Economic relations between Turkey and BiH continue to rise

The Embassy of the Republic of Turkey in BiH issued a press release regarding the economic relations between Turkey and Bosnia and Herzegovina. The Patria News Agency transmits the statement in its entirety.

-As is known, one of our priorities is to crown the deep historical, cultural, and outstanding political relations between Turkey and Bosnia and Herzegovina with strong trade and economic cooperation and to raise it to a much higher level than the existing one.

In addition to direct investments, Turkey is implementing various projects to support investments that will boost production and thus increase the employment rate in Bosnia and Herzegovina.

Within this framework, our country, through Ziraat Bank BH and Bosna Bank International, has provided a low-interest "soft-loan" credit line of 100 million euros for small and medium-sized economic investments in Bosnia and Herzegovina.

Thanks to investments primarily in agriculture and livestock, then tourism and industry, realized through this credit line, 6,500 displaced persons have been given the opportunity to return to their pre-war homes. Again, in order to strengthen the BiH economy, in mid-2015, another credit line of 50 million euros was offered to entrepreneurs of this country to encourage startup companies. With this credit line as well, small and medium-sized enterprises, as in the previous case, received strong financial support with the possibility of loan maturity of up to 10 years.

According to preliminary data from the Central Bank of BiH for the first 9 months of 2015, the total amount of investments within foreign direct investment (FDI) flows amounted to 218.9 million KM (approx. 111.9 million euros), while Turkey, with a share of 22.3%, invested 48.8 million KM (approx. 24.9 million euros) in Bosnia and Herzegovina during this period.

According to preliminary results, Turkey was positioned as the third largest foreign investor in BiH in the period January-September 2015. Along with this, the direct financial contribution of the private sector and Turkish public institutions and organizations of our country to the Bosnian-Herzegovinian economy from the Dayton Peace Agreement to date exceeds one billion euros. With the mentioned investments and their indirect effect, Turkey has thus become one of the leading countries that have contributed the most to the development of the BiH economy.

Among the most significant products that Bosnia and Herzegovina imports are fuels and oils, machinery and electrical appliances, medicines, food and beverages, base metals, motor vehicles, plastics and rubber, textile products, agricultural products, livestock, and animal products. In 2015, Turkey achieved exports to BiH worth 292 million dollars (Turkey ranks 8th among the countries from which BiH imports).

On the other hand, imports from BiH to Turkey increased by 45.9% compared to the previous year, reaching 250 million dollars. Within the trade exchange between the two countries, the foreign trade surplus is realized in favor of Turkey, although it is visibly decreasing, given that since July 2014, Turkey has approved a tariff quota of 15,000 tons of chilled and frozen beef for BiH, which reduced Turkey's foreign trade surplus to 42 million dollars in 2015.

The Free Trade Agreement between our country and BiH, which has been in effect since 2003, has given a strong impetus to our trade relations. Thus, bilateral trade, which was at the level of 71 million dollars in 2003, reached 542 million dollars in 2015.

As a result of the activities carried out by analyzing the leading products imported by BiH and the dynamics of their import, customs tariffs in practice, as well as Turkey's position regarding the export of these products to BiH and other countries, it has been determined that products from the agricultural sector such as confectionery, biscuits, fresh fruits and vegetables, pasta, poultry, juices and non-alcoholic beverages, from the industrial sector such as primary and secondary automotive industry products, chemical industry, haberdashery, cosmetics and personal care, furniture, electronics, home appliances, construction materials, machinery and machine parts, plastic packaging, iron and steel products, heating, cooling, and air conditioning systems stand out as potential export products.

In addition, our country participated as a partner country in the 19th International Economy Fair held in Mostar from April 12-16, 2016, which represents an important organization for showcasing our export potential and strengthening economic relations with the Herzegovina region, which simultaneously represents an entry into the Croatian market.

On the other hand, cooperation between our country and BiH at the government and technical levels has also intensified within the framework of the trilateral trade committee of Turkey-Bosnia and Herzegovina-Serbia. Namely, within this mechanism, the "Joint Economic Representation of Serbia and BiH" will begin operating in Istanbul in the coming period, which will have an effect on expanding cooperation, especially in the field of investments in foreign trade.

Drawing strength from our historical, cultural, and social ties and considering the potentials it possesses, Bosnia and Herzegovina represents one of the most important countries in the Balkans for Turkey. Our investments and the activities of our companies in Bosnia and Herzegovina so far contribute to strengthening its economy. One of the concrete indicators of our contribution to the BiH economy is the fact that two of the top 10 exporting companies have Turkish capital.

Joint efforts are also being made to increase this number. Considering the multiple growth in trade, the acquisition of new markets in agriculture, livestock, tourism, and industry, supported by existing agreements between Turkey and BiH, as well as the employment potential in BiH and numerous logistical advantages, it is quite clear that the two countries need to make joint efforts to achieve stable growth, the Embassy's statement reads.