COMPETITIVENESS OF BOSNIA AND HERZEGOVINA – COMPARATIVE ANALYSIS

Abstract

Competitiveness or market competition is the basic regulatory mechanism of the market. Today, some economic theorists propose that the competitiveness actually measures the wealth of a society in another way, so it is very important that it contributes to innovation, improvement of the business and overall economic growth. Bosnia and Herzegovina is located close to the very bottom of the European countries according to the competitiveness of its economy. Occasionally it is possible to notice positive changes, but unfortunately they were not strong enough or continuous for achieving economic development or improving living standard. Benchmark analysis of competitiveness deepened the view of the overall movement of the BiH competitiveness and its key factors, as well as the comparison with the selected reference countries. So, the competitiveness of our economy in the period 2007-2015 is the main topic of this paper, with the basic hypothesis that BiH has a positive trend in competitiveness relative to comparable countries in the reporting period. The aim of the research is to determine the conditions, trends and underlying determinants of competitiveness of Bosnia and Herzegovina and state of our competitiveness in relation to comparative economies. Through application of standard scientific methodology, particularly methods of statistical analysis, we came to results that show that BiH economy had significant growth of competitiveness in most observed indicators, with minor variations in the period 2007-2014, while the level of variability in 2015 was so huge that we have been excluded from the Global Competitiveness Report for 2014-2015 year of the World Economic Forum. Although our country generally exhibits the lower performance than the comparative countries it is possible to perceive areas where we have strengths and potentials. The fact that the World Economic Forum, for the first time, has omitted Bosnia and Herzegovina from the Global Competitiveness Report 2014/2015, is an additional reason to re-examine all the factors that may affect the movements of competitiveness in BiH.