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Bosnian and Herzegovinian’s commercial and economic relations with Turkey: The status of B&H’s economy and recommendations for the future

TitleBosnian and Herzegovinian’s commercial and economic relations with Turkey: The status of B&H’s economy and recommendations for the future
Publication TypeBook
Year of Publication2016
AuthorsGanić, M, Brankovic, A
PublisherInternational University of Sarajevo
Place PublishedSarajevo
ISBN NumberISBN 978-9958-896-29-3
Other NumbersCOBISS.BH-ID 23220230
KeywordsFDI inflows, The Post-Dayton Economy of B&H, trade relations, Turkey

The main aim of this research project is to analyze key trends in bilateral economic
and trade cooperation between Bosnia and Herzegovina and The Republic of Turkey,
as well as the current level of Foreign Direct Investment (FDI) outflow from Turkey
to B&H. The second major component of this project looks at economic activities
between the two countries discusses ways to attract new FDI inflows. There is
no doubt that the current levels of economic cooperation between B&H and Turkey
are insufficient taking into account historical and cultural ties. Turkey is becoming
an increasingly salient regional player and an important actor in the region. Turkey,
unlike most of the rest of Europe, had a successful decade with a strong economic
growth. Recently, Turkey returned to the region with its own long-term interests, and
since that Turkey has close economic and political ties with some Balkan countries
(B&H, Kosovo, Albania, Macedonia) putting them at the forefront of its international
partnerships. Accordingly, there is a potential for the whole region to continue with
strengthening and deepening of the trade and investment ties with Turkey, as a major
regional power.
Also, Turkey can become the main export destination for a majority of companies
from the Western Balkans, which are not members of the EU. Trade with Turkey has
already experienced an upward trend in the aftermath of the global crisis. Since 2009,
B&H´s commercial and economic relations with Turkey grew at a much faster rate
than exports to the rest of its neighboring countries. It is expected that this positive
trend will continue if the Turkish economy maintains its economic growth. Increasingly,
Turkish companies consider Western Balkan region as a desirable investment
destination. In the past two decades, the inflow of FDI’s to B&H was modest compared
to the total FDI inflows. The most interesting sectors for Turkish investors have
been: manufacturing, service, banking, education and tourism. The positive trend of
increasing FDI for Turkey was reversed in 2012, but it is expected that Turkish investments
will continue to grow in the medium term according to a recent announcement
by the Turkish companies.
This research project is divided into two parts. The first part of this project analyzes
the competitiveness of B&H, macroeconomic trends and business environment
in lieu of key trends in developments of FDI inflows. In addition, thiswork analyzes 

the trade relations of B&H with EU countries as well as the bilateral trade relations between
B&H and Turkey. The second part is devoted to providing a qualitative analysis
of FDI by companies from Turkey invested to Bosnia and Herzegovina. The survey
instrument was originally developed by researchers for the purpose of conducting personal
interviews regarding the experiences of investors about doing business in B&H.
The questionnaire contained questions of unstructured nature. It focused on obtaining
information about the performance of observed investments and selected companies
operating in B&H (mode and reasons for entering in B&H, volume of investments, employment,
perception of the business environment, growth of Turkish comapnies etc.).
Primary qualitative research was conducted in a cross-sectional time frame in a period
Apri-May, 2016 in addition to thorough review of multifacted secondary sources.

Refereed DesignationRefereed