ANALYSIS OF THE COMPETITIVENESS OF THE ECONOMY AND THE BUSINESS ENVIRONMENT IN BOSNIA AND HERZEGOVINA IN THE LIGHT OF CURRENT INTERNATIONAL ANNUAL REPORTS

Abstract

Competition means the ability of economic agents to compete and be more successful, innovative and creative than the other participants at the local, national, regional and global markets to create added value. Competitiveness of the domestic economy, including the creation of an appropriate business environment, has become the dominant economic issue in the process of the European integration processes. Current reports on competitiveness and the business environment in BiH, placed BiH at the tail of the list of European countries. The low level of competitiveness of the BiH economy adversely affects the value of exports and inevitably leads to a high trade deficit, which is unsustainable in the long term. To reduce it, it is necessary to increase the competitiveness and productivity of the factors that could contribute to more efficient, and more diversified production and exports. Internal factors are key to achieve the necessary operational efficiency, i.e. the ability of management to make their decisions based on economic principles and economic valorization of the effects and results. At the same time it is important to restructure the economy, having in mind the circumstances of reduced investment activity, low inflow of foreign capital, and the low level of national saving and improving limiting business and institutional environment, which has a negative impact on the competitiveness of the BiH economy.