UTICAJ MEĐUNARODNOG KAPITALA NA PRIVREDNU AKTIVNOST BOSNE I HERCEGOVINE
THE INFLUENCE OF INTERNATIONAL CAPITAL ON THE ECONOMIC ACTIVITY OF BOSNIA AND HERZEGOVINA

Summary/Abstract: The basic task of the international movement of capital in all forms, especially in the form of loans from international monetary and financial institutions, as well as direct foreign investments in the economy of each country, including Bosnia and Herzegovina, should have a positive effect on economic trends, promote economic growth and a better quality of life for the people who live there. At the beginning of the transition period, the credit market in this country was extremely inactive, and the balance sheets of banks in the pre-transition period were characterized by bad and uncollectible loans granted to public and social enterprises. The arrival of international capital through borrowing abroad was supposed to increase the accumulation of the economy, with the fact that it is very important and crucial how and for what purposes these funds are used. The increase in credit activity resulted in an increase in aggregate demand, i.e. a consumer or investment boom. If credit growth is a consequence of the need to secure funds for financing investments and working capital, this growth is not risky. The results in the first years of the transition, after that period and today, showed positive macroeconomic trends in terms of gross domestic product (GDP) growth, a gradual reduction in the high inflation rate, employment growth (simultaneous reduction in the unemployment rate), an increase in the income of the domestic workforce, an increase in tax income, positive impact on the balance of payments as well as the transfer of new technologies.

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