1. Equitable Development: Reduction of
Disparities in BiH through EU Accession
Prepared for:
The Balkans by 2030: full members of the European Union Seminar
in organisation of ISS
Sarajevo, June, 2011

2. BiH Regional Disparity Assessment 2010

3. BiH Regional Disparity Assessment 2010
Background
• A useful innovation and addition to the existing resources and statistical
findings
• User-friendly reference with select information in one place, at sub-entity
administrative level especially
• Official data in one place for 17 different territorial units/regions and
142 municipalities.
• 43 different sets of inputs encompassing economic, poverty, social,
infrastructural and other parameters.
• 19 indicators used for regional and 5 indicators for municipal ranking
• Key summary section and analysis of findings on a regional level in the 7
distinct areas: Demography; Education; Access to Utilities (Electricity,
Water and Sewerage); Quality of Life, Standard of Living, Transport
Infrastructure and Health; Employment; Economic Disparity, Income and
Poverty and Social Inclusion and Vulnerable Groups

4. BiH Regional Disparity Assessment 2010
Indicators
Indicators used for regional ranking Indicators used for municipal ranking
Employment rate (%) Net salary (Ø 2008)
Unemployment rate (%) Employment rate
GDP per capita (KM) Unemployment rate
Salary -monthly average (KM) Total number of students in all levels of
Average expenditure (KM) (Consumer Basket Cost) education per 1000 people
Poverty rate (%) Number of population to one doctor
Number of doctors per 1000 people
Total number of students per 1000 people
Number of registered travel cars per 1000 people
Percentage of households with sewerage system
Share of 4 member HHs without any income (%)
Share of 4 member HHs with only one income source (%)
Share of 4 member HHs with two or more income source (%)
Number of hospital beds per 1000 people
Number of displaced persons per 1000 people
Poverty gap (%)
Percentage of households with potable water
ILO Employment rate (%)
ILO Unemployment rate (%)

5. BiH Regional Disparity Assessment 2010
Sources
• Combining the findings of two largest household surveys conducted by
statistical institutions in BiH:
– Household Budget Survey (HBS) 2007 (n=7468);
– Labour Force Survey (LFS) 2008 (n=9261); and
– Administrative data
• Access to electronic HBS and LFS databases secured through MoU
between BHAS and UNDP
• Team and timeframe: UN RCO/UNDP - May-June 2010
• Final assessment document will be distributed to all interested parties in
due course
• Purpose of the assessment multi-fold – for planning, more accurate
targeting, further research and assessment, advocacy and fundraising

6. BiH Assessment
Regional and Municipal Maps
REGIONAL DISPARITIES MUNICIPAL DISPARITIES

7. BiH Regional Disparity Assessment 2010
Considerable regional disparities
• 5 Best ranked: Sarajevo, Hercegovina-Neretva, Istočno Sarajevo, Banja Luka and
Zenica-Doboj
• 5 Worst ranked: Canton 10, Una-Sana, Bosnian Podrinje, Posavina and Bijeljina
Indicators: Best ranked: No: 1 Worst ranked: No. 17
GDP per capita (KM) 13,024 KM (Sarajevo) 3,953 KM (Canton 10)
Salary -monthly average (KM) 941 KM (Sarajevo) 599 KM (Bos. Podrinje)
Average expenditure (KM) (Consumer Basket Cost) 2,242 KM (Neretva) 1,086 KM (Foca)
Poverty rate (%) 5.2% (Sarajevo) 37% (Foca)
Number of doctors per 1000 people 2.8 (Sarajevo) 0.8 (West Herz.)
Number of hospital beds per 1000 people 5.7 (Sarajevo) 0 (West Herz.)
Percentage of households with sewerage system 92.9 % (Sarajevo) 9.1% (Posavina)
Poverty gap (%) 18.8% (Sarajevo) 39.4% (Bos. Podrinje)
ILO Employment rate (%) 43.1% (Doboj) 20.4% (Canton 10)
ILO Unemployment rate (%) 14.7% (Doboj) 38.8% (Central Bos.)
Employment rate (%) 33.7% (Sarajevo) 13.8% (Canton 10)
Unemployment rate (%) 30% (B. Luka) 51% (Una-Sana)

8. GENERAL DEVELOPMENT AND LIVING STANDARDS PER TERRITORIAL UNIT IN BiH - INDICATORS
INDICATORS
Number of displaced persons
Share of 4 member HHs with
Share of 4 member HHs with
Number of hospital beds per
two or more income sources
ILO Unemployment rate (%)
Average expenditure (BAM)
Number of registered travel
only one income source (%)
Total number of students
Percentage of households
Percentage of households
ILO Employment rate (%)
Salary -monthly average
Unemployment rate (%)
without any income (%)
(Consumer Basket Cost)
Share of 4 member HHs
GDP per capita (BAM)
Employment rate (%)
cars per 1000 people
with sewage system
with potable water
Number of doctors
Areas
per 1000 people
per 1000 people
per 1000 people
Poverty rate (%)
Poverty gap (%)
1000 people
(BAM)
(%)
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
BIH 21.9 40.6 6,429 752 1,655 18.2 1.5 160 185 47.7 1.6 34.3 64.1 3.5 32 26.2 94.1 33.6 23.4
FBiH 22.6 44.0 6,718 751 1,777 17.0 1.6 174 192 55.3 2.0 32.5 65.5 3.5 24 25.2 96.9 31.8 25.0
Una-Sana 15.0 51.2 4,060 686 1,719 19.5 1.0 165 146 45.2 9.1 40.1 50.8 2.6 15 25.3 97.2 26.8 27.7
Posavina 15.5 50.3 4,274 656 1,822 11.7 1.2 144 176 8.1 7.5 38.7 53.8 2.3 14 23.2 96.4 34.0 20.0
Tuzla 20.4 50.8 5,802 707 1,459 26.5 1.7 173 182 50.2 1.1 41.6 57.3 2.9 39 28.1 95.6 33.0 23.4
Zenica-Doboj 22.6 45.6 5,588 621 1,483 23.5 1.2 173 167 60.3 1.7 32.0 66.3 2.6 12 24.0 98.7 35.5 23.5
Bosnian-Podrinje 16.8 46.6 4,238 599 1,350 29.2 1.1 141 145 68.9 0.0 27.4 72.6 2.2 106 39.4 95.3 34.5 25.5
Central Bosnia 18.5 49.0 4,445 608 1,739 15.3 1.1 173 168 46.0 0.9 34.4 64.7 5.1 31 21.8 99.2 26.1 38.8
Neretva 22.5 40.9 7,592 822 2,242 9.9 2.0 174 234 38.7 0.0 25.6 74.4 3.9 21 19.2 94.0 38.9 16.7
West Herzegovina 19.6 39.9 4,860 616 1,880 7.5 0.8 190 263 14.7 0.0 68.6 31.4 0.0 2 18.8 97.4 28.7 21.7
Sarajevo 33.7 34.5 13,024 941 2,207 5.2 2.8 186 253 92.9 0.9 16.3 82.8 5.7 22 21.4 99.2 31.4 24.6
Canton 10 13.8 46.7 3,953 676 1,492 19.6 1.0 121 147 25.0 0.0 28.6 71.4 1.1 20 30.1 79.9 20.4 33.6
RS 20.6 33.9 5,906 755 1,463 20.1 1.4 138 166 33.8 0.6 37.9 61.5 3.4 47 27.5 89.6 37.3 20.5
Banja Luka 22.7 30.0 6,659 773 1,526 19.5 1.6 139 175 40.0 0.0 41.0 59.0 4.4 32 31.3 91.2 33.8 22.0
Bijeljina 17.2 39.3 4,899 749 1,431 18.7 1.0 129 160 18.7 1.8 41.6 56.6 1.7 57 26.1 89.5 41.5 18.4
Doboj 17.2 37.4 4,255 646 1,411 20.2 1.1 121 158 29.6 0.0 30.0 70.0 2.7 52 26.3 88.2 43.1 14.7
East Sarajevo 22.0 34.5 6,672 782 1,590 17.3 1.5 133 160 33.1 0.0 13.8 86,2 3.6 57 20.0 92.8 42.7 17.0
Foca 17.9 42.2 5,667 810 1,086 37.0 2.4 116 121 62.5 0.0 45.5 54.5 5.1 63 23.4 98.9 29.9 26.7
Trebinje 24.9 34.6 6,846 740 1,367 22.9 1.6 151 178 36.9 3.7 47.5 48.7 2.5 91 20.3 73.6 31.9 34.8
DB 25.5 42.3 7,681 730 1,395 25.8 1.5 163 268 57.3 1.5 42.4 56.1 3.8 15 26.2 88.9 25.1 31.9
*The data displayed in this table is a compilation of the most relevant findings presented in the rest of the document which contains refference to the
sources of information.

9. GENERAL DEVELOPMENT AND LIVING STANDARD PER REGIONS IN BIH – INDICATOR RANK
REGION RANK BY INDICATORS
Number of displaced persons
with potable water available
Share of 4 member HHs with
Share of 4 member HHs with
Number of hospital beds per
two or more income sources
ILO Unemployment rate (%)
Average expenditure (BAM)
Number of registered travel
without any income source
only one income source (%)
possessing sewage system
Total number of students
Percentage of households
Percentage of households
Unemployment rate (%)
ILO Employment rate (%)
Salary -monthly average
(Consumer Basket Cost)
Share of 4 member HHs
GDP per capita (BAM)
Employment rate (%)
cars per 1000 people
Number of doctors
Areas
per 1000 people
per 1000 people
per 1000 people
Poverty rate (%)
Poverty gap (%)
1000 people
(BAM)
(%)
(%)
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
Una-Sana 16 17 16 10 6 9 16 7 15 8 17 10 15 11 13 10 6 14 13
Posavina 15 15 13 12 4 4 10 10 7 17 16 9 14 13 15 7 7 7 5
Tuzla 8 16 7 9 11 15 4 5 5 6 11 12.5 10 8 7 14 8 9 8
Zenica-Doboj 5 11 9 14 10 13 9 6 10 4 13 7 7 10 16 9 4 5 9
Bosnian-Podrinje 14 12 15 17 16 16 12 11 16 2 4.5 4 4 14 1 17 9 6 11
Central Bosnia 10 14 12 16 5 5 11 5 9 7 9.5 8 8 2 9 6 1.5 16 17
Neretva 6 8 3 2 1 3 3 3 4 10 4.5 3 3 5 11 2 10 4 2
West Herzegovina 9 7 11 15 3 2 17 1 2 16 4.5 17 17 17 17 1 5 13 6
Sarajevo 1 2 1 1 2 1 1 2 3 1 9.5 2 2 1 10 5 1.5 11 10
Canton 10 17 13 17 11 9 10 15 15 14 14 4.5 5 5 16 12 15 16 17 15
Banja Luka 4 1 6 5 8 9 5 12 8 9 4.5 11 9 4 8 16 12 8 7
Bijeljina 12 6 10 6 12 7 14 14 12 15 14 12.5 11 15 5 11 13 3 4
Doboj 13 4 14 13 13 11 13 16 13 13 45 6 6 9 6 13 15 1 1
East Sarajevo 7 5 5 4 7 6 8 13 12 12 4.5 1 1 7 4 3 11 2 3
Foca 11 9 8 3 17 17 2 17 17 3 4.5 15 13 3 3 8 3 12 12
Trebinje 3 3 4 7 15 12 6 9 6 11 15 16 16 12 2 4 17 10 16
Brčko District 2 10 2 8 14 14 7 8 1 5 12 14 12 6 14 12 14 15 14

10. BiH Regional Disparity Assessment 2010
Municipal Disparities
• 89 municipalities in total or 62% are underdeveloped or extremely
underdeveloped
– 34 extremely underdeveloped municipalities
– 55 underdeveloped municipalities
• Some municipalities are too small/diverse to constitute useful units of
measurement. Differences in municipal population:
– East Drvar - 110 residents; Petrovac – 259 residents; VS
– Sarajevo - 304,614 residents; Banja Luka - 223,641.
Indicators: Best ranked: No: 1 Worst ranked: No. 17
Net salary (Ø 2008) 1,069.21 KM (SA Centar) 481.83 KM Usora
Employment rate 67.9% (SA Centar) 3.2% Vukosavlje
Unemployment rate 14.5% (SA Centar) 79.7% Teocak
17.2% (Prnjavor) 77.7% Sapna
Total number of students in all levels of education 235/229 (SA C/Lukavica) 0/7 Dobretici/Ravno
per 1000 people
Number of population to one doctor 81 (SA Centar) 4,618 Kalinovik
No doctor in Istocni Mostar,
Osmaci, D. Zabar, Vukosavlje...

11. Equitable Development, BiH EU Accession
and EU Policies to alleviate poverty and
disparities

12. Key issues in rural areas of BiH and
agriculture sector
• Most of BiH is rural - average population density is 75.1 people per km2
• 47% of area is agriculture land
• Only 20% of area is adequate for intensive farming
• Rural population accounts for 60% of the population, farms provide
income/livelihoods for approx. 20% of population
• Issue of depopulation and aging population of rural areas
• Poor infrastructure and services, outdated technology
• Overlapping institutional competences and functions in Agri sector
• Poor market orientation/difficult to export to EU/low competitiveness
• No product standardisation/lack of laboratory certification
• Fragmented supply chains, expensive logistics, limited access to finance
• Small-sized family farms/small land plots/limited commercial farming
• Only 2-3% of BiH budget dedicated to agri sector that contributes approx.
10% to GDP (13% in RS, 6 in FBiH)-ongoing underinvestment in the sector
• BiH remains net importer of agricultural and food products
• Poor care for the environment / Rural dev. policy still of marginal interest

13. EU principle of regional equitable development
EU Regional / Cohesion Policy
• EU Regional Policy – Implemented through structural funds - The
European Fund for Regional Development (EFRD), European Social Fund
(ESF) , Cohesion Fund contribute to three objectives:
– Supporting Development in the Less Prosperous Regions
– Regional Competitiveness and Employment
– European Territorial Cooperation
• In the period 2007-2013, cohesion policy benefits from 35.7% of the total
EU budget or 347.41 billion EUR aimed at Member States whose Gross
National Income (GNI) per inhabitant is less than 90% of the Community
average (all non EU-15 member states + Spain)
• Europe is divided into various groups of regions corresponding to the
classification known by the acronym NUTS (for collection of statistics,
analysis, framing of EU policies)

14. EU Map – NUTS division
• Remote rural areas of EU
(more than 45 mins drive to a
town with 50,000 inhabitants)
experience similar problems as
rural areas in BiH
(depopulation, aging
population, etc.)
• EU regional development
statistical, monitoring and
planning tools:
– EUROSTAT Regional Yearbook
– EU Regional Lisbon Index
– EU Regional Competitive Index
– EU Quality of Life Survey
– EU Analysis on Remote Rural
Regions
– Regional Challenges in the
Perspective of 2020 (EU Regional
Disparities and Future Challenges)

15. EU Support to Agricultural and Rural Development
CAP – Common Agricultural Policy
• CAP benefits 48% of the total EU budget (480 billion EUR 2007-2013) –
implemented through European Agricultural Guarantee Fund (EAGF),
European Agricultural Fund for Rural Development (EAFRD):
– Promotes a viable and competitive agricultural sector
– Contributes to sustainable development of rural areas, protecting the
environment and climate change, improving quality of life in rural
areas
– Promotes the EU agricultural sector in world trade
• EAGF finances direct payments to farmers and measures to regulate
agricultural markets – 2009 budget was 41.13 billion EUR
• EAFARD – 20% of CAP budget – 2009 budget was 13.97 billion EUR
– Axis 1: Improving the competitiveness of the agricultural and forestry sector
– Axis 2: improving the environment and the countryside
– Axis 3: quality of life in rural areas and diversification of the rural economy
– Axis 4: LEADER (implementation of local development strategies through LAGs)

16. Finacing of agriculture in BiH
• 2011 FBiH subsidies/agriculture contributions – 55 million KM
• 2011 RS subsidies/agriculture contributions – 60 million KM
• FDI inflow in BiH in the period 1994-2009 amounted to 5.8 billion EUR, The
average FDI contribution to GDP, in last period, was 5.8%.
FDI inflow in BiH by sectors – dismal investments in Agriculture?
Source: Central Bank of BiH; MoFTER,FIPA

17. What EU future holds for BiH?
Case of Croatia
• SAPARD 2005-2006 (Special Accession Programme for Agriculture & Rural
Development) for structural adjustment of beneficiaries countries
agricultural sectors and rural areas, and implementation of the Acquis
concerning the CAP and related legislation (2006 SAPARD support to
Croatia was 25 MEUR)
• SAPARD was succeeded by Component V for Rural Development of the IPA
programme.
• Croatia IPARD funds 2007-2011 – EU contribution 129.4 MEUR (75.25%),
total public aid to programme 171.97 MEUR and anticipated private
contribution of 135.5 MEUR – Total: 307.5 MEUR
• Overall IPA 2011 for BiH is envisaged to be 102 MEUR - BiH IPARD would
make considerable contribution to agricultural and rural development in
the country – but is BiH ready?

18. EU Instruments – Post Accession
CAP 2009 Expenditure
European Agricultural European Agricultural Fund for
Guarantee Fund Rural Development
(EAGF) (EAFRD)
EU Total EUR 46.47 billion EUR 13.97 billion
Czech Republic EUR 557.4 million EUR 409.0 million
Slovenia EUR 104.4 million EUR 136.5 million
Slovakia EUR 274.1 million EUR 282.7 million
Romania EUR 598.3 million EUR 1.5 billion
Bulgaria EUR 227.9 million EUR 456.8 million
Poland EUR 2.03 billion EUR 1.97 billion
Absorption of EAFRD in 2009
70% 76% 79%
45% 53%
37%
Bulgaria Romania Poland Czech Republic Slovenia Slovakia

19. Conclusions
• Agriculture and rural potential not tapped in BiH
• Equitable development crucial – geographical disparities in BiH are
considerable
• Rural areas stagnate and need to become more attractive
• Agricultural sector needs to become more competitive
• EU pre and post accession funds would play crucial injection for
revitalization of rural areas and agricultural sector in BiH
• BiH IPARD important next step to address a number of
rural/agriculture/poverty systematic issues
• Development of absorption capacities at all levels (including municipal)
needs to become priority for all development actors