Sociology

In the world there are unfortunately many countries that are poor. Some of these countries experience poverty due to wars as is the case with Bosnia and Herzegovina. The 1992-1995 war transformed Bosnia-Herzegovina from a medium-income country within the former Federal Republic of Yugoslavia to a poor country (Rural Poverty in Bosnia and Herzegovina, para.1). Bosnia and Herzegovina gained its independency in 1992 which was followed up with the blooded civil war. Still, 17 years after the war, Bosnia remains poor country and unsafe area for foreign investments. There have been only 222 direct investments in Bosnia and Herzegovina in the past year. 

Bosnia has been actively using credits provided by the International Monetary Fund, World Bank and other institutions trying to recover its economy. For more than 17 years the Bosnian government is being granted with loans with high interest covering the past ones that have been taken. The trouble lies in the ineffective Bosnian economy that has been doing it for too long and this is why it has become a repeated cycle.

Theories of Global Inequality
According to the Dependency theory, Bosnia is perpetually in the situation in which the import from developed countries is enormously higher than the export. For example, in the year 2008 merchandise export was 5 064 (million US) and import was 12 282 (million US) (Economic information about Bosnia and Herzegovina Investment, Population, GDP, Household income, Economie, Economia, n.d.)  and that is what makes Bosnia a weak player in a regional market. 
         
Other theory such as the State-centered theory stresses the role that governments can play in the improvement of the economic development. The trouble with Bosnia is associated with the government that is excessively involved in its economy not letting a free market to take place without any intervention and regulation by the government.

After the secession and the war, Bosnia did not have enough of resources to progress independently, thus the government fostered trade with foreign Yugoslav countries. Croatia, as one the former member that has suffered less and with the best economy in the region, has been the most important trade partner for Bosnia. This lead to erasing the state borders under the influence of economic agreements between the countries. As World System Theory claims, Croatia soon became core and welfare state, while Bosnia remained peripheral poor neighbor. 

According to these facts, Bosnian situation is best explained by the Market  oriented Theory of global inequality.  The biggest challenges that Bosnia and Herzegovina is facing today are cost-ineffective, self-unsustainable institutional frameworks and the lack of co-operation between the institutions that are bringing the economy of this region down. .Bosnia fits perfectly in the explanation of why countrys poverty is possible. Consistently with the theory claims, the institutional barriers can do more harm than good to a small country.

The modernization theory mentions also how cultural barriers influence country which is the case with Bosnia and Herzegovina as well. The state in which the social evolution is hardly possible, as well as the inner cultural barriers combined with the traditionally accepted governmental corrupted behavior, brought Bosnia face to face with the status quo.

Politicians in Bosnia and Herzegovina have been intentionally making ethnicity the main political cleavage in the country for more than 20 years which has led to the complete blurring of social reality and inequality within the region.The manipulation of Bosnian leadership has strengthened and secured the position of corrupt politicians who continue to exploit the situation up to the present day.     If Bosnia is to overcome the semi-protectorate status and to become a democratic state within Europe, with an economic status similar to the rest of the Balkan countries, its citizens and politicians need to have the same vision. Bosnia and Herzegovina is not only in a ransitional period, but is still struggling with the post-war consequences and this is obvious through the ineffective and entity-divided institutons. Institutions have to be efficient stakeholders, but on the other side, civil society has to secure internal coordination and synergy, avoid overleaping, and empower Bosnia and Herzegovina in general.