Doing business in bosnia and armenia

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Doing business in Bosnia and Herzegovina and Armenia

2009

Contents
1. Doing business in Bosnia and Herzegovina
* Geographical overview………………………………………………………………3
* A general overview of the economic, political, social & business environments…3
* Key economic indicators …………………………………………………………….5
* The country’s imports & exports, its competitiveadvantages…………………….5
* Cultural awareness when doing business in the country: dos and don’ts………...6
* Where could we do business & how…………………………………………………6
2. Doing business in Armenia
* Geographical overview……………………………………………………………….8
* A general overview of the economic, political, social & business environments….9
* Key economic indicators…………………………………………………………….10
* The country’s imports &exports, its competitive advantages…………………....12
* Cultural awareness when doing business in the country: dos and don’ts……….13
* Where could we do business & how………………………………………………..14
3. Comparison of main Indicators………………………………..…17

DOING BUSINESS IN BOSNIA AND HERZEGOVINA

GEOGRAPHICAL OVERVIEW

Bosnia and Herzegovina is a country on the Balkan peninsula of South EasternEurope with a area of 51,129 square kilometers. Bosnia and Herzegovina is bordered by Croatia to the North, West and South, Serbia to the east, and Montenegro to the South.

1. A general overview of the economic, political, social & business environments.

Economic environment:
The interethnic warfare in Bosnia and Herzegovina caused production to plummet by 80% from 1992 to 1995 andunemployment to soar. With an uneasy peace in place, output recovered in 1996-99 at high percentage rates from a low base; but output growth slowed in 2000-02. Part of the lag in output was made up in 2003-08 when GDP growth exceeded 5% per year. Banking reform accelerated in 2001 as all the Communist-era payments bureaus were shut down; foreign banks, primarily from Western Europe, now controlmost of the banking sector. 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. Bosnia's private sector is growing and foreign investment is slowly increasing, but government spending, at nearly 40% of adjusted GDP, remains high because of redundant government officesat the state, entity and municipal level. Implementing privatization, however, has been slow, particularly in the Federation where political division between ethnically-based political parties makes agreement on economic policy more difficult. A sizeable current account deficit and high unemployment rate remain the two most serious macroeconomic problems. Successful implementation of a value-addedtax in 2006 provided a predictable source of revenue for the government and helped bring in gray market activity. National-level statistics have also improved over time but a large share of economic activity remains unofficial and unrecorded. Bosnia and Herzegovina became a full member of the Central European Free Trade Agreement in September 2007.

Political environment:
Government type:emerging federal democratic republic

Social environment:
On the background of a weak economy and in view of the huge number of people who depend on social services and support from the state, it is close to impossible to generate the necessary financial resources for funding even a basic system of social services and security. Previous systems are no longer functioning, while social serviceprovision is characterised by a lack of coordination between the public administration, NGOs and international agencies. The situation is aggravated by the fact that increasing numbers of people are becoming dependent on public support. The development of appropriate and financially viable models for social service delivery is a high priority, but it requires clear social policies and...
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