Research
‘Bosnia and Herzegovina’s Bilateral Relations with Turkey’
December, 2008
Preface
As part of its activities, Centre for Security Studies regularly produces its own research on different topics related to the security sector reform and Euro-Atlantic integration, as well as topics on bilateral relationships in the domain of foreign policy Therefore, following research represents an analysis of the relation between Republic of Turkey and Bosnia and Herzegovina from the economic aspect of cooperation.
The mentioned research has been conducted by Mr. Nerkez Opacin, within the framework of his internship at the Centre for Security Studies as a part of obtaining a BA major in International Relation, International University of Sarajevo.
The author received the guidelines and assistance from the Centre for Security Studies but all statements in the research are the author’s own and CSS cannot be held responsible.
‘Bosnia and Herzegovina’s Bilateral Relations with Turkey’
The main focus of this research is to closely examine and analyze the extent of bilateral relations between Republic of Turkey and Bosnia and Herzegovina. The methodology is based on analyzing the general definition of international relations as an introduction, followed by a synopsis of bilateral relations between these two countries, whilst the main focus will be placed on the current state of economic cooperation.
International relation (IR) is a branch of political science. It represents the study of foreign affairs and global issues among states within the international system, including the roles of states, inter-governmental organizations (IGOs), non-governmental organizations (NGOs), and multinational corporations (MNCs). It is both an academic and public policy field, and can be either positive or normative as it both seeks to analyze as well as formulate the foreign policy of particular states.
Apart from political science, IR draws upon such diverse fields as economics, history, law, philosophy, geography, sociology, anthropology, psychology, and cultural studies. It involves a diverse range of issues including but not limited to: globalization, state sovereignty, ecological sustainability, nuclear proliferation, nationalism, economic development, terrorism, organized crime, human security, foreign interventionism and human rights.
Bilateralism comprises the political and cultural relations between two states. Most international diplomacy is done bilaterally. Examples of this include treaties between two countries, exchanges of ambassadors, and state visits. The alternatives to bilateral relations are multilateral relations, which involve many states, and unilateralism, when one state acts on its own.
Bosnia and Herzegovina has a tradition of bilateral relations with the Republic of Turkey, since the very beginning of Bosnia and Herzegovina as an independent state. Relations between these two states are based on several aspects, which are political, educational, military, cultural and economical. Whilst some are less developed, certain aspects which comprise relations between Turkey and BiH are further emphasized and expanded. The examples of relations which are significant and impact upon further development of BiH are relations which are focused on political, educational and economic strengthening. .
Political relations between Turkey and BiH reflect a very strong myriad of assistance and support. Due to deep historical, cultural and social bonds, Bosnia and Herzegovina has always been one of those countries which have a privileged place on the Turkish foreign policy agenda. Turkey believes that the re-establishment of the multi-ethnic and multi-cultural status of Bosnia and Herzegovina through preservation of its independence, sovereignty and territorial integrity within its internationally recognized borders is important.
Turkey has substantially contributed to the reconstruction of Bosnia and Herzegovina and actively supported the implementation of the civilian and military aspects of the Dayton Peace Agreement which ended the war. Turkey has also played a role of a security provider for BiH and as a Steering Board member has actively been joining the work of the Peace Implementation Council and contributing to the EUFOR (Operation Althea) by a force composed of approximately 450 personnel including Integrated Police Unit (IPU). There are also Turkish personnel in the EU Police Mission (EUPM).
At the start of September 2008 members of the BiH Presidency visited the Grand National Assembly of the Republic of Turkey and met with the President of the Assembly Mr. Koksal Toptan. During the meeting it was stated that the parliamentarian relations between Bosnia and Herzegovina and the Republic of Turkey are very good, attested by cooperation between the parliamentarian groups of the two countries. During the meeting both parties expressed satisfaction over satisfying political relations between the two countries, which serves as a basis for better economic and trade cooperation.
Turkish President Abdullah Gul highlighted the importance of its ties with Bosnia-Herzegovina, saying that "we maintain our efforts to protect Bosnia-Herzegovina's sovereignty, political unity and territorial integrity. Turkey is an influential member of the Steering Board of the Peace Implementation Council, the international body charged with implementing the Dayton Peace Agreement for Bosnia-Herzegovina."[1]
In the field of educational assistance, Turkey did invest a lot in Bosnia and Herzegovina and as a result, several cultural and educational centres have been opened. One of them is the Konya – Sarajevo Cultural Educational Centre. The main aim of the centre is to negotiate in agricultural, cultural and sport interactions between the two cities. Another aim of this Centre is to organize various courses and by bringing lecturers from Konya to educate the participants in various aspects, like EBRU painting, wood painting, paining on porcelain, making bijouterie, and learning Turkish. The Konya – Sarajevo Cultural Educational Centre was opened in the year 2007 where the two cities signed an agreement about further cooperation in an educational sense.
Another huge investment considering the developments in education sector was the opening of the International University of Sarajevo. The founders and the co-founders of the International University of Sarajevo are the Foundation for Education Development Sarajevo established according to theBosnian lawon July 2nd2002 and the Advisory Board of the International University of Sarajevo. Other institutions that will substantially contribute to the founding of the IUS will also be considered as founders or co-founders of the University. By founding the International University of Sarajevo the members of the Foundation for Education Development Sarajevo and the IUS Advisory Board are determined to contribute to academic, democratic and economic advancement in Bosnia and Herzegovina and to help offset the magnitude of the destruction caused by the war. The members of the Foundation for Education Development Sarajevoand the IUS Advisory Board are committed to increase academic interest in the project among Bosnian and foreign scholars who are willing to participate in its realisation and who adhere to the highest academic criteria and standards; to seek cooperation with interested universities in the world, universities in Bosnia and the region, and especially with other universities of similar profiles; to initialize educational connections with the Bosnian diasporas and in particular with Bosnian experts and scientists abroad; to seek for financial, material, academic and legal support for the project from all relevant institutions in Bosnia and Herzegovina and the city of Sarajevo, and other countries, and from all relevant institutions representing the international community in Bosnia and Herzegovina.
In September 2008 Turkey had opened a Linguistic Center at the International University of Sarajevo which was founded by TIKA, an organization I will further explore at a later stage in the research.
Another educational institution is the Turkish-Bosnian College. It is a private educational institution which exists and acts within the framework of Bosna-Sema educational institutions, founded in 1996 with the aim to give help and support to the educational system of Bosnia and Herzegovina. During its work in Bosnia and Herzegovina Bosna-Sema has founded a number of new subjects with the same activity in the field of primary and high education as Sarajevo College, Una-Sana College, International Primary School Sarajevo and International Primary School Tuzla in Tuzla.
However, one area of cooperation which stands out the most is the area of economical development. Due to Bosnia and Herzegovina's strict currency board regime, which links the convertible mark (Konvertibilna Marka - BAM) to the Euro, inflation has remained low. Privatization has been slow, and unemployment remains on a very high level. The introduction of a value-added tax (VAT) in 2006 has increased the government's tax revenues and resulted in a budget surplus. The economy of Bosnia and Herzegovina is based mainly on agriculture and mining, however the energy sector and forestry are also of significant importance. Electric energy is obtained largely from hydroelectric power stations placed on Trebišnijca andNeretwa rivers and thermal power stations, for example: Kakanj, Lukavac and Zenica.
Bosnia and Herzegovina (BiH) has made significant efforts to open its economy to more foreign investment. Major initiatives include a liberal State Foreign Investment Policy Law, a new value-added tax (VAT), and a uniform trade and customs policy. Despite these efforts, foreign investors continue to face a number of serious obstacles, including a complex legal and regulatory framework, non-transparent business procedures, and weak judicial structures. Privatization has lagged behind the rest of the region, providing fewer opportunities to investors interested in working in the region. Foreign investment has shown only limited gains. Foreign investment in the banking sector is the exception, with Austrian banks taking a dominant position in the local banking market. However, the investing of banks in Bosnia and Herzegovina shows that they consider this country a safe one and this could be a motivation for other investors to invest more. Under the State investment law, a foreign enterprise has the same rights as a Bosnian enterprise or citizen. Consequently, foreign entities can establish and own business enterprises with the same rights as domestic entities. Still, establishing a business in Bosnia can be an extremely burdensome and time-consuming process for investors. There are a total of twelve procedures to complete registration for a new business and it takes at least one month to complete all required steps. Registration can sometimes be expedited if a local lawyer is retained to follow up at each step of the process. The myriad of state, entity and municipal administrations creates a heavily bureaucratic system that lacks transparency. All three levels of government (municipal, cantonal, and entity) establish laws and regulations affecting businesses, creating redundant and inconsistent procedures that encourage corruption. Often it is impossible to know all of the laws or rules that might apply to certain business activities, given overlapping jurisdictions and the lack of any central source of information. It is therefore critical that foreign investors obtain local assistance and advice. Bosnia and Herzegovina in order to ease and to gain foreign investments has signed agreements to promote and protect investments with many countries including Turkey. Some of the agreements I will later explore in more detail.
Since the end of the last war and even during the war in Bosnia and Herzegovina Turkey has helped the people of this country. The Turkish companies were involved in the reconstruction of houses, factories, hospitals and the infrastructure in the region. Former Minister of State responsible for housing, Ali Dincer, said that Turkish firms would play an important role in Bosnia's reconstruction. "Turkey has made enormous efforts to achieve peace in the region and will continue its efforts to ensure peaceful coexistence."[2] Aware of the massive demand for housing for repatriation of refugees returning to Bosnia, Turkey has asked the Bosnian government to give priority to Turkish contractors to do the job of restoring destroyed buildings during the war in Bosnia and Herzegovina.
During my research I have visited the Turkish Embassy and did an interview with the Turkish Commercial Counselor Nurhan Verda Özyer. The Commercial Counselor gave me some information about the current situation in the field of economic cooperation between the two countries. According to her telling, the Turkish companies that want to invest in Bosnia and Herzegovina do not have to give any report to the Turkish Embassy in Sarajevo and that is the main reason why they cannot track the current Turkish investments in very detail. Turkish firms if they are interested in Bosnia for investing can ask for general information in their embassy in Sarajevo. Ms. Nurhan Verda Özyer said that at the moment there are no significant Turkish investments in Bosnia and Herzegovina and some of the main investors are the Turkish Ziraat Bank, the Sisecam (glass producer), and the Hayat Kimya (chemical products).
The Turkish International Cooperation and Development Agency (TIKA) was established on January 24, 1992 in order to “[provide] development assistance foremost to developing countries where Turkish is spoken and countries that border Turkey as well as [improve] cooperation through projects and programs in economic, commercial, technical, social, cultural and educational arenas. “[3] TIKA has a strategic mission to promote a positive image of Turkey and to establish durable relationships with foreign publics. Generally speaking, TIKA’s role is to facilitate economic, commercial, technical, social, cultural and educational cooperation with developing countries via projects aimed at assisting the development of these countries. In accordance with this role, TIKA works to enhance infrastructure, improve living standards, provide vocational training and employment, protect monuments of joint heritage and culture, improve cultural relations, provide information and publishing services, and assist in the teaching of the Turkish language. One effort of particular importance to Turkey’s public diplomacy activities is TIKA’s “Turcology Project”, established in 1999. In an attempt to encourage further study of the Turkish language and its relationship to similar languages and dialects, this project has aggressively worked to “widen the reach of the Turkish language, improve communications, and establish a shared cultural platform with neighboring countries. A Turcology Center has been established in Bosnia and Herzegovina. A linguistic center has been opened at the International University of Sarajevo. The Turkish minister Mustafa Said Yazicioglu inaugurated a linguistic center which was funded by TIKA. Yazicioglu said Turkey's Cooperation and Development Agency (TIKA) was running many projects in Bosnia-Herzegovina, including the restoration of historical sites in the country.
In 2006, numerous projects and activities were implemented by TIKA in Bosnia-Herzegovina including educational, social and cultural cooperation projects like support for the production of a documentary film and for the production of a television program. Another major project is the modernization of the Gorazde State Hospital. As part of the framework of the project being implemented through its Bosnia-Herzegovina Program Coordination Office, TIKA has commenced works to set up an operating theatre, as well as internal diseases, intensive and post operative intensive care and pediatric units in the Gorazde State Hospital located in Eastern Bosnia. The Gorazde Canton is forced to meet the expenses incurred by patients that are transferred out of its own budget. This situation foremost through loss of patients places a large financial burden on the Gorazde Canton which is already in a difficult economic situation. The shortfall in health services experienced by the Gorazde State Hospital will be alleviated to a large degree following the completion of the assistance project being implemented through TIKA’s Bosnia-Herzegovina Program Coordination Office.