Where is Bosnia and Herzegovina on the List of Countries with the most Resilient Economies?

April 7, 2020 1:45 PM

 

 

Denmark and Norway are at the top of the countries with the most resilient economies, the countries that will recover the fastest after the global pandemic of the coronavirus, according to FM Global Insurance, SRNA news agency reports.

The list of economic systems resilience ranks the resilience of the business environment in 130 countries on the basis of factors such as political stability, corporate governance, environmental risk, supply chain logistics and transparency.

The ten countries with the highest capacity for rapid recovery are Norway, Denmark, Switzerland, Germany, Finland, Sweden, Luxembourg, Austria, Central American countries and the United Kingdom. Of the countries in the region, Croatia ranks 37th, Slovenia at 42, Serbia at 63, and BiH at 70.

The BBC singles out Denmark as an example of the economy’s ability, which scores high on supply chains.  It responded quickly when it came to adopting social distance measures due to the spread of the virus.

Measures such as the compensation of 90 percent of the hourly wage and 75 percent of the full-time, crisis-stricken worker are hailed in the rest of the world as an example, because it is essentially about “freezing” the economy until the “storm” passes.

Bosnia and Herzegovina is an upper middle-income country which has accomplished a great deal since the mid-1990s. Today, it is an EU potential candidate country and is now embarking on a new growth model amid a period of slow growth and the global financial crisis. Bosnia and Herzegovina is a small, open economy, dominated by services, which accounted for 55% of gross domestic product (GDP) in 2016, with a moderately developed industrial and manufacturing sector (23% and 12%, respectively), and a limited agricultural base (about 6% of GDP).

The key economic challenge for Bosnia and Herzegovina in the imbalance of its economic model: public policies and incentives are skewed toward the public rather than the private sector, consumption rather than investment, and imports rather than exports. The country needs to shift to a business environment that is conducive to private investment. The country faces the dual problem of rebuilding a war-torn country and introducing liberty market reforms to its economy.

The konvertibilna marka (convertible mark or BAM) – the national currency introduced in 1998 – is pegged to the euro, and confidence in the currency and the banking sector has increased. Implementation of privatization, however, has been slow, and local entities only reluctantly support national-level institutions. Banking reform accelerated in 2001 as all ; foreign banks, primarily from Western Europe, now control most of the banking sector. A sizable current account deficit and very high unemployment rate remain the two most serious economic problems. The country receives substantial amounts of reconstruction assistance and humanitarian aid from the international community but will have to prepare for an era of declining assistance.

 

 

 

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