1. Market competitivness in Bosnia and Herzegovina
Mr. Emir Demirović
Assitent director / directorate for economic planning of BiH

2. INTRODUCTION
Although there are many definitions of competitiveness, the OECD has defined competitivness as the ability of a country to produce goods and services that can satisfy international market test and conditions while at the same time increasing the real income of the population.
This definition of competitiveness clearly indicates that a country can be regarded as competitive not only provided it has a significant role in the production and marketing of goods on world markets, but also that the citizens of that country achieve a higher standard of living measured by different indicators in the observed period.
Competitiveness is the key determinant of the movement of Bosnia and Herzegovina in the process of economic convergence towards the EU28, and the dynamics of moving towards full EU membership.

3. GDP- (in purchasing power parity ) per capita as a main indicator of competitivness in BiH
GDP in PPP-i is the main indicator of commpetitivnes in one country
BiH is has very low ranking in terms of competitivness when comaperd to EU countries and the region
Currently GDP per capita in BiH is 28% of EU28 level.
When looking the period form even though BiH made some progress, there was not substantional convergence to EU28 level.

4. International comparison of competativness in BiH with countries in EU

5. Development of BiH competitivness position from 2000 to 2015
Within time period of 15 years it is obvious that other counties have made greater progress in competitivness
Candidate countries hve improved their BDP- per capita by 10 procet points
Progress in bulgaria and Romania was even greater and they have reached to % of EU28 average.
Convergence process in Croatia after good perfomance in the beginig, was partialy slowed down due to world economic crisis in

6. Share of manufacturing in % GDP.
Underdeveloped industrial structure which produces very few products of very low value added.
Causes: historic legacy and war, unsucsesful process of privatization, slow down in reform process, bad transition performace and weak integration i international markets.
Share of manufacturing in GDP is hardly 13%, which is very dow when compared to Eastern Europe countries which have 20%.

7. Employment rate as a good indicator of commpetitivnes in BiH in comparison to EU countries
Due to historical legacy and and low capacity utilization BiH has very low employment rate.
Developmetnt model and low level of investment and economic growth are key reasons for longstanding and presistent low level of employment in BiH.
Employment rate in BiH of only 39% is by far the lowest rate in Europe nad region as well.

8. Share of exports in % GDP
Weak production base, underdeveloper industrial structure and weak competitvness are key reasons for low level of exports in GDP.
Expots of Bosnia and Herzegovina have share of only 30%.
Sturcture of BiH export supply is very infavorable, prety narrow and consists of energy and row materials intensive.
Share of capital and technology intensive goods is quite small at around 5% of total exports

9. Exports of goods per capita in $
BiH as small and open economy is strategicly relays a lot on its exports.
The best indicator of low competitivness in BiH is its export of goods per capita of around 1150$.
In general all countries of the western balkans have similar problems, while counties of Central and Eastern Eurupe have reached the level of $ per capita.

10. Foregin Direct Innvestments in % GDP (cumulative approcah)
Export oriented development strateg relays a lot on domestic and foreign invetmens
Complex political structure, legal franemwork and competitivnes level in the county hase prevended larger inflows of FDI.
Up to now total foreign direct investment in BiH have reached 10 billion KM which is around 40% of GDP in Bosnia and Herzegovina.
FDI per capita in BiH is around 2500$, while for exaple in Czeck Republic it is around $.

11. International comparison of FDI per capita $

12. Thank you for your attention!