Creating a Consulting Business in Bosnia

¶ … setting up a Consulting Business in Bosnia-Herzegovina (BaH); a newly independent state that sought international recognition on 6th April 1992. Since infancy, Bosnia met with fierce aggression due to racial discord administered by Serbs and Croats. Despite the odds, this nation upheld the emblem of unity within diversity. A home to 4.36 million people (1991 census figure), with a diverse ethnic background but melded culture and heritage, BaH suffers from a complex and divided legal environment. After the Dayton Peace agreement of 14 December, 1995 BaH evolved into a weak confederation of two entities namely, Federation of B-H in which only Bosniaks (Moslem Bosnians) and Croats enjoy full constitutional rights, and Republika of Srpska (Serb Republic) in which only Serbs have full rights. Hence the legal system of Bosnia lacks uniformity and integrity. Culturally, Bosnia is blessed with the wealth of ancient cultural heritage, Cyrillic and also world's finest writers, film makers, musicians, writers and cuisine. Topographically, Bosnia is rich with coal, iron ore, bauxite, copper, lead, zinc, chromite, cobalt, manganese, nickel, clay, gypsum, salt, sand reserves, forests and hydropower. While the natural hazards on land are destructive earthquakes. With a below average technological makeup, Bosnia was placed next to Macedonia as the poorest republic in the Yugoslavian Federation. Although agriculture is entirely privatized, the republic has a tradition of being an importer of food. The ethnic warfare of Bosnia 1992-1995 has crumbled the production and left behind soaring rate of unemployment. A sizeable current account deficit and high unemployment rate are two most serious economic issues. The country continues to receive lofty amounts of reconstruction assistance and humanitarian aid from the international community.

Planning a business venture in Bosnia will have to meet with certain monetary issues. Since the country has a current account deficit, an instable government and strained legal environment, a careful market aspect strategy needs to be chalked out keeping in mind the financial/corporate sector, political scenario and infrastructure. Even though some progress in macroeconomic stabilization and structural reforms has been witnessed but that too is less than expected. Moreover internal political situation appears to be complex and thus creates apprehensions for potential entrepreneurs. While Annual growth rate is 4-5%, and inflation in low single digits, strong reserve coverage is providing bedrock to currency board. Significant and necessary reforms have been made in the public sector thus improving the prospects of fiscal sustainability. The scenario is fairly favorable after having taken up the task of balancing budgets in both the entities; however the process of building state-level institutions would be presenting new fiscal challenges. Also critical challenges wait to be tackled due to poor data quality which hampers consistency in policy making. Moreover the size of public sector needs to be cut down. Corruption is widespread and major fundamental reforms still need to be introduced. Most importantly, proper Judiciary system is absent. Living standards of the people of this region are low accounting to fleeting unemployment rate.

The Human resource paradigm also needs to be considered before setting up the business. This primarily constitutes choosing the right outsourcing partner for the company. Since it is very important to evaluate the vendors with whom you are considering partnership. Following points should be kept in mind while scrutinizing a suitable partner. Generally, interviewing prospective partners just like a potential employee is not a bad idea at all. Partners should be just as ambitious as the firm is and should be able to understand and agree to potential challenges and goals. During the course of decision-making one must enquire the potential partners' proof of achievements and capabilities particularly in helping their clients achieve efficiency, savings and long-term strategic goals. Speaking to their old clients is also advisable. An account of their technical expertise should be demanded and lastly, finding out if the clients in question would be comfortable in the culture and work environment of the firm. Applying all these key features to Bosnian market gives a surfeit of disappointing conclusions. Since it is hard to find industries and trustees of good caliber while corruption is prevalent and cheating is widespread. Industrial progress is meager as the country is agrarian and dismally, a traditional food importer. Competitive business and highly accomplished organizations are minimal. So there is a bleak chance of finding a suitable partner for business in Bosnia.