Bosnia and Herzegovina

The OECD/EBRD Enterprise Policy Performance Assessment for Bosnia and Herzegovina presents an overall assessment of the business environment for SMEs.  It assesses the conditions regarding the institutional framework, the rule of law, tax policy, financial services availability, advisory services availability, business incubators, and access to education and technology.

Private investment by Small and Medium-sized Enterprises (SMEs)1 is a key generator of economic growth and social change in OECD member country economies. In most countries, over 90% of all enterprises are SMEs. It is now widely accepted that the contribution of SMEs to new jobs, exports, innovation and regional development is vital to national development. How to benefit from and maximise this contribution is a continuous challenge for all countries. This Enterprise Policy Performance Assessment seeks to help address that question for Bosnia and Herzegovina (BiH) and highlights issues that require attention and priority action.

Educational work is a key element for both human capital formation and the promotion of peace and democratic values. It has therefore been identified as one of the priorities of the Stability Pact. The OECD was asked to be Co-ordinator for “General Education Policy and System Change” within the Education and Youth Task Force, and to carry out “Thematic Reviews of Education Policy” in the countries of the region. The main outcome of this project is a series of reports which provide both country overviews and a regional overview. These reports offer an analysis of the education system and address issues and barriers to reform and recommendations. The recommendations are designed to be of use for national policy-makers and to assist Stability Pact partner countries and institutions target regional assistance in order to achieve the goal of supporting South Eastern Europe towards European integration. These reports are part of the OECD’s ongoing co-operation with non-member economies around the world.

Les travaux dans le domaine de l’éducation, retenus comme l’une des priorités du Pacte de stabilité, sont un volet essentiel pour former le capital humain et promouvoir la paix et les valeurs démocratiques.  Il a été demandé à l’OCDE d’assurer la coordination des activités du Groupe spécial sur l’éducation et la jeunesse dans le domaine de la politique générale de l’éducation et de la transformation des systèmes éducatifs et de réaliser des examens thématiques des politiques nationales d’éducation dans les pays de cette région.  Ce projet a abouti à l’établissement de rapports sur chacun des pays et à une synthèse régionale qui offrent une analyse des systèmes éducatifs, des problèmes en jeu et des obstacles à la réforme.  Ils présentent des recommandations, utiles aux décideurs publics nationaux, qui devraient permettre aux pays et organismes partenaires du Pacte de stabilité de mieux cibler l’aide régionale afin de faciliter l’intégration européenne des pays de l’Europe du Sud-Est.  Cette étude s'inscrit dans le cadre des relations de coopération que l'OCDE entretient avec les économies non membres de diverses régions du monde.

Bosnia and Herzegovina can legally issue the following four types of rulings within the scope of the transparency framework: (i) cross-border unilateral APAs and any other cross-border unilateral tax rulings (such as an advance tax ruling) covering transfer pricing or the application of transfer pricing principles; (ii) rulings providing for unilateral downward adjustments; (iii) permanent establishment rulings; and (iv) related party conduit rulings. It is noted that the Tax Administration in the Bosnia and Herzegovina entity of Republic of Srpska is the only authority issuing rulings in scope of the FHTP work.

First reporting fiscal year: Commencing on or after 1 January 2018

Bosnia and Herzegovina can legally issue the following four types of rulings within the scope of the transparency framework: (i) cross-border unilateral APAs and any other cross-border unilateral tax rulings (such as an advance tax ruling) covering transfer pricing or the application of transfer pricing principles; (ii) rulings providing for unilateral downward adjustments; (iii) permanent establishment rulings; and (iv) related party conduit rulings. It is noted that the Tax Administration in the Bosnia and Herzegovina entity of Republic of Srpska is the only authority issuing rulings in scope of the FHTP work.

First reporting fiscal year: Commencing on or after 1 January 2018

Over the last two decades, Bosnia and Herzegovina (BiH) has become a middle-income country and made some progress to improve the socio-economic development and quality of life of its population (European Commission, 2021[1]). However, gross domestic product (GDP) per capita remains one of the lowest in the region, indicating the country’s ongoing struggle to raise productivity and living standards. As of 2015, around 17% of the BiH population was living below the poverty line and there are large regional disparities in terms of access to services and well-being outcomes (World Bank, 2020[2]). Similar to other countries in Europe, the COVID-19 pandemic has led to a contraction in the BiH economy, exacerbating challenges that were already present, such as raising revenue for public services and allocating resources efficiently. Recovery efforts and future growth will depend on the extent to which BiH governments can address structural challenges, including demographic shifts, high levels of unemployment, especially among youth, and the need for investment in infrastructure and human capital.

With a population of over 80 000, Brčko District represents less than 1% of the territory of Bosnia and Herzegovina (BiH), and is on average more densely populated than the rest of the country (). Nearly half of the district’s population lives in the city of Brčko, the centre of the administrative unit. The District is one of the richer regions of the country, and its economy is more closely linked to trade than that of many other regions of BiH, as Brčko District has historically taken advantage of its strategic location near the three-party border of BiH, Croatia and Serbia. Due to its unique structure of governance within Bosnia and Herzegovina, Brčko District faces particular challenges, especially when it comes to education. From the outset, the district ensured a harmonised curriculum for its population, while in some other parts of BiH, curricula is still administered differently among ethnic lines. The district’s education system, however, displays a similar structure of governance to that of other self-governing administrative units of BiH of similar size.

In Bosnia and Herzegovina (BiH), competent education authorities are beginning to promote the more student-centred approaches to instruction that are increasingly common across OECD countries and can support students in developing their core competences. However, teaching practice has been slow to change, largely because there is a lack of supports and incentives to encourage the adoption of these new approaches. This chapter proposes how BiH could make use of new teacher appraisal procedures and learning opportunities to help transform teaching practices by reinforcing clear expectations, establishing feedback loops that reward performance, and supporting teachers’ initial preparation and their continuous improvement.

Several competent education authorities in Bosnia and Herzegovina (BiH) have been moving away from a compliance-oriented approach to school quality assurance towards procedures that emphasise the development of learning and teaching practices. Despite these efforts, most competent education authorities covered by this review do not conduct external evaluations or self-evaluations of schools. Many also lack consistent standards or implementation protocols for evaluating school performance, which makes it difficult to form reliable judgements and determine where and how best to provide schools with support. This chapter puts forward a set of practical recommendations that aim to accelerate the development of improvement-oriented evaluation practices in BiH school systems, while making the most of limited resources and capacity

Republika Srpska (RS) is a centralised self-government entity within Bosnia and Herzegovina that contains 64 local self-government units (i.e. municipalities). With a surface area that makes up nearly half of BiH (), the entity’s socio-economic development is primarily driven by industry, agriculture and services, which respectively employ 28%, 24% and 48.5% of the entity’s population (Republika Srpska Institute of Statistics, 2021[1]). In RS, one out of two employed individuals has completed secondary education, and one out of four has completed higher education (ibid). According to the Bosnia and Herzegovina’s Foreign Investment Promotion Agency, Republika Srpska’s main strengths for attracting investments rely on its natural resources, favourable tax regulations and an increasingly qualified workforce (Emerging Europe, 2020[2]). The entity’s Ministry of Education and Culture is responsible for pre-university education policy and has a staff of around 80 people (BiH, 2021[3]). This profile examines the context and features of the evaluation and assessment system for education in RS and highlights policy recommendations that can help strengthen this system to improve teaching and learning.

Education stakeholders in Bosnia and Herzegovina have taken steps to establish some of the basic building blocks needed to monitor and evaluate education policy and guide system improvements. However, major gaps in system evaluation frameworks remain, namely the availability of comparable data on learning outcomes, which is lacking in most jurisdictions. This chapter presents possible pathways that competent education authorities and other BiH actors could take to strengthen collaboration and co-ordination in the education sector, as well as increase the use of evidence for planning and policy development.

Education systems in Bosnia and Herzegovina’s (BiH) have taken steps to introduce new competence-based curricula. However, assessment policies and practices in many of the competent education authorities covered by this review do not yet reflect the types of instructional practices that support student learning. For example, teachers often lack resources and support to implement formative assessments in their classrooms and the use of standardised assessment in the country is very limited. This chapter sets out recommendations for how education authorities can address these challenges and use student assessment as a tool for helping all young people to develop core competences.

Prior to the early 1990s, the region presently known as West Herzegovina Canton was one of the poorest areas of Bosnia and Herzegovina (BiH), while today it is one of the richest. It has an important agricultural sector, and it has embarked upon an active investment promotion strategy, focusing on the processing industry, trade and civil engineering (HERAG, 2019[1]). West Herzegovina Canton has the sixth largest population among the cantons composing Federation of Bosnia and Herzegovina (FBiH) (); its primary and secondary school cohort is also the sixth largest. Correspondingly, the canton also comes sixth in terms of the size of its network of primary and secondary schools. The canton’s Ministry of Education, Science, Culture and Sports governs education policy. The ministry has around 25 members of staff, five of which cover education. This profile examines the context and features of West Herzegovina Canton’s evaluation and assessment system for education and highlights policy recommendations that can help strengthen this system to improve teaching and learning.

Education has a key role to play in supporting COVID-19 recovery efforts in Bosnia and Herzegovina (BiH) and helping the country to achieve more inclusive and sustainable growth. In recent years, BiH administrative units have taken steps to improve their various education systems by integrating the Common Core Curriculum Based on Learning Outcomes (CCC) and by participating in international assessments of student learning, like the Programme for International Student Assessment (PISA) and the Trends in International Mathematics and Science Study (TIMSS). However, BiH continues to face sizeable educational challenges. While the country achieves good levels of participation in schooling, data from PISA reveal that the average learning outcomes remain lower than in EU countries and large shares of students leave school without mastering basic competences. Moreover, the country’s decentralised governance structure and limited co-operation among government partners creates significant challenges for setting strategic objectives, policy coherence, and ensuring the effective delivery of public services.