Majority

Minority

Majority

Minority

Majority

Minority

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 onproblems related to polarisation of the different sides around these issues and constitutional changes there is verylittle actual engagement in these issues.

The lack of any consensus regarding the concept of multi-ethnicity and how it may be reflected in Bosnian and Herze-govinian society and the State, as well as the constant conflicts over the current model of consociative democracyand the Westminster Model of Civil Society, will continue not only to be a cause but also a consequence of the socialexclusion of a large number of individuals. In the absence of a common approach to society and the State it wouldappear that those who profit most care least for the problems and effects 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 Bosniaand Herzegovina.

Social Inclusion

87

Social inclusion still does not appear to be high on the agenda of government representatives, in spite of the factthat 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 confirmationfrom the fact that work on the Social Inclusion Strategy of Bosnia and Herzegovina has been ongoing already fortwo 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 benefit payments for only 2% of theunemployed, while the basic role of the employment bureaux is limited to securing the right to healthcare. Generallyspeaking, the economic situation is worse in rural than in urban areas, as a result of low and irregular income, theunregulated employment status of people working in agriculture and the current pension and disability insurancepolicy.

The situation is similar when we look at our sample by gender, where we found disparities between men and womenwith regard to levels of cash income (favouring men) and the enjoyment of rights under employment-related legalobligations. Systematic policies which do not provide enough support for a decent life continue to be one of themain 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 isethnic 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 higherlevels of unemployment and are generally financially worse off. The current political situation, like forecasts of thepolitical situation during the upcoming election period, is unlikely to be conducive to significant change in the policiesthat 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 confidence 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

Relationsand

Stability

By Eldar Sarajlić

1. The Interethnic Stability Index and the Political Context in Bosnia and Herzegovina2. Ethnic Division and Discrimination on the Rise

3. Declining Support for Refugee Return4. Social Distance: Party Politics and the Ethnic Affect

5. Ethnic Pride and the State of Bosnia and Herzegovina6. Conclusion

89

As shown in Graph 1, the Interethnic Stability Index has fallen by five points compared to the last report: from 77 to72. This decline represents the first break in the upward movement of the index in the past two years, from November2007 to the present. In November 2009 the index returned to the same level as it had held in March 2008. The fluc-tuation of the index over the reporting periods was, naturally, caused by the specific dynamic of political and socialrelations in BiH; therefore, this fall in the Interethnic Stability Index was not entirely unexpected, bearing in mind thepolitical events that occurred during the reporting period. Yet we can say that the fall in the index was due to boththe local and to the regional political situation as well as to the global situation, which has left its mark on Bosnianand Herzegovinian society. The global recession and the regional political context have also had an impact on thestability of relations between ethnic groups in BiH.

As a specific dimension of social relations ethnicity very largely reflects rather than determines social trends, as isparticularly 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 formof a growth in the importance of ethnic identity, it is evident that relations between different ethnic groups reflectwider geopolitical and geo-social forces. In other words, ethnic relations between individuals and groups dependdirectly 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: Predicting retail price trends in Bosnia and Herzegovina, 2006-2009 80

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80 Source: research conducted by Prism Research for the purposes of this project, November 2009.

90

influence all spheres of social life, as well as to guide its political and social development. Relations between ethnicgroups 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 anelection testifies 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 assumethat 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 AssociationAgreement, there has been no further major progress in mutual agreement between the political leaders of Bosnianand Herzegovina. The failure of the process of negotiations begun last year in Prud and conflict, not simply betweenbut within ethnic camps, have raised the perception of the ethnic situation and deflated public confidence in theprospect for an improvement in the overall political situation. This is particularly clear from the responses regardingperceptions 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 than70% of the sample is now of this opinion, with just 19% (compared to 30% last year) of the view that the situation isimproving (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 ofpolitical and cultural autonomy for the ethno-national community in BiH.

elations between the ethno-political communities and the international community are also difficult. This is partic-ularly true of the already traditionally poor relations between politicians from RS and the Office of the High Repre-sentative (OHR). In October 2007 Serb representatives walked out of state level institutions and threatened thefunctioning of the State of BiH itself, which raised tension between the ethnic groups to a new high. The disagreementbetween RS and the OHR had the potential to raise tension between Serb respondents and Bosniak respondents inparticular, because the nature of the conflict is highly complementary to the ideological differences and strategicpriorities of Serb and Bosniak ethno-politics in BiH.

Quite certainly, this and similar cases during the reporting period, which have been accompanied by quite sharpethno-nationalist rhetoric, have led to an increase in the number of cases of verbal harassment and physical attackon the basis of ethnic or national identity. The number of the sample that said they had been subject to harassmentor physical attack once on the basis of their ethnic or national identity in November 2009 was double what it hadbeen 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 five percentage points, from nearly 95% to 90%. The increase was similar for all three of thedominant ethnic groups in BiH, which bears witness to a widespread trend. The situation was somewhat more seriousin 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: ineach case the number of responses indicated that ethnic discrimination in BiH is slowly rising, which confirms thelower 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 attack 81

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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 regardingsupport for minority refugee return. Support has fallen by six full points from last year's 90% full or partial supportin towns to just 84% (see Graph 3). Support has declined in all surveyed categories: down four points in rural areasand five points amongst men and women. There has also been a reduction in support for minority return in all agegroups, averaging 6% (Table 2a in annex).

The question arises as to what could have caused such a significant fall in support for minority return. First, the overallpolitical situation is certainly not encouraging for the integration of minority returnees into a society determined bymajority ethnic norms. However, the trend of increased support for minority return registered in the previous tworeporting periods was positively refreshing. This trend was even to be expected, in the wider historical context, giventhe years that have passed since the preceding conflict and the cumulatively greater level of individual freedoms. Inthis regard, in comparison with the previous two reporting periods, when support increased by nearly 7 points, therehas 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 difficulties of achieving a political consensus on the future constitutional organisation ofthe 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: Questions related to return in Bosnia and Herzegovina 82

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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 thatthe continuous failure to reach political consensus reintroduced to the public discouraging the already fragile con-fidence 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 cometo conflict were, nonetheless, insufficient to maintain the trend of support for minority return in BiH.

This was also reflected in the moderate increase (up 3%) in the percentage of respondents that believed that if EUFORwithdraws from BiH war might once again be possible. What is of most concern in this respect and that will certainlyhave 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 thepast two years. In September 2008 the number was 17%, whereas in November 2009 it had risen to 25%. This beliefin the hypothesis of the coming of new conflicts is one of the key causes for the public’s lack of confidence in safeminority return. This fear was greatest among Bosniak respondents and it is amongst them that the largest rise inthe trend was noticed: rising from last year's 27% to the current 35%, amongst Serb respondents the increase wasmore modest from 20% to 21%, while it was only amongst Croat respondents that the trend was down, from 20% inNovember 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 Affect

Reflecting the overall situation, vis-à-vis ethnic relations, the reporting period saw a lower degree of acceptance ofcoexistence with members of other ethnic or national groups. The percentage for which it was unacceptable to livein the same state as Bosniak respondents grew by more than five points compared to last year, reaching 15% in No-vember 2009. This increase in the unacceptability of coexistence with Bosniak respondents was particularly evidentamong respondents who identified themselves as Croat by ethno-nationality and for whom such unacceptabilityhas risen a full 10 points on last year, from 12% in November 2008 to 22% in November 2009. This change may belargely explained by a shift in the political scene and a certain increased tension in relations between the Bosniakand Croat ethno-political blocks on a number of grounds, such as the radicalised debates on the establishment of apublic Croat language television channel and the so-called third entity. At the same time, there occurred a processof limited strategic rapprochement between the Croat and Serb ethnic parties, with concomitant activities by theprint media.

With regard to the Serb sample, the level of unacceptability of living with Bosniaks was similar to that of the previoussurvey, 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 theidea of a common life with Croats. In majority Serb areas the situation was more or less unchanged (88% considered itacceptable to live in the same state as Croats), while in minority ones the number was somewhat larger (96% comparedto 88% last year). The acceptability of living with Serbs was also in modest decline, from a total of 92% in the last reportingperiod to 88% in this one. This decline was low for Bosniak respondents, 93% of whom accepted the idea of coexistencewith Serbs (a 0.7% difference from last year). The same was for Croat respondents, 70% of whom approved the same ideawith only a 2% difference from last year. There were no major discrepancies between the answers of men and women tothese questions, any more than with regard to the questions regarding the desirability of living in the same neighbour-hood as people of a different ethno-national profile. Such an option was considered approximately as acceptable as livingin 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 different when it came to the matter of how acceptable itwas for family members to marry someone from a different 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 werein fact on average some 3 or 4 points lower for this reporting period compared to those collected last year (see annex formore detail).

Generally, even though the acceptability of coexistence is an idea that is accepted by the majority of all three Bosnianand Herzegovinian communities the level of acceptability is a little down on last year. It is to be expected that the trendwill continue to be determined by the dominant party-based ethnic politics, the political context and the burning politicalissues and problems.

Turning to the acceptability of the option of moving to a town where another ethnic group is in the majority on the basisof better employment prospects we found a somewhat more optimistic situation. Overall, 42% of both male and femalerespondents replied in the affirmative to this question, which represents a significant increase on the previous reportingperiod when the number of such answers was 33%. The main change was with the Bosniak ethno-national group, whosereadiness 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 affirmatively, 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 thepercentage 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 majoritydue to better job prospects to be explainable (that is, complementary to) the data on economic circumstances, giventhat it is directly related to the respondent's economic circumstances, but this does not seem to be the case. Whilethe percentage of Bosniak respondents who described their situation as generally poor 85 was quite high (around82%), 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 generallypoor, but also indicated in large numbers that they were not prepared to move to another "ethnic" town for betterjob prospects. It would appear that in this case the ethno-nationalist bonds are much stronger than the potential forchanging one's economic circumstances, which at least partially refutes the theory 86 of the rigid dependence ofethnic expression on individual socio-economic circumstances.

It is interesting that there were no major differences in the gender or urban/rural splits: rural respondents were just4% more willing to take such a step than those in urban areas. The variations were greater when it came to agegroups. More than half (54%) of the respondents in the 18-35 age group replied affirmatively to the question. Thisindicator could be explained by high youth unemployment and their inability to find work where they live. The con-clusion imposed by these indicators is that ethnic distance amongst the young could be reduced by the developmentof 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 thebasic reference for ethnic distance and stability in the political situation, we found little change in the answers fromthe previous reporting period, with just a moderate decline in support of a couple of percentage points. This meansthat, like last year, more than two-thirds of respondents (71%) believed that the ethno-national parties cannot ensurethe protection of the vital national (ethnic) interests that they so strongly advocate. As expected, this percentagewas highest in Brčko District (94%), while the difference between the Federation and RS was just 3% (70% versus73%). Turning to the different ethnic groups, we found the greatest level of support shown by Croat respondentswith 25% of respondents taking the view that the ethno-national parties can ensure their vital national interests. Thelowest level was amongst Bosniak respondents (12%). Some 20% of Serb respondents also took this view. Thesedifferences 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

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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 protection of national (ethnic) interests 87

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Nonetheless, if elections had been held the week following the interview questionnaire the balance of political forceson 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.

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98


Graph 6: The involvement of the religious communities in political events 88

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We see that nearly half of the sample was undecided with regard to their party of preference, while the other halfwas basically divided between the main ethnic parties (excluding the 7% who said they would vote for the SDP). Achange in preferences by Bosniak respondents for parties of their own ethnic provenance can be highlighted. Bosniaksupport 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 first time in these surveys, recorded3% of respondents saying that they would vote for them (see annex).

Moving on from party politics, the religious communities have also exerted a powerful influence in public life in BiHover the recent past. This is clear from the indicators of what the respondents thought about the influence of the re-ligious communities on political life in the country. Here we noted a definite increase compared to last year, whereas29% of the sample said that they thought the religious communities had a "strong" influence over political events,the current figure is 34%.

99

The fact that the situation regarding ethnic relations was somewhat worse during this reporting period comparedto the preceding one would suggest an increase in the level of ethnic pride, but the data shows that this was not thecase. The number of respondents saying that they were "very proud” of their personal ethnic identity decreased from83% 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 expressedsuch strong pride has decreased on last year by seven and nine percentage points respectively (from 85% to 72% forBosniak respondents and from 81% to 72% for Serb respondents). The level of ethnic pride recorded amongst Croatrespondents was insignificantly lower than before, by 0.1 of a percentage point and currently stands at 82%. Therewere no major differences between the various gender, urban/rural and age categories. In each of these cases thelevel of ethnic pride was a number of percentage points lower than last year. However, there has been an interestinginversion 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 environmentsas expressing strong pride in belonging to their people (which is understandable, having in mind the contextual andreactive nature of ethnic expression) there was an inversion in November 2009: that percentage is now somewhatlower in minority than in majority ethnic areas. Nonetheless, the explanation for the general fall in the level of ethnicpride 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 minorityBosniak 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

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5. Ethnic Pride and the State of Bosnia and Herzegovina


100

The overall level of pride in being a citizen of BiH has also been falling. During the previous reporting period thenumber who said that they felt "very proud” of being a citizen of BiH was 54%, while today the number is 47%. Themost significant change was to be found in the Bosniak sample where the indicator fell by more than 20 points overthe 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 Bosnianand Herzegovinian citizens was up, from 40% last year to 55% this year. It would appear that in this case the majorchange is to be seen in the Bosniak context, which may be largely explained in terms of not just the overall politicalsituation 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 affected all Bosnian Herze-govinian ethno-national groups. All of this has had an impact on the degree of civic identification with the State ofBiH, as well as on the level of pride in civic identity.


Graph 8: Levels of civic pride in Bosnia and Herzegovina 90

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101

We may conclude from the indicators for the last reporting period that relations between the various ethnic groupsin BiH have deteriorated moderately. This was evident from a number of indicators. The Interethnic Stability Indexwas 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 constitutionalchange, were largely responsible for this fall. As well as the ethno-political rhetoric and the regional and global situ-ations which have affected the trends within Bosnian and Herzegovinian society, tighter economic living conditions,the global recession and the regional political context have also affected 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, wereEUFOR to withdraw, war might break out again as well as an increase in ethnic distance (particularly between Croatsand Bosniaks) and a modest increase in the willingness to move to a town where another ethnicity is in the majoritybecause of better job prospects. This was particularly marked amongst the younger generation, obviously due to ofthe burning problem of unemployment. The people of BiH continue, to a considerable degree, to believe that theethnic nationalist parties are not the answer to their political problems. Unlike the Bosniak respondents, who appearto be disappointed by their ethnic political representatives, the support for the main ethnic parties of Serb or Croataffiliation was somewhat more marked, as can be seen from the continued support of Croat respondents for the HDZand even somewhat increased support among Serb respondents for the SNSD. However, most respondents seemedapolitical, at least with regard to party affiliation. A very large number expressed no desire to vote or were unsure asto which of the parties on offer to give their vote. As a result of poor political relations in Bosnia and Herzegovina thepeople's identification with both their ethnic communities and the State has declined to some degree. This was mosttrue of the Bosniak respondents, whose level of pride in both ethnicity and the State has fallen more significantlyduring 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 Sarajlić

1. The Security Stability Index: a Gentle but Steady Fall2. Collective Security: what after EUFOR?

3. The Global Economic Crisis and the Potential for Social Unrest4. Personal Safety and Criminal Activity

5. Confidence and Perceived Corruption within the Police and Judiciary6. Conclusion

103

1. The Security Stability Index: a Gentle but Steady Fall

Graph 1: The Security Stability Index for Bosnia and Herzegovina 91

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Following the two earlier reporting periods during which the Security Stability Index did not change we saw it fallmodestly in the most recent poll. Compared to last year, when stability was indicated by the index at 88 points, it liesone degree lower this year, at 87 points on the index scale.

There are a number of fundamental parameters whose influence on the condition of the Security Stability Index ofBosnia and Herzegovina are important to recognise. The first is that the general security situation has hardly changedcompared to the previous two reporting periods (during 2008), which were under the strong influence of lamentableevents related to juvenile delinquency and crime. While local and state level authorities have taken limited action inthis area (principally related to defining strategic steps at the local level and passing the proposed police reform Lawat the state level) the public impact of these measures seems to have been at best tepid. Further incidents involvingunderage individuals took place in Sarajevo, including one killing. Like the earlier killing of Denis Mrnjavac in 2008,the killing of Amar Mistrić in August 2009 provoked a reaction, albeit rather milder, that expressed the public’s ex-treme dissatisfaction with the level of public safety in the capital city of BiH. 92

91 Source: research conducted for the purposes of this project by Prism Research in November 2009. 92 See news archive at http://www.oslobodjenje.ba/index.php/flash/index.php?id=2043

Public and Personal Security

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The security situation was not much better in the other parts of BiH. According to data carried by news agencies inNovember 2009,93 there were 44 murders in Bosnia and Herzegovina during the first nine months of the year. Twentyfour of them were committed in the territory of the Federation of BiH and 20 on that of Republika Srpska (RS). Of thetotal number of victims seven were women; the remaining victims were men.

A major problem that feeds the public’s sense of a general lack of safety in BiH would appear to derive more fromthe inability of the law enforcement agencies to prevent such events in advance than from a lack of responsibility ontheir part for taking action after a criminal act has taken place. This would seem clear from the fact that of the 44above mentioned murders during the first nine months of 2009, only one remains unsolved, while the other 43 havebeen 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 inprison. 94 The effectiveness of police and judiciary action after the fact was in this case, no doubt due in part to thestrength of the public reaction. One may assume that this was also the reason for the similar response of the securityforces in the other cases. Nonetheless, it would appear that what most concerns the public is the relatively high levelof criminal activity throughout the country in the first place, which the police evidently have difficulty keeping aproper lid on. This includes the large number of cases involving weapons. According to UNDP data reported in themain print media, there was a 403% increase in the use of weapons in such incidents over the nine month period inBiH. 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 oružanih 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 whichthey will withdraw from the country. While this decision remains a subject of discussion at the European Union foreignpolicy level, the fact that this information has for some time already been a matter of discussion 96 in the media andin the public sphere in BiH has had a direct impact on the assertions of long-term security and stability in BiH. This isalso clear from the Early Warning System's data for 2009. In this year (2009) the number of people who thought thatwar might be a possibility in BiH, were EUFOR to withdraw, increased by some three points, from 22% to 25% (seethe discussion in the section on ethnic relations).

Given the political aspect of this question certain differences were certainly to be expected in how the differentethnic 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 amongstSerb respondents (from 20% to 21%) and none at all amongst Croat respondents, where the trend was in the oppositedirection (from 20% to 19%). Given the role of the international community in maintaining overall stability in BiHsuch trends are very understandable. EUFOR has a marked stabilising and political function in the country and soany change in circumstances will produce, at least at the rhetorical level, a significant reaction. This is particularlytrue 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 ofSerbia 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 sevenpoints, from 19% to 25% during 2009, but no particular deviations from the general trend were noted with regard tothe gender or urban-rural categorisations.

Graph 2: Responses regarding the possibility of a new outbreak of conflict 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 Source: research conducted for the purposes of this project by Prism Research in November 2009.

106

The visa liberalisation process is adding to the concern of certain population groups within the general public andis directly related to the possibility of EUFOR withdrawal from BiH. While perhaps not directly contributing to thepublic'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 announcementof the withdrawal of EUFOR from BiH. Two examples being the Bosniak sample, who, we assume, must feel ratherunder protected in the regional context and the respondents aged between 18 and 35, whose desire to travel andemigrate is significantly hampered under the visa regime, thus deepening the sense of concern over the situation ifEUFOR were to withdraw from BiH. As indicated in earlier United Nations reports in BiH, as well as by the Early WarningSystem, 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 inunemployment, were particularly worrisome because of the consequences of the financial crisis.98 The unemploy-ment rate, according to the most recent data, has peaked (see the section on economic stability). All this feeds intothe potential for social unrest in BiH, a country already considerably weakened by a difficult transitional period, acomplex privatisation process and an increase in social inequality and ethnic tension. The very process of integratingBiH into the global and regional economy presents an additional burden. The potential that this represents for thedevelopment of social dissatisfaction was clear to see throughout 2009, when particular categories of the population(veterans, disabled veterans and similar categories of social welfare beneficiaries) in the Federation displayed theirhigh level of dissatisfaction with the conditions for the entity Government's credit arrangement with the InternationalMonetary 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 suggeststhat the possibility for complications and more significant 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 significant changes withregard to the public pulse. The percentage of the sample willing to take part in public protests, for a given social orpolitical cause, averaged 50% or below during the reporting period. The major change during the period related tothe context of protests over job losses, where the percentage of the sample ready to protest in this case has increasedfrom 48% to 52% over the past year. It is interesting to note that social reasons seem somewhat more important thanthe 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 insignificant increase of 1.7% onthe previous year. Hence this data, to a certain extent, confirms the primacy of individual (financial) status over groupor 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 respondentsfrom RS: 60% compared to 38%. The latter suggests that the citizens of the Federation are rather more sensitive tothe problem of unemployment than those in RS. The sample from the Federation was generally more ready to protestagainst the entity authorities (47%) than the respondents from RS (34%); however, the trend in the Federation hasbeen downward since November 2008 (when it was 49%) and runs counter, at least to some degree, to the mediapicture 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 majorityprepared 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 official ethno-political discourse of the main parties. This applies in particular tothose with a Croat affiliation who argue that citizens from the Croat ethno-national group in BiH are extremely dis-satisfied with the level of political inequality. Yet in fact, this trend has been in significant decline, when it comes tothe 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 Table8 in annex).

With regard to gender disaggregation, it is worth noting that men were more likely than women to protest againstjob losses (55% compared to 50%), while the age group 36-50 was the sample group most likely to engage in suchactivities (63%). While the generally accepted opinion in contemporary culture is that the younger generation aremore ready to protest for various social, economic and political causes this does not appear to be the case in BiH: inevery question of this section it was the middle generation (from 36 to 50) that took the lead, while the youth andthe over 50s showed less willingness to participate in public protests (see Table 8 in annex). It would seem that thisdata confirms the claim of sociologists regarding the inertness of young people in BiH as both a cause and a conse-quence of their difficult socio-economic circumstances.


Graph 3: Responses regarding public protests, strikes and demonstrations in Bosnia and Herzegovina 99

25%

64%

No

Yes

Don't know

11%



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 theftand the theft of other valuables. Burglary of houses and apartments has increased overall from 1% in the previousreporting period to 3% in this reporting period. The rate of car theft has increased from 0.6% to 1.7%, while the theftof other valuables increased from 2% to 3% in 2009. There is an interesting difference between the entities withregard to car theft: while the percentage was somewhat higher in the Federation (4% when compared to 2008) itwas practically negligible in RS where 0.8% of the sample said that they or a family member had been the victim ofsuch a crime during 2009. Only in the territory of Brčko District was the level higher than in the Federation of BiH, byjust 0.7% (thus totalling 5%). In general terms, the level of recorded criminal activity in any of the categories waslower in RS than in the Federation (see Table 1 in annex). There could be many reasons for such a situation, rangingfrom the effectiveness of the police to the different levels of economic development and thus the opportunity fortheft in the first place. Similar differences were noted between rural and urban areas; the theft rates were practicallydouble in all categories in urban areas. Similarly, men were much more exposed to theft than women (see Table 1ain annex).

The number who sought police assistance on some grounds doubled from 4% in the previous reporting period to9% in the current one. While this doubling was recorded in both entities the resulting rate was considerably higherin the Federation where the number of those who sought police intervention rose from 5% to 10%, compared to anincrease 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 forwomen was 5 points up on the previous period, when it was 4%. Looking at minority and majority ethnic areas, itwas 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 inethnic majority areas.

110

The increase in the number of calls for police assistance was accompanied by an increase in the level of dissatisfactionwith 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 entitieswas interesting. While a higher level of criminal activity was recorded for almost all categories in the Federation thelevel 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


111

This data would appear to suggest that the different rates of criminal activity in the Federation and RS cannot bewritten off to different levels of police effectiveness. In fact, the only general conclusion that one can draw is that thepolice in the Federation seem to be more effective in providing assistance after a given criminal act has taken place(as confirmed by the previously mentioned fact of a virtual 100% success rate in dealing with murder cases), whilethe police in RS may be, to some extent, more successful in preventing criminal activities from happening in the firstplace.

Turning to the reports of police exceeding their authority during the reporting period, the data indicated a certainincrease 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%. Inthis case we also noticed a major difference between the entities. The percentage in the Federation increased bythree points (from 8% to 11%), but by nine points in RS (from 7% to 16%). We saw similar trends in the other variousrespondent categories: urban-rural, gender and majority-minority (see Table 5a in annex).


112

5. Confidence 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 thepolice forces in society, was that these institutions were generally perceived to be corrupt. Earlier UNDP reports drewattention to this fact, 101 which has received additional confirmation from the most recent Early Warning System data.Thus, 61% of the overall sample for BiH said that they believed that abuse of office, bribery and corruption werefactors in police operations. It is interesting that the situation was so similar in both entities, within 2 points, and inline with the general picture, although the trend in the Federation was downward while in RS it had increased a bycouple 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 2008figure of 61% to 53% this year. In the Federation the percentage was up by 8 points (from 42% to 50%), while it wasdown by three points in RS (from 76% to 73%).

Graph 5: Perception of the extent of police corruption 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.


113

One should note that according to the data from the reports the approval rating for the police in RS was undeniablyhigher than that of the Federation, even though other indicators, namely the data on the level of satisfaction withthe 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 respondedin the affirmative 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 inthe 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 downwardtrend 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 influenced by last year's debacleover public safety and a number of unfortunate events involving minors. In addition to the poor general sense ofpublic safety, public perceptions in this regard have been significantly influenced by the global recession and theeconomic problems that have appeared in BiH as a reflection of the global context. This is connected in particular tothe prospect for social unrest and dissatisfaction amongst certain categories of the population with state and entitygovernment economic policy. The data in this regard shows that the social and financial 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., ethnicfactors that are normally considered to play the dominant role in Bosnian and Herzegovinian society. The percentageof the public who would take to the streets over their national rights was considerably smaller than the percentagethat would do so over job losses. The data from the reporting period thus confirms the primacy for the individual ofsocial/financial status over political rights in BiH. Similarly, there is interesting data which indicates that those mostprepared to protest come from the 36-50 age group; one might have expected, as a general principle, that theyounger 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-nificant change in respect to public disapproval of special police actions: rising from last year’s very low level ofdissatisfaction with the level of police assistance of 18% up to 75% this year. Similarly, more than half of the samplesaid that they thought corruption was a factor in the police force, which has had a considerable impact on the overallperception of the police's role within society.

6. Conclusion

Special Insert on the Environment

By Igor Palandžić

116

Bosnia and Herzegovina, as a country in transition, is faced with numerous social and economic problems andamongst 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 naturalresources (timber, energy, etc.) and a supply base for the immediate and wider surrounding area. In recent yearsthere has been some progress towards improving environmental protection and the better management of naturalresources, but not enough. For sustainable development to be reached, as advocated by the EU, there must first bebetter links between the social and economic aspects and those of the environment. For this to happen the relevantinstitutions 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 decisionmakers. A public that is well informed on environmental protection issues is a key factor for the measures needed tointegrate 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 conductedfor the Early Warning System Report. From the results received (Graph 1) it is possible to conclude that the public iswell informed about the main environmental issues facing BiH today. They agree to a considerable extent with thestrategic documents prepared on this theme in BiH, which single out air and water pollution and the problems relatedto the creation of waste as the main problems. Public opinion in BiH on climate change (Graph 2) is also in line withexpert 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 public’s readiness to paymore 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 benefit the en-vironment in BiH.

These indicators offer some guidance for the political parties and leaders in BiH regarding the public’s increasinglevel of awareness on environmental issues and how they relate to sustainable development. Naturally, there is aneed to do more on additional education and programmes to stimulate environmentally responsible behaviour andthis approach should be used to encourage the public to engage in environmental protection issues and increasepressure on decision makers.

Public Awareness of Environmental Protection as an Issue in Bosnia and Herzegovina


117

Graph 1: Perceptions 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: Perceptions of the effects 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 Source: research conducted for the purposes of this project by Prism Research in November 2009.104 Source: research conducted for the purposes of this project by Prism Research in November 2009.

118


Graph 3: Support for environmental protection 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?


ANNEX

120

In which direction would you say Bosnia and Herzegovina is headed, given the current political situation?

AllGender

Sample Male FemaleMarch08

June08

Sept08

Nov08

Nov09

March08

June08

Sept08

Nov08

Nov09

March08

June08

Sept08

Nov08

Nov09

% % % % % % % % % % % % % % %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 73.1Better 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 17.9DK/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 8.9Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0Source: Public opinion polls conducted by PRISM Research

Table 1

100

Mach 08

Tota

l sam

ple

%

June 08

67.0 %50.0 % 50.9 %

63.4 %

75.0 %

Sept 08 Nov 08 Nov 09

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

March08

June08

Sept08

Nov08

Nov09

March08

June08

Sept08

Nov08

Nov09

March08

June08

Sept08

Nov08

Nov09

% % % % % % % % % % % % % % %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 62.9Better 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 24.2DK/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 12.9Total 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 2

How would you describe the economic situation Bosnia and Herzegovina is in?

Sample All Bosniak majority Croat majority Serb majorityNov 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 24.4Generally poor 36.6 38.3 40.3 36.4 23.1 47.1 46.8 37.9Neither good nor bad 29.8 17.7 21.3 15.4 46.8 20.6 32.9 35.4Generally good 2.9 1.1 1.2 16.2 0.7 3.1 0.6Very good 0.4 0.2 0.4DK/NA 1.3 0.8 0.9 1.6 3.7 2.5 1.6Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0TOTAL POOR 65.7 80.5 77.6 83.5 35.0 74.9 61.4 62.3Neither good nor bad 29.8 17.7 21.3 15.4 46.8 20.6 32.9 35.4TOTAL GOOD 3.3 1.1 0.2 1.2 16.6 0.7 3.1 0.6DK/NA 1.3 0.8 0.9 1.6 3.7 2.5 1.6Total 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 50March08

June08

Sept08 Nov 08

Nov09

March08

June08

Sept08

Nov08

Nov09

March08

June08

Sept08

Nov08

Nov09

% % % % % % % % % % % % % % %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 51.9No 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 39.0DK/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 9.0TOTAL 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?


March08

June08

Sept08

Nov08

Nov09

March08

June08

Sept08

Nov08

Nov09

March08

June08

Sept08

Nov08

Nov09

% % % % % % % % % % % % % % %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 32.7No 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 63.2DK/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 4.1TOTAL 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

Sept08

Nov08

Nov09

Sept08

Nov08

Nov09

Sept08

Nov08

Nov09

Sept08

Nov08

Nov09

% % % % % % % % % % % %Strongly support 50.9 48.5 54.7 72.2 74.5 82.6 45.6 34.3 38.7 29.3 20.2 29.4Somewhat support 24.7 27.4 28.4 15.8 15.2 11.8 19.4 44.0 31.8 34.9 36.7 43.8Neither 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 16.5Somewhat oppose 2.5 1.9 2.2 1.0 0.4 0.2 1.4 1.9 2.7 4.7 4.0 4.6Strongly oppose 3.9 5.0 2.4 0.1 0.7 0.8 1.9 1.1 2.0 8.8 11.7 4.5DK/NA 3.6 3.4 1.8 3.3 3.1 0.7 4.2 5.4 7.8 4.0 3.3 1.3Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0TOTAL SUPPORT 75.6 75.9 83.0 88.0 89.7 94.4 65.0 78.3 70.5 64.2 56.9 73.2Neither 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 16.5TOTAL OPPOSE 6.4 7.0 4.6 1.2 1.1 1.1 3.4 3.0 4.6 13.5 15.7 9.1DK/NA 3.6 3.4 1.8 3.3 3.1 0.7 4.2 5.4 7.8 4.0 3.3 1.3Total 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 Bosniak majority Croat majority Serb majority Br ko DistrictNov 09 Nov 09 Nov 09 Nov 09

% % % %Yes 86.7 67.6 74.5 77.7No 5.2 15.3 12.5 10.2! & 10 � � � & � � � & � � answer 8.1 17.0 12.9 12.1TOTAL 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 Bosniak majority Croat majority Serb majority Br ko DistrictNov 09 Nov 09 Nov 09 Nov 09

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

Sept08

Nov08

Nov09

Sept08

Nov08

Nov09

Sept08

Nov08

Nov09

Sept08

Nov08

Nov09

% % % % % % % % % % % %

DNZ BiH Demokratska narodna zajednica BiH 0.1 0.2 0.2 0.5 0.2Stranka za Bosnu i Hercegovinu 4.3 3.2 1.2 9.4 6.8 1.7 2.8SDA Stranka demokratske akcije 6.9 8.8 7.2 15.2 17.6 15.2 0.3 3.5Stranka 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 0.1Penzionerska stranka RS 0.1 0.2DNS 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 34.8Socijalisti ka partija 0.6 1.4Narodna stranka "Radom za 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 0.2SBBBiH Savez za bolju budu nost BiH FahrudinRadon i 1.2 2.6

DP Demokratska partija Dragan avi 0.9 2.2Some other party 0.1 0.3 0.2 1.1 0.8 0.2" 9/ ! 5vote 16.5 16.5 15.2 12.3 31.7 20.2 12.5 19.6None 9.8 25.0 22.5 14.0 28.5 29.7 6.8 36.5 23.8 6.7 16.2 14.6= 9; 4/ ! 58/ 9� � � 6/ ! 5decide 15.3 7.0 19.4 18.1 6.1 16.3 10.8 6.2 17.7 13.6 8.8 24.5No 6/4� ; 7� " 9/ ! 5answer 10.4 17.2 0.2 8.0 11.7 0.4 9.4 7.6 0.2 13.8 27.9Nasa stranka 0.4 0.0 0.7 0.8 0.3

Srpska radikalna stranka Republike Srpske 0.1 0.2

Gra anska demokratska stranka Bosne i Hercegovine 0.1 0.1 0.3 0.3

BSP Bosansko hercegova ka stranka prava 0.1 0.1Evropska ; 89� 9 86 stranka E 5 0.0 0.1Hrvatska stranka prava Bosne i Hercegovine api dr.� � 72 2 0.3 0.3 2.1 2.2Hrvatska demokratska zajednica 1990 0.7 0.6 0.1 5.1 4.8 1.0Nezavisna demokratska stranka 0.0 0.1Narodna � 9 / 16 ka stranka 0.1 0.1BOSS Bosanska stranka 0.8 0.2 0.1 1.7 0.4 0.2

SDU BiH Socijaldemokratska Unija Bosne i Hercegovine 0.1 0.0 0.3BPS Sefer Halilovi 1.5 0.1 3.3 0.2TOTAL 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0


126

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


Sept08

Nov08

Nov09

Sept08

Nov08

Nov09

Sept08

Nov08

Nov09

% % % % % % % % %

The parties currently ingovernment are relativelysuccessful at defining andimplementing key reforms

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

The parties currently ingovernment show a sufficientsense of responsibility towardsthe public


The parties currently ingovernment are capable ofmeeting the conditions forprogress towards European

Strongly agree 3.2 1.0 0.4 0.4 1.3 0.6 10.6 8.6 4.8Somewhat agree 5.6 3.2 0.5 5.0 8.7 3.9 25.3 24.7 24.3Neither agree nor disagree 20.3 21.2 9.4 41.3 35.1 27.1 30.4 36.7 43.1Absolutely disagree 62.5 67.2 87.6 39.3 26.8 54.5 23.8 20.7 24.2

Table 10

127

integration on time DK/NA 8.4 7.5 2.2 14.0 28.0 13.8 10.0 9.4 3.5Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0TOTAL AGREE 8.7 4.1 0.9 5.4 10.1 4.6 35.9 33.2 29.2Neither agree nor disagree 20.3 21.2 9.4 41.3 35.1 27.1 30.4 36.7 43.1TOTAL DISAGREE 62.5 67.2 87.6 39.3 26.8 54.5 23.8 20.7 24.2DK/NA 8.4 7.5 2.2 14.0 28.0 13.8 10.0 9.4 3.5Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

The parties currently ingovernment deserve to remainin office


Replacing the parties currentlyin government would helpaccelerate the implementationof reforms and the economicrecovery of the country



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3 12.0 2.40.0 100.0 100.0 1.6 41.2 31.3.0 38.1 51.75 0 6

% % %35.0 42.7 33.145.1 36.7 50.51.9 1.49.7 8.9 13.1

8.3 11.6 1.9100.0 100.0 100.034.4 42.8 32.145.2 36.4 51.72 0 0 6

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8.3 12.4 2.8100.0 100.0 100.040.7 39.7 30.535.1 39.7 51.70 9 0 6

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6 12.0 2.40 0 100 0 100 0 1

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8.9 12.0 2.2100.0 100.0 100.035.8 43.6 32.644.4 36.0 50.42.0 1.19.3 8.7 13.7

8.4 11.7 2.3100 0 100 0 100 0

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9.1 12.4 3.0100.0 100.0 100.040.9 39.1 31.435.6 40.3 50.80.7 0.5

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100.0 100.0 100.033.5 39.8 29.045.5 39.4 53.02.5 0.79.8 9.1 15.2

8.8 11.7 2.1100.0 100.0 100.032.9 42.1 30.846.3 37.6 52.22 7 0 9

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1.5 0.413.9 8.7 13.3

9.6 12.4 3.7100.0 100.0 100.0

128

Table 1II. 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

131

Table 2

Do you approve of the job being done by...?

132

133

134

Table 5

How widespread do you think corruption, understood as bribery or abuse of office for private gain is in the following institutions?

135

136

Table 6

How would you rate the measures taken by the Office of the High Representative in the following areas?

137

138

Table 7

How would you rate the measures taken by the Office of the High Representative in the following areas?

you think the HighR p powers should be reduced, y the same?

*Source: Public opinion polls conducted for this project by PRISM Research

139

Table 9

Do you think the High Representative's powers should be reduced, increased, or stay the same?

140

Table 10

Sept08

Nov08

Nov09

Sept08

Nov08

Nov09

Sept08

Nov08

Nov09

% % % % % % % % %

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*Source: Public opinion polls conducted for this project by PRISM Research

Table 11

Looking at the effectiveness of state-level institutions over the past five years, has it significantly improved, somewhat improved, stayed the same, somewhat deteriorated, or significantly deteriorated?

Looking at the effectiveness of entity-level institutions over the past five years, has it significantly improved, somewhat improved,stayed the same, somewhat deteriorated, or significantly deteriorated?

141

The Economic Stability Index for Bosnia and Herzegovina

Survey Chain index Composite index

Feb 05 96.83 61Jun 05 98.36 60Sep 05 96.67 58Nov 05 103.45 60Apr 06 101.67 61Jun 06 98.36 60Sep 06 101.67 61Nov 06 101.64 62Apr 07 98.39 61Sep 07 96.72 59Nov 07 96.61 57Mar 08 103.51 59Jun 08 100.00 59Oct 08 101.69 60Nov 08 100.00 60Nov 09 98.33 59

Source: Public opinion poll conducted by PRISM Research. November 2009. and thecalculations of the EWS team.

Index of the volume of industrial production in Bosnia and Herzegovina

Entity 1 12 20081 12 2007

Results achieved during 2009

11 20092008

1 11 20091 11 2008

Bestperforming

sector

Worstperforming

sector

Federation of BiH107.9 86.6 88.2

Tobaccoproduction

Car industry

Republika Srpska

116.8 129.6 118.8

Petrolproduction

Productionof technicalequipment

Source: Federal Statistics Office. Mjese ni statisti ki pregled. No. 12. Year XIII. December 2009;Republican Statistics Office of the RS. Mjese no ; 7* � � 8< 0� < $ No. 219/09. Indeksi industrijske proizvodnje. December2009

Table 1

Table 2

III. THE ECONOMIC SITUATION IN BOSNIA AND HERZEGOVINA

142

Expectations regarding prices changes over the coming half-year

BiHSep2006

Dec2006

April2007

Sep2007

Nov2007

March2008

June2008

Sep2008

Nov2008

% % % % % % % % %Falling prices 5.0 6.8 2.2 4.1 6.7 4.7 2.5 9.8 8.7Rising prices 54.7 62.8 60.2 87.6 87.5 83.8 81.1 71.8 74.9No change 33.7 25.5 26.0 2.9 3.8 7.9 11.5 13.1 11.6No answer 6.7 4.9 11.6 5.4 1.9 3.6 4.9 5.2 4.9

Source: Public opinion polls conducted by PRISM Research. November 2009

Unemployment in Bosnia and Herzegovina

Bosnia and Herzegovina 2007 2008 January2009

October2009

Total unemployment in BiH 520.432 480.313 488.496 503.979Unemployed women in BiH 247.279 254.274Unemployed men in BiH 241.217 249.705Unemployed Highly SkilledBiH

12.516 16.083

Federation of BiH 342.174 351.444Republika Srpska 134.798 143.305Sources: BiH Statistics Agency. Statement: Registrirana nezaposlenost u Oktobru 2009..No. 10. Year III; Federal Statistics Office. Mjese ni statisti ki pregled broj 12. Year XIII.December 2009; Republika Srpska Statistics Office. www.zzrs.org. December 2009.

Retail price index for Bosnia and Herzegovina

Retail price index 11 20090 2005

11 200911 2008

1 11 20091 11 2008

Retail price index for Bosnia and Herzegovina 116.0 99.3 99.6

Retail price index for the Federation of Bosnia

and Herzegovina 116.2 98.9 99.7

Retail price index for the Republika Srpska 115.9 99.7 99.5Source: Data for BiH: BiH Statistics Agency. Statement: Indeks 5! � 4! � : kih cijena u BiH u oktobru 2009.

Year III. No. 11.Data for FBiH: Source: Federal Statistics Institute. Mjese ni statisti ki pregled broj 12. Year XIII.December 2009Data for RS: Republic Statistics Institute. Monthly Statement: Indeks 5! � 4! � : kih cijena No.217/09. December 2009

Table 3 Table 4

Table 5

143

Foreign Currency Reserves of the Central Bank of BiH

Month Reserves

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 6089Source: Central Bank of BiH. www.cbbh.gov.ba. November 2009. Data refer tototal 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 � � � � � � � � � � � � � � � � � ! � � in %

Export 5.849 4.649 20.5 %

Import 13.598 9.984 26.6 %

Volume 19.447 14.633 24.76

� � � � ! � � 7.749 5.335 31.16

Import Export� � � " in %

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

BiHMarch2008

June2008

Sep2008

Nov2008

Nov2009

% % % % %Better 13.5 14.0 15.5 10.8 45.9Same 51.5 51.5 57.1 53.8 47.0Worse 34.3 33.7 27.0 34.5 5.4No 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

BiHMarch2008

June2008

Sep2008

Nov2008

Nov2009

% % % % %Worse 20.2 22.5 16.1 24.5 29.1Same 56.2 56.1 62.0 55.4 51.3Better 20.0 17.2 17.2 15.0 15.6No answer 3.6 4.3 4.7 5.1 5.1Source: Public opinion polls conducted by PRISM Research. November 2009.

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 0.3Source: Public opinion polls conducted by PRISM Research. November 2009.

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 66June 2005 4 39 57September 2005 2 42 56December 2005 5 51 44March 2006 7 41 53June 2006 7 39 54September 2006 17 38 45December 2006 13 40 47April 2007 16 51 33September 2007 22 34 43December 2007 9 29 62March 2008 12 35 53July 2008 9 35 55September 2008 12 35 53December 2008 4 28 68November 2009 48 46 6Source: 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 33June 2006 13 60 26September 2006 16 62 21December 2006 19 54 25April 2007 21 55 23September 2007 21 52 24December 2007 18 29 62March 2008 17 47 36July 2008 15 58 26September 2008 11 52 37December 2008 3 35 62November 2009 38 57 5Source: The Business Environment Survey conducted for the UNDP Early Warning

System in BiH project by PRISM Research. Business to Business Survey � top150. November 2009.

Table 1 Table 2

IV. THE BUSINESS ENVIRONMENT IN BOSNIA AND HERZEGOVINA

146

Capacity utilisation at company Survey Above At Below

% % %Bosnia andHerzegovina

December 2005 31 39 29March 2006 5 51 43June 2006 7 57 35September 2006 7 47 46December 2006 9 42 48April 2007 6 49 45September 2007 9 53 38December 2007 8 42 51March 2008 10 43 48July 2008 10 43 47September 2008 5 56 39December 2008 2 53 45November 2009 52 45 3

FBiHMarch 2006 4 50 45June 2006 7 59 34September 2006 8 49 43December 2006 11 42 45April 2007 6 51 43September 2007 11 54 35December 2007 8 47 45March 2008 12 42 46July 2008 10 46 44September 2008 4 61 35December 2008 1 53 46November 2009 51 48 1

RS March 2006 7 54 39June 2006 13 38 50September 2006 38 62December 2006 42 58April 2007 6 44 50September 2007 29 48 35December 2007 6 24 71March 2008 3 45 52July 2008 10 21 47September 2008 9 36 55December 2008 0 58 42November 2009 56 31 13

Source: The Business Environment Survey conducted for the UNDP Early Warning System in BiHproject by PRISM Research. Business to Business Survey � top 150. November 2009.

Table 3

147

Considering your company’s 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 21September 2007 62 24 14December 2007 46 34 20March 2008 50 32 17July 2008 35 41 24September 2008 28 46 26Decmber 2008 27 44 29November 2009 73 27Source: 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 company’s operations, financially speaking, to be...

Bosnia and Herzegovina Better The same Worse(%) (%) (%)

March 2008 50 36 14July 2008 45 46 9September 2008 31 48 21December 2008 21 36 43November 2009 73 27

FBiHApril 2007 55 41 4September 2007 54 38 7December 2007 27 47 26

March 2008 49 32 18July 2008 46 46 9September 2008 31 47 22December 2008 18 36 46November 2009 73 27

RSDecember 2005 23 52 26April 2007 78 11 11September 2007 58 29 10December 2007 53 12 35March 2008 52 45 3July 2008 41 48 10September 2008 27 55 18December 2008 25 33 42November 2009 75 25

Source: The Business Environment Survey conducted for the UNDP Early Warning System in BiH project byPRISM 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 company’s level of debt is...?

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

Sept2008

Dec2008

Nov2009

Sept2008

Dec2008

Nov2009

Sept2008

Dec2008

Nov2009

Sept2008

Dec2008

Nov2009

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 25Source: The Business Environment Survey conducted for the UNDP Early Warning System in BiH project by PRISMResearch. Business to Business Survey � top 150. November 2009.

During the first quarter of the year your company made a...

Profit Loss(%) (%)

March 2006 76 24June 2006 77 23September 2006 79 21December 2006 81 19April 2007 79 18September 2007 79 16December 2007 77 20March 2008 78 18July 2008 72 26September 2008 63 26December 2008 69 31November 2009 67 33Source: 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.

How helpful are the various levels of government to the business sector in dealing with business problems?

Very helpful Generallyhelpful

Neither helpfulnor unhelpful

Generallyunhelpful

Not at allhelpful

Sept08

Dec08

Nov09

Sept08

Dec08

Nov09

Sept08

Dec08

Nov09

Sept08

Dec08

Nov09

Sept08

Dec08

Nov09

State level1 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 28Cantonal 1 2 8 22 19 53 19 13 38 22 26 1 19 25Municipal 3 2 13 16 20 44 20 15 42 23 28 1 23 24Source: The Business Environment Survey conducted for the UNDP Early Warning System in BiH project by PRISM Research. Business toBusiness 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 allSept08

Dec08

Nov09

Sept08

Dec08

Nov09

Sept08

Dec08

Nov09

Sept08

Dec08

Nov09

Customs procedures 21 19 26 46 39 50 17 25 23 12 12 1Tax rates 39 48 9 33 28 48 17 17 41 6 2 2Unfair business practices 34 42 13 26 27 52 25 16 34 7 9 1Corruption 37 42 13 25 26 45 20 12 39 5 6 3How the courts work 43 45 22 22 26 36 20 16 38 5 3 4Political instability 26 34 19 39 27 42 23 24 36 3 6 3Labour market legislation 24 28 19 31 31 53 27 21 24 11 14 3Tax administration 20 19 7 34 38 65 29 29 27 9 9 1Work permit regulations 36 38 19 29 29 42 20 20 35 7 8 4Environmental regulations 17 17 17 35 36 49 30 23 32 9 12 2Safety regulations andstandards 11 14 18 28 30 53 36 31 27 13 15 2Lack of qualified personnel 17 19 19 34 34 49 25 26 31 16 14 1Source: The Business Environment Survey conducted for the UNDP Early Warning System in BiH project by PRISMResearch. Business to Business Survey � top 150. November 2009.

How well do the following institutions do their jobs?

Very well Well enough Quite poorly Very poorly

Sep08

Dec08

Nov09

Sep08

Dec08

Nov09

Sep08

Dec08

Nov09

Sep08

Dec08

Nov09

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 1Entity taxadministrations 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 1Directorate forEuropean 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 6Foreign TradeChamber of BiH 7 4 17 28 29 44 32 30 35 20 18 1Entity chambers ofcommerce 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 4Source: The Business Environment Survey conducted for the UNDP Early Warning System in BiH project by PRISMResearch. Business to Business Survey � top 150. November 2009.

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 10Source: The Business Environment Survey conducted for the UNDP Early Warning System in BiH project by PRISMResearch. Business to Business Survey � top 150. November 2009.

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...


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 12Source: The Business Environment Survey conducted for the UNDP Early Warning System in BiH project by PRISMResearch. Business to Business Survey � top 150. November 2009.

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


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 18Source: The Business Environment Survey conducted for the UNDP Early Warning System in BiH project by PRISMResearch. Business to Business Survey � top 150. November 2009.

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...)


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 21Source: The Business Environment Survey conducted for the UNDP Early Warning System in BiH project by PRISMResearch. Business to Business Survey � top 150. November 2009.

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 09March 08 BIH FBIH RS BIH FBIH RS BIH FBIH RS0 5 % 13 13 14 14 17 13 47 46 505 10 % 29 35 9 20 21 17 41 40 4410 20 % 22 20 32 28 26 29 9 1120 30 % 13 14 5 13 14 8 2 1 630 40 % 5 4 3 4 4 440 50 % 1 5 0 0 050 60 % 3 4 0 4 4 4> 60 % 1 1 5 7 0n.a. 13 9 27 13 7 25 1 1Source: The Business Environment Survey conducted for the UNDP Early Warning System in BiH project by PRISMResearch. Business to Business Survey � top 150. November 2009.

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 09March 08 BIH FBIH RS BIH FBIH RS BIH FBIH RS0 5 % 10 13 15 18 13 34 32 445 10 % 27 27 23 25 21 29 39 40 3110 20 % 26 33 5 21 24 13 26 26 2520 30 % 9 7 18 10 10 13 1 130 40 % 4 4 5 3 4 040 50 % 7 4 18 3 3 450 60 % 1 1 2 3 0> 60 % 3 1 9 7 6 8n.a. 13 10 23 14 13 21 1 1

Source: The Business Environment Survey conducted for the UNDP Early Warning System in BiH project by PRISMResearch. Business to Business Survey � top 150. November 2009.

Table 16

151

152

��

��

�� !��!�"��#$%&��' �(��)�� *�+��,�� &-.��-��/�� 0��+�� /�$��1/��

�

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 ko DistrictSept08

Nov08

Nov09

Sept08

Nov08

Nov09

Sept08

Nov08

Nov09

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 1.6101 200 2.2 4.3 7.0 6.7 5.6 14.9 13.5 8.7 34.5201 300 15.3 5.8 8.1 15.4 10.4 6.0 38.1 19.0 7.2301 400 15.7 12.8 13.0 17.7 12.5 6.8 18.9 20.4 17.6401 500 11.7 1.5 2.9 13.2 2.0 2.6 3.8 3.8501 600 9.5 8.7 11.8 6.7 6.2 19.0 3.9 14.1 7.7601 700 6.7 3.5 3.5 4.6 5.2 1.0 4.1 4.8701 800 5.5 9.4 4.3 2.3 8.2 7.9 5.9 9.6801 900 5.9 1.4 2.5 2.7 1.8901 1000 3.3 6.3 4.3 1.6 3.4 6.5 0.5 1.91001 1100 0.9 2.0 3.1 4.11101 1200 0.1 4.5 2.7 0.3 3.4 4.0 1.0 0.51201 1300 0.2 1.4 2.4 0.3 1.01301 1400 4.0 1.1 1.2 2.91401 1500 1.6 2.3 1.01501 1600 0.3 1.21601 1700 0.3 0.2 0.2 0.8 0.61701 1800 1.1 0.9 0.61801 1900 0.6 0.7 0.1 0.71901 2000 1.1 0.1 1.1

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

100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0June08

Sept08

Nov08

June08

Sept08

Nov08

June08

Sept08

Nov08

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 1.6101 200 2.2 4.3 7.0 6.7 5.6 14.9 13.5 8.7 34.5201 300 15.3 5.8 8.1 15.4 10.4 6.0 38.1 19.0 7.2301 400 15.7 12.8 13.0 17.7 12.5 6.8 18.9 20.4 17.6401 500 11.7 1.5 2.9 13.2 2.0 2.6 3.8 3.8SUBTOTAL to 500 47.0 28.1 37.6 59.4 38.1 38.6 86.3 66.5 71.4

June08

Sept08

Nov08

June08

Sept08

Nov08

June08

Sept08

Nov08

1501 1600 0.3 1.21601 1700 0.3 0.2 0.2 0.8 0.61701 1800 1.1 0.9 0.61801 1900 0.6 0.7 0.1 0.71901 2000 1.1 0.1 1.1>2000 KM/DM 2.1 2.1 0.4 0.9SUBTOTAL > 1500 0.3 5.4 5.2 0.0 2.4 2.8 0.0 0.0 0.0Source: Public opinion polls conducted by PRISM Research

Table 1

V. INCOMES AND THE SOCIAL PROTECTION SYSTEM

153


Sept 08 Nov 08 Nov 09No income 1.0 3.4 4.5< 100 KM 3.0 2.1 2.9101 200 4.2 4.9 10.9201 300 15.9 7.9 7.2301 400 16.6 12.9 10.7401 500 12.1 1.8 2.7SUBTOTAL to 500 52.8 33.0 38.9Source: Public opinion polls conducted by PRISM Research

Table 1a


Income in KM Bosniak majorityareas (BMA)

Croat majorityareas (CMA)

Serb majority areas(SMA)

QuarterSept08

Nov08

Nov09

Sept08

Nov08

Nov09

Sept08

Nov08

Nov09

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 4.5101 200 2.0 5.4 7.9 2.8 3.7 6.7 5.6 14.9201 300 17.2 6.0 7.3 8.7 5.0 10.8 15.4 10.4 6.0301 400 18.8 14.4 14.0 5.1 6.5 9.4 17.7 12.5 6.8401 500 12.2 1.6 3.3 10.0 1.2 1.3 13.2 2.0 2.6Subtotal 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

QuarterSept08

Nov08

Nov09

Sept08

Nov08

Nov09

Sept08

Nov08

Nov09

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 8.6101 200 2.0 9.3 9.1 1.9 6.6 6.7 11.8 7.7 11.7201 300 15.4 20.5 14.2 11.4 8.8 10.3 25.9 13.9 4.9301 400 24.5 13.7 17.2 10.8 9.4 8.0 16.8 23.3 10.2401 500 10.6 3.8 7.0 14.4 1.2 9.5 2.7 7.7Subtotal to 500 56.5 57.7 49.5 39.3 29.9 29.0 70.1 56.0 59.2Source: Public opinion polls conducted by PRISM Research

Table 2

154

155


Area Gender Age groupIncome in KM Urban Rural Male Female 18 35 36 50 51+

Nov08

Nov09

Nov08

Nov09

Nov08

Nov09

Nov08

Nov09

Nov08

Nov09

Nov08

Nov09

Nov08

Nov09

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 3.9101 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 20.0201 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 11.7301 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 10.1401 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 2.3SUBTOTAL 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 52.3Source: Public opinion polls conducted by PRISM Research

Table 3

Have your family’s economic circumstances changed over the past year (in %)?

BiH FBiH RS Br ko District

Bosniakmajorityareas(BMA)

Croatmajorityareas(CMA)

Serbmajorityareas(SMA)

SurveyNov08

Nov09

Nov08

Nov09

Nov08

Nov09

Nov08

Nov09

Nov09

Nov09

Nov09

TOTAL BETTER 10.76 5.43 10.24 4.72 9.39 5.40 43.77 20.17 4.3 6.2 5.4The same 53.78 47.00 51.95 44.77 58.24 50.58 28.00 43.73 44.8 44.5 50.6TOTAL WORSE 34.46 45.86 36.73 47.77 31.63 43.73 25.41 36.10 49.9 39.8 43.7DK/NA 0.99 1.71 1.09 2.74 0.74 0.29 2.82 0.9 9.5 0.3Total 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.0 100.0 100.0Source: Public opinion polls conducted by PRISM Research

Table 4

156

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

Part of the Federation ofBiH with a Bosniakmajority (only for

respondents from theFBiH Bosniak majority

areas)

Part of the Federation ofBiH with a Croat majority(only for respondentsfrom the FBiH Croat

majority areas

Republika Srpska (only forrespondents from the RS)

Nov 08 Nov 09 Nov 08 Nov 09 Nov 08 Nov 09Much WORSE 0.1 14.4 5.5 8.9 3.7 5.6Generally WORSE 39.6 36.9 17.1 25.8 23.7 35.1The same 38.9 34.5 57.1 38.9 48.8 41.7Generally BETTER 4.0 2.4 15.9 7.6 19.1 15.3Much BETTER 13.3 0.2 0.2 1.0DK/NA 4.1 11.5 4.2 17.8 4.7 2.3Total 100.0 100.0 100.0 100.0 100.0 100.0TOTAL WORSE 39.7 51.3 22.6 34.7 27.3 40.7The same 38.9 34.5 57.1 38.9 48.8 41.7TOTAL BETTER 17.2 2.7 16.1 8.6 19.1 15.3DK/NA 4.1 11.5 4.2 17.8 4.7 2.3Total 100.0 100.0 100.0 100.0 100.0 100.0Source: Public opinion polls conducted by PRISM Research

N

Expect continuation of the privatisation process to affect their family’s economic circumstances (%)

FBiH RSBr ko

District

Bosniakmajority

areas (BMA)

Croatmajority

areas (CMA)

Serbmajority

areas (SMA)

QuarterNov08

Nov09

Nov08

Nov09

Nov08

Nov09

Nov08

Nov09

Nov08

Nov09

Nov08

Nov09

TOTAL NEGATIVE 66.4 67.4 53.5 57.9 33.6 44.1 68.8 71.3 56.9 52.9 53.5 57.9TOTAL POSITIVE 10.1 7.0 11.3 17.7 40.1 16.0 7.9 5.2 18.9 13.7 11.3 17.7DK/NA 23.5 25.6 35.2 24.4 26.3 39.9 23.3 23.5 24.3 33.4 35.2 24.4Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0Source: Public opinion polls conducted by PRISM Research

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 RSBosniakmajorityareas

Croatmajorityareas

Serbmajorityareas

18 35 36 50 51+

QuarterNov08

Nov09

Nov08

Nov09

Nov08

Nov09

Nov08

Nov09

Nov08

Nov09

Nov08

Nov09

Nov08

Nov09

Nov08

Nov09

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 20.9TOTAL 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 17.6No 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 54.6DK/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 6.9Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0Source: Public opinion polls conducted by PRISM Research

Table 7

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

FBiH RS Br ko DistrictNov07

June08

Nov08

Nov09

Nov07

June08

Nov08

Nov09

Nov07

June08

Nov08

Nov09

TOTAL FALL 6.48 2.40 7.40 8.28 7.48 2.46 8.88 17.87 4.18 35.56 6.73TOTAL RISE 89.51 76.32 78.08 71.58 83.87 89.28 74.92 54.43 100.00 59.62 0.43 6.00No change in prices 2.08 15.01 9.31 14.36 6.62 5.30 11.67 23.68 33.33 61.96 85.63DK/NA 1.93 6.27 5.22 5.78 2.03 2.96 4.53 4.01 2.87 2.05 1.64Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0Source: Public opinion polls conducted by PRISM Research

Table 8

158

Do you expect your household cash income to change in the next six months (in%)? Urban Rural

Nov07

June08

Nov08

Nov09

Nov07

June08

Nov08

Nov09

TOTAL FALL 20.40 11.53 13.62 21.63 14.24 10.80 10.53 18.77TOTAL RISE 16.44 18.22 20.67 20.16 18.94 18.79 21.14 21.89No change 56.71 61.93 60.20 54.45 58.92 63.83 64.36 53.17DK/NA 6.45 8.32 5.52 3.76 7.90 6.58 3.97 6.17Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0Source: Public opinion polls conducted by PRISM Research

Expect to be jobless during the next three months (in %) FBiH RS Br ko District 18 35 36 50 51+

Sept08

Nov08

Nov09

Sept08

Nov08

Nov09

Sept08

Nov08

Nov09

Nov08

Nov09

Nov08

Nov09

Nov08

Nov09

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 13.84Source: Public opinion polls conducted by PRISM Research

Table 8a

Table 9

159

Support the holding of public protests, strikes, or demonstrations related to(in %)

FBiH RS Br ko District Urban Rural 1835

3650

51+

SurveySept08

Nov08

Nov09

Sept08

Nov08

Nov09

Sept08

Nov08

Nov09

Sept08

Nov08

Nov09

Sept08

Nov08

Nov09

Nov09

Nov09

Nov09

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 48.3Inability to find ajob 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 42.6Against entitygovernment 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 37.9Lowsalaries/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 50.1Threats to ethnic orcivil 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 44.2The conduct of theinternationalcommunity 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 37.2The recovery ofproperty 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 17.57Nov 09 44.02 52.10 32.69 66.54 51.92 22.22Source: Public opinion polls conducted by PRISM Research

Trends in the average salary and the consumer price indices in the RS and FBiH (2009)

RSMonth 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

CPI (Consumer Price Index) 99.90 99.70 99.90 98.50 99.90 100.10 101.00 99.79 100.30 100.90

FBiHMonth 01/09 02/09 03/09 04/09 05/09 06/09 07/09 08/09 09/09 10/09

Average salary (in KM) 790.55 785.21 795.20 797.97 792.26 792.88 792.94 782.76 784.86 789.83CPI (Consumer Price Index) 99.90 100.10 99.90 99.00 99.90 100.00 100.30 99.90 99.90 100.60Source: Entity Statistics Offices

Pension data for the RS and FBiH for November 2008 and 2009

FBiH RSNov 08 Nov 09 Nov 08 Nov 09

Maximum pension 296.36 296.36 160.00 160.00Minimum pension 1393.48 1977.00 1408.88 1564.56Average pension 368.42 343.00 319.41 316.22Source: 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

December2007

October2008

September2009

Salarygrowth(Sep 09/Oct 08)

December2007

October2008

September2009

Salarygrowth(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. andpersonal 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. andbusiness 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%

Source: Entity Statistics Offices

Table 12b

Consumer Price Index (CPI) by category (October 2009)

RS FBiH1 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 95.30Accommodation. water. electricity.gas. and other fuels

104.70 103.60 104.40 101.20

Furniture. household goods. andregular 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

Source: Entity Statistics Offices

Table 13

Average household costs, itemised (in %)

FBiH RS

QuarterNov07

Nov08

Nov09

Nov07

Nov08

Nov09

Food (including coffee and drinks) 29.8 40.2 37.6 33.0 36.7 42.7Clothes and footwear 6.4 5.5 6.3 7.1 6.8 7.6Cigarettes / tobacco 5.3 4.0 4.3 5.1 3.8 4.0Personal Hygiene Items 6.2 6.0 7.2 6.4 6.4 6.5Fuel and car maintenance 6.1 5.5 7.1 5.9 6.2 3.5Public transport � bus and tram 2.6 1.4 1.6 1.7 1.6 1.3Kindergarten / child care 1.3 0.2 0.2 0.6 0.1 0.0Debt repayment 4.2 5.9 3.0 4.0 3.7 2.5Works and house repairs 3.3 1.9 2.5 2.8 2.4 0.9Medicine and treatment 7.0 5.0 6.0 6.3 4.9 4.1Recreation 3.4 2.4 1.9 4.2 2.8 1.6Children� s education 4.6 3.0 4.9 4.7 3.4 1.8Power 8.6 6.3 7.7 9.8 7.8 6.9Water 3.6 2.0 3.0 2.4 1.5 2.0Telephone 6.1 4.3 4.1 5.1 4.7 4.1Gas 1.5 0.2 0.3 0.8 0.6 0.1Source: Public opinion polls conducted by PRISM Research

Table 14

162

163

HiBFvoN voN voN

RSvoN voN voN

nohpeleThpeliboM

laiD - capuraC

buP:ecruoS

eenoh

emohtatenretniehtotssecc

MSIRPybdetcudnocsllopnoinipocilb

voN07

voN08

voN09

74.18 58.36 58.3656.36 58.46 58.4682.51 76.8 76.868.05 27.84 27.84

hcraeseRM

voN07

voN08

voN09

58.36 14.17 65.5658.46 32.56 73 66.

76.8 22.41 82.3127.84 95.45 56.84

Table 15

gnivivrusyleraBgarevawoleblleWgarevawolebtibArevawolebLATOTnoinipocilbuP:ecruoS

HiBtpeS

08voN

08voN

099.5 8.1 14.9

eg 14.0 11.4 12.1eg 19.7 24.3 22.0

ega 43.2 43.8 49.0hcraeseRMSIRPybdetcudnocsllop

HiBF RtpeS

08voN

08voN

09tpeS

08N0

7.7 5.1 8.3 11.7 112.0 9.2 11.6 15.4 117.5 24.4 25.1 23.1 237.2 38.7 45.0 50.2 4

RSvoN

08voN

09tpeS

08voN

08oN

01.5 23.7 13.7 25.7 284.3 11.6 44.4 17.3 274.1 17.7 19.7 24.4 17

49.9 53.0 77.8 67.4 73

vo9

8.57.77.6

.7

noinipocilbuP:ecruoS

hcraeseRMSIRPybdetcudnocsllop

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 46Jun 05 97.83 45Sep 05 93.33 42Nov 05 102.38 43Apr 06 104.65 45Jun 06 102.22 46Sep 06 100.00 46Nov 06 102.17 47Apr 07 104.26 49Sep 07 91.84 45Nov 07 95.56 43Mar 08 106.98 46Jun 08 97.83 45Oct 08 102.22 46Nov 08 100.00 46Nov 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 %) FBiH RS Br ko District

Sept 08 Nov 08 Nov 09 Sept 08 Nov 08 Nov 09 Sept 08 Nov 08 Nov 0914.97 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 %)

BiHUrban Rural Male Female 18 35 36 50 51+

Nov08

Nov09

Nov08

Nov09

Nov08

Nov09

Nov08

Nov09

Nov08

Nov09

Nov08

Nov09

Nov08

Nov09

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 3.9101 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 20.0201 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 11.7301 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 10.1401 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 2.3Number of lowincomehouseholds 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 52.3Source: Public opinion polls conducted by PRISM Research

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 17.57Nov 09 44.02 52.10 32.69 66.54 51.92 22.22Source: Public opinion polls conducted by PRISM Research


18 35 36 50 51+Nov 08 Nov 09 Nov 08 Nov 09 Nov 08 Nov 09

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 3.9101 200 0.6 3.4 4.4 4.5 9.8 20.0201 300 2.0 4.8 5.5 2.1 15.6 11.7301 400 9.4 9.2 12.5 14.5 16.8 10.1401 500 1.0 2.6 1.4 3.5 2.8 2.3Number of households 17.1 26.7 27.2 31.8 53.2 52.3Source: Public opinion polls conducted by PRISM Research

Table 3

Table 4

167


Income in KM Bosniak majority areas (BMA) Croat majority areas (CMA) Serb majority areas (CMA)

Quarter Nov 08 Nov 09 Nov 08 Nov 09 Nov 08 Nov 09No income 2.6 5.7 1.5 0.7 4.5 3.9< 100 1.2 2.1 1.6 1.3 3.1 4.5101 200 5.4 7.9 3.7 5.6 14.9201 300 6.0 7.3 5.0 10.8 10.4 6.0301 400 14.4 14.0 6.5 9.4 12.5 6.8401 500 1.6 3.3 1.2 1.3 2.0 2.6Subtotal to 500 31.3 40.4 15.7 27.2 38.1 38.6

Income in KM Minorities in BMA Minorities in CMA Minorities in SMA

Quarter Nov 08 Nov 09 Nov 08 Nov 09 Nov 08 Nov 09No income 4.3 2.0 2.6 1.2 4.6 16.1< 100 6.2 2.5 1.6 3.8 8.6101 200 9.3 9.1 6.6 6.7 7.7 11.7201 300 20.5 14.2 8.8 10.3 13.9 4.9301 400 13.7 17.2 9.4 8.0 23.3 10.2401 500 3.8 7.0 1.2 2.7 7.7Subtotal to 500 57.7 49.5 29.9 29.0 56.0 59.2Source: Public opinion polls conducted by PRISM Research

Table 5

Possession of durable consumer goods Bosniaks majority Croats majority Serbs majority

Nov07

Nov08

Nov09

Nov07

Nov08

Nov09

Nov07

Nov08

Nov09

Telephone 83.3 85.7 80.7 75.1 73.4 73.2 63.8 71.4 65.9Mobile phone 64.3 74.6 79.1 61.2 73.1 66.0 64.9 65.2 74.9Car 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 SMANov07

Nov08

Nov09

Nov07

Nov08

Nov09

Nov07

Nov08

Nov09

Telephone 84.5 80.5 58.2 76.5 62.5 76.1 63.8 51.2 76.4Mobile phone 60.5 47.6 67.5 56.3 53.1 71.3 64.9 62.2 64.9Car 28.3 31.3 40.4 54.3 36.9 52.1 48.7 24.5 34.3Source: Public opinion polls conducted by PRISM Research

Table 6

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

Croat majorityareas (CMA)

Serb majorityareas (SMA)

Quarter Nov 08 Nov 09 Nov 08 Nov 09 Nov 08 Nov 09TOTAL WORSE 30.2 30.4 15.0 14.5 21.8 33.7The same 56.7 55.5 65.8 54.4 52.2 45.1TOTAL BETTER 8.2 11.0 14.7 18.8 20.2 18.2DK/NA 4.8 3.0 4.5 12.4 5.8 3.0Total 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 09TOTAL WORSE 26.7 31.1 20.7 17.1 24.1 22.9The same 64.5 47.5 59.9 51.9 60.5 61.3TOTAL BETTER 8.1 15.3 18.6 17.0 13.0 14.0DK/NA 0.7 6.0 0.7 14.0 2.4 1.8Total 100.0 100.0 100.0 100.0 100.0 100.0Source: Public opinion polls conducted by PRISM Research

Table 7

168

169

Think that the legal system will support them regarding contractual and property rights (in %)

BosniaksCroats Serbs

Nov 08 Nov 09 Nov 08 Nov 09 Nov 08 Nov 09Majority 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 12.20Somewhat agree 44.12 16.99 26.64 30.13 24.21 21.63 29.30 22.62 46.87 42.32 39.46 41.97Somewhat disagree 11.04 23.68 8.87 10.73 22.11 17.35 7.52 10.77 12.75 6.27 4.57 3.07Absolutely disagree 21.61 36.47 35.75 23.17 19.66 18.47 37.21 37.74 22.02 15.52 28.60 30.56DK/NA 9.60 5.59 3.38 8.44 26.21 23.30 12.39 11.23 7.93 12.02 14.78 12.20Total 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00Source: Public opinion polls conducted by PRISM Research

Table 8

Assessment of political trends in BiH (%)

Bosniaks Croats SerbsNov 08 Nov 09 Nov 08 Nov 09 Nov 08 Nov 09

Majority Minority Majority Minority Majority Minority Majority Minority Majority Minority Majority MinorityDeteriorating 79.7 82.1 89.6 81.1 52.9 47.4 71.4 75.9 50.3 41.2 64.0 46.6Improving 13.5 14.7 6.8 13.3 24.7 48.2 15.8 16.8 34.6 51.7 25.2 38.2DK/NA 6.8 3.1 3.7 5.5 22.4 4.4 12.8 7.2 15.1 7.1 10.8 15.1Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0Source: Public opinion polls conducted by PRISM Research

Table 9

170

Number of people who approve of the performance of various institutions in BiH (in %) - November 2009

Bosniaks Croats Serbs

Majority Minority Majority Minority Majority Minority

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 50.6FBiH Government 15.8 18.4 27.5 28.0 48.8 51.3RS National Assembly 9.3 16.6 10.0 13.3 71.6 53.1RS Government 9.2 19.0 11.6 13.5 71.9 52.6Municipal Authorities 19.0 22.1 28.4 25.6 69.0 54.2Cantonal Governments 18.1 19.5 29.4 24.1Source: Public opinion polls conducted by PRISM Research

Table 11

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


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

Table10

171

Pride in being a citizen of BiH (%)


Majority Minority Majority Minority Majority Minority Majority Minority Majority Minority Majority MinorityVery proud 80.7 87.0 61.7 52.4 32.5 75.4 52.4 69.3 23.7 72.9 17.9 46.4Somewhat 11.2 8.7 18.7 17.4 33.8 12.5 25.1 13.6 20.1 9.8 16.5 16.7Not much 5.4 2.7 6.5 12.3 13.8 3.0 7.7 1.3 15.7 1.1 22.7 21.6Not at all 0.4 8.5 9.6 4.7 1.1 6.5 7.1 20.8 5.3 20.7 3.0Of 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 1.0DK/NA 0.6 0.8 0.2 3.2 0.9 1.4 0.9 2.2 0.9 0.7 3.2 4.3Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0Source: Public opinion polls conducted by PRISM Research

Table 13

Pride in belonging to one’s own ethnic group/people (%) - November 2009

Bosniaks Croats SerbsMajority Minority Majority Minority Majority Minority

Very proud 73.4 65.5 82.4 79.2 72.3 75.1Somewhat 14.4 18.4 11.5 10.8 13.0 12.9Not very 4.3 5.2 1.6 0.9 7.7 5.7Not at all 3.3 5.1 0.2 1.4 4.3Of no importance 3.6 3.0 2.2 6.3 2.4 4.9� 0+ - � + 0 � � 2+ - decide 1.0 2.0 0.7 0.1DK/NA 0.8 1.3 1.4 0.3 1.5Total 100.0 100.0 100.0 100.0 100.0 100.0Source: Public opinion polls conducted by PRISM Research

Table 12

172

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

BMA CMA SMAMajority Minority Majority Minority Majority Minority

Cautious with others (RESPONSES ona scale of 1 5) 82.66 80.44 81.36 77.26 87.10 93.12Trustful of others (RESPONSES on ascale 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 0.00Total 100.00 100.00 100.00 100.00 100.00 100.00Source: Public opinion polls conducted by PRISM Research

Table 15

Expect things to get worse in BiH as regards the political situation (%)

Bosniaks Croats SerbsMajority Minority Majority Minority Majority Minority

Nov 07 79.4 90.7 80.2 60.3 82.4 82.5Nov 08 79.7 82.1 52.9 47.4 50.3 41.2Nov 09 89.6 81.1 71.4 75.9 64.0 46.6Source: Public opinion polls conducted by PRISM Research

Table 14

110

100In

tere

thn

ic S

tab

ilit

y In

de

x

Chain index

Composite index

90

80

70

60May00

Feb04

103

76

Apr02

99

75

Apr06

101

76

Jan01

101

73

Feb05

100

77

Jan03

99

75

Apr07

96

76

Jun08

J105

78

Jan01

106

73

Sep04

101

76

Aug02

100

75

Sep06

100

76

Dec01

103

76

Sep05

97

72

Sep03

100

76

Nov07

94

72

Nov08

99

77

Aug00

95

6973

Jun04

99

75

Jun02

100

75

Jun06

100

76

Aug01

101

74

Jun05

96

74

Jul03

101

76

Sep07

101

77

Oct08

100

78

Apr01

99

72

Nov04

101

77

Oct02

101

76

Nov06

104

79

Mar02

100

76

Nov05

104

75

Nov03

97

74

Mar08

103

74

Nov09

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 RSSep2008

Nov2008

Nov2009

Sep2008

Nov2008

Nov2009

Sep2008

Nov2008

Nov2009

% % % % % % % % %No 2 Never 93 95 90 91 93 88 98 97 94Yes 2 Once 2 2 3 3 2 5 1 0 1Yes 2 On a number ofoccasions 2 1 2 3 2 2 1 1 1Yes 2 Often 1 1 1 1 1 2 1 1 1DK/NA 2 1 3 2 1 2 0 1 3TOTAL 100 100 100 100 100 100 100 100 100Source: 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?

Bosniaks Croats SerbsNov 2009

Majority Minority Majority Minority Majority Minority% % % % % %

No 2 Never 92 90 86 79 95 92Yes 2 Once 4 3 6 9 1 1Yes 2 On a number ofoccasions 1 2 3 6 1 1Yes 2 Often 1 3 3 2 0 2DK/NA 3 2 2 3 3 4TOTAL 100 100 100 100 100 100Source: Business environment survey for the UNDP Early Warning System in BiH project. conducted by PRISM Research.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 ko District Bosniaks Croats SerbsNov 2009

% % % % % % %Disagree 11 12 11 0 9 14 11Agree 84 83 86 98 88 77 86DK/NA 5 6 3 2 3 8 3Total 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 Age groupUrban Rural Male Female 18 35 36 50 50 +

Nov 2009% % % % % % %

Agree 11 11 12 10 10 12 11Disagree 84 84 83 85 84 84 85DK/NA 5 4 5 5 6 4 4Total 100 100 100 100 100 100 100


Table 2b

Into which category does your household fall?

Nov 2009BiH FBiH RS Bosniaks Croats Serbs% % % % % %

Locals 68 70 70 78 61 70Displaced 9 6 15 4 7 15Refugees from another country 2 2 1 4 1Returnee 15 16 10 11 21 10Moved here after the war 5 5 4 6 4 4DK/NA 2 2 1 1 3 1TOTAL 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 ko DistrictNov 2009

% % % %Yes 42 47 33 28No 49 43 59 69DK/NA 9 10 9 4Total 100 100 100 100Source: Business environment survey for the UNDP Early Warning System in BiHproject. conducted by PRISM Research. November 2009.

Table 7


BiH FBiH RSNov 2009

% % %Very proud 76 77 73Somewhat 13 13 13Not very 4 3 7Not at all 2 2 4Not important 3 3 3Don� t know/Can� t decide 1 1 0No answer/Won� t answer 1 1 0Total 100 100 100Source: Business environment survey for the UNDP Early Warning System in BiHproject. conducted by PRISM Research. November 2009.

Table 8




Table 8a

176


Bosnia and HerzegovinaSep 2008 Nov 2008 Nov 2009


Table 9


FBiH RSSep2008

Nov2008

Nov2009

Sep2008

Nov2008

Nov2009

% % % % % %Very proud 61 62 58 31 37 23Somewhat 19 20 21 27 17 17Not very 9 8 7 17 12 23Not at all 4 2 8 11 17 18Not important 5 6 5 11 16 16Don� t know/Can� t decide 1 1 1 1 1 1No answer/Won� t answer 2 1 1 2 1 3Total 100 100 100 100 100 100Source: Business environment survey for the UNDP Early Warning System in BiH project. conducted by PRISM Research.November 2009.

Table 9a


Bosniaks Croats SerbsSep2008

Nov2008

Nov2009

Sep2008

Nov2008

Nov2009

Sep2008

Nov2008

Nov2009

% % % % % % % % %Very proud 80 82 60 42 40 55 31 37 23Somewhat 12 11 18 26 30 23 27 17 17Not very 5 5 7 13 12 7 17 12 23Not at all 1 0 9 6 4 7 11 17 18Not important 2 1 3 8 13 7 11 16 16Don� t know/Can� t decide 0 1 1 1 0 1 1 1 1No answer/Won� t answer 0 1 1 3 1 1 2 1 3Total 100 100 100 100 100 100 100 100 100Source: Business environment survey for the UNDP Early Warning System in BiH project. conducted by PRISM Research. November2009.

Table 9b

177


Bosnia and Herzegovina

Sep 2008 Nov 2008 Nov 2009% % %

Yes 17 22 25No 71 66 64DK/NA 12 13 11Total 100 100 100Source: Business environment survey for the UNDP Early Warning System in BiH project. conducted byPRISM Research. November 2009.

Table 10


FBiH RSSep2008

Nov2008

Nov2009

Sep2008

Nov2008

Nov2009

% % % % % %Yes 20 24 27 12 20 21No 67 61 60 77 69 72DK/NA 13 15 14 11 10 7Total 100 100 100 100 100 100Source: Business environment survey for the UNDP Early Warning System in BiH project. conducted byPRISM Research. November 2009.

Table 10a

Do you think war might break out if EUFOR withdraw? Bosniaks Croats Serbs

Sep2008

Nov2008

Nov2009

Sep2008

Nov2008

Nov2009

Sep2008

Nov2008

Nov2009

% % % % % % % % %Yes 24 27 35 16 20 19 12 20 21No 60 64 53 74 59 66 77 69 72

DK/NA 16 9 12 10 21 15 11 10 7Total 100 100 100 100 100 100 100 100 100

Source: Business environment survey for the UNDP Early Warning System in BiH project. conducted byPRISM Research. November 2009.

Table 10b

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


Ethnic and civil rights % % %Yes 49 47 49No 43 46 43DK/NA 9 7 8

Total 100 100 100Source: Business environment survey for the UNDP Early Warning System in BiH project. conducted byPRISM Research. November 2009.

Table 12

178

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

FBiH RSSep2008

Nov2008

Nov2009

Sep2008

Nov2008

Nov2009

% % % % % %Ethnic and civil rights Yes 50 55 53 47 38 40

No 40 37 37 47 58 55DK/NA 10 8 10 6 5 5

Total 100 100 100 100 100 100Source: Business environment survey for the UNDP Early Warning System in BiH project. conducted by PRISMResearch. November 2009.

Table 12a

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


% % %None 14 13 7Not much 22 20 23Some 30 29 30A lot 25 29 34DK/NA 8 9 7Total 100 100 100TOTAL NOT MUCH 36 33 29TOTAL A LOT 56 58 64DK/NA 8 9 7Total 100 100 100Source: Business environment survey for the UNDP Early Warning Systemin BiH project. conducted by PRISM Research. November 2009.

Table 13


FBiH RSSep2008

Nov2008

Nov2009

Sep2008

Nov2008

Nov2009

% % % % % %None 8 4 4 23 23 13Not much 19 17 15 30 24 38Some 34 31 30 23 28 29A lot 32 39 43 15 16 15DK/NA 8 9 8 9 9 5Total 100 100 100 100 100 100Source: Business environment survey for the UNDP Early Warning System in BiH project. conducted by PRISMResearch. November 2009.

Table 13a

179


Bosniaks Croats SerbsSep2008

Nov2008

Nov2009

Sep2008

Nov2008

Nov2009

Sep2008

Nov2008

Nov2009

% % % % % % % % %None 7 3 3 9 6 5 23 23 13Not much 12 17 10 25 16 20 30 24 38Some 31 30 21 37 32 39 23 28 29A lot 44 48 59 20 29 27 15 16 15DK/NA 7 3 7 9 17 9 9 9 5Total 100 100 100 100 100 100 100 100 100Source: 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 RSNov 2009

% % %Absolutely disagree 44 46 39Generally disagree 28 24 34Generally agree 15 15 17Absolutely agree 4 4 4DK/NA 9 11 6Total 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?


% % %Absolutely disagree 62 30 39Generally disagree 20 28 34Generally agree 9 21 17Absolutely agree 4 5 4DK/NA 5 17 6Total 100 100 100Source: Business environment survey for the UNDP Early Warning System in BiH project. conducted by PRISMResearch. November 2009.

Table 14a

180

Please state in what direction you think BiH is headed, as regards the political situation?

BiH FBiH RSSep2008

Nov2008

Nov2009

Sep2008

Nov2008

Nov2009

Sep2008

Nov2008

Nov2009

% % % % % % % % %Worse 53 58 72 60 67 80 43 48 61Better 33 30 19 27 21 12 41 39 27DK/NA 14 12 9 13 12 8 16 13 12Total 100 100 100 100 100 100 100 100 100Source: Business environment survey for the UNDP Early Warning System in BiH project. conducted by PRISM Research.November 2009.

Table 15

181

182

110

100

90

80

The Security Stability Index for Bosnia and Herzegovina

Se

curi

ty S

tab

ilit

y In

de

x

May00

Feb04

101.2

87

Apr02

102.3

89

Apr06

100

86

Jan01

100

88

Feb05

101.1

88

Jan03

100

88

Apr07

102.3

88

Jun08

101.2

86

Jan01

100

89

Sep04

97.73

86

Aug02

98.86

87

Sep06

103.5

88

Dec01

98.88

88

Sep05

101.2

87

Sep03

97.73

86

Nov07

102.3

88

Nov08

100

88

Aug00

100

8989

Jun04

101.1

88

Jun02

98.88

88

Jun06

98.84

85

Aug01

101.1

89

Jun05

97.73

86

Jul03

100

88

Sep07

97.73

86

Oct08

102.3

88

Apr01

98.88

88

Nov04

101.2

87

Oct02

101.1

88

Nov06

97.73

86

Mar02

98.86

87

Nov05

98.85

86

Nov03

100

86

Mar08

96.59

85

Nov09

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... Bosnia and Herzegovina

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

Sep2008

Nov2008

Nov2009

% % %

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? Bosnia and Herzegovina

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

Sep2008

Nov2008

Nov2009

Sep2008

Nov2008

Nov2009

% % % % % %

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... ? Bosnia and Herzegovina

Sep 2008 Nov 2008 Nov 2009

% % %

The police Yes 52 61 53

No 27 20 33

No applicable 1 1

Neither approve nordisapprove 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 nordisapprove 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 nordisapprove 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 nordisapprove 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 somedegree 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 somedegree 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...?


Sep2008

Nov2008

Nov2009

% % %

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 internationalcommunity 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

Documents

Bosnia and Herzegovina: Early Warning Report 2009