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Article:
Bosnia - An Economy in search of a State by: Sam Vaknin, Ph.D. Bosnia-Herzegovina (heretofore 'Bosnia') is an artificial polity with four, tangentially interacting, economies. Serbs, Croats and their nominal allies, the Bosniaks each maintain their own economy. The bloated, fractured, turf conscious, inefficient, and often corrupt presence of the international community, in the form of the Office of the High Representative, among others, constitutes the fourth - and most dominant - parallel economy. The divergence of the economies of these components of Bosnia is so high that the inflation differential between them amounts to 13%. The Bosniak-Croat Federation experienced deflation in 1999 - while the Republika Srpska (RS) was in the throes of 14% inflation. The real effective exchange rate in RS appreciated by 13% and depreciated by 6% in the Federation between 1998-2000. Wages in the Federation are higher by 30% compared to the RS. The International Crisis Group in its October '8
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