The Challenge

As a country in transition, postwar Bosnia and Herzegovina (BiH) still needs to ensure political stability, foster a national identify, and create a single economic space.  While over 50% of GDP goes to support the public sector, the country struggles to perform basic governmental functions and has not transitioned to full sovereignty.  The country remains deeply divided along ethnic lines, and these divisions inflame distrust and impede progress in virtually every socio-political and economic area.

USAID Goals

The U.S. foreign assistance program, implemented primarily by USAID, is helping create a more stable country closer to Euro-Atlantic integration through two mutually reinforcing development objectives – democracy and governance, and economic growth.

Democracy and Governance Objective:  More functional and accountable institutions and actors that meet citizens’ needs.

USAID’s democracy programs strengthen BiH’s democratic institutions while increasing citizen engagement in governance, focusing primarily on the areas of rule of law, good governance, and civil society. USAID’s rule of law program strengthens the independence, accountability, and effectiveness of the judiciary; coordinates implementation of the Justice Sector Reform Strategy; and helps BiH judicial institutions prepare for EU accession.

USAID works with local governments to improve customer service, administrative systems, budgeting, and financial management, and to reduce opportunities for corruption. Our programs support political and legislative processes to promote policy reforms and improve the legal framework to affect more transparent and effective government administration at the national and sub-national levels.
USAID’s civil society programs strengthen independent media and empower organizations and citizens to engage in advocacy and civic actions to improve the quality of life of BiH citizens. These programs help NGOs build strategic partnerships with the government and improving the financial viability of the sector.

Economic Growth Objective:  A competitive, market-oriented economy providing better economic opportunities for all its citizens.

USAID programs improve economic opportunities and promote a business-friendly environment by supporting BiH efforts to increase competitiveness and productivity, attract investment, and make economic policy reforms.

Efforts to improve economic opportunities target the sectors with the highest growth potential:  agriculture, wood products, tourism, and light manufacturing. Assistance includes marketing BiH as a tourist destination, introducing new technologies in the agriculture sector, promoting marketing linkages, and supporting the use of IT applications to improve efficiency of small and medium-sized enterprises. USAID uses Development Credit Authority credit guarantees to improve access to finance for SMEs and capitalize on technical assistance through other programs.

Efforts to promote a business-friendly environment focus on economic reforms and increasing the ability of government institutions to support economic growth and development.  Assistance will reduce or eliminate barriers for businesses, establish a more transparent tax system, create a reliable energy regulatory environment, and promote transparent banking, investment, and insurance policies.

Cross-cutting Priorities:

 Cross-cutting initiatives that are critical to U.S. foreign policy objectives include youth, empowering women, and inter-ethnic reconciliation.  USAID integrates these important concepts into the design and work of all its programs in BiH, and works to create a vibrant society that values tolerance and diversity, and where women, youth, and minorities flourish. Corruption is also a cross-cutting area of focus since it is pervasive in many facets of BiH life – including education, health, judicial systems and the public employment sector – and is a major obstacle to progress in BiH.  USAID programs will seek opportunities to promote transparency within all beneficiaries in the public and private sector.

How We Do Business: 

USAID uses several models for partnering with local organizations to promote local initiatives and expertise in economic development as well as civil society and governance.  USAID designs its activities (either directly with local implementers or with international implementers) to include formalized partnerships with local organizations to transfer knowledge and expertise to its BiH partners as part of its sustainability plan.
 
USAID initiates and successfully implements creative partnerships with other donors.
To date, USAID has leveraged over $80 million with other donor countries in projects in agriculture, SME competitiveness, loan guarantees, financial reform, and local governance.  Direct collaboration and co-funding projects with other donors multiplies the impact of U.S. foreign assistance and sends a unified donor message to BiH authorities and local partners to continue particular reforms.