Analysis 1/13
Policy analysis
Economic Diplomacy – High Priority Challenge for Bosnia and Herzegovina
Sarajevo, August 2013.
Non nova sed nove (Not new, but in a new way)
DTP and print: Arch Design Print run: 300
With the support of: This Independent analysis has been prepared by the Foreign Policy Initiative BH (FPI BH) with the financial support of the Friedrich Ebert Stiftung. The views expressed here are those of the Foreign Policy Initiative BH and are not to be understood as in any way reflecting the views of Friedrich Ebert Stiftung.
Contact: info@vpi.ba www.vpi.ba
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Economic Diplomacy – High Priority Challenge for Bosnia and Herzegovina Non nova sed nove (Not new, but in a new way) – Resolving economic issues in international relations has become an inherent part of diplomatic theory and practice. Increased globalisation and trade liberalisation led to fierce competition on domestic and foreign markets. Consequently, countries which have not embraced the concept of economic diplomacy cannot have a proactive role in relations with other countries and they become objects of economic diplomacy of other countries. In the post-war period, time of aid receiving and partial rebuilding in the country, development of a strong concept of economic diplomacy emerged as the highest priority in the foreign policy of Bosnia and Herzegovina. The concept of economic diplomacy of Bosnia and Herzegovina has not yielded satisfactory results, which is best manifested in the large trade deficit. In order for the concept of economic diplomacy of Bosnia and Herzegovina to be more efficient, it is necessary to undertake permanent activities and apply the tools of economic diplomacy that are developed in a manner suitable to the given time and place. Despite numerous difficulties associated with the concept of economic diplomacy in Bosnia and Herzegovina, it is, nonetheless, taking a clear shape and has a real chance to develop into an effective leverage that will enhance the growth of the domestic economy.
1. Economy as an integral part of diplomatic practice At the beginning of the 21st century, the increasing pace of globalisation created, in terms of the economy, a new reality in international relations. Increasing globalisation diminishes the distance between countries, reducing the travel or transport time and transaction and transport costs and enabling direct communication with business partners by means of Internet or telephone, regardless of the distance. State economies are increasingly integrated and the volume of world trade is growing at ever increasing pace. Investments are planned all over the world and there is a free flow of capital on a global scale. The resources are depleting because the population growth and adoption of values of a consumerist society have led to the resources being exploited faster. The classical understanding of a state sovereignty is challenged by continuously growing interdependence of states, which, together with trade liberalisation, enables the establishment of networks within and between regions that weaken state borders and trade barriers. Under the circumstances of ever increasing free movement of people, goods, capital and services that resulted in enormous competition both on foreign and domestic markets, diplomacy should give priority to the economic prosperity of the country, so that geoeconomics take precedence over geopolitics.
2. Developed concept of economic diplomacy as a priority of foreign policy in the contemporary era responsible governments respond to the events arising from the recent globalisation processes by developing the efficient concept of economic diplomacy, which can respond to the challenges we face. Developing the concept of economic diplomacy is the best method to successfully carry out the foreign policy under the circumstances when it is necessary to continuously look for best foreign investors and new markets for domestic products as a requirement for economic development and reduction of unemployment in the country. Economic diplomacy means diplomatic activities directed towards improving and protecting the economic interests of a country, while the concept of economic diplomacy should ensure that the activities of economic diplomacy are efficient and successful. A concept of economic diplomacy should be strategically designed, coherent and coordinated in practice. Development of the concept of economic diplomacy must be preceded by a political decision and it has to be constantly accompanied by political support based on the determination to achieve results. Political will and political decision to put the economic diplomacy as a priority implies creation of a business friendly atmosphere at the internal political level. It is necessary to resolve internal issues in the country, which have an impact on the reputation of the country in the international community. The manner of business operations is very important and it has to be compliant with global regulatory requirements and standards. Foreign investors should be protected at the level to which they are protected in other countries and general business environment has to be such that they feel welcome.
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It is necessary to identify the most attractive sectors and research economic processes in a concrete environment in order to recognise the benefits offered to foreign investors and business people, who principally driven by the profit motive. Economic diplomacy has to make the connection between the plans and desires for economic development of a country and the foreign policy and diplomacy, as the instrument of that policy. The concept of economic diplomacy is primarily based on the work of diplomatic missions and consular offices. However, significant assistance can also be provided by representative offices of the foreign trade chamber or chamber of commerce or specialised agencies for promotion of export and foreign investments in Bosnia and Herzegovina, as well as by honorary consuls.
3. Economic diplomacy in foreign policy of Bosnia and Herzegovina Following the war, period of aid receiving and partial rebuilding of the country, development of a strong concept of economic diplomacy emerged as the highest priority of the foreign policy of Bosnia and Herzegovina, together with the membership in the EU and nATo, which are to ensure, for Bosnia and Herzegovina, sustainable peace and necessary level of security and make it more attractive for businesses, both foreign and national.
3.1 Why does Bosnia and Herzegovina need the efficient concept of economic diplomacy? Table 1
3.1.1 Trade deficit
Trade deficit in â‚Ź billion
In order to effectively achieve economic stability and economic growth, Bosnia and Herzegovina has to reduce trade deficit, which currently amounts to approximately â‚Ź 7 billion each year. This is possible to achieve by increasing the total exports and reducing the imports and by ensuring the constant inflow of foreign investments, primarily in production capacities. Total exports will increase if we increase the volume of exports, which means that the BiH economic diplomacy must look for partners all over the world. Products and services from our country should be present at the markets where they can make best profit, whether those are the markets of our neighbouring countries or the markets of distant countries. Therefore, it is necessary to strengthen the position of the BiH export companies at the markets where their products are already present and introduce them at the markets where they have not been present so far. Companies from Bosnia and Herzegovina that do not export their products should be encouraged and supported to start exporting those products and services which can be offered at foreign markets. In order to boost exports, it is also necessary to increase the number of exporters from BiH. In Bosnia and Herzegovina, only 100 companies participate in 70% of the total exports and this number has
Source: BiH Central Bank
Table 2 Number of exporters in Slovenia and the Republic of Austria
Sources: For Austria: Advantage Austria For Slovenia: Statistical Office of the Republic of Slovenia
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not changed in years. out of those 100 companies, 40% of them have foreign capital. In the European Union, 8% of all companies are exporters. Following this criterion, it means that in Bosnia and Herzegovina around 12.000 small and medium enterprises should be exporters.1 The number of exporters in Slovenia and Austria is presented in the Table 2. In order to boost the BiH export sales, economic diplomacy of Bosnia and Herzegovina can provide assistance in making analysis and providing high-quality information about foreign markets, promoting and branding BiH, removing trade barriers and establishing direct contacts. However, it cannot be a substitute for a series of measures that have to be implemented in order to increase the exports from Bosnia and Herzegovina and which are related to economic policy such as: introduction of subsidies for exporters, simplification of export procedures, establishment of an export credit bank which would keep pace with exporters and financially support their activities, establishment of a local company which would own a chain of markets and guarantee sale of agricultural products, initiation of establishment of consortiums of local companies and also of consortiums with foreign companies for the purpose of a joint action on third markets, increasing the quality of domestic products, certification of products, establishment of an association of BiH exporters, discounted prices for energy-generating products, telephone and internet services for exporters, etc. The basic strategy for decreasing the trade deficit should be the strategy of export growth, while the development of an import strategy may not be the right approach as such strategy would not be in compliance with the free trade requirements and applicable trade rules of the WTo and other multilateral and bilateral agreements. However, it would be necessary to implement a series of different measures, such as quality control of imported products, affirmation of domestic products and measures to ensure stable import of those products which are necessary to the BiH economy and BiH does not have them.
3.1.2 Promotion of foreign investments In order to create new jobs and reduce the unemployment rate in BiH, it is necessary to enable a constant inflow of foreign direct investments, particularly of investments in production capacities and services. In addition to lowering the unemployment rate Table 3 and ensuring the distribution of goods and services on the BiH market, foreign Foreign direct investments in the countries of the region investments involve production of goods for in € million export sale, thereby influencing the increase of the overall exports from Bosnia and Herzegovina and consequently, reduction of the trade deficit.
Sources: For BiH: the Central Bank of BiH, FIPA For Albania: the Bank of Albania For Montenegro: Montenegrin Investment Promotion Agency (MIPA) For Croatia: Investment and Competition Agency, State Institute for Statistics For Serbia: the Ministry of Finance of Serbia
The data in the table indicate that Croatia and Serbia had the highest level of foreign investments, while Albania had a constant growth of foreign investments. Bosnia and Herzegovina, ever since 2009, has had a constant growth of foreign investments and activities of economic diplomacy should be directed to maintain this trend and increase the overall volume of foreign investments.
The BiH Central Bank data on the inflow of foreign direct investments have been revised in line with the recommendations of the International monetary Fund and organisation for Economic Cooperation Note: Data for 2005 and 2012 for some countries are not available and Development (oECD). In line with the statistical principles, the amounts for the inflow of foreign direct investments have been revised for earlier years. In 2007, Bosnia and Herzegovina, thanks to the privatisation of large state-owned companies, had the inflow of foreign direct investments in the amount of € 1.3 billion, which is the largest amount in the last fifteen years. The largest foreign direct investment in Bosnia and Herzegovina, which is the privatisation of Telekom of republika Srpska, 1
Draft Export Growth Strategy of BiH for the period 2012-2015, BiH Export Council, november 2011. http://komorabih.ba/wp-content/uploads/2013/05/6nacrt-strategije-rasta-izvoza-nov-11.pdf, download 20. 06. 2013. p. 23
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was also realised in 2007. Foreign direct investments in the amount of € 684 million in 2008, without expected privatisations, can be considered to be satisfactory, particularly having in mind their favourable structure (investments in the production sector and high percentage of greenfield investments). The world economic crises affected the FDI inflow. The increase of FDI over the two previous years is encouraging, but the FDI levels remain significantly lower compared to the period prior to the global crisis. regardless of the lower levels of FDI, the FDI in 2011 increased by 31.6% compared to 2010. Having in mind the announced investment projects, this trend is expected to continue.2 Economic diplomacy of Bosnia and Herzegovina should brand Bosnia and Herzegovina, promote a positive business environment in our country for foreign direct investments, provide support in establishing the business contacts, establish direct contacts with potential foreign investors and assist them in finding partners in Bosnia and Herzegovina. In order to increase the inflow of foreign investments, it is, however, necessary to undertake a series of measures which do not fall under the scope of economic diplomacy: infrastructure investments, good education system, simplified administrative procedures, creation of a friendly environment for foreign investors in Bosnia and Herzegovina, facilitation of visa issuance for potential and existing foreign investors, furthering the concept of tax-free zones, development of the concept of business zones and services and reduction of costs of energy and telecommunication services which should be lower and not higher than the prices for households, etc.
3.2 What measures need to be taken in order for the concept of BiH economic diplomacy to be more efficient? 3.2.1. Organisation of economic diplomacy in the BiH Ministry of Foreign Affairs Economic diplomacy has been promoted as a priority of the BiH foreign policy since 2002. The ministry of Foreign Affairs sent to the Washington D.C. a group of around 20 diplomats, at the level of ministeradvisor and advisor, who gained specialist knowledge in the field of economic diplomacy. Following that, a number of these diplomats were posted to the positions of economic advisors in BiH embassies and two of the diplomats started working in the Economic Diplomacy Department within the ministry of Foreign Affairs of Bosnia and Herzegovina, which was established in 2003. In the BiH ministry of Foreign Affairs, there are currently two departments dealing with the economic diplomacy. The Economic Diplomacy Department organisationally falls under the Sector for Bilateral relations and it has 8 diplomats. In terms of monitoring, analysis and promotion of bilateral economic relations between Bosnia and Herzegovina and other countries, it combines in its work regional and functional approach. The Department closely cooperates with the diplomatic missions and consular offices and coordinates their activities. Bilateral dimension of the economic diplomacy is quintessentially similar to the economic diplomacy of majority of countries like BiH, because that is realistically the maximum they can accomplish. most important activities of bilaterally-oriented economic diplomacy are focused on concrete markets and situations on these markets, establishment of bilateral economic
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Foreign Direct Investments (FDI) – Condition and Performance, FIPA 2013 http://www.fipa.gov.ba/informacije/statistike/investicije/default.aspx?id=180&langTag=bs-BA, 27 June 2013.
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cooperation and on B2B contacts, i.e. concrete projects, companies, products and services, as well individual investors. This approach requires the engagement of significantly smaller scope of resources, while preparations for certain business activities and events, being less complex, demand significantly less time. In addition, control of the entire process is considerably cheaper. In practice, this implies working on the establishment of an alliance of BiH institutions, organisation of business forums, investment conferences and other economy-related events in the world, staff training and education, provision of high-quality instructions and information to diplomatic and consular offices in the area of economic diplomacy and guidelines for their work in the host countries, as well as resolving concrete problems in practice. Department for multilateral Economic Cooperation and reconstruction has 7 diplomats and it is in charge of coordination of activities with multilateral financial organisations, economic forums, international organisations and specialised agencies. This Department mobilises foreign donors and coordinates international assistance in Bosnia and Herzegovina. In order for the concept of economic diplomacy to better function, it would be beneficial for these departments to merge into one Economic Diplomacy Sector, which would be managed by the Assistant minister for Economic Diplomacy. Thereby, economic diplomacy would also, in terms of its organisation, be supported as a priority of the BiH foreign policy. There might be a dilemma that, due to the existence of the BiH Export Promotion Agency and FIPA, there would be an overlap of competences. However, by carefully defining the competences of the Department for Export Promotion and Department for Foreign Investment Promotion, it will not be the case, because the main task of these departments is to coordinate the work in these areas between BiH institutions, primarily the BiH Export Promotion Agency and FIPA and diplomatic missions and consular offices. In mid-2012, the BiH ministry of Foreign Affairs made changes in staff appointments, followed up by intensive efforts to make the economic diplomacy a real and not only a declarative priority of the foreign policy of Bosnia and Herzegovina. Departing from earlier reactive approach, priority is given to proactive approach to work. Communication is significantly enhanced though the efficient use of informationtechnology, while the concept of economic diplomacy is also designed at a theoretical level. Under the new circumstances, BiH diplomatic missions and consular offices receive adequate instructions and support from the Head Quarters (BiH mFA), in line with the new concept and the manner of its implementation. Based on the strong decision to give real contribution to the establishment of an efficient concept of economic diplomacy in Bosnia and Herzegovina and with a full political support, the concept of economic diplomacy is theoretically designed and implemented in practice, in spite of aggravating circumstances. This concept is not a novelty compared to what is done in the region and the world, but it is made in a new way and adjusted to the conditions in Bosnia and Herzegovina. The Department changed the way of work and, instead of a reactive approach, starting applying a proactive approach, implementing a series of activities which transformed the economic diplomacy from a declarative to the real priority of the BiH foreign policy. A shift was made towards a systematic approach in this area. Prior to this, economic diplomacy was reduced to individual success of BiH diplomats who had enough predisposition, desire, initiative and strength to implement noteworthy activities in this
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area. Such an example would be the engagement of the ambassador Ferhat Šeta in libya, which, from the point of view of economic diplomacy, can be evaluated as very successful. In order for the concept of economic diplomacy to truly come to life, it is necessary to pay attention to personnel issues and take into account the opinion of the Head of Department when selecting staff to work in the Department. Also, it is necessary to pay much more attention to improving the technical equipment in the Department. In the forthcoming stages, it will be necessary to establish better links with the business sector, whereby the economic diplomacy will be more business oriented.
3.2.2 Organisation of BiH Economic Diplomacy Abroad The concept of economic diplomacy abroad is primarily based on the work of diplomatic missions and consular offices of Bosnia and Herzegovina supported through the work of honorary consuls and business clubs or business councils, as well as the representative offices of the BiH Foreign Trade Chamber which need to be established. Diplomatic missions and consular offices have, without any doubt, the most important role in the concept of economic diplomacy. From the point of view of economic diplomacy, it is necessary to appoint economic advisors in the most important embassies, who will exclusively deal with the economic diplomacy. They should have good insight into the economic situation in the host country and well established contacts. In the focus of their interest should be the following: information about the economic sectors of interest for BiH export, contacts with potential investors, legislation pertaining to the business operations in the host country, possible trade barriers, etc. Diplomatic missions and consular offices should be able to provide practical advice concerning the manner of business operations of domestic companies in the host country. In addition, they should be able to give proposals as to which products and in which manner can find buyers at the market of the host country. reporting on economic sectors of the host country, which are attractive to exporters from BiH, should be focused on the following: description of the market for a specific economic sector, production and demand for products within that sector, information about the policy of the host country in that sector, assessment of opportunities for BiH businesses in that sector, conditions and manner of payment, data and assessments about the competition in that sector, specific or aimed fairs and tenders and projects which are to be implemented in that specific sector. majority of BiH diplomatic and consular offices have two to three persons with diplomatic status. Therefore, it is difficult under such circumstances to organise specialists who would, as diplomats, be dedicated only to the issues concerning the economic diplomacy. In any case, it is necessary in a decision on appointment to determine which person in a diplomatic mission or consular office is in charge of the tasks related to the economic diplomacy, in order to achieve the quality of work through accountability and performance appraisal. In addition, it is very important that diplomatic missions and consular offices have an adequate budget for economic diplomacy tasks, since the economic diplomacy without budgetary support remains a “paper dragon”. An assessment of opportunities for economic cooperation with a country should not be crucial, but it should be one of the most important factors when deciding on opening or closing of a diplomatic mission or consular office of a sending country in a host country. Spokesperson of the ministry of Foreign Affairs of the Philippines, raul Hernandez, on the occasion of closing of 10 Philippine embassies said that the decision on closing of the embassies was made based on the three pillars of the national foreign policy: national security, promotion of economic diplomacy and protection of rights and prosperity of the Filipinos living abroad. Hernandez said that, in addition to the costs of the embassy and staff, main factors affecting the
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decision to close a diplomatic mission are the scope of trade with a host country, investments ... Filipinos who live there.3 on 08 April 2011, the rnW broke the news that the netherlands would close 9 embassies, primarily led by the redesign of the priorities of its own foreign policy. The then Dutch minister of Foreign Affairs, Uri rosenthal said that economic interests of the netherlands had the priority over the provision of assistance to developing countries. Accordingly, the Dutch embassies were closed in four African countries (Burkina Faso, Cameroon, Eritrea and zambia) and in five countries of latin America (Bolivia, Ecuador, guatemala, nicaragua and Uruguay). Simultaneously, the netherlands opened two new diplomatic missions in Panama and Chinese city of Chengdu, while the embassy in Tanzania was transformed into an economic representative office.4 Particular support to business-related lobbying and networking can be provided by honorary consuls. The Council of ministers of Bosnia and Herzegovina has so far appointed 17 honorary consuls in 13 countries, while the appointment of additional 46 honorary consuls is in process. In 2013, the Presidency of Bosnia and Herzegovina took over the task of appointment of honorary consuls. In order to achieve results in their work, honorary consuls should complete training in duration of at least 7 days in the BiH ministry of Foreign Affairs, particularly in the Department for Economic Diplomacy. It is also necessary to develop a reporting system for them to report on their activities, particularly in the field of economy. The existing practice is that honorary consuls report to the BiH Foreign ministry once a year. reappointment of honorary consuls should depend on the quality of work and reporting. In addition to the partnership within the strategic alliance of BiH institutions, it is necessary to build another significant partnership, which is a partnership with the BiH diaspora in the world. nobody knows a country better than the people who live in it and make their living and struggle for the advancement of their families. Diplomats come and go, while diaspora share their destiny with the citizens of the host country. In principle, experiences with the BiH diaspora are very positive, but it is necessary to maintain the existing and establish new relations with our diaspora. BiH diaspora, by its structure, is heterogeneous. There are BiH citizens abroad who made great success in business, science and art. They earned respect in the host country solely on the basis of their work and conduct and there are numerous BiH citizens abroad who were awarded prestigious awards. Therefore, it is necessary to pay particular attention to the development of bilateral relations with the countries where there is a large BiH diaspora, primarily to protect the interests of BiH citizens in those countries, to improve cultural relations, but also to include diaspora in bilateral economic relations. In that sense, a very good approach would be to ensure support for the concept of economic diplomacy abroad through the network of business clubs and business councils. Business clubs should be a place of gathering of business people, establishment of business to business contacts (B2B), fast organisation of business meetings and a place where business people can meet each other and exchange information. of particular importance is to maintain contacts between businessmen from Bosnia and Herzegovina who live and work in the host country and businessmen from Bosnia and Herzegovina who intend to start a business in the host country.
3.2.3 Strategic alliance of BiH institutions Department for Economic Diplomacy initiated the establishment of a strategic alliance of BiH institutions which acts as an informal group composed of the BiH ministry of Foreign Affairs, BiH ministry of Foreign Trade and Economic relations, Foreign Investment Promotion Agency and BiH Foreign Trade Chamber. The main reason behind the establishment of the strategic alliance of BiH institutions is to create a competitive synergy of the institutions that are members of the strategic alliance. In this way, communication in the field of economic diplomacy was improved. All other state and entity institutions and chambers which want to do so can assist in improving the export of BiH products to other countries and promoting foreign investments in BiH and they are welcome to join the strategic alliance of BiH institutions. 3
Tina g. Santos, 10 PH embassies, consulates to be closed, 25 January 2012. http://globalnation.inquirer.net/23935/10ph-embassies-consulates-to-be-closed-palau-appeals, downloaded 20 June 2013.
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John Tyler, Netherlands to close nine embassies, radio netherlands Worldwide, 8 April 2011, http://www.rnw.nl/english/article/netherlands-close-nine-embassies, downloaded 24 June 2013.
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3.2.4 Environment in which economic diplomacy operates The concept of economic diplomacy cannot remain at the level of ideas. It operates in a real environment where there are real processes going on and whose subjects are real people. For that reason, activities on the development of a strong concept of economic diplomacy have to be implemented continually and related techniques must be developed and tailored in a manner suitable to a particular place and time. The environment in which the economic diplomacy of Bosnia and Herzegovina currently operates is very complex. EU and nATo integration has significantly stagnated, our country is not yet a member of the WTo and as of 01 July 2013, Croatia, which is a very important BiH trade partner will leave CEFTA and become a member of the EU. Export of BiH products is harder due to a strong currency, which is, at the same time, important for attracting foreign investments. There is an obvious lack of adequate legislation in BiH, particularly of those regulations governing the area of certification of domestic products which are to be exported. In addition, budgets are ever tighter, while the need to finance economic diplomacy activities is increasing because good marketing is costly. In addition, it is necessary to have in mind conditions on foreign markets: fierce competition, overcrowded markets with goods of different quality, very cheap products, as well as the economic crisis in today’s globalised world. Still, even under such conditions, the BiH economic diplomacy is implementing its activities and investing further efforts to ensure BiH businesses find their place on the world market. Thanks to the activities under the realm of economic diplomacy, Bosnia and Herzegovina is today a member of CEFTA and it has a Free Trade Agreement with Turkey, which, in addition to 4 million citizens of our country, increases the market to around 100 million consumers. In addition, it is also planned to joint EFTA, which would further increase the number of consumers. Economic diplomacy also has some wider implications, because good economic cooperation acts as a factor of stability in the region. A logical path towards renewal of trust in the region is implementation of large economic projects of regional significance.
3.2.5 Strategic markets for BiH markets of strategic importance for BiH and thereby for economic diplomacy are the neighbouring countries, other countries of the Western Balkans, EU market, mediterranean countries, middle Eastern countries and large markets in expansion, such as India and China. In the current situation, so called third markets are the most promising markets because BiH has had a positive economic memory with them and it has already realised significant business projects there. Having in mind the global recession, these markets are the ones with the most dynamic development as they are still not developed or crowded and objectively they offer wide room for business activities. The fact is that the competition is getting fiercer in these markets, wherefore the time is one of the key factors and requires that the activities in these markets start as soon as possible.
3.2.6 Local communities in the concept of economic diplomacy local communities, from municipal to cantonal or regional level, are insufficiently used as a potential to attract foreign investors in Bosnia and Herzegovina, although they could be the best acceptors of foreign investments in our country. local communities which have well designed development projects in line with the global standards are very attractive to foreign investors and BiH economic diplomacy should in future rely on this potential much more. on the other side, authorities in a local community can resolve majority of issues that foreign investors face. e strane, vlasti u lokalnoj zajednici mogu riješiti većinu pitanja s kojima se strani investitori susreću.
3.4 Business Forum – a positive example of efficient concept of BiH economic diplomacy Efficient organisation of economic diplomacy involves a systematic approach to precisely defined activities. organisation of a business forum abroad represents a proactive approach to economic diplomacy, considering that BiH diplomacy takes over the initiative by analysing and precisely determining the countries that have potential for further development of economic cooperation. Business forums are based on the idea that improvement of exports and increasing of inflow of foreign investments can be achieved by establishing direct contacts between businessmen. This is the way to create a friendly environment for businessmen from both countries. In the first half of 2013, the BiH ministry of Foreign Affairs, in cooperation with the BiH Foreign Trade Chamber and FIPA, organised 6 business forums in the United Arab Emirate, Qatar, India, Austria, russia and the UK.
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Having in mind the increasing oil prices, potential of investment in the countries that sell oil has been recognised as high yielding. Considering that BiH has good political relations with the gulf countries, it is logical that the UEA and Qatar were the first countries to organise business forums in 2013. The business forums in India and russia were next, because these are the countries with large markets. The fact that the number of business forums organised abroad in the first half of 2013 is larger than the number of business forums organised over the three previous years speaks how much the BiH economic diplomacy activities have been intensified. The BiH Foreign Trade Chamber, in cooperation with the BiH ministry of Foreign Affairs, announces a call for applications, which practically means that any BiH company, member of the BiH Foreign Trade Chamber, can be a member of the state delegation, which is a sort of “innovation” compared to earlier practice. Companies from BiH attend the forums on the basis of their own interest and costs of travel and accommodation of their representatives are borne by the companies themselves. Diplomatic missions and consular offices, together with the host, i.e. institutions of the host country attempt to bring esteemed partners from the host country, which means that the BiH companies are in the position to establish high-quality contacts. organisation of a business forum is linked to the visit at a high or highest level, whereby linking the politics and economy. Every visit within which a business forum is organised also includes the signing of an agreement with a host country in order to remove potential barriers to economic cooperation and foreign investments. A business forum starts with opening remarks by high-level officials, usually the BiH minister of Foreign Affairs, followed by presentations of the existing trade cooperation and possibilities for investments in Bosnia and Herzegovina. An important element of the business forum is a time for B2B contacts and a round table. The forum is closed by a reception where businessmen can exchange information and further already established contacts in an informal atmosphere. Following the business forum, diplomatic missions and consular offices of Bosnia and Herzegovina provide further support to the BiH companies for their engagement at the market of the host country.
4. Conclusion Bosnia and Herzegovina has faced different challenges over the years. one of these challenges is how to achieve successful economic development. Bosnia and Herzegovina is a country with great potential. An expression characterising the country boasting about its unused potentials is that it is a “... rich country of poor people...”. good leadership and good organisation is required to achieve that rich people live in a rich country, or at least people who are not on the verge of poverty. This therefore means that potentials should be transformed into economically attractive and environmentally acceptable projects that can be offered to domestic and foreign investors. However, development of an efficient concept of economic diplomacy implies much more than the activities related to the development of such projects and it includes a series of other activities. Development of such a concept requires a multidisciplinary approach both in terms of the areas covered and institutions involved in this concept. The ultimate objective of the economic diplomacy must be economic development of the country. Therefore, it is an imperative that every government that wishes good for the country it governs has such concept. Despite numerous difficulties accompanying the concept of economic diplomacy in Bosnia and Herzegovina, it is taking a clear shape and has a very real chance to develop into an effective leverage that will enhance the growth of the domestic economy. Empty political catchphrases and apathy will not resolve the economic problems and a problem of mass unemployment in BiH. only consistent hard work on a daily basis (nulla dies sine linea) on economic growth and development of economy of our country will move things forward, while it is necessary to use offered opportunities, which always exist. good and efficient concept of economic diplomacy can certainly contribute to move from poverty to prosperity, but only if it is supported by a proactive policy which will engage institutions at all levels in this country, as well as the civil society and non-governmental sector.
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