Turkish businesses have not fully realised Bosnia and Herzegovina's (BiH) economic potential yet, and much remains to be done to take economic relations to the level of bilateral political and diplomatic ties.
"When we refer to the political and cultural relations that we have, our economic and commercial relations are far behind," Maida Becirovic, the executive director of the Foreign Investment Promotion Agency of BiH (FIPA), told SES Türkiye.
Turkey's exports to BiH reached 205m euros ($269m) in 2011, a 20% increase from 2010, according to figures published by the Turkish economy ministry. However, both years fall behind the 2008 export levels, which were 429m euros ($572m).
BiH's exports to Turkey have also increased steadily, reaching a high of 68.8m euros ($90m) in 2011, a 25% growth compared to 2010 exports. In 2001, BiH exports to Turkey totalled around 3.8m euros ($5m).
Turkey's main exports to BiH in 2011 included manufactured goods, machinery and transport equipment -- as well as food products, according to FIPA. Meanwhile, the main items exported from BiH to Turkey last year were crude materials, manufactured goods as well as chemicals, mineral fuels and lubricants.
Turkey was in 9th place on the list of BiH's most important trade partners in 2011, according to FIPA. Although Turkey was the third largest investor in BiH by the end of 2010, the country maintains 9th place regarding total investments to BiH between May 1994 and December 2010, with a total investment amount of 131m euros.
Some of the Turkish companies in BiH include Kastamonu Entegre, Soda Sanayii, Ziraat Bank, Turkish Airlines, Seha Industrial Investments and Yildirim Ozbek.
Turkish investors have also been active in the education sector in BiH -- the International University of Sarajevo's Turkish Linguistic Centre, Konya-Sarajevo Educational Centre, and the Turkology departments in University of Tuzla and Zenica are among the recent interests.
"If we look at Turkish investment in the region [and compare] the percentage of that investment falling to each country, BiH is not in the top priority level," BiH's Federal Minister of Education and Science Damir Masic told SES Türkiye.
Noting the historically positive relations between the two countries, Masic said BiH deserves more Turkish presence and attention.
One of the main concerns for foreign investors, however, is the country's political instability, according to Muzzafer Kutlay, a Balkans expert at the Ankara-based International Strategic Research Organisation (USAK).
"As in all other fields, political stability is a key factor for businessmen as well," she told SES Türkiye, noting that BiH's failure to establish a government after the October 2010 elections -- a crisis that lasted for 15 months -- also affected Turkish investments.
Caner Sancaktar, an associate professor of Balkan politics at Kocaeli University, told SES Türkiye that BiH's small population also poses a barrier to foreign direct investment.
"Investors try to look for large markets [where they can sell their products] before making investment decisions on a certain country," Sancaktar told SES Türkiye.
However, Selman Ulusoy, chairman of the Turkey-BiH Business Council of Turkey's Foreign Economic Relations Board (DEIK), argued that BiH must be considered from a broader perspective. The country could serve as a window for the 32 million people living in the former Yugoslav republics, and it is located next to the EU.
"Travelling from Sarajevo to Vienna takes as long as the trip from İstanbul to Ankara. Businesses could use BiH as a centre [for their investments] and then export to neighbouring countries," Ulusoy said. Once this central position of BiH is understood, the potential is clear, he added.
Ulusoy said research is needed to determine which sectors show potential for BiH products in Turkey, to then orient members of the Bosnian business community. This can be achieved through an informal level of co-operation between businesses of the two countries, he noted.
Another issue is whether Turkish businesses use all available tools for investment in BiH, such as funds and grants provided by international organisations, including the European Bank for Reconstruction and Development. "We must look at these more carefully and assess all possibilities," Ulusoy said.
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