Bosnia and Herzegovina is a mountainous country in southeastern Europe. A corridor south of Mostar provides access to the Adriatic Sea. The post-1945 Yugoslav regime promoted coexistence between Bosniak Muslims, Croats, and Serbs, but, with Yugoslavia collapsing after 1990, ethnic rivalries led to violent conflict. Around 250,000 died and more than two million were displaced before the 1995 Dayton peace accord ended three years of war.

In 1990, the population was 44% ethnic Bosniak (mostly Muslim), 31% Serb, and 17% Croat, while 8% described themselves as Yugoslav or of other ethnicity. Intermarriage was common and ethnic violence rare. Society was largely secular and materialistic. However, civil war and "ethnic cleansing" displaced some 60% of the population. Bosniak, Serb, and Croat areas became more distinct and separate.

Strengths

Potential to revive prewar industries and become a thriving market economy, with solid manufacturing base. Growth in 2000 of 10%. End of cross-border tariffs with Slovenia from 2002.

Weaknesses

War damage of $20–$40 billion. Lowest foreign investment in entire region. Corruption. High unemployment.

Bosnia is subdivided between the Muslim–Croat Federation, the Serbian Republika Srpska (RS), and the multiethnic district of Brcko. Consequently there are two levels of government: the overall Republic – with a rotating three-member collective presidency – and the constituent republics, with their own presidents, governments, and parliaments. A UN High Representative retains ultimate control. Nationalist parties have substantial support, although moderate policies are favored in government. Bosniaks have led the way in supporting non-ethnic parties. Croats in the Federation have agitated for greater autonomy.

An international High Representative administers Bosnia under the 1995 Dayton agreement. The Stabilization Force (SFOR) is NATO-led, but its 35 participant countries include Russia.

The international Stabilization Force (SFOR), in place since 1996, has been progressively downsized. The merger of Bosnian and Croat forces under the Dayton accord was completed in 1997.

Bosnia's land is not well suited to agriculture, but has mineral deposits, forests, and hydroelectric potential.

Apart from war damage, Bosnia faces the effects of industrial pollution incurred during the communist regime.

War severely damaged the transportation network, resulting in wrecked bridges, roads, and railroads. De-mining and reconstruction have reopened most main routes. Sarajevo remains the hub of the communications network.

War strained health services severely and many died for lack of basic care. Reconstruction includes reform of the primary health care system.

Ethnic bias and educational segregation are being combated by the development of a new coordinated curriculum.

All sides in the war, but especially the Serbs, have been accused of war crimes. The International Criminal Tribunal for the former Yugoslavia (ICTY) in The Hague has indicted over 60 suspects relating to crimes committed in Bosnia. Serb leader Radovan Karadjic and over 20 others have evaded arrest. The RS finally passed laws on cooperating with the tribunal in October 2001.

With some 60% of the prewar population displaced, housing, jobs, and reintegration are key challenges, while a lack of significant investment means that postwar poverty remains.

Even before the war, Bosnia did not have much tourism infrastructure; only the adventurous have begun to visit.

In 1945, Bosnia and Herzegovina became one of Yugoslavia's six republics.

• 1990 Nationalists defeat communists in multiparty elections.
• 1991 Parliament announces republican sovereignty.
• 1992 EU and USA recognize Bosnia. Serbs declare "Serbian Republic." Civil war begins.
• 1995 NATO air strikes on Serbs; US-brokered Dayton peace accord.
• 1996 First international war crimes trial since 1945 opens in The Hague. Elections held under Dayton accord.
• 1998–2000 Elections; dwindling support for nationalist parties.
• 2001 Ethnic Croats briefly establish autonomy in Herzegovina (in south).