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
Volume1
Publication Languageeng
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
Abstract

The main aim of this research project is to analyze key trends in bilateral economicand trade cooperation between Bosnia and Herzegovina and The Republic of Turkey,as well as the current level of Foreign Direct Investment (FDI) outflow from Turkeyto B&H. The second major component of this project looks at economic activitiesbetween the two countries discusses ways to attract new FDI inflows. There isno doubt that the current levels of economic cooperation between B&H and Turkeyare insufficient taking into account historical and cultural ties. Turkey is becomingan 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 economicgrowth. Recently, Turkey returned to the region with its own long-term interests, andsince that Turkey has close economic and political ties with some Balkan countries(B&H, Kosovo, Albania, Macedonia) putting them at the forefront of its internationalpartnerships. Accordingly, there is a potential for the whole region to continue withstrengthening and deepening of the trade and investment ties with Turkey, as a majorregional power.Also, Turkey can become the main export destination for a majority of companiesfrom the Western Balkans, which are not members of the EU. Trade with Turkey hasalready 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 ratethan exports to the rest of its neighboring countries. It is expected that this positivetrend will continue if the Turkish economy maintains its economic growth. Increasingly,Turkish companies consider Western Balkan region as a desirable investmentdestination. In the past two decades, the inflow of FDI’s to B&H was modest comparedto the total FDI inflows. The most interesting sectors for Turkish investors havebeen: manufacturing, service, banking, education and tourism. The positive trend ofincreasing FDI for Turkey was reversed in 2012, but it is expected that Turkish investmentswill continue to grow in the medium term according to a recent announcementby the Turkish companies.This research project is divided into two parts. The first part of this project analyzesthe competitiveness of B&H, macroeconomic trends and business environmentin 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 betweenB&H and Turkey. The second part is devoted to providing a qualitative analysisof FDI by companies from Turkey invested to Bosnia and Herzegovina. The surveyinstrument was originally developed by researchers for the purpose of conducting personalinterviews regarding the experiences of investors about doing business in B&H.The questionnaire contained questions of unstructured nature. It focused on obtaininginformation about the performance of observed investments and selected companiesoperating 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 periodApri-May, 2016 in addition to thorough review of multifacted secondary sources.

Refereed DesignationRefereed