Digital Ecosystem Country Assessment (DECA)

This document is made possible by the generous support of the American people through the United States Agency for International

Development (USAID). The contents are the responsibility of the authors and do not necessarily reflect the views of USAID or the United

States Government.

MONITORING AND EVALUATION SUPPORT ACTIVITY (MEASURE II)

DIGITAL ECOSYSTEM COUNTRY

ASSESSMENT (DECA)

January 2023

MONITORING AND EVALUATION SUPPORT

ACTIVITY (MEASURE II)

DIGITAL ECOSYSTEM COUNTRY

ASSESSMENT (DECA)

External Report

January 2023

Prepared under the USAID Bosnia and Herzegovina Monitoring and Evaluation Support Activity

(MEASURE II), Contract Number AID-167-I-17-00004, Task Order Number 72016819F00001

Submitted to:

USAID/Bosnia and Herzegovina, January 2023

Contractor:

American Institutes for Research® (AIR®)

ACKNOWLEDGEMENTS

The American Institutes for Research (AIR) was tasked by the United States Agency for International

Development in Bosnia and Herzegovina (USAID/BiH) under USAID/BiH’s Monitoring and Evaluation

Support Activity (MEASURE II) to conduct the Digital Ecosystem Country Assessment (DECA). The

DECA team included Anela Kadić Abaz, DECA Manager; Troy Etulain, Principal Investigator and

International Subject-Matter Expert; Sadik Crnovršanin, Local Subject-Matter Expert/Technical

Researcher; Amina Mahović, Research Assistant; Boris Badža, Geographic Information System (GIS)

Specialist/Research Assistant; Erol Barina, Research Assistant; and Haris Mešinović, Research Assistant.

The authors express deep gratitude to USAID/BiH DECA Team Lead, Anela Šemić, and Karl Wurster,

Director of USAID/BiH’s Economic Development Office, for providing critical insights and support

during all phases of conducting the DECA. The direction and input of Elma Bukvić Jusić, USAID/BiH

Contracting Officer’s Representative for MEASURE II, were indispensable to the successful completion

of this assessment. The authors wish to thank the USAID/Washington Development, Democracy, and

Innovation Department, notably Craig Jolley and Samantha Chen for their guidance, selfless sharing of

advice and experience, and a detailed review of the report. The authors also extend their sincere

appreciation to all stakeholders, including USAID staff members and implementing partners, government

institutions and agencies, donor and international financial organizations, civil society representatives,

academia, and media representatives who shared their knowledge, opinions, and ideas with the DECA

team and thereby made this assessment possible.

TABLE OF CONTENTS

EXHIBITS ..................................................................................................................................... I

ACRONYMS ..............................................................................................................................II

EXECUTIVE SUMMARY ..........................................................................................................1

Key Findings ...................................................................................................................................................... 1

INTRODUCTION ....................................................................................................................4

ABOUT THIS ASSESSMENT ..................................................................................................4

Road Map for the Report .............................................................................................................................. 5

PILLAR 1: DIGITAL INFRASTRUCTURE AND ADOPTION ........................................6

Connectivity Infrastructure, Security, Interoperability, and Competitiveness ................................. 6

Mobile Coverage ...................................................................................................................................... 9

Internet Use and Consumer Preferences ........................................................................................ 10

Prospects for Expanded Coverage .................................................................................................... 12

Affordability ............................................................................................................................................. 14

Digital Literacy ............................................................................................................................................... 15

The Digital Divide ......................................................................................................................................... 19

Critical Infrastructure, Geopolitics, and Cybersecurity Concerns ................................................... 21

PILLAR 2: DIGITAL SOCIETY, RIGHTS, AND GOVERNANCE ............................... 23

Media and Information Literacy ................................................................................................................. 24

Lack of Government Movement on Structured MIL Approach Despite Donor Interest .... 27

Hate Speech .................................................................................................................................................... 28

Civil Society .................................................................................................................................................... 30

Media ................................................................................................................................................................ 32

Digital Rights and Freedoms ....................................................................................................................... 36

Internet Freedom: Digital Repression .............................................................................................. 37

Digital Government: Delivery of Government Services ...................................................................... 38

E-services ................................................................................................................................................. 39

GSB and Data Exchange ....................................................................................................................... 41

Digital Signatures ........................................................................................................................................... 43

Digital Government: Management of Government Systems .............................................................. 45

Digital Government: Electronic Voting .................................................................................................... 47

Digital Government: Engaging Citizens and Organizations ................................................................. 48

Smart Cities .................................................................................................................................................... 48

Trafficking in Persons ................................................................................................................................... 49

PILLAR 3: DIGITAL ECONOMY ....................................................................................... 52

Digital Transformation Challenges for Businesses ................................................................................ 53

e-Commerce .................................................................................................................................................. 57

Digital Financial Literacy .............................................................................................................................. 59

Online Shopping and Consumer Behavior .............................................................................................. 60

Payment Systems ........................................................................................................................................... 61

Cryptocurrencies .......................................................................................................................................... 63

ICT Industry and Digital Talent Pool ........................................................................................................ 64

ANNEX A. METHODOLOGY ........................................................................................... 68

Methodology................................................................................................................................................... 68

Analysis ............................................................................................................................................................ 70

Limitations ....................................................................................................................................................... 70

ANNEX B. DEFINITIONS ................................................................................................... 72

ANNEX C: LITERATURE .................................................................................................... 75

ANNEX D. LIST OF RELEVANT LAWS/POLICIES/REGULATIONS/STRATEGIES88

ANNEX E. RELEVANT DONOR PROJECTS ................................................................. 92

USAID.GOV DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) | i

EXHIBITS

Exhibit 1. Mobile network coverage in BiH, overlaid with population footprint (analysis performed

and maps produced by the DECA team in July 2022) ............................................................................................ 10

Exhibit 2. BiH internet usage and preference statistics .......................................................................................... 11

Exhibit 3. Fiber-optic cables in BiH, taken from the 2008–2025 FBiH and 2020–2025 RS spatial plans .... 12

Exhibit 4. Comparison of prices for different types of internet services in the Western Balkans

(2021) ................................................................................................................................................................................. 15

Exhibit 5. Financial literacy versus digital literacy versus media and information literacy.............................. 16

Exhibit 6. Percentage of people who feel comfortable with specific technologies .......................................... 18

Exhibit 7. Percentage of males and females that use the internet in Western Balkan countries, 2020...... 20

Exhibit 8. Connections between groups of media which have published the same disinformation at

least three times .............................................................................................................................................................. 32

Exhibit 9. Overview of trust providers in BiH (qualified electronic signatures) ............................................... 44

Exhibit 10. Digital technologies used by BiH companies ........................................................................................ 55

Exhibit 11. Areas in which support with digitalization is needed ......................................................................... 56

Exhibit 12. Use of e-commerce in BiH ....................................................................................................................... 59

Exhibit 13. Notice of the BiH Ministry of Finance about digital payment slips posted on a government

building ............................................................................................................................................................................... 62

Exhibit 14. Potential savings from an increase in the use of electronic payments in CBBH payment

systems (in USD) ............................................................................................................................................................. 63

Exhibit A-1. Summary of key informant interviews ................................................................................................. 69

ii | DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) USAID.GOV

ACRONYMS

BAM Bosnia-Herzegovina Convertible Mark

BCX Balkan Crypto Exchange

BHRT Radio-Television of Bosnia and Herzegovina

BiH Bosnia and Herzegovina

BIRN Balkan Investigative Reporting Network

CA Certification Authority

CBBH Central Bank of Bosnia and Herzegovina

CDCS Country Development Cooperation Strategy

CERT Computer Emergency Response Team

CIDR Critical Infrastructure Digitalization and Resilience Project

CMDA Center for Media Development and Analysis

CRA Communications Regulatory Agency

CSIRT Computer Security Incident Response Team

CSO Civil Society Organization

DCX Digital Crypto Exchange

DECA Digital Ecosystem Country Assessment

DFC U.S. Government International Development Finance Corporation

DFS Digital Financial Services

DO Development Objective

EBRD European Bank for Reconstruction and Development

EC European Commission

Entso-E European Network of Transmission System Operators for Electricity

EU European Union

EUCOM United States European Command

FBiH Federation of BiH

FGDs Focus Group Discussions

GDP Gross Domestic Product

GDPR General Data Protection Regulation

GIS Geographic Information System

GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit

GSB Government Service Bus

GNP Gross National Product

GSMA Global System for Mobile Communications

ICT Information and Communication Technology

IDDEEA Agency for Identification Documents, Registers and Data Exchange

IFC-EMMAUS International Forum of Solidarity-Emmaus

IOM International Organization for Migration

IR Intermediate Result

ISOBiH Independent System Operator

ISP Internet Service Provider

IT Information Technology

USAID.GOV DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) | iii

ITA Indirect Tax Administration

ITU International Telecommunication Union

KIs Key Informants

KIIs Key Informant Interviews

LGU Local Government Unit

Mbps Megabits Per Second

MEASURE II Monitoring and Evaluation Support Activity

MIL Media and Information Literacy

MNO Mobile Network Operator

MOU Memorandum of Understanding

MVNO Mobile Virtual Network Operator

NATO North Atlantic Treaty Organization

NCMEC National Center for Missing and Exploited Children

NGO Non-governmental Organization

NIS Network and Information Security

NSCP-BiH National Survey of Citizens’ Perceptions in BiH

OPA Online Payment Platform

OSCE Organization for Security and Cooperation in Europe

OTI Office of Transition Initiatives

PDPA Personal Data Protection Agency

PISA Program for International Student Assessment

POS Point of Sale

RCC Regional Cooperation Council

RS Republika Srpska

RTRS Radio-Television of the Republika Srpska

SEENPM Southeast Europe Network for the Professionalization of Media

SEPA Single Euro Payments Area

SERC State Electricity Regulatory Commission

SMS Short Message Service

UN United Nations

UNDP United Nations Development Program

UNESCO United Nations Educational, Scientific and Cultural Organization

UNICEF United Nations Children’s Fund

USAID United States Agency for International Development

USD U.S. dollars

iv | DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) USAID.GOV

USAID.GOV DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) | 1

EXECUTIVE SUMMARY

A digital ecosystem includes the stakeholders, systems, and enabling environments that empower

people, companies, organizations, and governments to achieve their goals. To identify opportunities,

maximize benefits, and manage the risks associated with digital technology in the world’s rapidly evolving

digital landscape, the United States Agency for International Development (USAID) designed the Digital

Ecosystem Country Assessment (DECA) as a reporting tool that will enhance the quality of inputs into

the planning and execution of USAID’s strategies and implementation of its activities. In late 2021,

USAID/Bosnia and Herzegovina (BiH) tasked its Monitoring and Evaluation Support Activity

(MEASURE II) to conduct a DECA for BiH. The assessment was guided by USAID’s strategic priorities in

BiH. USAID/BiH’s strategic priorities are defined in the 2020–2025 Country Development Cooperation

Strategy (CDCS) and include:

1. Improving the impact of inclusive citizen engagement by enhancing civil society

constituency connections, strengthening the information space, and increasing political and civic

leadership of BiH citizens, with specific focus on youth, women, and marginalized populations.

2. Strengthening governance effectiveness in targeted areas by addressing the problem of

high-level corruption in BiH, supporting reforms that are in line with European Union (EU)

regulations, and strengthening the protection of human rights.

3. Strengthening social cohesion by developing and empowering connections and building

solidarity among various groups in society, including civil society, the private sector, the

diaspora, and marginalized populations.

4. Boosting private-sector growth by supporting sectors that have the greatest growth

potential in BiH and increasing access to transparent financing.

Guided by these priorities, the DECA team assembled by MEASURE II collected and reviewed an

extensive list of relevant documents produced by USAID, its implementing partners, government

institutions and agencies, international organizations, academia, the non-governmental sector, and the

media. To extend the knowledge acquired through desk review, the DECA team organized, completed,

and analyzed data from 87 interviews and two focus groups with a total of 122 key informants. Finally,

the DECA team triangulated data obtained through desk review and interviews with data from the 2021

wave of the USAID/BiH’s National Survey of Citizens’ Perceptions in BiH (NSCP-BiH) to enrich the

understanding of BiH’s digital ecosystem and best inform assessment findings. Key DECA findings are

presented next.

KEY FINDINGS

Connectivity infrastructure in BiH is strong. Although all three primary mobile network operators

(MNOs) claim wide network coverage, enabling their consumer service throughout the country, BH

Telecom, HT Eronet, and M:Tel each predominantly serve a specific ethnic group in the area of the

country in which that group has a majority of residents. The internet service provider (ISP) market is

more diversified, especially with the growing presence of Telemach. However, the infrastructure that

the three dominant ISPs inherited from before the 1992–1995 war puts them in an advantageous

situation over new market competitors, especially since there is no infrastructure sharing among ISPs.

2 | DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) USAID.GOV

Despite this situation, internet infrastructure covers 82 percent of BiH territory, with 99.7 percent of

the population covered by at least a 2G mobile signal and 85.3 percent of residents covered by a 4G

signal. Implementation of 5G is still in the planning phase.

Despite strong connectivity infrastructure, BiH’s digitalization process continues to be stymied by

political paralysis. For example, BiH remains the only country in Europe without a state-level computer

emergency response team (CERT), the required central point of contact for collaboration with the

European Union on cybersecurity. Additionally, BiH lacks a common understanding and definition of

critical digital infrastructure. Whereas RS adopted a Law on Critical Infrastructure, political turmoil has

resulted in the absence of adequate legislation at the state and Federation of BiH (FBiH) levels.

Political paralysis also hinders the enabling environment for and uptake of digital signatures. The national

legislation on e-signatures is not aligned with the EU Acquis Communautaire. Although three certified

authorities are registered at the state level—Indirect Tax Authority; Agency for Identification

Documents, Registers and Data Exchange (IDDEAA); and a private company, Halcom D.D.—the use of

e-signatures remains modest. In RS, certificates for e-signature can also be obtained from the Ministry of

Scientific and Technological Development, Higher Education and Information Society. The Ministry plays

the role of certificate authority issuer, central coordinator of all certificates, and certificate inspector.

However, “trust services” (which include certification authorities) have not been regulated by EU

member states since 2016. In addition, according to the EU Regulation on electronic identification and

trust services for electronic transactions in the internal market (eIDAS Regulation), qualified certificate

providers should be recognized independently of the Member State where the Qualified Trust Service

Provider is established or where the specific qualified trust service is offered.

The lack of utilization and accessibilit

y of e-signatures has been identified as a key limitation to further

development and provision of e-services to citizens and the business community. Complex and slow

administration creates space for corrupt behavior, hinders the business enabling environment, and

contributes to citizens’ dissatisfaction with public services, all of which are identified to be among drivers

of high emigration from BiH. A highly skilled labor force continues to leave the country and information

technology (IT) professionals are not an exception. The IT sector is the most prosperous sector in BiH;

however, it faces an estimated labor force deficit of 6,000 workers that the current formal education

system cannot fill. Attraction and retention of digitally skilled workforce are the most challenging for

government institutions that cannot provide working conditions as good as the private IT sector does.

Furthermore, data on digital literacy among the general population are limited. Yet a perception that

youth are more digitally skilled compared to adults is common. Digital divides persist to the detriment

of older generations, women from rural areas, and Roma populations. Whereas access to and use of

digital technology by Roma stems mainly from poor economic conditions, women from rural areas face

a “triple divide” that includes digital, rural, and gender factors. This issue extends to the use of digital

financial services (DFS). Although use of DFS is low in general, women less often than men own a credit

card, use e-banking services, engage in e-commerce, and make payments online. The barriers to

expanding the uptake of DFS in BiH include its challenging topography, the prevalence of traditional

social and financial structures that depend on community- and cash-based networks, low trust in digital

platforms, low levels of financial inclusion, and low digital literacy in particular.

Another challenge to accelerating digital ecos

ystem development relates to digital media. The ability of

citizens to recognize misinformation, disinformation, and malinformation is limited and this state of

USAID.GOV DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) | 3

affairs is especially alarming given that media in BiH tend to be ethnically polarized and work of

investigative journalists is frequently obstructed. There is no systematic approach to addressing the

digital literacy deficit, and stakeholders including government agencies, MNOs, banks, media, and civil

society believe that it is not their responsibility to help consumers improve their critical thinking skills

and increase their awareness of how digital systems work. At the same time, violation of digital rights in

BiH is rising. Violations commonly include online intimidation, manipulation and propaganda in the digital

environment, and information security breaches. Media freedom and the safety of journalists are

hindered; however, both preventive and repressive institutional measures on political pressure,

intimidation, and harassment towards journalists are missing. There is a worrisome rise of threats and

violence against female journalists as well as online violence manifested through social networks and

internet portals.

4 | DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) USAID.GOV

INTRODUCTION

In 2020, the United States Agency for International Development (USAID) adopted its first-ever Digital

Strategy

that aims to improve USAID development and humanitarian assistance outcomes through the

responsible use of digital technology and to strengthen the openness, inclusiveness, and security of

partner country digital ecosystems. A digital ecosystem includes the stakeholders, systems, and enabling

environments that empower people, companies, organizations, and governments to achieve their goals.

The Digital Strategy charts an agency-wide vision for development and humanitarian assistance in the

world’s rapidly evolving digital landscape.

The flagship initiative of the Digital Strategy is the Digital Ecosystem Country Assessment (DECA). The

DECAs will inform the development, design, and implementation of USAID’s strategies, projects, and

activities with regards to the digital landscape. It is a decision-making tool designed to help USAID

Missions identify opportunities, maximize benefits, and manage the risks associated with digital

technology.

In late 2021, USAID/Bosnia and Herzegovina (BiH) tasked its Monitoring and Evaluation Support Activity

(MEASURE II) to conduct a DECA for BiH.

ABOUT THIS ASSESSMENT

The DECA examines three broad areas to understand the opportunities and challenges in a country’s

digital ecosystem:

1. Digital Infrastructure and Adoption

2. Digital Society, Rights, and Governance

3. Digital Economy

The purpose of the DECA is to inform the development, design, and implementation of USAID’s

strategies, projects, and activities with regards to the digital landscape. It is a decision-making tool

designed to help USAID Missions identify opportunities, maximize benefits, and manage the risks

associated with digital technology.

In late 2021, USAID/BiH tasked its Monitoring and Evaluation Support Activity (MEASURE II) to conduct

a DECA for BiH. The BiH DECA was developed between December 2021 and September 2022. It

included desk research, consultations with USAID/BiH, and 87 key informant interviews (KIIs) and two

focus group discussions (FGDs) with a total of 122 participants from civil society, academia, the private

and public sectors, international development organizations, and USAID/BiH technical offices. Finally, the

DECA team triangulated data obtained through desk review and interviews with data from the 2021

wave of USAID/BiH’s National Survey of Citizens’ Perceptions in BiH (NSCP-BiH) to enrich the

understanding of BiH’s digital ecosystem and best inform assessment findings. Refer to Annex A for

more details on the applied methodological approach.

See https://www.usaid.gov/sites/default/files/2022-05/USAID_Digital_Strategy.pdf.pdf.

USAID.GOV DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) | 5

Rather than act as an authoritative source on the country’s digital ecosystem, the DECA is intended to

be a rapid assessment of opportunities and challenges tailored to USAID’s programmatic priorities.

Thus, it may not cover all USAID/BiH program offices and activities in depth.

ROAD MAP FOR THE REPORT

This document provides extensive data and analysis on the status and trajectory of BiH’s digital

ecosystem.

Section 1 provides a summary of USAID/BiH’s priorities on which the DECA team focused while

researching the digital ecosystem in BiH.

Section 2 presents the key findings about BiH’s digital ecosystem. This section is organized into three

subsections by DECA pillar: (1) Digital infrastructure, access, and use; (2) Digital Society and

Governance; and (3) Digital Economy.

6 | DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) USAID.GOV

PILLAR 1: DIGITAL INFRASTRUCTURE AND ADOPTION

Digital infrastructure enables the flow of data and information between people and systems. Its key

aspects include network coverage, network performance, internet bandwidth, and spectrum allocation,

as well as security, interoperability, and telecommunications market dynamics. It is affected by

behavioral, economic, and social factors that influence the extent of digital literacy, affordability, and

adoption of digital solutions.

KEY FINDINGS

Three Mobile Network Operators (MNOs) with 5G are on the horizon: Overall,

connectivity infrastructure is strong, with 82 percent of the territory of BiH covered by mobile

networks. BiH has not yet introduced 5G, although BH Telecom started testing the technology in

2019. The lack of a national broadband strategy, as well as the lack of financial resources, have directly

affected the deployment of 5G and the overall growth in the information and communication

technology (ICT) sector.

Legacy of 4G licenses is a burden to MNOs: The 4G spectrum licenses granted to three MNOs

in 2017 included the requirement that they cover 90 percent of the country’s territory and

98 percent of its roads within five years, regardless of population density. These requirements were

unusual; it is more common for licenses to require a minimum percentage of population coverage.

The obligation has proved to be financially burdensome for MNOs and has slowed down the growth

trajectory of their businesses, while their counterparts in neighboring countries introduce 5G.

Pandemic-driven increase in demand: Due to the COVID-19 pandemic, citizens increasingly

turned to digital technologies, especially in areas such as education, shopping, and banking, among

others. This trend has implications for all levels of government. However, computer literacy data

show that 38.7 percent of the population ages 10 and above are computer illiterate, which indicates

that BiH still has significant room for improvement in enhancing the digital literacy of its citizens.

Although not documented, digital divides exist to the detriment of older generations, Roma, and

women from rural areas.

Cybersecurity concerns: There is no common understanding and definition of critical digital

infrastructure in BiH. Whereas Republika Srpska adopted a Law on Critical Infrastructure, political

turmoil has resulted in the absence of adequate legislation at the state and Federation of BiH levels.

Furthermore, BiH remains the only country in Europe without a state-level computer emergency

response team.

CONNECTIVITY INFRASTRUCTURE, SECURITY, INTEROPERABILITY, AND

COMPETITIVENESS

Since the 1992–1995 war, the telecommunications sector in BiH has been largely separated along ethnic

lines, as demonstrated by the market share of the country’s three largest MNOs. In FBiH, a majority of

consumers prefer either Sarajevo-based BH Telecom, which dominates in Bosniak majority areas, or

Mostar-based HT Eronet, which leads in Croat majority areas. In RS, Banja Luka-based M:Tel dominates

USAID.GOV DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) | 7

the market in the Serb-majority entity.

While no publicly available map of MNOs market share exists,

key informants (KIs) suggested it would follow the same boundaries as the regions with a majority of

one ethnic group. However, all three MNOs claim wide network coverage, thereby providing fair

service to their consumers throughout the BiH territory.

The ownership of the three MNOs varies. M:Tel was privatized in 2007, when it was sold to Telekom

Srbija,

the dominant fixed-line and mobile telephone provider in Serbia. The largest shareholder of both

BH Telecom and HT Eronet is the Government of FBiH, although it has different stakes in the two

companies. While the Government of FBiH holds 90 percent of BH Telecom shares,

it owns half of the

shares in HT Eronet, with the second largest company shareholder being Hrvatske Telekomunikacije

(39 percent),

the main telecom operator in Croatia. While it is possible to purchase a SIM card from

any of the three providers, the historical strength of the MNOs in the regions with a majority of one

ethnic group persists for various reasons, including the historical tendency for consumers of one

ethnicity to prefer the MNO controlled by members of their same ethnicity. Each group’s subsequent

loyalty to the MNO whose service to which they initially subscribed was prolonged by the long-standing

practice of offering lower prices for in-network calls. Until recently, MNOs that operated in multiple

countries offered cheaper calls between countries as part of their in-network service. For example, it

was cheaper to call a Telecom Serbia number from M:Tel than from other operators. However, on

July 1, 2019, an agreement was signed to reduce roaming fees affecting all MNOs operating across the

Western Balkans.

While there are only three MNOs, the internet service provider (ISP) market is more diversified. In

addition to BH Telecom, M:Tel, and HT Eronet, which provide mobile network services but are also the

primary means of internet access for a majority of BiH citizens, there are several ISPs that compete for

market share in the telecommunications sector, one of the most profitable sectors in BiH. The total

revenue generated by the sector in 2020 was more than 793 million USD, which equaled 3.54 percent of

BiH’s gross domestic product (GDP).

Although Telemach strengthened competition among ISPs—

especially in FBiH—BH Telecom, HT Eronet, and M:Tel continue to dominate the market.

The total number of mobile network subscriptions (3.8 million as of December 2021)

exceeds the total

population of BiH,

possibly indicating that people have more than one SIM card.

Although the number

International Trade Administration. (2021). BiH – Telecommunication Industry. https://www.trade.gov/country-

commercial-guides/bosnia-and-herzegovina-telecommunications-industry

M:Tel. Ownership Structure. https://mtel.ba/n363/Investors#tab-three

The Sarajevo Stock Exchange. Share issue profile: BH Telecom DD Sarajevo.

http://www.sase.ba/v1/Tr%C5%BEi%C5%A1te/Emitenti/Profil-emitenta/symbol/BHTSR

The Sarajevo Stock Exchange. Share issue profile: JP HT DD Mostar. http://www.sase.ba/v1/en-us/Market/Issuers-

Securities/Issuer-profile/symbol/HTKMR

Regional Cooperation Council. (2021). Agreement on the price reduction of the roaming services in public

mobile communication networks in the Western Balkans Region.

https://www.rcc.int/download/docs/FINAL%20RRA2%20SIGNED.pdf/25c8b674d235cf5bc19894a8a24fbd6b.pdf

BiH Communication Regulatory Agency. (2021). Annual report of the Communications Regulatory Agency for 2020.

https://docs.rak.ba//documents/f8910d22-e538-4b11-9b21-4f7cfd0e0b88.pdf

Mobile network subscriptions reflect the number of prepaid and postpaid SIM cards active during the past three

months.

BiH Communications Regulatory Agency. (2021). Annual Report. https://docs.rak.ba//documents/fb41882e-cbe4-

4e8f-8efa-fe45a9376971.pdf

Data on SIM cards owned by tourists or members of the BiH diaspora community are unavailable. Thereby, it is

impossible to assess the extent to which these (potential) users contribute to the total number of mobile network

8 | DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) USAID.GOV

of postpaid subscriptions has increased over the past ten years, the number of active, prepaid SIM cards

remains almost three times higher (1 million postpaid cards vs. 2.8 million prepaid cards).

In April 2019, the Communications Regulatory Agency of BiH (CRA) issued 4G licenses to the three

MNOs with a validity period of 15 years and a

requirement to commence 4G services within one

month of the award.

Both 3G and 4G were

introduced in BiH significantly later than in

neighboring countries, mainly because CRA took a

long time to issue licenses for MNOs.

While there is competition in the country, the

current makeup of players is not likely to change.

BH Telecom, HT Eronet, and M:Tel are the only

licensed MNOs. BH Telecom is the market leader

in mobile network subscribers (43 percent of

market share), followed by M:Tel (35 percent), and

HT Eronet (21 percent). Together, these companies also control 81 percent of fixed-line connections.

Based on commercial agreements with the three licensed MNOs, BiH citizens may also use mobile

network services provided by mobile virtual network operators (MVNOs) Dasto Semtel, Logosoft,

Novotel, and Haloo.

14,15

However, the combined market share of these four operators does not exceed

one percent.

While the Law on Communications of BiH

allows MNOs to share infrastructure, the companies mostly

choose not to, because they consider the location and extent of their towers to be a primary means by

which they can outperform their competitors. This is true, even though the MNOs could have saved

significant resources while fulfilling the land coverage requirements stipulated in their 4G spectrum

licenses. According to KIs, the cooperation between MNOs is limited mostly to humanitarian relief

activities, through which they enable consumers to make donations by text message. Although setting up

a unique number for collecting monetary donations can be done to support humanitarian causes, it

entails significant costs; however, these services are not tax deductible for the customer.

17,18,19

The

costs associated with making humanitarian donations over the phone have led citizens to organize an

initiative to abolish value-added tax (VAT) and fees associated with humanitarian calls. However, changes

in the legislative framework were never made.

subscriptions in BiH.

BiH Communications Regulatory Agency. (2021). Annual Report. https://docs.rak.ba//documents/fb41882e-cbe4-

4e8f-8efa-fe45a9376971.pdf

ITU Office for Europe. (2020). 5G Country Profile – Bosnia and Herzegovina

BiH Communications Regulatory Agency. (2021). Annual Report. https://docs.rak.ba//documents/fb41882e-cbe4-

4e8f-8efa-fe45a9376971.pdf

Ibid.

Two out of four MVNOs are owned by MNOs—specifically, M:Tel acquired Logosoft in 2017, and HT:Eronet

founded Haloo d.o.o. in 2020.

Official Gazette of BiH, No. 31/03, 98/12.

M:Tel. (2022). Price Overview: August 2022. https://mtel.ba/Binary/1772/cjenovnik.pdf

BH Telecom. (2021). Price List of Services in Domestic and International Traffic of BH Telecom.

https://www.bhtelecom.ba/wp-content/uploads/2021/04/Cjenovnik-V014.pdf

HT Eronet. Humanitarian telephone numbers. https://www.hteronet.ba/upoznajte-nas/humanitarni-telefoni-s127

Lack of a Broadband Strategy

Although the draft version of a strategy for the

development of broadband access in BiH for the

period 2019-2023 exists, it has not yet been

adopted. KIs did not provide comprehensive

reasoning on what may be preventing the

adoption of the strategy. This makes BiH the only

country in the neighborhood that lacks a

broadband strategy.

USAID.GOV DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) | 9

MOBILE COVERAGE

A current map of mobile coverage in BiH is not available; however, data provided by CRA and

international agencies, including the International Telecommunication Union (ITU), show that mobile

penetration (the number of accounts per person) reached 106.7 percent in 2021. In the same year,

96 percent of the population was covered by a 3G mobile network (UMTS); 82 percent, by a 4G mobile

network (LTE).

According to KIs, CRA is in the process of mapping the country’s broadband infrastructure.

The result of this process will be a map with geolocated infrastructure that will serve, per an EU

request, as the primary source of telecommunications infrastructure information for the country.

Based on Global System for Mobile Communications (GSMA) network coverage maps

and geographic

information system (GIS) analysis performed by the DECA team, it is evident that 96.7 percent of the

territory of BiH is covered by 2G signals, whereas some smaller areas in the country are not covered by

any signal of any mobile network (Exhibit 1). Whereas 3G covers 80.5 percent of the territory of BiH,

only 48.9 percent of the territory is covered by a 4G signal. The data the DECA team obtained through

GIS analysis using the GSMA network coverage and Humanitarian Data Exchange (HDX) 2020

population tallies

also indicate that 99.7 percent of the BiH population has access to a 2G signal. In the

case of 3G coverage, this percentage is slightly lower (97.7 percent), while 85.3 percent of the

population has 4G access. As the maps in Exhibit 1 illustrate, 4G is most commonly used in densely

populated areas, leaving rural areas without its benefits.

Although BiH has not yet introduced 5G, BH Telecom started testing 5G technology in 2020, with

testing continuing into 2022. However, according to the ITU, the lack of a national broadband strategy is

“one of the most pressing issues for the development of broadband in the country in terms of market

competitiveness and growth in the ICT sector.” It has slowed the introduction of 5G technology in

the country.

BiH Communication Regulatory Agency. (2021). 2021 Annual Report: Communications Regulatory Agency.

https://docs.rak.ba//documents/92647e3b-3b39-40e3-88b0-5324ccec753f.pdf

In accordance with International Telecommunication Union (ITU) data practices, the data were taken from the

operator that reported the highest percentage of GSM, UMTS, and LTE network coverage. However, GSMA data

show that 4G coverage in BiH is only at 23 percent.

GSM Association. (2021). Network Coverage Maps. https://www.gsma.com/coverage/.

The Humanitarian Data Exchange. Bosnia and Herzegovina – Population Counts.

https://data.humdata.org/dataset/worldpop-population-counts-for-bosnia-and-herzegovina

Halimić, E. (2021, October 9). The blockade of institutions is hampering the introduction of the 5G network in

BiH. Dnevni avaz. https://avaz.ba/vijesti/bih/687426/ponovo-kasnimo-za-regionom-i-evropom-blokada-institucija-

koci-i-uvodenje-5g-mreze-u-bih

10 | DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) USAID.GOV

Exhibit 1. Mobile network coverage in BiH, overlaid with population footprint (analysis performed and

maps produced by the DECA team in July 2022)

Note: The average population density in BiH (state level) is between 66 and 69 people per square kilometer. The highest

population density values are in the Sarajevo Canton (more than 6,500 people per sq. km), while the lowest values (less than 10

people per sq. km) are in the southwest areas in Canton 10.

INTERNET USE AND CONSUMER PREFERENCES

According to data from the ITU and the BiH Agency for Statistics, 73.2 percent of the population in BiH

use the internet,

and about the same percentage of households have internet access at home.

Households in urban areas are more likely to have internet access (75 percent) compared to households

in rural areas (71 percent).

The most common reasons for private internet use include online and

video calls, text messaging through online tools, and participation in social networks.

The most

common reason people choose not to pay for internet service is that they do not perceive the benefits

of doing so. Of those who chose not to pay for internet service because they did not perceive the

ITU. (2021). Connectivity in education: Status and recent developments in nine non-European Union countries.

https://www.itu.int/dms_pub/itu-d/opb/phcb/D-PHCB-CONN_EDUC-2021-PDF-E.pdf

Agency for Statistics of BiH. (2021). Use of information and communication technologies in Bosnia and

Herzegovina. https://bhas.gov.ba/data/Publikacije/Bilteni/2021/IKT_00_2020_TB_1_BS.pdf

Ibid.

USAID.GOV DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) | 11

benefit, 77 percent of respondents were adults and 33 percent were youth.

The next two most

common reasons for not having regular access to the internet are the lack of devices (33 percent of

adults and 31 percent of youth) and the cost of internet access (17 percent of adults and 33 percent of

youth). See Exhibit 2 for more details.

World Bank data reveal that fixed broadband subscriptions in BiH increased from 27 in 2000 to 770,624

in 2020.

Although the number of ISPs has declined over the past five years, the number of internet

subscribers has increased over the past ten years. In 2020, 60 ISPs operated in BiH.

Compared to the

previous year, the operators improved their offers by introducing new services and improving the ease

of using existing services. However, the operators face numerous problems in network expansions.

Exhibit 2. BiH internet usage and preference statistics

Source: National Survey of Citizens’ Perceptions in BiH (2021).

BiH still has a low rate (5.84 percent) of subscribers using fiber to the home (FTTH). The NSCP-BiH

found that digital subscriber line (DSL) is the most common means of connection for internet users in

rural areas (41.8 percent) and that cable is the most popular form of internet access for urban dwellers

(49.3 percent).

The deployment of fiber-optic technologies is still very slow, and it is characterized by

unequal conditions for the installation within the country, lack of coordination between operators, and

lack of a national broadband strategy. Complex construction permitting processes can also be linked to

slow fiber-optic implementation, especially in connecting the last segment of the last mile. In addition,

Speedtest Global Index ranks BiH 109th of 178 economies assessed in fixed broadband with a speed of

22.79 Megabits per second (Mbps). The global average is 59.75 Mbps.

USAID. (2022). 2021 National Survey of Citizens’ Perceptions in BiH (NSCP-BiH).

World Bank data. Fixed broadband subscriptions.

https://data.worldbank.org/indicator/IT.NET.BBND?locations=BA

BiH Communication Regulatory Agency. (2021). Annual report of the Communications Regulatory Agency for

2020. https://docs.rak.ba//documents/f8910d22-e538-4b11-9b21-4f7cfd0e0b88.pdf

USAID. (2022). 2021 National Survey of Citizens’ Perceptions in BiH (NSCP-BiH).

Ookla. (2021). Speedtest Global Index. https://www.speedtest.net/global-index

12 | DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) USAID.GOV

Exhibit 3, created by the DECA team based on the synthesis of data from the spatial plans of FBiH and

RS, shows that almost all cities and towns in both entities are connected by the existing or planned

fiber-optic cable routes, which indicates that BiH, in planning and technical terms, has an adequate basis

for the development and improvement of fiber-optic infrastructure. It is worth noting that while other

maps of telecommunication infrastructure in BiH, such as the ITU’s Interactive Transmission Map,

show microwave networks crisscrossing the country, the microwave network was established to

facilitate communication between critical government agencies, including the police, security organs, and

others. The network is used neither by companies for retail connectivity services nor by MNOs or ISPs

to provide internet access to consumers.

Exhibit 3. Fiber-optic cables in BiH, taken from the 2008–2025 FBiH and 2020–2025 RS spatial plans

PROSPECTS FOR EXPANDED COVERAGE

Ethnic politics, market regulations, anticompetitive behavior, and corruption all affect the prospects for

expanding telecommunication infrastructure in BiH. Regulations governing network expansion give

municipalities the authority over the administrative procedures governing the construction of

telecommunication cables, as well as the ability to set utility fees. This, however, may provide space for

corrupt behavior or may be used as a means for reaching political goals. For example,

ITU. Interactive Transmission Map. https://www.itu.int/itu-d/tnd-map-public/

USAID.GOV DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) | 13

telecommunication companies may encounter hurdles in obtaining construction permits for the

completion of their infrastructure projects, because political parties who have decision-making power in

the local government unit (LGU) may be connected with, or may support, their competitors.

Additionally, about 12 percent of firms in BiH are asked or expected to give gifts or informal payments

when requesting a construction permit.

Even without corrupt behavior, however, LGUs are

characterized by slow and inconsistent procedures, making it challenging for MNOs and ISPs to

efficiently pursue national expansion plans.

The challenge for network expansion is exacerbated by the lack of infrastructure-sharing possibilities,

meaning that new market entrants are forced to build their own networks and are not allowed to lease

existing infrastructure, even if that infrastructure is not used by other companies in the market. This

situation benefits the BiH’s three MNOs that inherited infrastructure built before the breakup of

Yugoslavia.

Either inherited or built, each telecommunications operator maintains detailed information

on its own infrastructure. This information is, however, not regularly shared with relevant stakeholders.

Lack of transparency and information sharing raises security concerns as a number of incidents happen

due to lack of familiarity with the exact location of the telecommunication infrastructure. For example,

underground cables are commonly damaged during excavation by construction companies that are not

informed of the location or even the vicinity of underground cables.

Bilateral donors are ready to support digitalization processes in BiH. Annex E provides a list of ongoing,

digital-related projects supported by donors and international financial institutions in BiH. Expanding

connectivity to rural areas is one of the issues that donors are willing to support; however, they have failed

to find interested and motivated partners within government institutions. Meanwhile, the interviewed

government officials are concerned that without government intervention and support for initiatives that

seek to expand affordable broadband access throughout the country, operators inevitably will choose to

invest in higher earning locations and leave behind BiH’s marginalized locations and populations.

Aside from the BiH government’s potential role, there are other internet access initiatives. One

example is the joint Giga initiative in BiH, as part of which the United Nations Children’s Fund

(UNICEF), together with the ITU, aims to connect the country’s schools to the internet.

As a first

step, UNICEF mapped all of BiH’s public schools and found that almost every third school in BiH does

not have access to the internet.

It found that, at that cantonal level, the percentage of schools without

internet access can be as high as 40 percent.

World Bank Group. (2019). Enterprise Surveys: Bosnia and Herzegovina 2019. Country Profile.

https://www.enterprisesurveys.org/content/dam/enterprisesurveys/documents/country/Bosnia-and-Herzegovina-

2019.pdf

According to the World Bank data, it takes 103 days to issue a construction permit in BiH. Source: World Bank

Group. (2019). Enterprise Surveys: Bosnia and

Herzegovina 2019. Country Profile:

https://www.enterprisesurveys.org/content/dam/enterprisesurveys/documents/country/Bosnia-and-Herzegovina-

2019.pdf

Hosman, L., & Howard, P. N. (2010). Information Policy and Technology Diffusion: Lessons from Bosnia, Croatia,

Macedonia, Montenegro, Serbia, and Slovenia.

https://www.academia.edu/2668555/Information_Policy_and_Technology_Diffusion_Lessons_from_Bosnia_Croatia

_Macedonia_Montenegro_Serbia_and_Slovenia

Giga: Global initiative to

connect every school to the internet by 2030.

https://giga.global/about-us/

UNICEF. (2022). Mapping ICT resources

in primary and secondary schools

in BiH: Results.

Ibid.

14 | DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) USAID.GOV

AFFORDABILITY

Approximately 17 percent of BiH citizens who do not have regular internet access say the main reason

is cost. The affordability variable from the GSMA Mobile Connectivity Index was 52.0 for BiH, which

means that compared to the neighboring countries, BiH, along with North Macedonia (49.4), has the

highest mobile data prices in the Western Balkans.

The affordability variable shows the availability of

mobile services and devices at price points that reflect the level of income across a national population.

Comparatively, the ITU uses five different price benchmarks, or “baskets,” to compare prices for

different types of internet services. These are (1) fixed broadband basket, (2) data-only mobile

broadband basket, (3) mobile data and voice low-consumption basket, (4) mobile data and voice high-

consumption basket, and (5) mobile cellular low-usage basket. The ITU data show that in 2021, BiH had

the second cheapest, data-only mobile broadband basket

and mobile data and voice high-consumption

basket

in the Western Balkans and was above the Western Balkan average cost of the fixed broadband

GSMA Mobile Connectivity Index (2019).

https://www.mobileconnectivityindex.com/?search=crp#year=2019&zoneIsocode=MKD

The cheapest plan provides at least 2GB of high-speed data (≥256Kbit/s) over a 30-day (or 4-week) period from

the operator with the largest market share.

The cheapest plan provides at least 140 minutes of voice, 70 SMS, and 2 GB of high-speed data (≥256Kbit/s) over

a 30-day (or 4-week) period from the operator with the largest market share.

USAID.GOV DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) | 15

basket,

mobile data and voice low-consumption basket,

and mobile cellular low-usage basket.

46,47

Exhibit 4 shows a more detailed comparison of prices for different types of internet services in the

Western Balkans.

Exhibit 4. Comparison of prices for different types of internet services in the Western Balkans (2021)

BIH CROATIA MONTENEGRO

NORTH

MACEDONIA SERBIA

WESTERN

BALKANS

(AVERAGE)

Fixed broadband basket

(5GB)

2.30 0.64 2.04 3.52 2.66 2.23

Data-only mobile

broadband basket (2GB)

1.35 0.71 2.26 1.95 1.48 1.55

Mobile data and voice

low-consumption basket

(70min+20sms+500MB)

2.03 0.57 2.26 2.35 0.78 1.60

Mobile data and voice

high-consumption basket

(140min+70sms+2GB)

2.54 0.71 2.79 3.31 2.58 2.39

Mobile cellular low-usage

basket (70min+20sms)

2.03 0.57 2.26 2.35 0.78 1.60

Note. All prices are shown as a percentage of GNI per capita

Source: ITU.

In April 2019 Albania, BiH, Kosovo, North Macedonia, Montenegro, and Serbia agreed to reduce

roaming charges for mobile subscribers traveling within the region. CRA published its decision on

May 12, 2021, that additional roaming charges for calls, SMS, and MMS would not be charged. Now

these countries are negotiating reduced data roaming tariffs with the EU because the roaming

agreements did not include data. This means that consumers still need to track their data usage while

using highly popular, over-the-top services such as WhatsApp and Viber while traveling abroad.

DIGITAL LITERACY

Digital literacy is “the ability to access, manage, understand, integrate, communicate, evaluate, and create

information safely and appropriately through digital devices and networked technologies for participation

in economic, social, and political life.”

The concept overlaps with financial literacy and with media and

The cheapest plan provides at least 5GB of high-speed data (≥256Kbit/s) over a 30-day (or 4-week) period from

the operator with the largest market share.

The cheapest plan provides at least 70 minutes of voice, 20 SMS, and 500MB of high-speed data (≥256Kbit/s)

over a 30-day (or 4-week) period from the operator with the largest market share.

The cheapest plan provides at least 70 minutes of voice and 20 SMS (in predetermined on-net/off-net/fixed

ratios) over a 30-day (or 4-week) period from the operator with the largest market share.

ITU. (2022). ICT Price Baskets (IPB). https://www.itu.int/en/ITU-D/Statistics/Dashboards/Pages/IPB.aspx

USAID. (2022). Digital Literacy Primer.

https://www.usaid.gov/sites/default/files/2022-05/USAID_Digital_Literacy_Primer.pdf

16 | DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) USAID.GOV

information literacy (MIL). (See Exhibit 5.) MIL is discussed in detail under Pillar 2, and more information

on financial literacy is presented under Pillar 3.

Exhibit 5. Financial literacy versus digital literacy versus media and information literacy

Strengthening digital literacy in BiH is hindered by a number of factors. Comprehensive data on the state

of digital literacy of BiH citizens are not available as there has been no extensive or regular research on

the topic to date. Several different types of organizations in BiH have a stake in citizens’ access and

ability to use digital communications technology and have the capacity to influence or address digital

literacy in the country. These include MNOs and ISPs; education institutions; government agencies;

banks; traditional media; NGOs; advertisers; online retailers; and social media. However, the research

for this report found a consistent view by stakeholders that digital (as well as media and information)

literacy was someone else’s responsibility. Repeatedly, DECA KIs, including interviewed government

officials, civil society representatives, and informants from academic and media sectors, did not

acknowledge responsibility for contributing to improved digital literacy among BiH society and said it is

someone else’s responsibility to improve citizens’ digital literacy. Finally, there is a lack of a common

understanding of what digital literacy refers to, especially given that any definition of the concept

inevitably must adapt to emerging technologies and concepts, including the evolving challenges of online

misinformation, disinformation, and malinformation.

The last census, which included only basic concepts of computer literacy, was conducted in 2013.

Otherwise, proxy indicators (related to service availability and use) including affordability, consumer

readiness, and content and services are the only data available that can be used to indirectly assess

digital literacy.

The U.S. Cybersecurity and Infrastructure Security Agency published “Mis, Dis, Malinformation,” a guide for

these concepts. https://www.cisa.gov/sites/default/files/publications/election-disinformation-toolkit_508_0.pdf

BiH Agency for Statistics. (2013). Census of population, households and dwellings in BiH: Final results.

https://www.popis.gov.ba/popis2013/doc/RezultatiPopisa_BS.pdf

GSMA Mobile Connectivity Index. (2019).

USAID.GOV DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) | 17

Given the lack of regular local research on the state of digital literacy in BiH society, data from

international organizations offer some insights. For example, according to the ITU, 37 percent of BiH

citizens have basic IT skills,

and only 2 percent of individuals have advanced skills.

Men more often

than women have basic digital skills (19 percent of men compared to 14 percent of women); however,

women more often than men have advanced digital skills

(10 percent of women compared to

6 percent of men).

Citizens are also active users of social media networks, with 55 percent of the total

population in January 2021 identified as active on social media, according to the Digital Global portal.

However, usage of social media platforms does not necessarily predict the ability to use functionalities

such as creating and sharing media, organizing contacts, etc. (analogous skills that the ITU metric may

use to categorize individuals levels of digital literacy). For example, for the majority of young people in

BiH (83.5 percent), using the internet is the most important activity during their free time; it is even

more important than going out with friends or playing sports.

Yet according to 2019 Eurostat data,

BiH is among worst performing countries in Europe when digital skills of youth are assessed: Only

57 percent of young people ages 16 to 24 have basic or above-basic digital skills.

This indicates that the

frequency of internet use among youth does not predict how digitally skilled they are, which conforms

with the concern expressed by interviewed NGOs related to citizens’ ability to recognize and

comprehend the implications of misuse of technology. They believe that BiH society is unprepared for

negative uses and the impacts they cause.

However, the majority of BiH citizens feel confident in using different digital devices, including desktop

computers, laptops, smartphones, and tablets. As found by the 2021 wave of the NSCP-BiH and

confirmed by the majority of KIs, youth tend to be more confident in using digital devices compared to

adults. At the same time, although the majority of KIs do not think there are notable differences

between the digital literacy of men and women in BiH, women self-reported lower levels of confidence

in using a desktop computer, laptop, or tablet compared to their male counterparts (Exhibit 6).

https://www.mobileconnectivityindex.com/#year=2019&zoneIsocode=BIH&analysisView=BIH

In the ITU research mentioned on this page, the ITU defines basic skills as “… the highest value among the

following four computer-based activities: copying or moving a file or folder; using copy and paste tools to duplicate

or move information within a document; sending emails with attached files; and transferring files between a

computer and other devices.”

ITU. (2019). Digital Development dashboard: Bosnia and Herzegovina.

https://www.itu.int/en/ITU-D/Statistics/Documents/DDD/ddd_BIH.pdf

The ITU defines advanced (ICT) skills as “the value for writing a computer program using a specialized

programming language.”

Agency for statistics of BiH. (2021). Men and Women in BiH.

https://bhas.gov.ba/data/Publikacije/Bilteni/2022/FAM_00_2021_TB_1_BS.pdf

Kemp, S. (2020). Digital 2020: Bosnia and Herzegovina. https://datareportal.com/reports/digital-2020-bosnia-and-

herzegovina

Friedrich Ebert Stiftung. (2019). Youth Study Bosnia and Herzegovina 2018/2019. https://library.fes.de/pdf-files/id-

moe/15262.pdf

Eurostat. Individuals’ level of digital skills (until 2019). Last update: March 30, 2022.

https://appsso.eurostat.ec.europa.eu/nui/submitViewTableAction.do

USAID. (2022). 2021 National Survey of Citizens’ Perceptions in BiH.

18 | DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) USAID.GOV

Exhibit 6. Percentage of people who feel comfortable with specific technologies

Source: National Survey of Citizens’ Perceptions in BiH (2021).

Experts commonly lamented the lack of systematic digital literacy training in the country. While there is

some digital literacy training for schoolchildren, it is not built into the school curricula so that students

start young and proceed through increasingly advanced concepts during succeeding years of school. For

example, computer science is a school subject taught starting in first grade in Sarajevo Canton primary

schools. In other FBiH cantons, as well as in RS, computer science is not taught until the fifth or sixth

grade. In September 2021, however, RS launched a program called “Digital World” that provides basic

digital literacy training to all second graders.

In this course, students are taught how to recognize and

respond to malicious behavior on the internet.

However, there is no follow-on program for the

remaining grades. Even if they provide formal

education connected to digital literacy, schools in

BiH often lack the necessary equipment that

would ensure high-quality teaching. According to

the 2018 Program for International Student

Assessment (PISA), only one-third of schools in

BiH have a sufficient number of digital devices or

appropriate teaching software available in school.

Additionally, every second school in BiH lacks

sufficient internet speed to support online

learning.

Pedagogical Institute of RS. Digital World. https://www.rpz-rs.org/922/rpz-

rs/Nastavni/programi/za/nastavni/predmet/Digitalni/svijet/za/II/razreda/osnovne/skole

Srpska Café. (2021, July 29). Digitalni svijet: Učenici drugog razreda osnovne škole dobijaju novi predmet.

http://srpskacafe.com/2021/07/digitalni-svijet-ucenici-drugog-razreda-osnovne-skole-dobijaju-novi-predmet/

OECD. (2019). 2018 Program for International Student Assessment (PISA): Bosnia and Herzegovina. Student

Performance – Resources for education.

https://gpseducation.oecd.org/CountryProfile?primaryCountry=BIH&treshold=5&topic=PI#:~:text=In%20reading%2

0literacy%2C%20the%20main,30%20points%20higher%20for%20girls).

USAID/BiH supports e-learning and blended

learning in BiH

USAID/BiH, as part of its Strengthening Social

and Health Protection in Response to the

COVID-19 Pandemic in BiH Activity (2021 –

2023), implemented by UNICEF, works on

enhancing the capacities of schools to provide quality

e-learning and blended learning. The Activity focuses

on helping children acquire knowledge, skills, and

values, and access and operate in digital environment

safely and effectively. This includes ability to critically

evaluate information and communicate safely,

responsibly, and effectively using digital technology

and content.

USAID.GOV DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) | 19

While leadership over the trajectory and fate of digital literacy in BiH remains unclear, a majority of KIs

said digital transformation in BiH has advanced as a result of the COVID-19 pandemic. The pandemic

not only required families in BiH to quickly transition to remote work and learning but also encouraged

them to turn to online shopping and banking. KIs reported that the need to use digital tools in the

absence of other alternatives strengthened the digital literacy of the BiH population, although no

research has been conducted to confirm this.

THE DIGITAL DIVIDE

Despite the generally strong connectivity infrastructure, digital

technology is not equally accessible or used by all members of

BiH society. A digital divide is evident among urban and rural

locations. Households from urban areas are more likely to

have a computer compared to households in rural areas

(65.6 percent versus 60.6 percent, respectively).

The same

applies to having internet access: 77.8 percent of households

in urban areas have internet access compared to 73.8 percent

of households in non-urban areas.

A digital divide is especially

visible among households with different monthly net incomes.

Whereas 93.4 percent of households earning more than 480

USD (900 BAM) a month own a computer and 97.1 percent

have access to the internet, only 47.1 percent of households with earnings less than 480 USD have a

computer, and only 63.8 percent of these households have internet access.

Socio-economic barriers limiting access to technological change and development are most evident

among Roma households. Roma are the largest minority group in BiH; the total population is 12,896,

according to the 2013 Census data.

However, estimates of the size of the Romani population range

between 40,000 and 75,000,

although these data are not officially confirmed. Roma in BiH face

cumulative and systematic discrimination and social exclusion,

with the digital environment being only

part of a more comprehensive issue to which this national minority group is subjected. For example,

there are ten Roma settlements around the country that lack access to electricity, let alone the

internet.

The main reason for the lack of access to electricity in these settlements is the inability of

households to cover electricity costs. Aside from these ten settlements, a large number of Roma

households struggle or cannot afford to pay for high electricity costs. Furthermore, strengthening the

Agency for Statistics of BiH. (2022). Use of Information and Communication Technology in BiH: 2021.

https://bhas.gov.ba/data/Publikacije/Bilteni/2022/IKT_00_2021_TB_1_HR.pdf

Ibid.

Agency for Statistics of BiH. (2013). Census of Population, Households and Dwellings in BiH - Final Results.

https://www.popis.gov.ba/popis2013/doc/RezultatiPopisa_BS.pdf

Romani Early Years Network (REYN). REYN Bosnia and Herzegovina. Access on: August 26, 2022.

https://reyn.eu/reynnationalnetworks/reyn-bosnia-and-herzegovina/

Civil Right Defenders. (2017). Roma in Bosnia and Herzegovina. https://crd.org/wp-content/uploads/2018/03/The-

Wall-of-Anti-Gypsyism-Roma-in-Bosnia-and-Herzegovina.pdf

According to DECA KI, the following Roma settlements do not have access to electricity: (i) Rakovica

(Municipality of Ilidza), (ii) Moscanica (Municipality of Stari Grad Sarajevo), (iii) Podhranj (Municipality of Gorazde),

(iv) Radimlja (Municipality of Stolac), (v) Prutace (District Brcko), (vi) Dolovi (Municipality of Zavidovici),

(vii) Hrastovi (Municipality of Kiseljak), (viii) Poljice (Municipality of Lukavac), (ix) Kupresani (Municipality of Jajce),

(x) Zivinice (Municipality of Zivinice).

The digital divide explained

The digital divide is the distinction

between those who have access and

can use digital products and services

and those Who are excluded. There

are often overlapping digital divides

that stem from inequities in literacy,

cost, social norms, or availability of

relevant content. Digital divides may

be associated with gender, economic

status, geography, and age among

other factors.

20 | DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) USAID.GOV

digital skills of Roma children is hindered by the lack of attainment of formal education. Although about

70 percent of Roma children enroll in the primary and secondary schools, less than half of them

complete the compulsory education.

As the COVID-19 pandemic accelerated the digital

transformation process across BiH, it broadened the digital

divide between Roma and other children. Roma children

could not afford devices and internet access, and they

lacked spaces where they could learn; therefore, they were

not able to attend online classes.

The situation is somewhat better when the digital divide is

assessed from a gender perspective. Approximately

79 percent of men and 73 percent of women between the

ages of 16 and 74 years old used the internet in 2021.

However good this may seem, when compared to the

neighboring countries, BiH has the lowest percentage of

women using the internet and is the second-worst

performer (together with Montenegro) when the percent

of men using the internet is assessed (Exhibit 7).

Although both men and women use the internet mostly to

make phone and video calls, send messages, and use social

networks, men, more often than women, engage in online

sale of goods and services (61.2 percent of men versus

38.8 percent of women), use internet banking (57.6 percent

of men versus 42.4 percent women), and play or download

games (56.5 percent of men versus 43.5 percent of

women).

These disparities conform with the gender

equality issues in BiH, including that men, more often than

women, have bank accounts

and spend less time than

women doing childcare and household work.

Although

there are no official data, experts believe that women from

rural areas are more marginalized than women from non-

rural areas when the use of ICT is assessed. According to

the Food and Agriculture Organization of the United

Nations, women in rural areas face a “triple divide” that

UNDP. The World Bank. EU. (2018). Roma at a Glance: Bosnia and Herzegovina. Fact Sheet.

https://www.undp.org/eurasia/publications/regional-roma-survey-2017-country-fact-sheets

UNICEF. (2021). Social Impacts of COVID-19 in BiH: Second Household Survey.

https://www.unicef.org/bih/media/6251/file/Social%20Impacts%20of%20COVID-19%20in%20Bosnia%20and%20Herz

egovina.pdf

Agency for Statistics of BiH. (2022). Use of Information and Communication Technology in BiH: 2021.

https://bhas.gov.ba/data/Publikacije/Bilteni/2022/IKT_00_2021_TB_1_HR.pdf

USAID/BiH. (2022). 2021 National Survey of Citizens’ Perceptions in BiH.

The World Bank. (2018). The Global Financial Inclusion Data/Global Findex - Bosnia and Herzegovina.

http://datatopics.worldbank.org/financialinclusion/country/bosnia-and-herzegovina

USAID/BiH. (2019). Gender Analysis for BiH: 2019 Follow-Up.

https://measurebih.com/uimages/Gender20Analysis20201920Follow-Up20Final20Report.pdf

Source: World Bank Data.

*Data for Kosovo from 2018.

Exhibit 7. Percentage of males and

females that use the internet in Western

Balkan countries, 2020

USAID.GOV DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) | 21

includes digital, rural, and gender factors. Coupled with the age factor, it puts women from rural areas in

an extremely vulnerable position.

Data on BiH reveal that older generations use digital technology less often. For example, 98.1 percent of

youth own a smartphone, compared to 79.6 percent of adults.

Youth in BiH are also more

comfortable using digital technologies than adults. The largest difference is related to laptop use, where

96.1 percent of youth and 82.6 percent of adults feel somewhat or very confident in using a laptop.

According to the Agency for Statistics of BiH, all students enrolled in higher level education use the

internet, compared to approximately 58 percent of retired citizens.

When only citizens using the

internet are observed, 100 percent of those ages 16 to 24 use the internet every or almost every day

compared to 97 percent of internet users ages 25 to 54 and 88 percent of internet users ages 55 to 74

who use the internet on (almost) a daily basis.

The age gap in having necessary skills and access to

hardware applies as well to the use of online public services. Only about 12 percent of citizens ages 55

to 74 use online public services compared to about 27 percent of citizens ages 25 to 54 and 23 percent

of citizens ages 16 to 24.

Key stakeholders interviewed by the DECA team agree that youth are more

likely to use digital technology and more easily adopt and adapt to new technologies compared to older

generations. This fact poses a challenge for the digital transformation of private entities as well as the

public sector, because the majority of people employed in the public sector, especially those in positions

of authority, are older.

CRITICAL INFRASTRUCTURE, GEOPOLITICS, AND CYBERSECURITY

CONCERNS

In BiH there is no common understanding or definition of critical infrastructure.

Whichever forms of

infrastructure might be included in a definition (bridges, fiber-optic cables, etc.) is important, because a

formal definition would have state-level policy implications. This is a challenge for the country’s

digitalization prospects because many different types of infrastructure play critical roles in BiH’s digital

ecosystem. The sectors listed in USAID’s regional Critical Infrastructure Digitalization and Resilience

(CIDR) project, which includes BiH, are energy, water, transport, healthcare, finance, and

telecommunications sectors. While telecommunications is listed as a distinct sector, all these sectors in

BiH rely heavily on digital tools and communications.

According to KIs, a Law on Security of Critical Infrastructure at the state level is under development.

However, experts are skeptical about its adoption. In July 2019, RS adopted an entity law that defines

activities aimed at protecting its industry, energy, ICT, transport, health, utilities, water management,

FAO. (2021). National Gender Profile of Agriculture and Rural Livelihoods: BiH.

https://eca.unwomen.org/sites/default/files/2022-01/2021-09-

01%20Gender%2C%20Agriculture%20an%20Rural%20Development%20in%20Bosnia%20and%20Herzegovina-

min.pdf

USAID/BiH MEASURE II. (2021). National Survey of Citizens’ Perceptions.

Ibid.

Agency for Statistics of BiH. (2022). Use of Information and Communication Technology in BiH: 2021.

https://bhas.gov.ba/data/Publikacije/Bilteni/2022/IKT_00_2021_TB_1_HR.pdf

Ibid.

Critical infrastructure is an asset or system that is essential for the maintenance of vital societal functions. For

more information, please see Annex B: Definitions.

22 | DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) USAID.GOV

food distribution infrastructure, and systems.

A draft FBiH law on critical infrastructure is already

prepared but has not yet been adopted. Most KIs agree that the reason laws such as this one are being

passed at the entity rather than state level is the resistance of RS to relinquishing control over any

sector to the state.

Indeed, the challenge in establishing a definition is not a matter of wordsmithing but, rather, determining

a politically agreeable set of implications of a definition, including the allocation of state resources to

protect or invest in officially designated critical infrastructure and to delegate responsibilities to state-

level institutions that could coordinate digitalization and cybersecurity issues.

One example of a critical national organization that is unable to be established due to the political

situation in BiH is a national computer emergency response team (CERT). In lieu of a national CERT, the

Organization for Security and Cooperation in Europe (OSCE) has established the Neretva working

group on cybersecurity, with a sub-working group on energy. The informal working group comprises

practitioners and experts from different sectors and all levels of authority sharing knowledge and

experience from the field, including representatives of three CERTs that currently operate in the

country: the CERT RS,

Academic CERT,

and CERT of the Ministry of Defense and the Armed Forces

of BiH.

The capacities of the three CERTs are limited, whereas BiH remains the only country in

Europe without a national CERT. The BiH Council of Ministers adopted the Strategy for the

Establishment of the BiH CERT in 2011; however, due to a lack of political support, it has not yet been

established.

Official Gazette of RS, No. 58/19.

The RS CERT became operational in 2015 under the auspices of the Ministry for Scientific and Technological

Development, Higher Education, and Information Society of RS. More information is available at

https://certrs.org/en/about/

Academic CERT was established in 2022 under the auspices of the University of Sarajevo. The establishment of

the Academic CERT was supported by the British Embassy in BiH and OSCE. The main purpose of the Academic

CERT is to provide cybersecurity-related support to academia, civil society, and independent media.

The Security Operation Center (SOC) of the CERT of the Ministry of Defense and the Armed Forces of BiH

became operational in early 2022. The SOC is working on supporting and protecting the cybersecurity of the

Ministry and Armed Forces.

USAID.GOV DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) | 23

PILLAR 2: DIGITAL SOCIETY, RIGHTS, AND GOVERNANCE

The concepts included under Pillar 2 are individuals’ ideas and rights, including how they are held,

promoted, communicated, and contested. More specifically, digital society refers to digitizing the

processes, procedures, and means by which societal systems function. Analogously, digital rights and

governance are the rights that governmental systems offer their citizens through digital means.

KEY FINDINGS

The polarizations in the media reflect those in society: BiH is known for its highly polarized

society and fractionalized media that reflect the country’s long-standing ethnic divisions. Furthermore,

members of both traditional and online media perpetuate ethnic divisions. Journalists attempting to

report stories face multiple challenges, including restricted access to information and threats of

violence. Even though there are laws that require government officials to provide media with access

to information, these laws are not harmonized with other protection laws related to national security,

criminal procedures, and taxation. While there is a law on access to information, the lack of

harmonization contains a loophole which allows government officials to deny requests for information

but does not prevent them from later criticizing or correcting news stories for inaccuracies once they

are published. Likewise, journalists face a myriad of challenges in covering activities of elected officials.

State media also face severe financial challenges due to controversies related to their funding sources.

Internationalization of issues: Many issues related to the veracity of online information identified

in this assessment highlight how BiH is affected by misinformation spread through social media as well

as through sites over which the government has little control. At the same time, MIL remains modest,

making citizens vulnerable to such misinformation.

Hate speech: Hate speech continues to permeate traditional and social media. Whereas it is not

unusual for online hate speech to target citizens of different ethnicities, the most common victims are

migrants.

Only a few end-to-end e-services are currently available in BiH: Lack of e-signature

utilization and accessibility are identified as key limitations to advance the development and provision

of e-services to citizens and businesses. In addition, although interoperability frameworks are in place

at the state and entity levels, institutions are not required to exchange data over the government

service bus (GSB). The limited number of GSB services results in citizens and businesses continuing to

have to submit paper documents in person and, in many cases, the same document to many different

government offices.

Wish list of government services for digitalization: DECA KIs agree that not all government

services need to be digitalized. Instead, the focus should be on the services that citizens use most

frequently. From the perspective of citizens, these include the issuance of birth, death, and marriage

certificates; renewal of various citizen documents (e.g., ID cards and passports); voter registration and

car registration; applications for admission to a school or university; and issuance of construction

permits. From the perspective of businesses, KIs agree that the following services should be

prioritized: digitalization of construction permitting, issuance of tax payment certificates, business

registration, and social support payments.

24 | DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) USAID.GOV

MEDIA AND INFORMATION LITERACY

“Media and information literacy” (MIL) refers to an individual’s capacity for and habit of thinking critically

about the information they are consuming, including an appreciation for the process by which

information is created and shared. MIL enables people to recognize the opinion presented as fact, when

elements of a story are missing, or when a necessary perspective from a stakeholder is absent. As noted

earlier in the report, this concept overlaps with digital literacy (see the Digital Literacy section) and

digital financial literacy.

MIL issues pervade nearly all aspects of BiH’s digital society, rights, and governance, with different

implications for government organizations, media outlets, NGOs, and individual citizens. MIL skills

require consumers to keep up to date on emerging and evolving concepts, including for youth who are

just beginning to consume media and adults who are trying to discern the veracity of information

conveyed through new technologies. These skills also require greater vigilance on the part of parents,

who may be unaware of what media their children are consuming and with whom they are interacting.

According to a Save the Children report on children’s behavior on the internet, parents do not prevent

children from using the internet in 48 percent of cases, primarily because their knowledge about it is

limited (70 percent).

“If we strengthen our educational system to create new generations of critical thinkers and cybersecurity

experts, then yes, in [the] near future, we’ll be able to build up on resilience in terms of cybersecurity,

information security, information disorder, warfare. It is possible. But at this moment, as we speak, our

resilience is very weak.”

– BiH DECA Key Informant

In addition to the history of inter-ethnic conflict, MIL is challenged by the legacy of state television and

the roles that various levels of government play in financing their corresponding television outlets.

Radiotelevizija Bosne i Hercegovine (Radio-Television of Bosnia and Herzegovina; BHRT), a state-level

broadcaster, and two regional public broadcasters, Radio-Television of the FBiH and the Radio-

Television of the RS (RTRS), collect monthly radio and television fees from every household or legal

entity in BiH that owns a radio or television receiver. However, there are a number of media outlets

that political parties directly support, and in exchange for such support, they are used by the political

parties as an intermediary in achieving their political goals. Given BiH’s lack of a strong advertising

tradition, some local media have long relied on local governments for the vast majority—if not all—of

their income. Nearly half of local radio stations in BiH are funded by local budgets. The condition of having

only one sponsor or buyer of advertising has affected the independent character of reporting and

squelched critical coverage of local authorities’ activities.

Save the Children. (2016). Behavior and Habits of Children on the Internet: Attitudes of Children, Parents, and

Computer Science Teachers. https://nwb.savethechildren.net/sites/nwb.savethechildren.net/files/library/Izvjestaj-

ponasanje-djece-na-internetu.pdf

Zurovac, Lj., Mosig, L., Madoleva, S. “Media Outlets in BiH”. Konrad Adenauer Stiftung. Accessed on July 26,

2022. https://www.kas.de/en/web/balkanmedia/media-outlets1

USAID.GOV DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) | 25

The MIL challenges in BiH are not new, and the situation is not improving. BiH is characterized as having

“ethnic populism” in which the media are polarized and report along ethnic and territorial lines.

2021 study by the Atlantic Initiative found that “when responding to questions about why they feel

threatened, respondents frequently repeated truisms about ‘the other’ that are commonly seen in online

discussions and regularly used by ethno-nationalists—such as “Croats are marginalized by Bosniaks” or

“NATO doesn’t want Serbs in BiH” or “No one cares about genocide committed against Bosniaks.”

Beyond these existing biases and the increasing amount

and effectiveness of online disinformation, citizens in BiH

face an immense challenge in basing their decisions upon

accurate information provided by traditional and online

news sources.

Yet in BiH, there are no systematic,

long-term strategies for the development of MIL.

Moreover, education on MIL is not adequately integrated

into the academic curricula in BiH.

Academic

institutions, the NGO sector, and to some extent the

private sector work to fill the void of nonexistent state

programs on MIL. The most common support for strengthening MIL provided by these organizations

includes workshops and training for students.

However, the majority of education programs are short-

term and limited by the duration of the donor projects as part of which they are being organized.

Because of financial sustainability challenges that the NGO sector encounters, further engagement of the

NGO sector in supporting MIL development almost exclusively depends on donor support.

Although

the media have great potential to support MIL development, especially by increasing the reach of MIL

Džananović, N. and Karamehić, M. (2016). Populist Political Communication in Europe. p.263. Routledge.

https://www.taylorfrancis.com/books/edit/10.4324/9781315623016/populist-political-communication-europe-toril-

aalberg-frank-esser-carsten-reinemann-jesper-str%C3%B6mb%C3%A4ck-claes-de-vreese

The Atlantic Initiative. (2021). Exploring Ethno-Nationalist Extremism in Bosnia and Herzegovina.

https://atlanticinitiative.org/wp-content/uploads/2021/07/Exploring-ethno-nationalist-extremism-in-Bosnia-and-

Herzegovina.pdf

Raskrinkavanje Media Literacy Project. Accessed January 6, 2022.

https://medijskapismenost.raskrinkavanje.ba/kakvi-mediji-trebaju-biti/kako-prepoznati-vjerodostojne-medije/koja-je-

razlika-izmedu-pravih-i-laznih-medija/

Hodžić, S. (2019). Media and Information Literacy in Bosnia and Herzegovina: Numerous Civil Society Initiatives

and Lack of Public Policies. In Media and Information Literacy in the Western Balkans: Unrealized Emancipatory

Potential.

https://www.novinarska-skola.org.rs/sr/wp-content/uploads/2019/04/MIL-Regional-publication-ENG-

final.pdf

USAID/BiH. (2016). Assessment of the Media Sector in BiH.

https://www.measurebih.com/uimages/Assessment%20of%20the%20Media%20Sector%20in%20B&H.pdf

Hodzic, S., Petkovic, B., Basic Hrvatin, S. (2019). Medijska i informacijska pismenost u Bosni i Hercegovini: brojne

inicijative civilnog sektora i nedostatak javnih politika.

https://www.media.ba/sites/default/files/medijska_i_informacijska_pismenost_u_bosni_i_hercegovini_final.pdf

Ibid.

Disinformation

Disinformation is false information that is

deliberately created or disseminated with the

express purpose to cause harm. Producers of

disinformation typically have political, financial,

psychological, or social motivations.

Source: Shorenstein Center, 2018 (the official

definition used by USAID as outlined in the

USAID's Disinformation Primer, 2021)

26 | DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) USAID.GOV

initiatives and raising citizens’ and the public sector’s awareness of related issues, their role in

strengthening MIL has been modest.

The public is aware of the

consequences of citizens’ lack of MIL.

The 2022 Balkan Barometer found

that 48 percent of BiH citizens believe

that propaganda and fake news

published by the media contribute to

violent extremism, and 38 percent

believe the same effect occurs when

they are shared through social

media.

This lack of progress was evident in

2020, when the University of

Sarajevo’s Faculty of Political Science

released their latest position

document on media literacy.

The

University found that the only

identifiable progress in improving MIL

since its 2018 position document was

the University’s adoption of the

Declaration on the Importance of

Media and Information Literacy in BiH

in 2019, which reiterated the urgent

need for strategic thinking on MIL.

Approximately 55 percent of BiH citizens feel confident in their ability to “identify news that

misrepresent reality.

100

Moreover, citizens perceive journalists, press and broadcasting management, and

online media as the top three spreaders of disinformation in BiH.

101

Although older generations in BiH

are more satisfied with the news they obtain from online news sites compared to the generation below

the age of 30 (49 percent of adults versus 37 percent of youth), older generations still trust traditional

media more than online news sources.

102

On the other hand, youth rely more on online sources for

news and information than traditional media. The 2021 NSCP-BiH found that 42 percent of youth get

Ibid.

2022 Balkan Barometer, https://www.rcc.int/download/docs/Balkan%20Barometer%202022%20-

%20PO.pdf/21e2192c1d34cc6194ecb029d7b5997f.pdf

Ibid.

Institute for Social Research. (2019). Declaration on the Importance of Media and Information Literacy in BiH.

https://fpn.unsa.ba/b/wp-content/uploads/2020/12/Deklaracija-MIP-BIH-2019.pdf

100

Regional Cooperation Council (RCC), Western Balkans SecuriMeter 2022,

https://www.rcc.int/download/docs/Securimetar%202022_final.pdf/812a4b746e4de5f7f5b657c61a82cd34.pdf

101

2022 Balkan Barometer, https://www.rcc.int/download/docs/Balkan%20Barometer%202022%20-

%20PO.pdf/21e2192c1d34cc6194ecb029d7b5997f.pdf

102

USAID. (2022). National Survey of Citizens’ Perceptions in Bosnia and Herzegovina (NSCP-BiH), 2021

Academia and Civil Society Picking Up the Slack on MIL

for Youth

Academic institutions and NGOs work to fill the void left by a

non-existent state program on MIL. For example, the university of

Sarajevo has developed an array of free online MIL courses

(courses are developed from UN Educational, Scientific and

Cultural Organization (UNESCO) resources). They include a 12-

module massively open online course (MOOC), a book, and

workshops organized in collaboration with school librarians. They

are also

working with 200 primary and secondary school teachers to roll

out a MIL curriculum in schools. University professors want to

develop and deploy MIL content that students can consume

throughout their schooling.

Mediacentar Sarajevo, an NGO, organizes MIL youth camps where

negative effects of current reporting trends are explained to

participants and uses roleplay to increase their appreciation of the

challenges faced while doing their jobs. They also organize Debate

Youth Camps to provide youth with skills to engage others on the

complexity of issues. In all these activities they include discussions

on media literacy. digital literacy. and digital security.

It may be necessary for academia and civil society to raise MIL for

children of a younger age. Researchers at the University of

Sarajevo found that youth in BiH are now reaching "digital

adulthood”, the point at which they are consuming all forms of

content, by age ten.

USAID.GOV DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) | 27

their news from social media and 32 percent from online news sites. Only 11 percent and 16 percent of

youth respondents, respectively, relied on television and radio.

103

Youth in BiH display stronger MIL than their elders, and according to DECA KIs, they carry hopes for

long-term improvements in MIL in BiH. According to the 2021 NSCP-BiH, 45 percent of people under

the age of 30 were more likely to agree with the statement, “While reading, listening, and watching

messages from media, I wonder if that media content is produced to gain power, profit, or influence,”

compared to 39 percent of those older than 30. In response to the question, “To what extent do you

agree with the following statements? When I read, watch, or listen to news from any source, I consider

who was the author of this message,” 53 percent of respondents under the age of 30 agree or strongly

agree compared to 45 percent of those over 30 years in age.

LACK OF GOVERNMENT MOVEMENT ON STRUCTURED MIL APPROACH DESPITE

DONOR INTEREST

While the CRA and the Press and Online Media Council promote improved MIL in BiH,

104

the inability

of the government to establish an MIL strategy has been lamented by organizations like Mediacentar,

which said, “The information and communication rights of citizens, freedom of expression, free access

to information and protection of privacy require the state to play an active role.”

105

Additionally, the

media do not appear to consider improving society’s digital literacy or MIL to be its responsibility. As a

result, the government and media outlets have, in effect, transferred responsibility for evaluating the

veracity of information to citizens.

106

Even given the mistrust of media in BiH society, this is a missed

opportunity for the media to improve their perception and role as arbiters of information. It would be

easy for media outlets to add links to fact-checking tools such as Google’s Fact Check Explorer

107

other trusted fact-checking tools identified in the Rand Corporation’s “Tools that Fight Disinformation

Online.”

108

Easy access to tools not only gives readers and viewers a chance to validate the accuracy of

information but also conveys the idea that one can cross-reference information in general.

The University of Sarajevo’s 2018 position paper called for the government to designate a public

organization that would coordinate implementation of an MIL strategy. The University suggested that

the CRA, with support from the ministries of Civil Affairs, Communications and Transport and Security,

as well as the State Commission of BiH for Cooperation with the United Nations Educational, Scientific

and Cultural Organization (UNESCO), be the designated organization; however, that did not occur. The

previous paper also called for the integration of MIL in school curricula and continuing education

programs for adults, as well as strengthening libraries’ ability to offer MIL learning opportunities. These

recommendations were also not followed.

109

103

USAID. (2022). National Survey of Citizens Perceptions in Bosnia and Herzegovina (NSCP-BiH),2021.

104

Media and Information Literacy: A Time for a Strategic Approach

105

Mediacentar. Petković, B; Bašić Hrvatin S; Londo I; Hodžić S; Nikodinoska V; Milenkovski S; Pavlović P; Valić

Nedeljković,D; Janjatović Jovanović M. (2019). Media and Information Literacy in the Western Balkans: Unrealized

Emancipatory Potential.

https://www.media.ba/en/publication/media-and-information-literacy-western-balkans-

unrealized-emancipatory-potential

106

Ibid.

107

https://toolbox.google.com/factcheck/explorer

108

https://www.rand.org/research/projects/truth-decay/fighting-disinformation/search.html

109

Vajzović, E., Turčilo, L., Osmić, A., Silajdžić, L. & Cerić, H. (2020). Istraživanja o medijskoj i informacijskoj

28 | DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) USAID.GOV

Disinformation, MIL, and digital literacy are priority topics for several key donors, including USAID (see

the text box below),

110

UNESCO, the European Commission (EC), and the United Nations

Development Programme (UNDP). One example is the trilingual Medijska pismenost (media literacy)

site,

111

funded by the EC and UNESCO and implemented by the CRA. The Government of RS has

conducted some unilateral work on MIL, such as a 2018 event titled “Strengthening Media Literacy in

RS,” which was organized by the RS Ministry of Transport and Communications.

112

HATE SPEECH

Addressing hate speech in BiH is especially challenging because the country’s legacy of entrenched inter-

ethnic conflict continues in verbal and written form online and is allowed or even supported by

commercial media outlets aligned with specific groups. In the same way that Facebook’s algorithms

prioritize the delivery of “angry, polarizing, divisive content,”

113

some electronic media owners in BiH

permit a spectrum of critical views that may include hate speech and views that validate their audiences’

pismenost: Istraživanje i razvoj. https://fpn.unsa.ba/b/wp-content/uploads/2021/03/Vajzovic-Emir-ur.-Medijska-i-

informacijska-pismenost-istrazivanje-i-razvoj-2020_predCIP.pdf

110

USAID. Fact Sheet: Media Engagement Activity in BiH. https://www.usaid.gov/bosnia-and-herzegovina/news-

information/fact-sheets/fact-sheet-media-engagement-activity-bosnia-and-herzegovina

USAID. Fact Sheet: Investigative Journalism in BiH. https://www.usaid.gov/bosnia-and-herzegovina/

fact-sheet/fact-sheet-investigative-journalism-bosnia-and-herzegovina

USAID. Fact Sheet: Balkan Media Assistance Program. https://www.usaid.gov/bosnia-and-herzegovina/fact-sheet/fact-

sheet-balkan-media-assistance-program

111

University of Sarajevo. (2020). Medijska i informacijska pismenost: istraživanje i razvoj, Institut za društvena

istraživanja fakulteta političkih nauka, Univerzitet u Sarajevu. https://fpn.unsa.ba/b/wp-

content/uploads/2020/12/MEDIJSKA-I-INFORMACIJSKA-PISMENOST-ISTRAZIVANJE-I-RAZVOJ_e-izdanje-1.pdf

112

Ibid.

113

CBS News. Facebook whistleblower says company incentivizes “angry, polarizing, divisive content.” Published on

October 4, 2021. https://www.cbsnews.com/news/facebook-whistleblower-frances-haugen-60-minutes-polarizing-

divisive-content/

A snapshot of USAID/BiH Media Programs addressing MIL

Media Engagement Activity (2021—2026)

USAID/BiH's newest media program has three objectives. including:

I. Enhance the operational capabilities of media outlets in business management and strategy, resource

mobilization, cybersecurity, and legal protection.

2. Improve the quality and reach of an expanded and diverse set of media partners/outlets, particularly

in the digital space

3. Expand collaboration and networking among media outlets.

Investigative Journalism (2020-2025)

This activity aims to provide “direct financial support to independent media outlets to produce high-quality,

fact-based investigative reports on public corruption to increase the public’s awareness and unacceptance of

corruption.”

The Balkan Media Assistance Program to Foster Organizational Readiness While Advancing

Resilient Development - BMAP Forward (2022-2027)

BMAP Forward is a regional activity covering BiH, Kosovo, Montenegro, North Macedonia, and Serbia. The

purpose of the Activity is to make media practitioners more competitive in the local, national, and cross-

border marketplaces and strengthen the sustainability of the independent media sector across the region,

thus amplifying independent voices.

USAID.GOV DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) | 29

views and keep them and their associated revenues coming. On the other hand, some media outlets

combat online hate speech by giving users the ability to report any comments that are perceived to

contain hate speech. For example, one of the most popular online portals in BiH, Klix.ba, created a form

for users to report inappropriate comments. Data on reported comments are visible under each article

on the portal and are updated every hour.

Since there is no single, internationally accepted definition of hate speech,

114

and given the expanding

and evolving ways in which people express themselves online, the meaning of hate speech is fluid and

grows ever more undefinable in the BiH public sphere. Unsurprisingly, BiH struggles to find a balance

between allowing freedom of expression and sanctioning hate speech. The Law on Public Order and

Peace in the RS

115

recognizes the Internet as public space and stipulates sanctions against persons who

threaten peace and public order. However, the EU Delegation, the Office of the High Representative,

OSCE, and the Embassies of the U.S., Germany, the United Kingdom all expressed concerns that the RS

Law not being aligned with the EU and international standards. Likewise, the District Brčko and FBiH

criminalize hate speech, though only for statements made by journalists through traditional media. In the

case of these two territorial units, hate speech shared on social media or by email is not criminalized.

116

The initiatives to amend the BiH Criminal Code and FBiH Law on the Maintenance of Public Order and

Peace have not yielded any results so far. Because there still is no state-level law that defines or

regulates hate speech, and the related defamation and bullying are not criminal offenses, investigating and

proving hate speech in court are also difficult. It is ultimately up to the courts to determine whether

someone is guilty of hate speech. However, as has been done in several EU countries (e.g., Denmark,

France, Germany, and the United Kingdom), it is important to harmonize amended laws on crimes

against public order and peace with domestic and international standards in this domain so as to

establish a balance between effective measures against online harassment and the individual's right to

free expression.

Even though the challenges related to tracking and addressing hate speech are well understood, the

CRA can only react to objectionable content in traditional media, because it has not been mandated to

monitor online speech. Instead, several NGOs try to counter hate speech by monitoring and reporting

on it. For example, Sarajevo Open Center uses software like CrowdTangle and Pulsar to track trending

topics and narratives online that contain hate speech. OSCE developed a tool and for a while used it to

track hate speech on Facebook, Twitter, and Telegram and to identify networks of individuals who share

or amplify one another’s hate speech. Yet after Cambridge Analytica was caught using the same

Facebook data source for illegitimate political purposes, Facebook cut public access, and OSCE was

forced to discontinue the monitoring activity. Meanwhile, in 2021, Wired reported that while Facebook

claims to remove 90 percent of hate speech from its platform, in reality it deletes only three to

five percent of posts that contain hate speech.

117

Finally, several organizations work on identifying and

collecting data on hate speech cases. For example, the Balkan Investigative Reporting Network (BIRN)

maintains a database on hate speech that catalogs attacks while distinguishing between attacks, genocide

114

UN actions against hate speech: https://www.un.org/en/hate-speech/united-nations-and-hate-

speech/international-human-rights-law

115

RS Official Gazette, No. 11/15, 58/19

116

Special Report on Hate Speech in BiH (The Ombudsman for Human Rights of Bosnia and Herzegovina),

https://ombudsmen.gov.ba/Download.aspx?id=321&lang=EN

117

Noah Giansiracusa, “Facebook Uses Deceptive Math to Hide Its Hate Speech Problem”, October 15, 2021,

https://www.wired.com/story/facebooks-deceptive-math-when-it-comes-to-hate-speech/

30 | DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) USAID.GOV

denials, and war crime denials. The organization uses its database to map out how hate speech spreads

across multiple platforms. Likewise, the OSCE Mission to BiH produces a monthly update on hate

speech incidents and responses throughout BiH, called “Hate Monitor.”

118

According to Hate Monitor,

there were 83 hate-motivated incidents in BiH since the beginning of 2022, most of which targeted

ethnicity or religion (82 percent).

119

Only two hate-motivated incidents referred to insulting phone,

internet, and SMS messages.

120

Migrant and Roma populations are among the groups most often targeted by hate speech online. The

Atlantic Initiative found that hatred for immigrants was the view shared among extremists across all

ethnic groups, that 56 percent are not welcome in the country.

121

One example is the Antimigrant.ba

portal, whose editor was indicted in 2021 by the BiH Prosecutor for “spreading national, racial and

religious intolerance.”

122

One expert suggested that many different kinds of

stakeholders need to be trained in recognizing and

responding to hate speech, including the police, lawmakers,

and members of the judiciary. Another suggested that

electronic media owners might implement measures across

their companies that would stem hate speech on their

platforms. Yet another expert identified a need for BiH to

establish a legal definition of hate speech that would enable

fines for violating it. Finally, one other organization believes

the country needs legal preconditions that would provide

structure for improving journalistic standards.

CIVIL SOCIETY

While BiH civil society does not have a long tradition,

123

it is seen to be filling the gaps in developing and

implementing digital literacy and MIL awareness-raising activities in BiH, and in monitoring hate speech.

Multiple organizations work on fact-checking and raising digital literacy through the creation of courses

delivered in person and online (e.g., SOC,

124

BIRN,

125

Zašto Ne,

126

MIL Institute at the University of

Sarajevo

127

). They are filling the gaps of what otherwise might be government-run programs, including

118

OSCE’s Hate Monitor: https://www.osce.org/hatemonitorbih

119

Ibid.

120

Ibid.

121

Atlantic Initiative. (2021). Exploring Ethno-Nationalist Extremism in BiH. https://atlanticinitiative.org/wp-

content/uploads/2021/07/Exploring-ethno-nationalist-extremism-in-Bosnia-and-Herzegovina.pdf

122

Radio Slobodna Evropa. “Why does hate speech spread freely in Bosnia and Herzegovina?” September 16, 2021

https://www.slobodnaevropa.org/a/govor-mrznje-bih-online-mreze-fatmir-alispahic/31463568.html

123

Bertelsmann Stiftung. (2022). The Bertelsmann Stiftung’s Transformation Index (BTI). Bosnia and Herzegovina

Country Report. https://bti-project.org/en/reports/country-report/BIH

124

More information is available at https://soc.ba/en/

125

More information is available at https://birn.eu.com/

126

More information is available at https://zastone.ba/

127

More information is available at https://fpn.unsa.ba/b/medijska-i-informacijska-pismenost/

First-ever verdict for hate speech on

social media

In 2022, the Court in Sarajevo issued a first-

ever verdict in which discrimination against

lesbian, gay, bisexual, transgender, and

intersex (LGBTI) persons was confirmed.

The verdict refers to a Facebook post of a

former member of the Cantonal Assembly

of the Sarajevo Canton in which she wrote

a hateful remark to the announcement of

the organizers of the first BiH Pride March.

USAID.GOV DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) | 31

for teachers and students in elementary and secondary school.

128

Several NGOs publish articles about

fake news and hold events to discuss it.

For example, the association International Forum of Solidarity-Emmaus (IFS-EMMAUS) has been

managing the Safer Internet Center in BiH

129

since 2018. The Safer Internet Center is a part of the Child

Protection Consortium, a joint initiative implemented by UNICEF BiH, Save the Children, and

IFS-EMMAUS that works to prevent violence against children online. In 2010, IFS-EMMAUS established

an emergency line for reporting inappropriate content and all forms of child abuse committed through

communications technology.

Otherwise, fact checking organizations have a high level of capacity and significant history. Zašto Ne’s

Istinomjer (“Truthometer”),

130

which fact-checks the statements of government officials at both the

state and local levels, was founded in 2010. For context, according to Reporters Lab, there were only 44

fact-checking organizations when they started in 2014,

131

a number that grew to 290 by 2020.

132

Zašto

Ne also organized the Political Accountability and New Technologies (POINT) Conference for nine

years.

133

They founded the Raskrinkavanje (“unmasking”) platform

134

in 2017, which applied a method

for identifying sources of disinformation and the connections between them. See Exhibit 8, which Zašto

Ne produced to visualize the networks of organizations that commonly share or reshare disinformation.

The COVID-19 epidemic affected the sustainability of BiH NGOs and their activities. According to the

Center for Civil Society Promotion, several NGOs had to close or suspend activities in 2020, but overall,

the sector remains stable. Even during the pandemic, NGOs were able to advocate for human rights and

democracy.

135

The country currently has more than 27,400 NGOs registered at the state, entity, and

cantonal levels, of which 25,646 are currently active.

136

However, citizens lack trust in NGOs’ work. According to the 2021 wave of the NSCP-BiH, about one-

third of citizens believe that NGOs mainly serve the interests of their international funders, 29 percent

of citizens believe NGOs serve the interests of their international funders, 18 percent claim NGOs are

highly influenced by political parties, and only 15 percent think NGOs can be trusted to do the right

thing for people in BiH.

137

According to the Bertelsmann Stiftung’s Transformation Index, only 6,000

128

Mediacentar. Petković, B; Bašić Hrvatin S; Londo I; Hodžić S; Nikodinoska V; Milenkovski S; Pavlović P; Valić

Nedeljković,D; Janjatović Jovanović M. (2019). Media and Information Literacy in the Western Balkans: Unrealized

Emancipatory Potential, p. 33.

https://www.media.ba/en/publication/media-and-information-literacy-western-

balkans-unrealized-emancipatory-potential

129

Safer Internet Centre. https://www.sigurnodijete.ba/

130

U.G Zašto Ne. Istinomjer. https://istinomjer.ba/

131

Stencel, M., Griffin, R. (2018). Fact-checking triples over four years. https://reporterslab.org/fact-checking-

triples-over-four-years/

132

Stencel, M., Luther J. (2020). Annual census finds nearly 300 fact-checking projects around the world.

https://reporterslab.org/annual-census-finds-nearly-300-fact-checking-projects-around-the-world/

133

POINT Conference Website. Accessed January 14, 2022. https://point.zastone.ba/point/

134 Raskrinkavanje.ba. https://raskrinkavanje.ba/

135

USAID. (2021). The NGO Sustainability Index for Bosnia and Herzegovina. pp.49-50.

https://www.fhi360.org/sites/default/files/media/documents/NGOsi-europe-eurasia-2020-report.pdf

136

Ministry of Justice of BiH. E-register of associations and foundations in BiH. Accessed on August 31, 2022.

http://zbirniregistri.gov.ba/Home

137

USAID/BiH. (2020). National Survey of Citizens’ Perceptions. http://measurebih.com/uimages/NSCP-

BiH20202020Report.pdf

32 | DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) USAID.GOV

NGOs in BiH include contact details, raising

questions about transparency. There are also

concerns that a significant proportion of

NGOs lack a constituency and are in fact

family businesses that prioritize revenue over

social impact. There are also NGOs that are

opaquely funded by elements within the

government and that engage in “illiberal and/or

anti-reform” activities.

138

The level of digitalization of NGOs in BiH

corresponds to the level of digital

sophistication of BiH society. While

knowledge and skills vary, generally those

located in urban areas tend to be more

sophisticated. Commonly, however, NGOs in

both urban and rural locations need help with

digitalization in ordinary daily subjects,

including for the use of digital financial tools.

Yet there are many cases of sophisticated

NGO use of technology in service of their

advocacy goals. According to the 2022 Balkan

Barometer, for example, 13 percent of NGOs

reported using social media to affect

government policy decisions.

139

Other NGOs

have begun using open data to develop their

advocacy materials.

140

MEDIA

While NGOs may find it possible to conduct objective research, the media in the country continue to face

many challenges in their work. One view that is widely reflected throughout the research holds that

“[g]eneral assessments describe journalism in BiH as undergoing a permanent crisis, and most media in the

country as lacking the required capacities for quality journalism. Media reports lack a pluralist perspective

and in-depth information, the media are ethnically polarized, specialist and investigative journalism is very

rare, and there are frequent instances of speech, especially online, that directly incite intolerance.”

141

138

Bertelsmann Stiftung. (2022). The Bertelsmann Stiftung’s Transformation Index (BTI). Bosnia and Herzegovina

Country Report. https://bti-project.org/en/reports/country-report/BIH

139

2022 Balkan Barometer, https://www.rcc.int/download/docs/Balkan%20Barometer%202022%20-

%20PO.pdf/21e2192c1d34cc6194ecb029d7b5997f.pdf

140

E.g., Pratimo tendere website established by the Assistance to Citizens in Fight Against Corruption (ACFC)

Activity, implemented by the Centers for Civic Initiatives, Transparency International, and Center for Media

Development and Analysis, and funded by USAID/BiH: https://pratimotendere.ba/bs-Latn-BA

141

Petković, B., et al. (2019). Media and Information Literacy in the Western Balkans: Unrealized Emancipatory

Potential. Sarajevo. Mediacentar. https://www.media.ba/en/publication/media-and-information-literacy-western-

balkans-unrealized-emancipatory-potential

Note. Graph created by Zašto Ne.

Exhibit 8. Connections between groups of media which

have published the same disinformation at least three

times

USAID.GOV DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) | 33

Media in BiH face a choice. If they want to be editorially and financially independent, and to provide

objective and quality news coverage, they likely will have small readerships and limited revenue. They

have to navigate diverse political pressures and trouble staying afloat. They are in a vulnerable position

because they are constantly being sued and are in dire need of financial assistance. Most media revenues

come from commercial activities, including but not limited to sponsorships, public relations services, and

small retail businesses (up to 40 percent); advertising (about 25 percent); and public funds (up to

25 percent). However, for most professional and independent media, foreign grants remain a crucial

source of revenue.

142

Journalists in BiH are often the target of both physical and nonphysical violence. Despite strong

advocacy from media workers, a state-level register of threats and attacks on journalists and media

workers has never been established.

143

The only official database administered by the government

institutions is the Registry of assaults, attacks and other incidents that relate to assaults and attacks on

journalists and other media staff, managed by the Ministry of Interior Affairs of RS since 2016. In

addition, the NGO sector collects data and informs on cases of attacks, threats, and pressure on

journalists. According to the BH Journalists Association and Free Media Helpline, there have been 190

cases of violence against journalists in the last four years (2018–2021). Most registered cases of violence

relate to attacks on journalists.

144

For example, in 2021, SafeJournalists recorded 26 cases of attacks,

threats, and pressure on journalists and media.

145

Eleven of these were cases of nonphysical threats and

harassment (e.g., surveillance or monitoring, disturbing phone calls, arbitrary judicial or administrative

harassment, aggressive statements by public officials, and other forms of pressure that may compromise

the safety of journalists); six threats against the life and physical safety of journalists (e.g., reference to

the murders of or inflicting harm on journalists, their friends, families, or sources); three attacks on

journalists that included actual physical or mental harm, abduction, breaking into a house/office,

confiscation of equipment, arbitrary detention, failed assassination attempts, or the like; and six threats

and attacks on media institutions, organizations, media outlets, and journalists’ associations (e.g., attacks

on the property of media outlets and organizations, their staff, confiscated equipment, aggressive

statements by public officials).

146

In addition, there is a worrisome rise of gender-based attacks; for

example, eight cases of threats and violence against female journalists were registered in 2021—three

more than in 2020.

147

However, attacks on male journalists still remain the highest in the total number

of registered cases of violence against journalists—44 percent of cases registered by SafeJournalists were

against male journalists, 23 percent, against female journalists; and 33 percent, against a group of

journalists that included both male and female media workers.

148

Of additional concern is the rising

incidence of online violence manifested through the growing number of threats that journalists receive

through social networks and internet portals.

149

According to the Registry of assaults, attacks. and other

142

USAID/BiH. (2020). Brief Media Assessment Update.

143

BH Journalists Association. (2021). Why is mapping of assaults and attacks on journalists within the institutions

important to us. E-Novinar Bulletin. Year VII, number 78. https://bhnovinari.ba/wp-content/uploads/2021/12/78-

IZDANJE-E-NOVINAR_ENG.pdf

144

Safejournalists. Statistics. https://old.safejournalists.net/ba/search-copy/

145

Safejournalists. (2022). Bosnia and Herzegovina: Indicators of the level of media freedoms and safety of

journalists in BiH 2021. https://safejournalists.net/wp-content/uploads/2022/06/BiH-ENG-2021.pdf

146

Ibid.

147

Ibid.

148

Safejournalists. Statistics. https://old.safejournalists.net/ba/search-copy/

149

Ibid.

34 | DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) USAID.GOV

incidents that relate to assaults and attacks on journalists and other media staff, 70 percent of assaults

and attacks on journalists recorded in the last two years relate to online violence and threats.

150

According to UNESCO and the International Programme for the Development of Communication,

journalists sometimes exercise self-censorship because they fear violent reprisal for things they write,

including from politicians.

151

As a result, a considerable

portion of citizens doubt media independence.

152

Specifically, half of BiH citizens think political and

government institutions have too much influence over

information shared on television, 42 percent of citizens

feel the same about newspapers, and 38 percent think

the same about online news sources.

153

Despite the alarming data, both preventive and

repressive institutional measures on political pressure,

intimidation, and harassment towards journalists are

missing. Media freedom and the safety of journalists are

hindered by a lack of legal provisions, mechanisms, or

guidelines that specifically address these concerns.

154

Under criminal codes in BiH, attacks on journalists are

not recognized as unique criminal offenses.

155

Similarly,

almost 40 percent of cases of violence against journalists do not reach the stage of legal proceedings,

156

while in 70 percent of cases, perpetrators go unpunished.

157

BiH is a particularly difficult country for journalists to do their work because long-standing, deep political

divisions are manifested in media outlets that reflect the divisions, and because of the market

characteristics for media to maintain commercial sustainability. According to the 2021 Vibrant

Information Barometer (the annual study formerly known as the Media Sustainability Index) report, in

BiH media, “[T]he quality of information has decreased, mainly driven by an alarming number of false

and misleading content about COVID-19.”

158

During the pandemic, there were attempts by authorities

150

BH Journalists Association. (2021). Why is mapping of assaults and attacks on journalist within the institutions

important to us. E-Novinar Bulletin. Year VII, number 78. https://bhnovinari.ba/wp-content/uploads/2021/12/78-

IZDANJE-E-NOVINAR_ENG.pdf

151

Gengo, A; Omerovic, E; Cendic, K. (2019). Assessment of media development in Bosnia and Herzegovina: based

on UNESCO’s media development indicators. https://unesdoc.unesco.org/ark:/48223/pf0000371223

152

USAID/BiH. (2021). National Survey of Citizens’ Perceptions. http://measurebih.com/uimages/NSCP-

BiH20202020Report.pdf

153

Ibid.

154

European Commission. (2021). Bosnia and Herzegovina 2021 Report. https://neighbourhood-

enlargement.ec.europa.eu/bosnia-and-herzegovina-report-2021_en

155

Mediacentar. (2018). Mechanisms of protection against online violence. Handbook for journalists.

https://www.media.ba/sites/default/files/mc_mehanizmi-zastite_web.pdf

156

Safejournalists. Statistics. https://old.safejournalists.net/ba/search-copy/

157

„Around 70 percent of attacks on Bosnian journalists go unpunished“. N1 Sarajevo. Published on June 1, 2021.

https://ba.n1info.com/english/news/some-70-percent-of-attacks-on-bosnian-journalists-go-unpunished/

158

IREX. (2021). Vibrant Information Barometer. p.2. https://www.irex.org/sites/default/files/pdf/vibe-bosnia-

herzegovina-2021.pdf

Journalists in BiH are exposed to death

threats and harassment

Journalist Nikola Vučić of NI television channel

received death threats in May 2020 after a

sarcastic tweet he posted on a self-proclaimed

"corona-free zone" in the West Herzegovina

Canton, leading him to close his Twitter

account.

Similarly, in April 2021, journalist Eldin

Hadžović of the Prometej.ba portal published

an article entitled “How the Mayor of Sarajevo

failed the first exam: They are not Serbian

criminals, but the RS Army", thereupon he

received threats via Facebook from a member

of the BiH Armed Forces BiH with numerous

curses and insults.

USAID.GOV DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) | 35

to limit the ability of certain media outlets to report facts by limiting their access to press events.

159

As a

result, in 2020, the reported levels of citizens’ trust in television, online news sources, and newspapers

was modest at 51 percent, 35 percent, and 36 percent, respectively, reflecting decreases in trust levels

compared to previous years.

160

By the same token, according to the results of the 2022 Balkan

Barometer, among participants, 70 percent of BiH citizens view disinformation as a security threat and

73 percent as a problem for democracy in general. More than one-third think that disinformation is

spread online through social networks; 43 percent say that several times a month, they come across

news or information that they believe misrepresents reality or is even false; 38 percent say they

seldomly encounter such information; 72 percent think that media operate under political influence; and

every third respondent perceives that media can effectively scrutinize the government and make it

accountable to citizens.

161

Such observations add to calls for increased media development and MIL

capacity-building programs.

162

Laws covering the practice of journalism are applied inconsistently. According to an OSCE study,

80 percent of defamation lawsuits against journalists in BiH were brought by public officials, even though

courts have often cited the principle that it is acceptable to subject public officials to more scrutiny than

ordinary citizens.

163

Additionally, 30 percent of these cases last more than five years, meaning journalists

can face significant costs when sued.

Journalists also face the challenge of convicted criminals exercising their legal right to have past

convictions struck from official records, including online.

164

Many think that the right to have digital trails

expunged, a right most prominently offered under EU’s General Data Protection Regulation (GDPR),

extends to a desire for having misdeeds forgotten by the media as well.

Furthermore, BiH’s small market (a population of only 3.2 million) contributes to the polarization of its

media because companies must take stark positions to distinguish themselves. Also, political parties

mostly control the flow of advertising spending towards the media outlets with which they are aligned.

165

BiH is behind schedule with its digital conversion of television and radio broadcasting. It is one of 119

ITU member countries from Europe, Africa, the Middle East, and Central Asia that agreed to completely

switch their analog television and radio to digital broadcasting by June 7, 2015, under the GE06 Regional

Agreement. However, in BiH the first digital television broadcasting licenses were not issued until March

159

Ibid.

160

USAID/BiH. (2021). National Survey of Citizens’ Perceptions. http://measurebih.com/uimages/NSCP-

BiH20202020Report.pdf

161

Regional Cooperation Council. (2022). Western Balkans SecuriMeter 2022.

https://www.rcc.int/download/docs/Securimetar%202022_final.pdf/812a4b746e4de5f7f5b657c61a82cd34.pdf

162

“EU funded research shows polarized public trust in the media in BiH”. Webalkans Platform. Published on: June

4, 2021. https://webalkans.eu/en/news/eu-funded-research-shows-polarised-public-trust-in-the-media-in-bih/

163

Balkan Insight. (2020). Suing to Silence: Lawsuits Used to Censor Bosnian Journalists.

https://balkaninsight.com/2020/12/21/suing-to-silence-lawsuits-used-to-censor-bosnian-journalists/

164

Panić, K. (2021). Media Censorship in Bosnia Just Got a Lot Scarier. https://www.fairplanet.org/story/media-

censorship-in-bosnia-just-got-a-lot-scarier/

165

Džananović, N; Karamehić, M. (2016). Populist Political Communication in Europe.

36 | DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) USAID.GOV

2016,

166

and Sarajevo, Mostar, and Banja Luka did

not complete their digital conversions until

October 2016. One factor that affects digital

conversion is that there are no laws at the entity

level enabling the digital conversion of television

broadcasting. For more than three years, the two

main public television broadcasters have not been

able to agree on the equipment they need to buy

to facilitate the conversion. KIs also reported that

TV stations in particular would find it difficult to

replace their analog broadcasting equipment.

DIGITAL RIGHTS AND FREEDOMS

Formally, media freedom, and freedom of expression are codified in BiH law, most notably within the

Freedom of Access to Information Law of BiH, Entity-level/District Brcko Criminal Code, Entity-level

Defamation Laws, Copyright and Related Rights Laws, and Entity and Cantonal Laws on Public

Information/Media. In practice, however, these rights are not always observed. For example, on

March 6, 2021, journalist Nidžara Ahmetašević, who has been tracking migration issues in the Balkans

since 2015, and has published many articles on the Kosovo 2.0 website, was arrested while covering

human rights and migration issues and charged with “disturbing public order and peace and belittling an

official in the performance of official duties and tasks.”

167

According to Kosovo 2.0, this was not the first

time she had been detained.

168

It is not always bad news for journalists, however. In 2018, the Center

for Investigative Reporting in Sarajevo and journalist Selma Učanbarlić won a defamation lawsuit against

a doctor who insulted them on Facebook.

169

Additional challenges related to how existing laws in BiH affect digital rights and freedoms include the

lack of harmonization of key laws. The Freedom of Access to Information Acts of BiH are not

harmonized with the Law on Protection of Secret Data, the Law on Intelligence and Security Agency,

the Law on Criminal Procedure, and the Law on Tax Administration, meaning that officials have multiple

legal reasons for denying journalists access to information. This is not the end of the harmonization

challenge, however, given that BiH also aspires to join the European Union and must work on

harmonizing its laws with the Acquis Communautaire. This will be an ongoing challenge; as is the case

everywhere, information technologies evolve faster than the regulations meant to govern them.

170

The Personal Data Protection Agency (PDPA), among its many powers, is in charge of upholding the

digital rights afforded to BiH citizens under the Law on the Protection of Personal Data No. 49/06,

including the right (1) to be informed; (2) to access their personal data; (3) to have their data rectified;

(4) to have their personal data erased in case data are incorrect and incomplete; (5) to file an objection

166

“CRA issued the first licenses for digital broadcasting”. Buka. Published on: February 11, 2016.

https://6yka.com/kolumne/rak-izdao-prve-dozvole-za-digitalno-emitovanje

167

Civicus Monitor. (2021). https://monitor.civicus.org/country/bosnia-herzegovina/

168

Kosovo 2.0. (2021). https://kosovotwopointzero.com/en/violent-arrest-and-detention-of-nidzara-ahmetasevic/

169

IREX. (2020). Media Sustainability Index. p.5. https://www.irex.org/sites/default/files/pdf/media-sustainability-

index-europe-eurasia-2019-bosnia-herzegovina.pdf

170

Zašto Ne. (2019). Disinformation in the Online Sphere the Case of BiH. pg.15.

https://zastone.ba/app/uploads/2019/05/Disinformation_in_the_online_sphere_The_case_of_BiH_ENG.pdf

BiH's National Public Broadcaster Faces

Hard Times

In 2022, BHRT experienced considerable financial

difficulties with its debt reaching $33 million (63

million BAM) which led to blocking of the station's

accounts. The main reason for this situation was

the inability of BHRT to receive revenues from the

radio and television fee. which is guaranteed by the

Law on the Public System of BiH adopted in 2005.

Specifically, the Radio Television of Republika

Srpska (RTRS) neglected to transfer to the BHRT

50 percent of the revenues collected since 2017

which caused this accumulation of debt.

USAID.GOV DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) | 37

if personal data were collected without their consent; and (6) to receive compensation for any physical

and consequential damage resulting from a violation of right to privacy. These rights were included as an

attempt to assist BiH in conforming as closely as possible to the EU’s GDPR, which became effective in

May 2018.

171

However, the current legislative framework on protection of personal data is not fully

aligned with the EU acquis. Moreover, PDPA received almost 1,300 complaints for potential abuses of

personal data in the period 2012–2021, 128 complaints on an annual basis, on average.

172

According to

PDPA data, in 2020, the dominant violations of the law included the breach of privacy through video

surveillance, illegal processing of an ID number, unwanted SMS messages for the purpose of direct

marketing, etc.

173

The CRA is pushing to have BiH adopt the European Electronic Communications Code, which is meant

to enable creation of a European Digital Single market. CRA would like to see a change in the law that

would allow them to switch from formally licensing electronic communications services to a system of

general authorization, so that the licensing process would no longer serve as a de facto barrier to

market entry. CRA wants this change even though they are financed in part by these licensing fees. They

also would like to see the law changed so that they can introduce 112 as the nationwide number for

emergency services.

INTERNET FREEDOM: DIGITAL REPRESSION

There is no evidence of cases of digital repression, including surveillance, censorship, social manipulation

and disinformation, internet shutdowns, and targeted persecution of online users by government

institutions in BiH. According to the Varieties of Democracy Institute, government institutions in BiH

have limited capacity to shut down the internet in the country or some of its regions, block access to

websites on the internet, and remove online content.

174

While it is hard to predict whether the

government would rely on the aforementioned capacities, if these were to exist, internet access and

content published or shared through online means in BiH remains unrestricted.

175

However, violations of digital rights in BiH are not uncommon. According to BIRN, there were 101

cases of digital rights violations between August 1, 2020, and August 31, 2021.

176

Most common

violations include pressures because of expression and activities on the internet, manipulation and

propaganda in the digital environment, and information security breaches.

177

171

Caselaw. (2021). Privacy Regulations in Bosnia & Herzegovina. https://caseguard.com/articles/privacy-

regulations-in-bosnia-herzegovina/.

172

Personal Data Protection Agency of BiH. (2022). Report on personal data protection in BiH in 2021.

http://azlp.ba/publikacije/?id=3601

173

Mediacentar. (2020). Lični podaci “na izvolite”. https://www.media.ba/bs/magazin-mreze-i-web/licni-podaci-na-

izvolite

174

V-Dem Institute. V-Dem Indicators. Country Graph. Accessed on September 6, 2022. https://www.v-

dem.net/data_analysis/CountryGraph/

175

Ibid.

176

BIRN. (2021). Online Intimidation: Controlling the Narrative in the Balkans. Annual digital Rights Report 2021.

https://balkaninsight.com/wp-content/uploads/2021/12/ONLINE-INTIMIDATION-CONTROLLING-THE-

NARRATIVE-IN-THE-BALKANS.pdf

177

Ibid.

38 | DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) USAID.GOV

Disinformation is widely recognized as a problem among media and is seen as an issue of media

professionalism and independence.

178

RTRS and the Srna news agency were identified by Zašto Ne as

the producers of the greatest amount of disinformation in the country. In addition, Zašto Ne remarked

that during the 2018 elections, BiH citizens were “bombarded” with disinformation on social media.

179

The issue of sharing disinformation online was exacerbated during the COVID-19 pandemic by mounting

misinformation and disinformation about the virus and COVID-19 vaccines, including conspiracy

theories, that were shared online. Adding to the disinformation challenge in RS, in 2021 the RS

government passed a decree stating that it will not comply with the national law that makes genocide

denial a crime.

Media in BiH have been subject to cyberattacks. The BIRN database of registered digital rights violations

(August 2020 through August 2021) includes 22 cases of information security breaches,

180

with the

media being a victim in some of the recorded cases. For example, the

website nezavisne.com was the

target of a cyberattack in August 2021. Media outlets Žurnal and Nomad were targeted with distributed

denial of service attacks in February 2021.

181

The most recent attack occurred in early summer 2022,

when Buka’s Facebook page was hacked, disabling the page administrators’ ability to upload new posts

or edit existing ones or to perform any other activity on the page.

182

However, because of other

pressures they face, including verbal and physical threats and financial challenges, media in BiH do not

prioritize cybersecurity.

183

DIGITAL GOVERNMENT: DELIVERY OF GOVERNMENT SERVICES

There are various functioning e-government services in BiH, but these services lack interoperability,

which poses a challenge for streamlining service delivery. Even the most sophisticated internationally

funded e-government projects are stymied by the inadequate framework for e-signatures.

184

Very limited

ownership of e-signature technology in the economy and society has been identified as a key constraint

to the continued development and provision of e-services. Only a few end-to-end e-services are

currently available, but there are several closed-loop and isolated e-service systems, notably tax

administrations, which offer e-services based on their own internal regulations and allow taxpayers to

submit tax declarations using internally issued digital signatures.

178

Zašto Ne. (2019). Disinformation in the Online Sphere the Case of BiH.

https://zastone.ba/app/uploads/2019/05/Disinformation_in_the_online_sphere_The_case_of_BiH_ENG.pdf

179

Zulejhić, E. (2021). Research: Misinformation in the election process in BiH. https://zastone.ba/istrazivanje-

dezinformacije-u-izbornom-procesu-u-bih/

180

BIRN. (2021). Online Intimidation: Controlling the Narrative in the Balkans. Annual digital Rights Report 2021.

https://balkaninsight.com/wp-content/uploads/2021/12/ONLINE-INTIMIDATION-CONTROLLING-THE-

NARRATIVE-IN-THE-BALKANS.pdf

181

Civicus Monitor. (2021). https://monitor.civicus.org/country/bosnia-herzegovina/

182

Karic, Sejla. A Range of Digital Rights Violations Disrupts the Region. Balkan Investigative Research Network.

Published on: August 8, 2022. https://balkaninsight.com/2022/08/08/a-range-of-digital-rights-violations-disrupts-the-

region/

183

USAID/BiH. (2021). Brief Media Assessment Update.

184

USAID/BiH MEASURE-BiH. (2018). Assessment Of Bosnia and Herzegovina - Governance And E-

Administration. http://www.measurebih.com/uimages/MEASURE-BiH20E-Governance20E-

Administration20Assessment20Final20Report2012Dec2018.pdf

USAID.GOV DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) | 39

Many government processes, including those for

paying taxes or providing information to the statistics

agency, still require submission of paper forms. As a

result of long-standing challenges to horizontal and

vertical interoperability among public institutions in

BiH, citizens have long been expected to submit

documents in person, often going from one counter to

another, even though the Law on General

Administrative Procedures states that public

institutions should exchange the documents through

official channels.

185

Yet in mid-2022, BiH saw some key

changes that bode well for the digitalization process.

As of August 2022, all transit procedures and customs

declarations must be submitted to the system of the

Indirect Tax Administration, only by electronic means,

and every transit application must be certified with a

new qualified digital signature. Amendments to the

FBiH Law on Administrative Procedure, adopted in July 2022, will further enable electronic

communications and digital signatures in official administrative procedures and court proceedings. This

move, which was supported by the USAID E-Governance Activity,

186

will also pave the way for creation

of new end-to-end services offered by FBiH.

One of the key impediments to digital transformation of public administration in BiH is the capacity of

BiH institutions to maintain and further develop ICT systems that will support the maintenance of

existing ICT systems and established e-services, and that will foster development of new e-services.

187

Positive strides have been made, however. For example, the Indirect Taxation Authority has made

advancements in digitizing submission of excise declarations. Another example is CMDA, which has

developed the public procurement monitoring platform pratimotendere.ba, which uses green, yellow,

and red flags to indicate the corruption risk level of a procurement. The UNDP’s eCitizen application

enables governments to receive and respond to citizen requests and complaints if, for example, a

manhole cover is missing. UNDP believes that lower levels of government are much more interested in

cooperation and that eCitizen will enable more impactful services with time.

E-SERVICES

E-governance encompasses the use of digital services to enhance government services. These include

government-provided citizen and business services (such as tax payment, document requests, and

registration), government transparency (minutes of meetings, public procurement processes and plans),

and consultation practices (ranging from citizen involvement to e-voting).

185

Ibid.

186

USAID. Fact Sheet: E-Governance Activity. https://www.usaid.gov/bosnia-and-herzegovina/fact-sheet/fact-sheet-e-

governance-bosnia-and-herzegovina

187

Ibid.

Internet Governance in BiH

BiH created its own Internet Governance

Forum, the primary platform for internet

governance discussions in the country, in 2015.

Civil society organizations were most active in

2017, when the Center for Internet Governance

(a joint BiH and Bulgarian organization)

organized the School for Internet Governance in

Jahorina, BiH. Approximately 25 universities,

NGO, private sector, and government

representatives attended. The Council of Europe

representatives presented several tools and

described best practices. Little has been

published on the topic since 2017, the final year

the national Internet Governance Forum was

convened. Thereafter,

there has not been

significant interest or outside funding to

continue.

40 | DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) USAID.GOV

The focus on governance (rather than

government) emphasizes that digital services

can be provided at a variety of levels of

government (local through the state, by

public service providers, and by regional and

international organizations), and that they

require the participation of numerous

stakeholders. Citizens’ trust in digital

communications and services, from data protection and privacy to reliability and digital skills, is linked to

e-governance. According to a report published by the initiative for digital transformation of the Western

Balkans (Digital WB6+),

188

compared with the European Union and the Western Balkans, BiH is in the

92nd place in the World Bank’s E-Government Index, well below the EU average and the last among

Western Balkans countries.

189

In its 2021 report on BiH, the EC highlights the slow implementation of e-services.

190

The legal

framework for user-centric administrative services varies substantially across the country. A new law on

electronic identification and trust services for electronic transactions, which complies with the EU

acquis, is still pending adoption. To foster efficient and user-centric administrative services delivery, BiH

must simplify and harmonize business registration procedures and ensure full, mutual recognition

between entities, including on concessions and licensing. Until then, the opinion of citizens about public

services is likely to remain very low.

Examples of progress achieved in e-government services thus far include the introduction of an

electronic system of business registers in Brčko District in April 2021 and the establishment of one-stop

shops for citizens or businesses in the RS and Brčko District.

191

Citizens can fully register a business or

make changes to existing registration without setting foot inside a bank or government building.

Furthermore, the Brčko District business registration system is the first government service that is

aligned with open-data standards by which business registration data are public and can be downloaded

in an open-data format. The Government of Brčko District is hoping to pave the way for new types of

services to be offered based on open data. The FBiH has been slower to implement e-registration

legislation, which was finally approved in November 2020.

192

It is expected that the FBiH will provide

188

According to this report, “The Digital WB6+ Initiative was established in April 2017 by Deutsche Telekom,

Telenor, Telekom Austria, EY, SAP as well as the Committee on Eastern European Economic Relations, Chambers

Investment Forum, German-Croatian Chamber of Commerce, German-Serbian Chamber of Commerce, Chamber

of Commerce and Industry of Serbia, Economic Chamber of Macedonia, Croatian Chamber of Economy, and

Hrvatska Udruga Poslodavaca to foster digital transformation in the Western Balkans and facilitate the path

towards the EU.”

189

The Digital WB6+ Initiative. (2018). The Impact of Digital Transformation on the Western Balkans.

https://wb6digital.files.wordpress.com/2018/01/wb6-study.pdf. According to this report, “The digital WB6+

Initiative was established in April 2017 by Deutsche Telekom, Telenor, Telekom Austria, EY, SAP as well as the

Committee on Eastern European Economic Relations, Chambers Investment Forum, German-Croatian Chamber

of Commerce, German-Serbian Chamber of Commerce, Chamber of Commerce and Industry of Serbia, Economic

Chamber of Macedonia, Croatian Chamber of Economy, and Hrvatska Udruga Poslodavaca to foster digital

transformation in the Western Balkans and facilitate the path towards the EU.”

190

European Commission. (2021). Bosnia and Herzegovina Report. https://ec.europa.eu/neighbourhood-

enlargement/bosnia-and-herzegovina-report-2021_en

191

E-Register of Business Subjects in the Brčko District of BiH. (n.d.). https://bizreg.osbd.ba/

192

FBiH Official Gazette, No. 27/05, 68/05, 43/09, 63/14, 85/21. https://www.feb.ba/wp-

USAID works on increasing the transparency of

public procurement in BiH

USAID/BiH's E-Governance Activity provides

technical assistance to the Public Procurement Agency

(PPA) to establish procurement IT and application and

related processes in four pilot cantons,

including

Sarajevo, Tuzla, Zenica, Doboj, and Gorazde.

USAID.GOV DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) | 41

online business registration by the end of 2022, and that it will be based on the BiH state e-signature

law. RS had a long-term strategy for the development of e-government for 2019–2022. There was also a

program for public administration reform in 2018–2022. This allowed RS to move faster with some

digitization processes, but since the COVID-19 pandemic, the positive trend has slowed down. While

these are the only documents adopted that exist in BiH, they are not considered to be substantive.

The lack of utilization and accessibility of e-signatures has been identified as a key limitation to further

development and provision of e-services to citizens and the business community. Only a limited number

of end-to-end e-services are available at this time, because most of the existing processes require at

least one visit to a bank or government office to confirm payment. There are several closed-loop and

isolated e-service systems. examples of which include the tax administrations, which offer e-services

regulated by internal procedural guidebooks that rely on nonqualified digital signatures for taxpayers to

submit tax declarations. The lack of e-signature utilization is hindering almost all e-service projects,

whether or not they were set up to be closed-loop or hybrid solutions. In these systems, most work

can be done online, but paper documents must still be submitted. Instead of replacing hand-signed hard

copies with digital documents and e-signatures, agencies must process both digital copies and hand-

signed paper copies.

Whereas businesses in RS can submit their yearly balance sheets in electronic form, if signed in

accordance with the Law on Electronic Signature of RS,

193

according to the FBiH Law on Accounting and

Auditing,

194

in FBiH, yearly balance sheets must be submitted in paper form as well as on compact disc.

This is due in part to a lack of trust among accountants, the person who submits reports, and the

institutions that receive reports. Yet for many years, the tax administration has required medium and

large tax-paying organizations/entities to submit their tax declarations online and has allowed small tax-

paying organizations/entities to submit their declarations only in writing. Larger organizations are

presumed to have more technical capacity that would enable them to submit tax declaration

electronically. However, the tax administration is moving in the direction of having all taxpayers submit

their declarations electronically.

GSB AND DATA EXCHANGE

One important tool that will enable the government to deliver digital services more efficiently is the

GSB,

195

a system that enables government databases to exchange data and information. This is useful

when a government service requires data from multiple sources to be approved and provided.

GSB services were introduced in BiH in 2017. Specifically, with World Bank support through their

Investment and Institutional Strengthening Project, GSB was introduced at the BiH Council of Ministers,

FBiH Government, RS Government, and Brčko District Government levels. In addition, coordinating

bodies for GSB implementation have been established by the national government, as well as by the

content/uploads/2021/10/af930-zakon-o-registraciji-preciscen.pdf

193

Official Gazette of RS, No. 59/08.

194

Official Gazette of FBiH, No. 83/09, 15/21.

195

The term “bus” (short for “omnibus”) comes from the computer hardware field and originally referred to a

bundle of parallel wires that connect key components, including the central processing unit, memory, and

peripherals. Today, any shared communication channel that allows different components to share information

might be referred to as a “bus.”

42 | DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) USAID.GOV

governments of RS and FBiH.

196

In FBiH, GSB integrates the databases of Tax Administration and

Inspections. In RS, GSB integrates the databases of four government organizations, including the

Intermediary Agency for IT and Financial Services, the RS Tax Administration, the Health Insurance Fund

of RS, and the RS General Secretariat. All of these institutions were integrated within the GSB in 2017,

whereas no initiative or assessment of other institutions’ capacity to join GSB happened since then. The

entity- and state-level governments adopted the framework for interoperability, which defines the usage

of GSB as mandated data-exchange interoperability for all future IT projects, while following the

European Interoperability Framework 2.0.

197

However, the prospects for a well-functioning GSB face many challenges. First, implementation of GSB is

hindered by the long delay in establishing a certification authority (CA) in BiH. Second, the validity of

data exchanged electronically is not recognized under BiH law. BiH has established an interoperability

body, but the entities have several autonomous IT systems that vary in quality and that are not

interoperable with one another. Thus, the potential of the GSB limits the autonomous nature of these

systems and approaches.

Another challenge is the lack of qualified personnel to install, manage, and use these systems. For

example, FBiH estimates that 80 to 90 percent of the data in its database could and should be exchanged

between government agencies. However, according to DECA KIs, 90 percent of government workers

are not familiar with existing GSB interoperability infrastructure. Yet the General Secretariat of the

Government of FBiH, which is in charge of administering the GSB within the FBiH Government, is

concerned about whether they will be able to find people in BiH who are qualified to maintain and

further improve the GSB framework.

Additionally, public institutions are not required to obtain approval before installing IT systems. Even

though interoperability frameworks have been adopted at the state and entity levels and the national

interoperability framework suggests that BiH governmental offices exchange data over GSB, this data-

exchange effort produced limited results.

One approach might be to assign management of the GSB, including coordination with all government

agencies, to one institution or agency. Yet a well-functioning GBS would need to be maintained and

managed at all levels of government, requiring a level

of organizational sophistication beyond the capacity

of any existing institution.

In the meantime, as a result of the limited number of

GSB services, citizens and businesses must continue

to submit paper documents in person and, in many

cases, the same document to many different

government offices. The USAID E-Governance

Activity plans to extend the number of services

196

USAID/BiH MEASURE-BiH. (2018). Assessment Of Bosnia and Herzegovina - Governance And E-

Administration. p.10. http://www.measurebih.com/uimages/MEASURE-BiH20E-Governance20E-

Administration20Assessment20Final20Report2012Dec2018.pdf

197

FBiH: https://fbihvlada.gov.ba/bosanski/zakoni/2016/odluke/631.html ; State Level:

https://www.vijeceministara.gov.ba/elektronska_vlada/Akti/OdlukaSl53_18.pdf

Promising digital reforms

While BiH's digital ecosystem has many areas

where national reforms could advance the

digitalization process, some reforms were

mentioned repeatedly, by diverse stakeholders,

during the research, including

•

electronic data exchange recognized by the law

•

digitalization strategy

•

CERT

•

broadband plan

USAID.GOV DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) | 43

offered through the GSB to automate as many processes as possible and to validate citizen data on behalf

of citizens.

DIGITAL SIGNATURES

The BiH Parliament passed the Law on Electronic Signature in 2006 but has yet to implement it. The

implementation of the Law has long been delayed because the Bureau for Monitoring and Accreditation

of Certifiers was established only recently, in 2018. The corresponding entity legislation is not

harmonized with the EU acquis. It should be noted that the current Law on Electronic Signature of BiH

is harmonized with Directive 1999/93/EC, and it should be harmonized with Regulation 910/2014 of the

European Parliament and the Council of Europe. Because the European Union recognizes only the

supervisory body at the state level, it is necessary to harmonize regulations at lower government levels;

otherwise, electronic signatures issued on the basis of entity laws would not meet interoperability

requirements and could not be used outside BiH. At this moment, three certified authorities are

registered at the state level, including Halcom D.D. Ljubljana (since October 3, 2019), the BiH Indirect

Tax Authority (since May 12, 2021),

198

and, as of April 4, 2022, the Agency for Identification Documents,

Registers and Data Exchange (IDDEEA).

199

As outlined earlier in the report, the tax administrations in the FBiH and RS have for years used

internally self-signed e-signatures to facilitate e-taxation services. These closed-circuit IT systems have

successfully functioned for many years, enabling business-related tax declarations to be submitted

through e-tax services online systems.

Policy design and delivery capacities and mechanisms are insufficient because they are limited by

complex vertical and horizontal cross-government collaboration, which undermines the quality of public

service delivery and the country’s ability to grow. The pace of public administration reform is slow in

general. The Strategic Framework of Public Administration Reform in BiH 2018–2022

200

has expired,

with no clear replacement in sight.

201

The cost of e-signatures should also be considered because it has a direct relationship with citizens’ and

businesses’ desire for e-services. The volume of available e-services has to be high enough to justify the

initial cost. Exhibit 9 illustrates the costs of each qualified digital service.

198

BiH Ministry of Communications and Transport. (2021). Registar ovjeritelja u BiH (Registry of Certification

Authorities in BiH). http://www.mkt.gov.ba/Content/OpenAttachment?id=2ef8e2de-2ea7-4f83-bdf4-

580c1d74af1a&lang=bs

199

Ibid.

200

Public Administration Reform Coordinator’s Office. (2018). Strategic Framework for Public Administration

Reform in BiH 2018-2022. https://parco.gov.ba/en/rju/o-rju-2/strateski-okviri-za-rju/

201

UNDP. (2020). Digital Transformation in the Public Sector in BiH, Project Document. p. 4.

https://info.undp.org/docs/pdc/Documents/BIH/Digital_transfromation_prodoc.docx.pdf

44 | DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) USAID.GOV

Exhibit 9. Overview of trust providers in BiH (qualified electronic signatures)

202

NAME

BIH OFFICE FOR

SUPERVISION AND

ACCREDITATION VALID FOR

COST IN USD

CITIZENS BUSINESSES

Halcom D.D. Registered

203

3 years

204

$125

205

$125

BiH Indirect Tax Authority Registered

206

5 years

207

$110

208

$110

RS Ministry of Scientific and

Technological Development,

Higher Education and Information

Society*

Not registered unknown $91 $607**

** Information is based on independent newspaper article (capital.ba).

** Businesses are issued a qualified electronic seal.

RS has a three-in-one solution, whereby its Ministry of Scientific and Technological Development, Higher

Education and Information Society plays the role of (1) CA issuer; (2) central coordinator of all

certificates, and (3) certificate inspector.

209

While the Ministry site claims that it issues digital certificates

“in accordance with relevant international standards and recommendations,” “trust services” (which

include certification authorities) have not been regulated by EU member states since 2016, and qualified

certificate providers “are recognized [sic] independently of the Member State where the Qualified Trust

Service Provider is established or where the specific qualified trust service is offered.”

210

Additionally,

according to the U.S. Government’s Chief Information Officers, the U.S. government has not run a CA

since 2016 and does not have any plans to do so in the future.

211

Because IDDEEA only recently became

a CA, citizens are hopeful that it will quickly start offering e-services. In the past, IDDEEA offered

several online services for identification document processing on its website that can now be converted

to end-to-end, fully digitized e-services based on its latest certification with the state-level Law on

Electronic Signature.

202

The Agency for Identification Documents, Registers, and Data Exchange (IDDEEA) was entered into the

the BiH Council of Ministers. The draft decision can be accessed at the following link:

https://ekonsultacije.gov.ba/legislativeactivities/details/120188

203

BiH Ministry of Communications and Transport. (2020). List of registered providers.

http://www.mkt.gov.ba/Content/OpenAttachment?id=2ef8e2de-2ea7-4f83-bdf4-580c1d74af1a&lang=en

204

Halcom Certification Agency. (2019). Price list, https://support.halcom.com/wp-

content/uploads/2022/12/Cjenovnik-Halcom-CA-za-pravna-lica_2022.pdf

205

Ibid.

206

BiH Ministry of Communications and Transport. (2020). List of registered providers.

http://www.mkt.gov.ba/Content/OpenAttachment?id=2ef8e2de-2ea7-4f83-bdf4-580c1d74af1a&lang=en

207

BiH Indirect Tax Administration (ITA). ITA Rules and conditions.

http://ca.uino.gov.ba/bs/dokumenti/UINO_CP_1_0_BS.pdf

208

ITA. ITA certification price list. http://ca.uino.gov.ba/bs/usluge/cjenovnik.html

209

“Registration Body”, Ministry of Scientific and Technological Development, Higher Education and Information

Society of the Republic of Srpska

https://www.vladars.net/eng/vlada/ministries/MST/CA/about/regbody/Pages/default.aspx

210

European Commission. (2016). Questions & Answers on Trust Services under eIDAS. https://digital-

strategy.ec.europa.eu/en/news/questions-answers-trust-services-under-eidas

211

The HTTPS-Only Standard. Does the US government operate a publicly trusted certificate authority.

https://https.cio.gov/certificates/#does-the-us-government-operate-a-publicly-trusted-certificate-authority

USAID.GOV DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) | 45

DIGITAL GOVERNMENT: MANAGEMENT OF GOVERNMENT SYSTEMS

As in other sectors of society, polarized political interests have severely limited collaboration. In this

case, the polarization has resulted in diverse, non-interoperable e-governance systems. Furthermore,

polarization has led to a “piecemeal” approach in which international donors have a stake in where

various virtual tools and services are set up. There have been, however, multiple attempts to make

comprehensive reforms to these systems.

212

One idea that has been discussed has been a single,

digitized “centralized public procurement module system” that serves all branches of the national

government.

In BiH, the Ministry of Transport and Communications is responsible for core e-governance and digital

transformation, and the Council of Ministers has some administrative support roles. In RS the Ministry

of Scientific and Technological Development, Higher Education and Information Society is responsible

for the e-government strategy.

213

In FBiH, the General Secretariat is responsible for implementation of

some e-government services, such as implementation of a public key infrastructure. Otherwise, the

Ministry of Justice and the Ministry of Transport and Communications are responsible for digital

transformation.

214

212

Ibid.

213

UNDP. (2020). Digital Transformation in The Public Sector in Bosnia and Herzegovina: Project Document, p. 5.

https://info.undp.org/docs/pdc/Documents/BIH/Digital_transfromation_prodoc.docx.pdf

214

USAID/BiH MEASURE-BiH. (2018). Assessment of Bosnia and Herzegovina - Governance and E-Administration.

http://www.measurebih.com/uimages/MEASURE-BiH20E-Governance20E-

Administration20Assessment20Final20Report2012Dec2018.pdf

46 | DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) USAID.GOV

USAID.GOV DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) | 47

DIGITAL GOVERNMENT: ELECTRONIC VOTING

Electronic voting has not yet been implemented in BiH; however, initiatives to introduce electronic

voting at voting sites recently were introduced. In June 2021, the Research Sector of the Parliamentary

Assembly of BiH published a research brief, Electronic Voting in Elections in Some European Countries and

Brazil,

215

to educate BiH parliamentarians on how this technology is applied in other countries.

216

The

Election Law of BiH would have to be modified to allow fully electronic voting. Experts further believe

that implementation of e-voting in BiH would have to be accompanied by an information awareness

campaign.

The Central Election Commission (CEC) of BiH is

also an advocate for the introduction of new

technologies.

217

Furthermore, in December 2021

the Coalition for Free and Fair Elections Pod

lupom conducted a campaign in more than 70

cities and municipalities in BiH, during which more

than 70,000 citizens signed a petition calling for

“prevention of election theft and fraud on election

day by introducing electronic voter identification

and ballot scanning machines.”

218

According to the

European Union, government officials in BiH have

never seriously considered deploying voting

machines to polling stations, because not all

citizens have internet access, and many of the

voters have low digital literacy levels, which could

lead to confusion while using the machines.

The European Union did support development of a strategy for the CEC. Although it was not formally

adopted, other donors began supporting aspects of the strategy, including ballot scanners and tablets

used for voter identification and data transfer from polling stations. For example, the CEC introduced an

SMS-based service for confirming the location of voters’ polling stations, which has the aim of shortening

the amount of time required to count ballots.

However, there are concerns related to digital voting. For example, violence against women increases

during the election processes and, in most cases, is initiated by social network users (74.7 percent).

215

BiH Parliamentary Assembly. (2021). Electronic voting in elections in some European countries and Brazil.

https://www.parlament.ba/Publication/Read/18753?title=elektronsko-glasanje-na-izborima-u-pojedinim-evropskim-

drzavama-i-brazilu&pageId=0&title=elektronsko-glasanje-na-izborima-u-pojedinim-evropskim-drzavama-i-

brazilu&pageId=0

216

BiH Parliamentary Assembly. (2021). Electronic voting in European countries and Brazil.

https://www.parlament.ba/Publication/Read/18753?title=elektronsko-glasanje-na-izborima-u-pojedinim-evropskim-

drzavama-i-brazilu&pageId=0&title=elektronsko-glasanje-na-izborima-u-pojedinim-evropskim-drzavama-i-

brazilu&pageId=0

217

Srpska Info. (2021). Kako izgleda elektronsko glasanje na izborima i zašto neke države dižu ruke od njega.

https://srpskainfo.com/ovom-bih-tezi-kako-izgleda-elektronsko-glasanje-na-izborima-i-zasto-neke-drzave-dizu-ruke-

od-njega/

218

Coalition for Free and Fair Elections – Pod lupom. https://podlupom.org/v2/

High Representative Imposed Technical

Changes to the Election Law

In July 2022, the High Representative of the

International Community in BiH, Christian

Schmidt, imposed technical changes to the

election law that improve the integrity of the

election process. including the introduction of

technology to monitor the election process. The

technical changes include the definition of the

abuse of information services of public institutions

for the election campaign. Also, technical

amendments have recognized hate speech as

strictly prohibited for election candidates,

especially emphasizing hate speech that occurred

via the internet and social media. Fines from 3,000

to 30,000 BAM are clearly stipulated for above

mentioned violations.

48 | DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) USAID.GOV

Online psychological violence, however, is poorly regulated by the criminal codes in BiH.

219

And while

not strictly a digital question, it is worth noting that in BiH, no other ethnicity besides Serbs, Croats, and

Bosniaks are allowed to run for office.

220

This rule has remained in place, even after the European Court

of Human Rights ruled in 2009 that the rule constitutes discrimination.

DIGITAL GOVERNMENT: ENGAGING CITIZENS AND ORGANIZATIONS

Political fractions in BiH typically pander to their respective ethnic groups. According to USAID/BiH’s

study on e-governance and e-administration, “Confrontation among diverging political interests has led

to further fragmentation of e-governance systems and to a piecemeal approach among international

development organizations and agencies, which have tried many times and at different levels to jump-

start reform processes with little or no success.”

221

Indeed, politicians in BiH promote and give

credence to conspiracy theories.

222

There is a consistent lack of a willingness to engage citizens and address media literacy, much less

algorithmic transparency—which could help illuminate which opinions are held by people and those that

are generated automatically by computers. Furthermore, citizens are lethargic and unmotivated to

engage in civic or political activities, whereas their perception of NGOs acting as citizens’ agents is

generally poor.

223

SMART CITIES

There are several smart city initiatives in BiH, with a diversity of governments and private-sector

partners.

UNDP has supported smart city activities—for example, in Sarajevo and Banja Luka—through its

Accelerators Lab. These have included efforts to leverage technology to improve public transportation,

improve air quality, introduce smart parking, and more. In Banja Luka, one initiative implemented with

the Ministry of Internal Affairs saw the installation of a camera at an intersection to catch people driving

without a seat belt or speaking on their cell phones. Also, The Bit Alliance has collaborated with

Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) to implement smart city projects in

Prijedor, Tešanj, Zenica, Zvornik, and Pale. EBRD is financing an active traffic management system with

Sarajevo Canton that will enable traffic lights and tram systems to run more smoothly together.

In 2018, the City of Sarajevo signed an MOU with Huawei to implement smart city activities, including

“comprehensive supervision projects, intelligent management systems, public safety systems and

intelligent traffic control system.”

224

. In 2021, Huawei organized a smart technologies road show through

219

USAID/BiH MEASURE-BiH. (2019). Gender Analysis for Bosnia and Herzegovina: 2019 Follow-up.

https://measurebih.com/uimages/Gender20Analysis20201920Follow-Up20Final20Report.pdf

220

Bertelsmann Stiftung. (2022). The Bertelsmann Stiftung’s Transformation Index (BTI). Bosnia and Herzegovina

Country Report. https://bti-project.org/en/reports/country-report/BIH

221

USAID/BiH MEASURE-BiH. (2018). Assessment of Bosnia and Herzegovina E-Governance and E-Administration.

http://measurebih.com/assessment-of-bosnia-and-herzegovina-e-governance-and-e-administration-

222

Zašto Ne. (2019). Disinformation in the Online Sphere the Case of BiH. p.16.

223

USAID/BiH. (2021). 2020 National Survey of Citizens’ Perceptions. http://measurebih.com/uimages/NSCP-

BiH20202020Report.pdf

224

Xinhua Silk Road Database. (2018). Huawei aids Bosnia and Herzegovina in building smart cities.

https://en.imsilkroad.com/p/118790.html

USAID.GOV DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) | 49

several European cities, including Sarajevo and Banja Luka,

225

and sponsored trips to China and Dubai

for two state ministers to see the company’s latest innovations.

226

Case Study: Proactive Local Communities

The mayor of Tešanj, a municipality of 43,000 people in the FBiH, captured the imagination of what effective

leadership can do to advance BiH’s digital ecosystem. The inhabitants of the municipality characterized Suad

Huskić’s approach as forward-thinking and highly communicative.

Despite the municipality’s small size and financial difficulties, the mayor supported digital transformation of the

municipal services, and the municipality became one of the most advanced in the digital domain. The municipality

of Tešanj took the initiative and introduced a Document Management System (DMS) using their own funds several

years ago. Since then, all internal communication between municipal staff has been switched to digital format.

With the support of UNDP’s Municipal Environmental and Economic Governance (MEG) project, the Municipality

of Tešanj digitalized several e-citizen services, including online complaints - 48 hours, public hearings, e-forms, etc.

In 2021, Tešanj won a smart city project financed by GIZ support and implemented in collaboration with the Bit

Alliance and two IT companies. The smart city project includes the implementation of smart city solutions, such

as “GoParking” and “Citizen Patrol.” Local communities included in the project receive licenses to use the

abovementioned digital solutions, including technical support for the project’s duration.

Another bright example is the City of Prijedor, located in the RS, with more than 89,000 inhabitants. Their

digitalization path started in 2008, when they adopted a local development strategy that defined IT infrastructure

development as one of the key objectives. The City of Prijedor created several e-government processes, such as

a virtual register where persons whose registries are kept in the City of Prijedor, including diaspora, can obtain

excerpts from registries and proof of citizenship online. Similarly to the Municipality of Tešanj, Prijedor developed

a DMS with support from a local company – the system helped them convert all requests into electronic format,

enabling citizens and municipal staff to monitor the status of requests online. As part of the MEG project, they

developed an online public debate, which has not been very popular among citizens compared to the platform for

online complaints on infrastructural problems that the municipality must respond to within 48 hours.

Proactive local communities such as Prijedor and Tešanj face interoperability issues because of the absence of the

DMS system at other levels of government that they share data with. In the context of e-government development,

local communities recognized that sharing information between institutions at different government levels is a

fundamental aspect that all institutions should recognize.

TRAFFICKING IN PERSONS

BiH is a country of origin, destination, and transit of trafficked persons. Victims of human trafficking in

BiH are forced to commit criminal acts, exploited for sex, and forced into manual labor exploitation,

domestic service, child pornography, and forced marriage.

227

Most of the identified potential victims of

225

Nemanja V. (2021). Huawei in Banja Luka and Sarajevo showed the future of smart technology.

www.nezavisne.com, https://www.nezavisne.com/nauka-tehnologija/internet/Huawei-u-Banjaluci-i-Sarajevu-

pokazao-buducnost-pametne-tehnologije/696623

226

Zoric, T. (2022). Huawei paid for the trip to two state ministers and invited them to presentations.

https://detektor.ba/2022/01/07/huawei-placao-put-dvojici-drzavnih-ministara-i-pozivao-ih-na-prezentacije/

227

Council of Ministers of BiH. (2020). Strategy for Combating Human Trafficking in BiH 2020-2023.

http://msb.gov.ba/PDF/290120205.pdf

50 | DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) USAID.GOV

human trafficking in BiH are children who are citizens of BiH.

228

BiH does not meet the standards for

the elimination of trafficking, yet it is making efforts to comply with the minimum standards.

229

The BiH Strategy for Combating Human Trafficking (2020–2023) recognizes the role of the digital

environment in the exploitation of female and male minors for pornography.

230

However, DECA KIs

perceive that digital tools are widely used by the perpetrators for other forms of human trafficking as

well, specifically for identification and communication with (potential) victims. Unfortunately, however,

there is no comprehensive study that has assessed and captured the use and role of digital tools in

trafficking persons in BiH. Yet the digital environment continues to pose a security risk, especially among

those with lower digital literacy, including children. According to a Save the Children study, almost every

second child in BiH received a message or accepted unknown persons as friends on social networks,

slightly less than one-third of children corresponded with strangers, and 11.4 percent of children agreed

to meet unknown persons they met online.

231

The government’s capacity to effectively address cybercrime, including online child sexual abuse, remains

modest.

232

In October 2021, the Government of FBiH adopted a strategic program for the safety of

children in the digital environment for the 2021–2024 period that aims to ensure the protection of the

youngest members of the population from risks in the online world.

233

The program does not refer to

human trafficking only but, rather, to all types of online child victimization. The Action Plan adopted as part

of the program envisages improvements in the current legislation, institutional capacities and cooperation,

prevention, and responsive measures related to online child abuse.

234

However, while none of the activities

outlined in the Action Plan have been implemented thus far, some of the activities envisaged by the Action

Plan exist in RS. For example, the Action Plan for FBiH includes activities related to the establishment of a

CERT for FBiH, strengthening digital literacy through a regular school curriculum, and establishing a

235

all of which are already implemented in RS.

CSOs and the international community are heavily engaged in preventing sexual exploitation and abuse

of children in the digital environment. A consortium for child protection in BiH, consisting of UNICEF,

228

GRETA. (2022). Evaluation Report: BiH – Third Evaluation Round: Access to Justice and Effective Remedies for

Victims of Trafficking in Human Beings. https://rm.coe.int/greta-evaluation-report-bosnia-and-herzegovina-3rd-

evaluation-round/1680a70b3b

229

U.S. Department of State. (2021). 2021 Trafficking in Persons Report: BiH. https://www.state.gov/reports/2021-

trafficking-in-persons-report/bosnia-and-herzegovina/

230

Council of Ministers of BiH. (2020). Strategy for Combating Human Trafficking in BiH 2020-2023.

http://msb.gov.ba/PDF/290120205.pdf

231

Save the Children. (2016). Behavior and Habits of Children on the Internet: Attitudes of Children, Parents, and

Computer Science Teachers. https://nwb.savethechildren.net/sites/nwb.savethechildren.net/files/library/Izvjestaj-

ponasanje-djece-na-internetu.pdf

232

European Commission. (2021). Commission Staff Working Document: BiH 2021 Report. 2021 Communication

on EU Enlargement Policy. https://ec.europa.eu/neighbourhood-enlargement/bosnia-and-herzegovina-report-

2021_en

233

End Violence Against Children, Save the Children, HO International Forum of Solidarity-Emmaus, UNICEF.

(2021). Strategic Program: Children Safety in Digital Environment in FBiH (2021-2024).

https://nwb.savethechildren.net/sites/nwb.savethechildren.net/files/library/Knjiga%20Strate%C5%A1ki%20Program%

20WEB.pdf

234

Ibid.

235

In July 2022, the House of Peoples of the Parliament of FBiH adopted draft amendments to the FBiH Criminal

Code that will enable the establishment of a registry of pedophiles in FBiH. A forensic DNA database at the state

level has yet to be established.

USAID.GOV DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) | 51

Save the Children, and IFS-EMMAUS, established the Safer Internet Center in BiH and introduced a web

platform, helpline, and hotline for reporting illegal content in the online environment (e.g., child abuse,

online child sexual abuse material, inappropriate online communication, child trafficking cases). This still

does not meet the EU expectation that BiH establish a coordination office to work with the European

Multidisciplinary Platform against Criminal Threats, which would seek to counter all forms of

cybercrime, including trafficking.

236

The UN’s International Organization for Migration (IOM) has worked to leverage technology to counter

the serious problem of trafficking of persons in BiH. With USAID support, they first created a database

of all trafficking victims and perpetrators in BiH and made it available to police officers working on

trafficking cases. Over time, they have improved the platform to enable NGOs working to counter

trafficking to enter data as well. IOM also created a web and mobile Tool for Vulnerability Assessment

and made it available for both Android and iOS mobile operating systems. The tool enables for people

to report situations they observe where they believe someone is being trafficked.

Despite these efforts, the number of convictions for online sexual trafficking or exploitation in BiH are

still low. In 2020, police identified 70 potential trafficking victims, and courts convicted only 34

perpetrators. The European Union believes that BiH laws need to be further aligned with the EU acquis

to increase the impact of law enforcement on the problem of cyber-trafficking.

236

European Commission. Bosnia and Herzegovina Report 2021. https://neighbourhood-

enlargement.ec.europa.eu/bosnia-and-herzegovina-report-2021_en

52 | DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) USAID.GOV

PILLAR 3: DIGITAL ECONOMY

Digital economy assesses the role of digital technology in economic activities. It explores the use of

digital technologies in the financial, trade, and fintech environment. This pillar also examines the

availability and characteristics of the country’s digital talent pool and its role in shaping the

digital economy.

KEY FINDINGS

Modest digital transformation hinders accelerated private-sector growth: Development of

BiH’s digital economy is limited by a persistently low level of technology adoption and digitalization in

both the public and private sectors, as well as by high levels of emigration. Despite a significant growth

of the ICT industry, the domestic economy overall is not sufficiently leveraging new technologies and

innovations so that businesses increase their competitiveness. Furthermore, schools and company

worker training programs are not producing enough qualified IT workers to meet the continuously

increasing demand. The COVID-19 pandemic highlighted the need for an accelerated digital

transformation in all industries, and the digitalization of business is justifiably seen as driving change in

business and consumer behavior and offering new growth prospects.

BiH is a net exporter of digital talent: Despite government inaction and policy failures, BiH is a

net exporter of talent, predominantly because of the leadership of private IT companies and (some)

higher education institutions in workforce training, which has enabled BiH IT companies to find their

place in international IT service markets.

Dynamic IT sector: The IT sector in BiH is one of the fastest-growing sectors. Employment in this

sector increased by 67 percent from 2015 to 2020,

237

and in 2020 it accounted for 4.5 percent of

BiH’s GDP.

238

The question for policymakers and donors is how they can help the rest of the

economy benefit from this growth.

Challenges to expansion of digital financial services (DFS): The barriers to expanding the

uptake of DFS in BiH include its challenging topography; the prevalence of traditional social and

financial structures that depend on community- and cash-based networks; low trust in digital

platforms; low digital literacy; and low levels of financial inclusion.

Recent policy changes bode well for digitalization: Both the FBiH government and the Indirect

Tax Authority have taken recent steps to make digital documents and signatures and digital processes

to be the norm. These steps are expected to lead consumers to increase their use of digital services.

237

German Cooperation Office (GIZ) in BiH. (2020). Innovation and digitalization in SMEs in Bosnia and

Herzegovina. https://b2bit.ba/wp-

content/uploads/2020/04/Innovation_and_digitalisation_in_SMEs_in_BH_BASELINE_STUDY_V2.pdf

238

Agency for Statistics of BiH. (2021). Gross Domestic Product of BiH 2020: Production Approach.

https://bhas.gov.ba/data/Publikacije/Saopstenja/2021/NAC_02_2020_Y1_0_BS.pdf

USAID.GOV DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) | 53

DIGITAL TRANSFORMATION CHALLENGES FOR BUSINESSES

The digital transformation of BiH businesses is at a very early stage. Approximately 63 percent of all

enterprises have a website. Unsurprisingly, 89.5 percent of large and 78.6 percent of medium-sized

enterprises have websites, compared to 58 percent of small businesses.

239

Although the level of internet

usage among enterprises is high (99 percent have internet access),

240

the share of medium-to-high, value-

added and technology products is low, with the economy’s innovation performance

241

experiencing a

decrease over the last two years.

242

Companies have varying capacities to pursue digitalization on their

own. Many have low capacities and imperfect access to information and a lack of understanding of how

digitalization might affect their business models. Only 15 percent of businesses employ ICT professionals

(15.4 percent in RS;

243

data for FBiH are unavailable),

244

while 11 percent of companies have employees

responsible for digitalization and a team responsible for digital transformation.

245

At the same time, only

12 percent of enterprises organize and deliver training to improve the ICT skills of their employees.

246

In 2020, the COVID-19 pandemic wreaked havoc on the BiH economy, causing a 5.5 percent decrease

in GDP and the first decrease in fiscal revenues since 2009.

247

In that year, 20 percent of businesses sold

their products online, and 11 percent of businesses reported that they had increased their efforts to sell

goods or services online because of the pandemic.

248

While government officials interviewed shared that they are aware of the importance of innovation

capacity and its direct link to improved economic performance, the government in BiH (at any level) has

not made any major investments in building up innovation capacity. The authorities’ unresponsiveness

towards the ICT-centric innovation ecosystem is recognized as a major threat to the digital ecosystem

in BiH.

249

In the Global Innovation Index for 2021, an index that measures an economy’s innovative

capacity and output, BiH was ranked 75th out of 132 countries; neighboring Croatia, Montenegro, and

Serbia ranked 42nd, 50th, and 54th, respectively.

250

The country’s poor index ranking stems from

modest scores obtained across all seven index pillars,

251

with business sophistication and creative

239

Agency for Statistics of BiH. (2021). Gross Domestic Product of BiH 2020: Production Approach.

https://bhas.gov.ba/data/Publikacije/Saopstenja/2021/NAC_02_2020_Y1_0_BS.pdf

240

Agency for Statistics of BiH. (2021). Usage of information and communication technologies in enterprises.

https://bhas.gov.ba/data/Publikacije/Saopstenja/2021/IKT_04_2021_Y1_0_BS.pdf

241

While not a formal term, the European Commission in this report explains that it considered BiH’s

“preparations of industry towards a green, digital transformation and global competitiveness in line with the EU

industrial strategy” when evaluating the country’s innovation performance.

242

European Commission. (2021). Bosnia and Herzegovina Report. p. 89. https://ec.europa.eu/neighbourhood-

enlargement/bosnia-and-herzegovina-report-2021_en

243

RS Institute of Statistics. (2021). Statistical Yearbook of RS, 2021.

https://www.rzs.rs.ba/static/uploads/bilteni/godisnjak/2021/StatistickiGodisnjak_2021_WEB_II.pdf

244

Agency for Statistics of BiH. (2020). Usage of information and communication technologies in enterprises.

https://bhas.gov.ba/data/Publikacije/Saopstenja/2020/IKT_04_2020_Y1_0_BS.pdf

245

Association for Digital Transformation in BiH. (2021). Studija o digitalnoj transformaciji kompanija u BiH.

https://www.udt.ba/wp-content/uploads/2021/11/Studija_final.pdf

246

Agency for Statistics of BiH. (2020). Usage of information and communication technologies in enterprises.

https://bhas.gov.ba/data/Publikacije/Saopstenja/2020/IKT_04_2020_Y1_0_BS.pdf

247

https://bti-project.org/en/reports/country-report/BIH

248

Agency for Statistics of BiH. (2021). Usage of information and communication technologies in enterprises 2021.

https://bhas.gov.ba/data/Publikacije/Saopstenja/2021/IKT_04_2021_Y1_0_BS.pdf

249

BiH Official Gazette, No. 46/17. https://docs.rak.ba/articles/aa3ed3af-d56e-4b8b-a62e-6816c2440397.pdf

250

Cornell University, INSEAD, and WIPO. (2020). Global Innovation Index 2021.

https://www.wipo.int/edocs/pubdocs/en/wipo_pub_gii_2021.pdf

251

Institutions, Human Capital and Research, Infrastructure, Market Sophistication, Business Sophistication,

54 | DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) USAID.GOV

outputs assessed as the least developed. For example,

only about one-third of BiH enterprises introduced new

or significantly improved products, services, or delivery

processes in the last three years. Most of these

(59 percent) were new only for the enterprises that

introduced them, whereas they already were available in

the market.

252

Almost two-thirds of companies

(62 percent) do not have a strategy for innovation, and

only 16 percent have a research and development

strategy.

253

As a result, BiH lags behind most Western

Balkan and European countries; only Albania ranked lower when the Global Innovation Index for 2021

was assessed.

254

Public and donor support for innovation in BiH is not substantial. Expenditures for research and

development amounted to only 0.2 percent of the country’s total GDP in 2020, half of which was spent

by higher education institutions (56 percent), followed by the business (39 percent) and government

sectors (5 percent).

255

The biggest portion of the funds invested in research and development in the

business sector comes from enterprises’ own resources (52 percent), followed by resources from the

private nonprofit sector (41 percent), government resources (4 percent), and funds from abroad

(3 percent).

256

According to a Regional Cooperation Council (RCC) study, only 33 percent of BiH

enterprises received financial support for innovation activities from government authorities at any

level.

257

Likewise, only 21 percent of enterprises are satisfied with support for innovative ideas from

public sources.

258

However, enterprises view the current level of collaboration between universities and

businesses seeking to solve practical problems as insufficient to strengthen innovation capacity in the

country.

259

They believe collaboration between universities and private sector has the greatest potential

to drive innovation, and since it is underutilized, the level of innovation in BiH is lower than it otherwise

might have been.

The level of adoption of advanced digital technologies is relatively low and uneven, with digital channels

used predominantly for social media (73 percent) and mobile services (46 percent).

260

As Exhibit 10

Knowledge and Technology Outputs, and Creative Outputs

252

Regional Cooperation Council. (2022). Balkan Barometer – Private Sector Opinion.

https://www.rcc.int/download/docs/Balkan%20Barometer%202022%20-

%20BO.pdf/56acb2cb729b5f1a74308ea7052bda10.pdf

253

Association for Digital Transformation in BiH. (2021). Studija o digitalnoj transformaciji kompanija u BiH.

https://www.udt.ba/wp-content/uploads/2021/11/Studija_final.pdf

254

Cornell University, INSEAD, and WIPO. (2020). Global Innovation Index 2021.

https://www.wipo.int/edocs/pubdocs/en/wipo_pub_gii_2021.pdf

255

Agency for Statistics of BiH. (2022). Science, Technology, and Digital Society: Research and Development, 2020.

https://bhas.gov.ba/data/Publikacije/Saopstenja/2022/RDE_01_2020_Y1_1_BS.pdf

256

Ibid.

257

Regional Cooperation Council. (2022). Balkan Barometer – Private Sector Opinion.

https://www.rcc.int/download/docs/Balkan%20Barometer%202022%20-

%20BO.pdf/56acb2cb729b5f1a74308ea7052bda10.pdf

258

Ibid.

259

Ibid.

260

Association for Digital Transformation in BiH. (2021). Studija o digitalnoj transformaciji kompanija.

https://www.udt.ba/studija-o-digitalnoj-transformaciji-kompanija-u-bosni-i-hercegovini-i-faza/

Example of Donor Support for Business

Digital Transformation

UNDP's DigitalBIZ project introduced Digital

Pulse, a self-assessment online tool that

enables companies that want to digitalize to

assess their current digital performance and

provides recommendations for the immediate

steps to consider in addressing the identified

digital gaps.

USAID.GOV DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) | 55

shows, one in three enterprises in BiH invests in technology for cyber-protection, whereas about

75 percent of businesses in BiH stated that they did not experience any internet security problems.

261

About 19 percent of companies have had security issues caused by viruses; 7 percent, by attacks on the

network; 8 percent, by ID misrepresentation or theft; and 4 percent, by illegal access to the network.

262

Exhibit 10. Digital technologies used by BiH companies

According to a study conducted by GIZ that focused on the tourism sector and the wood and metal

processing sectors, subject-matter experts (SMEs) operating in these sectors have the greatest need for

support in improving and digitalizing their business models, digitalizing their products and/or services

(e.g., introducing a new product with an integrated digital solution), improving their digital marketing,

and building digital technology skills among their employees (Exhibit 11).

263

A need for improving digital

marketing is especially important among tourism organizations. Whereas some organizations invested

heavily in their online presence, others have an almost invisible online presence and need support in

261

Regional Cooperation Council. (2022). Balkan Barometer 2022 – Private Sector Opinion.

https://www.rcc.int/download/docs/Balkan%20Barometer%202022%20-

%20BO.pdf/56acb2cb729b5f1a74308ea7052bda10.pdf

262

Ibid.

263

GIZ. (2020). Innovation and Digitalisation in SMEs in BiH: Baseline Study. https://b2bit.ba/wp-

content/uploads/2020/04/Innovation_and_digitalisation_in_SMEs_in_BH_BASELINE_STUDY_V2.pdf

Source: Association for Digital Transformation in BiH.

56 | DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) USAID.GOV

creating and managing targeted, measurable, and conversion-driven social media posts and

campaigns.

264,265,266,267,268

Exhibit 11. Areas in which support with digitalization is needed

Source: GIZ.

Although local IT companies could help fill in the identified “digital gaps of SMEs in BiH, cooperation

between the growing IT sector and other industries is relatively low. Thus far, only a small portion of IT

companies (26 percent) have developed a product/service for local SMEs, whereas the estimates show

that, even if the IT sector becomes more oriented to local SMEs as potential customers, the majority of

their work will remain focused on the market (58 percent).

269

Despite its importance for the economy, digitalization does not have a prominent place in the relevant

government strategic documents that define policies and guidelines for the development of reforms.

Additionally, business support services and products are limited, which is especially pronounced in the

area of support for business digitalization and other business innovations.

270

However, some progress

264

USAID. (2021). Digital Revolution Marketing and Social Media Campaign Plans: Tourism Organization Republika

Srpska.

265

USAID. (2021). Digital Revolution Marketing and Social Media Campaign Plans: Tourist Board of Herzegovina

and Neretva.

266

USAID. (2021). Digital Revolution Marketing and Social Media Campaign Plans: Trebinje Tourism Office.

267

USAID. (2021). Digital Revolution Marketing and Social Media Campaign Plans: Tourism Organization of Tuzla.

268

USAID. (2021). Digital Revolution Marketing and Social Media Campaign Plans: Visit Sarajevo.

269

Ibid.

270

DigitalBIZ Project. (2021). Digitalna transformacija u poslovnom sektoru (DigitalBIZ) - O nama.

USAID support digital transformation in the tourism sector

USAID/BiH, through its five-year Sustainable Economic Growth Activity in BiH (Turizam), is launching a digital

transformation initiative for the tourism sector. With tourism boards, clusters. and collaborating partners,

Turizam transfers innovations in online marketing and social media campaigns through training and deploys

matching marketing campaign funds close to $1 million.

USAID.GOV DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) | 57

has been made. For example, the RS Ministry of

Scientific and Technological Development,

Higher Education and Information Society, the

RS Ministry of Economy and Entrepreneurship,

the RS Chamber of Commerce, Banja Luka

Innovation Center, and GIZ established a

network for digital transformation of the

economy in RS in late 2019. As part of this

initiative, the Center for Digital Transformation

of the Chamber of Commerce of the RS was

founded and modeled after the Center for

Digital Transformation in Serbia. The center aims

to support businesses in applying digital solutions

in their business processes to increase the

competitiveness of the economy. GIZ works on

the same initiative in Tuzla Canton as well.

E-COMMERCE

E-commerce, while small, is undoubtedly growing in BiH. In 2020, 17 percent of businesses sold goods

online and realized a 5 percent increase in business.

271

However, for the majority of companies engaged

in e-commerce (88 percent), the online sale of goods and services accounts for less than 50 percent of

total sales,

272

and approximately 70 percent of online merchants also have a physical store. In 2021, only

16 percent of small enterprises (10–49 employees) had online shops compared to 23 percent of

medium-sized enterprises (50–249 employees) and 25 percent of large companies (250+ employees).

273

Companies offering accommodation services and food (44 percent) and repair and maintenance of

computers and communication equipment (43 percent) have online sales more often than enterprises

engaged in other activities.

274

On the other hand, only 2 percent of companies engaged in electricity, gas,

steam, and water or wastewater management, and 6 percent of real estate companies sell their goods or

services online.

275

The extent of online sales to external markets is limited. Whereas 94 percent of

companies that were engaged in e-commerce sold their goods or services locally in 2020, only

31 percent made sales to EU countries and 18 percent to non-EU countries.

276

The situation is

somewhat worse when only SMEs are considered: In 2020, only 9 percent of small businesses and 12

(https://digitalnaekonomija.ba/bs-Latn-BA/about)

271

Agency for Statistics of BiH. (2022). Use of Information and Communication Technology in BiH, 2021.

https://bhas.gov.ba/data/Publikacije/Bilteni/2022/IKT_00_2021_TB_1_BS.pdf

272

Regional Cooperation Council. (2022). Balkan Barometer 2022 – Private Sector Opinion.

https://www.rcc.int/download/docs/Balkan%20Barometer%202022%20-

%20BO.pdf/56acb2cb729b5f1a74308ea7052bda10.pdf

273

Agency for Statistics of BiH. (2022). Use of Information and Communication Technology in BiH, 2021.

https://bhas.gov.ba/data/Publikacije/Bilteni/2022/IKT_00_2021_TB_1_BS.pdf

274

Ibid.

275

Ibid.

276

Ibid.

The role of digital innovation hubs in

strengthening digital transformation

There are few digital innovation hubs (DIB) in BiH that

serve as one-stop-shops that help companies become

more competitive in their business and production

processes, products, or services using digital

technologies. These include: INTERA Technology Park

in Mostar, HUB387 Sarajevo, LabHub Sarajevo, and

Onex Banja Luka. The Innovation Center Banja Luka -

ICBL -

manages a business incubator where

approximately 80 percent of start-up companies are in

the ICT sector, the rest are in different business

service provision sectors. The Business Innovation and

Technology (BIT) Center in Tuzla is an incubator that

provides hard and soft infrastructure for ICJ-based

startups and SMEs. Since 2005, it has hosted over 53

companies, employed more than 500 highly skilled

individuals and has enabled more than 6,000 people to

improve technical and entrepreneurial skills through

workshops and training programs.

58 | DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) USAID.GOV

percent of medium enterprises sold their goods over online platforms to EU countries.

277

These data

indicate that smaller companies are struggling to implement online platforms necessary to reach broader

EU markets. Yet more than half (65 percent) of online sales in 2021 were made to the foreign market.

278

Online sale of goods is challenged by courier service costs defined by the Law on Post Offices of BiH.

According to the law, a minimum tariff for courier services is 9.01 BAM (almost 5 USD),

279

which

hinders the cost-effectiveness of online sale of low-cost products. International shipping fees are very

high, and complex export procedures make the sale of goods to international buyers, such as the

European Union or the United States, highly inefficient and uncompetitive.

Data presented by the eCommerce Association of BiH show positive trends, even in the face of

COVID-19 challenges. Between January 2020 and November 2021, the number of new online stores

increased by 35 percent.

280

The transaction volume increased by 350 percent, and the number of

transactions increased by 400 percent.

281

The popularity of e-commerce is fast growing in BiH. E-commerce trading platforms, such as OLX, have

seen a major increase in popularity. When comparing the number of products sold from March 2020 to

March 2021, sales increased from 3,169,750 articles to 4,318,754 articles, a 36 percent increase.

282

However, according to NSCP-BiH data, in 2021, only 39 percent of BiH citizens bought goods from

online stores of companies registered in BiH, 24 percent of citizens bought goods online outside of BiH,

20 percent bought services online, and only 16 percent used PayPal or other online payment

methods.

283

Men, more often than women, tend to buy goods online. Additionally, buying merchandise

online is more common among young people than adults. However, the largest discrepancies in

purchasing goods online are among citizens with different education levels and household income.

According to the multiple regression analysis run by the DECA team, education level is a predictor of

the use of e-commerce services. Specifically, the more educated an individual is, the more likely it is for

them to use e-commerce services. For example, citizens with a university diploma are almost two times

more likely to buy goods and services online and almost three times more likely to use PayPal or other

online payment methods compared to citizens with a secondary school diploma. Likewise, whereas the

majority of citizens with a household income exceeding 3,000 BAM per month buy goods online in BiH

(82 percent), every second citizen coming from a household with a monthly income of 1,001–3,000

BAM and every fourth citizen coming from a household with a monthly income of up to 1,000 BAM buy

goods online in BiH (Exhibit 12).

284

277

Association for Digital Transformation in BiH. (2021). Study of Digital Transformation of Companies in BiH.

https://www.udt.ba/wp-content/uploads/2021/06/Study-on-DT-in-BiH-phase-I-FINAL-web.pdf

278

Central Bank of BiH. (2022). Payment systems in BiH in 2021.

https://www.cbbh.ba/content/DownloadAttachment/?id=0c3f6563-7f6d-4f44-b9b1-057e75fb2a92&langTag=bs

279

Official Gazette of BiH, No. 33/05

280

eCommerce Association in BiH. (2022). https://e-comm.ba/

281

Ibid.

282

Blog.olx.ba. (2021). E-commerce in BiH. https://blog.olx.ba/2021/05/21/e-commerce-u-bih/

283

USAID. (2022). National Survey of Citizens’ Perceptions in BiH, 2021.

284

Ibid.

USAID.GOV DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) | 59

Exhibit 12. Use of e-commerce in BiH

Source: National Survey of Citizens’ Perceptions in BiH (2021).

DIGITAL FINANCIAL LITERACY

Digital financial services are not used often by BiH citizens. Socio-economic conditions, coupled with

modest financial literacy, are the primary factors that impede greater financial inclusion of BiH

citizens.

285

In 2021, almost 2 million debit cards were in use;

286

however, only 9.7 percent of the

population had a credit card.

287

Both debit and credit cards are most often used to make payments in

super/hypermarkets

288

and in clothing/shoe stores, and to withdraw cash at banks/ATMs. In addition,

every second debit card holder uses their card when making payments at gas stations, whereas one in

two credit card holders uses a credit card to buy furniture or some technical equipment.

289

However,

only 33 percent of citizens (34 percent of men and 31 percent of women) use a credit card for everyday

payments, such as for groceries.

290

Likewise, every third BiH citizen uses online banking services

(33 percent of men and 31 percent of women) and pays bills online (27 percent of men and 24 percent

of women).

291

As with e-commerce services, more educated citizens are more likely to use DFS.

Specifically, highly educated citizens are almost ten times more likely to use a credit card and online

banking, and to pay bills online, compared to those with no secondary school diploma.

292

Yet according

to data published by the Central Bank of BiH, only 39 percent of e-banking users were actively using the

service in 2021.

293

285

Mastercard. (2022). MasterIndex 2022: BiH, Results on use of payment cards and online payments.

286

Central Bank of BiH. (2022). Card Operations in BiH: 2021.

https://cbbh.ba/press/ShowNews/1428?title=Karti%C4%8Dno-poslovanje-u-BiH-u-2021.:-Pove%C4%87anje-broja-

aktivnih-kartica,-vrijednosti-i-broja-transakcija

287

Center for Open Access in Science. (2021). Digital Literacy, Education and Employment Status:

Evidence from Bosnia and Herzegovina https://centerprode.com/ojss/ojss0502/coas.ojss.0502.03071h.pdf

288

Hypermarkets are large stores (larger than supermarkets) that offer a variety of products at their original or

discounted prices.

289

Ibid.

290

USAID. (2022). National Survey of Citizens’ Perceptions in BiH, 2021.

291

Ibid.

292

Ibid.

293

Central Bank of BiH. (2022). Payment systems in BiH in 2021.

https://www.cbbh.ba/content/DownloadAttachment/?id=0c3f6563-7f6d-4f44-b9b1-057e75fb2a92&langTag=bs

60 | DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) USAID.GOV

Online payments have been increasing in the last three years by an average rate of 11.6 percent.

294

The

new “normal” environment brought about by the COVID-19 pandemic is perceived to have contributed

to an increase in online payments. In addition, withdrawing cash from ATMs continues to increase by

8.2 percent annually, on average.

295

However, the former trend of strong traffic growth at point-of-sale

(POS) terminals decreased with the pandemic; using POS for making payments dropped by almost

8 percent in 2021.

296

Modest financial and digital literacy hinder the accelerated expansion of DFS. Citizens are mostly

concerned about someone else misusing their personal data and the security of online payments when

engaging in online banking or buying merchandise online.

297

Low trust in online services and limited

knowledge of technology indicate why the digital marketplace in BiH is a hybrid-mode marketplace in

which sales are digital but the final stage is door-to-door delivery service with payment on delivery.

(Fifty percent of e-commerce activities end with payment on delivery.)

298

The NSCP-BiH also found that

56 percent of all respondents think it is unsafe to enter confidential information online.

299

ONLINE SHOPPING AND CONSUMER BEHAVIOR

Among online shoppers, use of courier services that offer expeditious door-to-door delivery and

payment collection as one service is very popular. Couriers even provide services that let buyers open a

package and inspect the product before they pay for it. Importantly, no credit card is necessary to use

these services, which also contributes to the popularity of these services. The big players are Post.ba,

EuroExpress, X Express, In-time, and A2B, all of which provide a door-to-door delivery and payment

collection for a relatively low fee that ranges between approximately 5 and 9 USD.

Indeed, people still prefer to pay for their online purchases in cash. The reason for the low number of

people who pay for goods on digital platforms is that they do not trust these technologies. According to

a 2019 World Bank study of DFS in the Western Balkans implemented by Cambridge University,

77.7 percent of people who made online purchases paid for them in cash.

300

Additionally, it is still not

possible for consumers to pay most of their bills online, though energy companies continue to

encourage people to switch to electronic billing.

When it comes to digital money and online transfers, few local banks have created digital payment

services as part of their mobile banking system. One example is mCash

301

from Sberbank.ba. However,

the popularity of these systems is very low because they require a bank account and visits to an ATM to

withdraw cash based on a unique transaction PIN.

294

Ibid.

295

Ibid.

296

Ibid.

297

2022 Balkan Barometer, https://www.rcc.int/download/docs/Balkan%20Barometer%202022%20-

%20PO.pdf/21e2192c1d34cc6194ecb029d7b5997f.pdf

298

Mastercard. (2022). MasterIndex 2022: BiH, Results on use of payment cards and online payments.

299

USAID. (2022). National Survey of Citizens’ Perceptions in BiH, 2021.

300

“Fintech Innovation in the Western Balkans: Policy and Regulatory Implications & Potential Interventions”

https://www.jbs.cam.ac.uk/wp-content/uploads/2020/08/2020-ccaf-fintech-innovation-western-balkans.pdf

301

Sberbank.ba. mCash User Manual.

https://sberbank.ba/upload/docs/korisnicko_uputstvo_za_uslugu_mcash_Qyy.pdf

USAID.GOV DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) | 61

PAYMENT SYSTEMS

Currently, there are few online payment gateways in BiH. The two leading online payment getaways are

Monri (WebPay) and WSPay. Both of these gateways offer integration to checkout shopping carts in e-

shops. The Monri company is part of the Payten Group, which is also one of the largest POS terminal

providers for traditional shops. Two other getaways are owned by banks; the RaiffeisenBank - ePay

302

and Unicredit - pay@web

303

provided as services by local banks. Most banks have implemented 3D

secure service as part of their credit card protection for online payments. A 3D secure program is the

global standard for verifying customers’ identities in the system of secure internet transactions.

Additionally, the customer is required to verify their identity as a confirmation that they are the

authorized card holder.

304

With regards to payment systems, the Central Bank of BiH (CBBH) has operated a modern payment

system since introducing the new gyro clearing system in 2019. All interbank transactions of up to

10,000 BAM (approximately 5,800 USD)

305

are conducted through this system. Looking to the future,

BiH needs to adopt legislation to align with the EU acquis (Payment Service Directive II, the Electronic

Money Directive II, and the Single Euro Payments Area [SEPA] Regulation) to be able to accede to the

SEPA schemes for communities of banks or financial institutions outside the European Economic Area.

Currently, it is not possible to pay for government services with a credit card. When payments are

made to government accounts, public revenue payment slips—a special method of payment—are used.

They require additional information, including the budget allocation code, city code, reference numbers,

and citizen ID number, all of which are defined by instructions for allocating budget funds developed by

multiple ministries of finance. All these codes need to be provided for payments to be allocated to the

appropriate government institution. In addition, government institutions often require copies of payment

slips to be enclosed as part of the application process. Because there is no electronic payment system in

place for public service delivery, there are no fully digitalized public services. All services require citizens

to appear in person (multiple times) at relevant administrative points across the system.

Since 2002, a number of local banks have joined in the creation of the payment processor center called

BamCard.ba. BamCard is the only clearinghouse and processing center that supports banks’ card

businesses in BiH. They also provide additional services, such as the personalization of credit cards. The

majority of larger internationally owned banks use card processing centers outside BiH as part of their

global business practices.

The latest newcomer in digital services is OPA (Online Payment Platform). The OPA was created in

2019 as a joint venture of BH Telecom, Raiffeisen bank, Comtrade, and QSS.

306

BH Telecom is trying to

promote this payment platform as part of its online services with limited success. The platform includes

302

Raiffeisen bank BH. Spisak trgovaca e-pay. https://rbbh-aa0d.kxcdn.com/sites/default/files/dokument-u-

tekstu/Spisak%20e-pay%20052020.pdf

303

Unicredit Bank BH. E-commerce.

https://www.unicredit.ba/en/poduzetnici/proizvodi_i_usluge/karticno_poslovanje.html

304

More information is available here: https://www.youtube.com/watch?v=2kc-FjU2-mY

305

Where appropriate, amounts in Bosnian BAM were converted to USD using the BiH Central Bank official

exchange rate for December 31, 2021 (BAM:USD 1.726). https://www.cbbh.ba/CurrencyExchange/?lang=hr

306

Al Jazeera Balkans. OPA, a unique payment platform, introduced. Al Jazeera Balkans. Published on: December 5,

2019. https://balkans.aljazeera.net/news/economy/2019/12/5/predstavljena-opa-jedinstvena-platforma-za-placanje

62 | DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) USAID.GOV

online payment, money transfer, and mobile applications on Android and IOS devices but requires a link

to a checking account at Raiffeisen bank.

The 2022 MasterIndex, an annual survey of Mastercard holders, found that there are only approximately

9,500 POS devices in use per million residents in BiH, compared to an average of 24,400 per million

residents in Central European countries. For its part, the CBBH said in 2021 there were 30,371 POS

devices “installed.”

307

An example of this inefficiency is shown in Exhibit 13.

This image of a notice posted outside the Ministry of

Finance illustrates the digital divide and the slow

implementation of the e-signature law. On one hand,

commercial banks are slow to implement e-signatures

as part of the e-banking system, which exports

payment proof without digital signatures and only

includes an image of the stamp. On the other hand,

government institutions are trying to find an approach

to handling digital transformation based on outdated

laws and bylaws. As a result, the cost is borne by

citizens and businesses. While e-banking payment

transfers cost between 20 and 40 cents, paper-based

payment orders—which also require clients to

physically visit the bank—cost between 1.50 and 1.80

USD. This is for the same transfer processed manually

by a bank teller. Considering that many government

services entail multiple payments, it is clear that costs

for citizens and businesses add up quickly.

According to the CBBH, in 2020 the CBBH payment

systems processed 43,774,406 transactions, 60 percent

of which were completed on the basis of paper-based payment orders (accompanied by paper payment

confirmation slips), and 40 percent were carried out in the form of electronic payments.

308

Considering

the difference in cost of paper-based and electronic payments (1.65 USD vs. 0.30 USD, respectively),

increasing the share of electronic payments could generate significant savings. Exhibit 14 provides an

overview of potential savings that would be generated even if the number of transactions remains the

same, but the ratio of electronic payments increases to 50 percent or 70 percent. One way to achieve

this outcome might be to reduce the number of payments required to access a government service. For

example, to register a car in the Sarajevo Canton, one must make three to five different payments to

different budget accounts.

309

307

Central Bank of BiH. Card operations in 2020: Increase of the number of active cards, the value and number of

transactions. CBBH. Published on: April 12, 2021. https://cbbh.ba/press/ShowNews/1337?lang=en

308

Central Bank of BiH. (2020). Payment Systems in BiH in 2020.

https://www.cbbh.ba/content/DownloadAttachment/?id=0c3f6563-7f6d-4f44-b9b1-057e75fb2a92&langTag=bs

309

Ministry of Interior Affairs. Canton Sarajevo. Administrative procedure for car registration in Canton Sarajevo.

https://ap.ks.gov.ba/administrativni-postupak/128

The notice reads, “The Ministry of Finance BiH, based

on its decision number 08-02-2-789-2/17 from

July 27, 2017, has proclaimed that there are no legal

grounds to accept validity of proof of electronic

payment to the Treasury accounts.”

Exhibit 13. Notice of the BiH Ministry of

Finance about digital payment slips posted

on a government building

USAID.GOV DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) | 63

Exhibit 14. Potential savings from an increase in the use of electronic payments in CBBH payment

systems (in USD)

# OF

TRANSACTIONS

% OF PAPER-

BASED

PAYMENT

TRANSACTIONS

% OF

ELECTRONIC

PAYMENTS

TOTAL COST OF

PAPER-BASED

PAYMENT

TRANSACTIONS

TOTAL COST

ELECTRONIC

PAYMENTS

POTENTIAL

SAVINGS

(ESTIMATE)

Actual data 43,774,406 60% 40% 43,336,661.94 5,252,928.72

Scenario 1 43,774,406 50% 50% 36,113,884.95 6,566,160.90 5,909,544.81

Scenario 2 43,774,406 30% 70% 21,668,330.97 9,192,625.26 17,728,634.43

Note. Calculation conducted by the DECA team based on data provided in the CBBH’s Payment Systems in BiH in 2020 report.

CRYPTOCURRENCIES

There is no state-level regulation of cryptocurrencies in BiH, and the CBBH has no legal mandate to

define or regulate cryptocurrencies. Although there were some initiatives for drafting legislation allowing

the BiH government to regulate cryptocurrencies,

310

no law has ever been passed. Because

cryptocurrencies are not legal unless explicitly allowed by law, no banks currently deal with them. The

Government of RS made movements in regulating cryptocurrencies by adopting the Law on

Amendments to the Law on the Securities Market

311

in 2022. By amending the law, the RS Securities

Commission was given the role of keeping records of persons who provide virtual currency exchange

services and wallet depository services, and of cooperating and exchanging data, information, and

documentation with other competent authorities regarding the implementation of laws and other

regulations governing the prevention of money laundering and financing of terrorist activities.

312

Yet, for the past three years, the RS has been the site of the largest legal dispute in Europe related to

cryptocurrencies. In March 2022, a Banja Luka district court ordered the BiH affiliate of Italy-based

UniCredit Bank to pay approximately 144 million USD in compensation for its closure of the accounts

of Bitminer Factory, a cryptocurrency mining company based in Gradiška, RS, which had planned to use

environmentally friendly power from the Bočac 2 hydroelectric power station.

313

The Bitminer Factory

received payments for the tokens it planned to issue via UniCredit, and the bank said it could not engage

in such transactions.

314

The fine incurred was approximately 25 percent of UniCredit’s assets in BiH.

310

Erazo, Felipe. “Bosnia and Herzegovina is preparing a draft bill to regulate cryptocurrencies”. Bitcoin.com.

Published on May 12, 2021. https://news.bitcoin.com/bosnia-and-herzegovina-is-preparing-a-draft-bill-to-regulate-

cryptocurrencies/

311

Official Gazette of RS, No. 63/22.

312

Ibid.

313

Isichei, Anthonia. “UniCredit fined $144 million for illegally closing crypto mining firm’s accounts”.

CryptoPotato. Published on March 29, 2022. https://cryptopotato.com/unicredit-fined-144-million-for-illegally-

closing-crypto-mining-firms-accounts/

314

“Court orders Unicredit Bank Banja Luka to pay EUR 130 mil compensation to cryptocurrency miner”.

Intellinews. Published on: April 1, 2022. https://www.intellinews.com/court-orders-unicredit-bank-banja-luka-to-

pay-130mn-compensation-to-cryptocurrency-miner-240044/?source=bosnia-and-herzegovina

64 | DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) USAID.GOV

In the meantime, the CBBH, which is monitoring the experiences of other countries, maintains the

stance that cryptocurrencies should be treated as financial instruments rather than actual money.

315

May 2022

BiH, due largely to its lack of enabling legislation, was ranked the fourth least crypto-friendly

country in Europe by crypto proponents.

316

It is not clear whether relevant BiH authorities (including

Central Bank and banking agencies) are aware of or have plans to adopt and implement legal, regulatory,

supervisory, and enforcement frameworks that are consistent with international standards and guidance

that apply to the crypto/digital assets ecosystem.

The Balkan Crypto Exchange (BCX), established by Digital Assets Management, is the first platform in

BiH for buying, selling, exchanging, trading, storing, and managing digital assets. BCX works on the

principle of stock exchange business, wherein the Digital Crypto Exchange (DCX) offers ATMs for

several cryptocurrencies in eight locations throughout BiH.

317

The first BiH cryptocurrency in the

country is called RXC.

318

ICT INDUSTRY AND DIGITAL TALENT POOL

ICT is an emerging industry that employs 27,056 people in BiH (3.2 percent of the total number of

employed persons).

319

Women make up 38.4 percent of persons employed in the ICT sector.

320

As of

2021, the most prosperous sector in the ICT industry is the IT sector. About two-thirds of employees

in the IT sector are people younger than 35 years of age.

321

Between 2019 and 2021, the annual income

of IT companies in BiH increased by 23.7 percent on average each year. Estimates show that more than

75 percent of revenues generated by the IT sector came from exports.

322

In 2019, the average monthly

net salary in the IT sector was 920 USD, which was almost two times more than the overall average

salary in BiH.

323

The annual growth rate of the average salary in the IT sector is about 9 percent.

324

The majority of persons employed in the IT sector are young, highly educated workers (85.3 percent).

Three-quarters of employees are IT specialists, engineers, and other technical professionals, whereas

one-quarter comprises other specialists, for example, non-IT staff, administration, and human resources.

About 30 percent of employees in the IT industry are women. Three out of four IT specialists,

engineers, and other technical professionals are men, whereas slightly more women than men work as

315

“CBBH: Cryptocurrencies should be viewed as a financial instrument, not as money”. FENA News. Published

on: April 17, 2022. https://www.fena.news/bih/business-and-economy/cbbh-cryptocurrencies-should-be-viewed-as-

a-financial-instrument-not-as-money/

316

Buckler, N. “The Least Crypto-Friendly Countries in the world for Enthusiasts”. beINcrypto. Published on May

17, 2022. https://beincrypto.com/the-least-crypto-friendly-countries-in-the-world-for-enthusiasts/

317

DCX ATMs are available in Gradiška, Banja Luka, Prijedor, Derventa, Sarajevo, and Tuzla.

318

Crypto.ba. RXC White Paper. https://oblak.crypto.ba/s/TF8774EY5PjBKYD

319

Agency for Statistics of BiH. (2022). Persons in paid employment by activity, April 2022.

https://bhas.gov.ba/data/Publikacije/Saopstenja/2022/LAB_02_2022_04_1_BS.pdf

320

Ibid.

321

BIT Alliance. (2019). IT MANIFESTO: Strategic Plan of IT Industry Development in BiH.

https://www.dropbox.com/s/1tzm0gvjnx7v7q5/IT_Manifesto_ENG.pdf?dl=0

322

Government of Sarajevo Canton. (2021). Canton Sarajevo Development Strategy 2021-2027.

http://zpr.ks.gov.ba/sites/zpr.ks.gov.ba/files/strategija_razvoja_ks_2021-

2027._strateska_platforma_nacrt_prosirena_verzija_0.pdf

323

UNDP. (2020). Analiza potrebnih vještina za softversku industriju.

https://www.ba.undp.org/content/bosnia_and_herzegovina/bs/home/library/razvoj/analiza-potrebnih-vjetina-za-

softversku-industriju-u-bosni-i-her.html

324

Ibid.

USAID.GOV DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) | 65

non-IT staff (administration, human resources, etc.) (54 percent).

325

These data conform with the

education statistics. For example, of the 4,224 students who studied computing in FBiH in the 2021–

2022 academic year, only 30 percent were women.

326

One of the biggest challenges to further growth of the IT sector in BiH is maintaining a qualified

workforce, given competition for talent and ongoing brain drain. Estimates show that BiH is facing a

deficit of about 6,000 people in the IT sector.

327

As of end-2019, the number of open positions for IT

specialists was much larger than the number of available IT specialists, with almost half of vacant

positions remaining unfilled.

328

As a result, BiH misses the opportunity to generate about 0.8 billion USD

each year.

329

To address this issue and ensure that the full potential of the IT sector is leveraged,

government authorities are introducing supportive measures, although these are still not substantial. For

example, in 2018 the University of Sarajevo initiated a two-year study of IT professionals, conducted at

two faculties (Faculty of Electrical Engineering Sarajevo and Faculty of Natural Sciences and Mathematics

Sarajevo) to enable professional development and training of programmers for IT needs through two-

year education program.

330

In 2022, the Government of the Sarajevo Canton decided to fully cover

costs of the study for students who enroll in the IT professional study programs in the 2022–2023

academic year.

331

325

UNDP. (2020). Analiza potrebnih vještina za softversku industriju.

https://www.ba.undp.org/content/bosnia_and_herzegovina/bs/home/library/razvoj/analiza-potrebnih-vjetina-za-

softversku-industriju-u-bosni-i-her.html

326

Institute for Statistics of FBiH. (2022). Higher Education 2021/2022. Statistical Bulleting 344. http://fzs.ba/wp-

content/uploads/2022/06/Bilten-2022.pdf

327

BIT Alliance. (2019). IT MANIFESTO: Strategic Plan of IT Industry Development in BiH.

https://www.dropbox.com/s/1tzm0gvjnx7v7q5/IT_Manifesto_ENG.pdf?dl=0

328

UNDP. (2020). Analiza potrebnih vještina za softversku industriju.

https://www.ba.undp.org/content/bosnia_and_herzegovina/bs/home/library/razvoj/analiza-potrebnih-vjetina-za-

softversku-industriju-u-bosni-i-her.html

329

BIT Alliance. (2019). IT MANIFESTO: Strategic Plan of IT Industry Development in BiH.

https://www.dropbox.com/s/1tzm0gvjnx7v7q5/IT_Manifesto_ENG.pdf?dl=0

330

“Published competitions for admission to the two-year IT specialist study at the University of Sarajevo”. Bit

Alliance. Published on June 13, 2018. https://bit-alliance.ba/bs/objavljeni-konkursi-za-upis-na-dvogodisnji-it-

specijalisticki-studij-na-univerzitetu-u-sarajevu/

331

Zugic, M. For Students Enrolling in the First Cycle of IT Study Programs, the Study Costs will be Borne by the

Sarajevo Canton. Accessed on July 22, 2022. https://vlada.ks.gov.ba/aktuelnosti/novosti/studentima-koji-upisuju-i-

ciklus-it-studijskih

Examples of initiatives to prepare BiH workers to enter the digital workforce

• The USAID Workforce and Higher Access to Markets Activity in BiH (WHAM) focused on accelerating

employment in SMEs in the metal processing, wood processing, textile/apparel, and ICT sectors. Main

activities included provision of training or assistance with in-house training in the latest technologies.

• As part of a 2019 pilot project in the RS 100 individuals with university diplomas who had not found a job

in their profession attended the first IT adult training program organized by the Ministry Of Science and

Technology Development, the Higher Education and Information Society of Republika Srpska at the

Innovation Center in Banja Luka.

• Within the FBiH Civil Service Agency, an online platform was created to assist "the in-house training for

civil servants.

• The e-Commerce Association has started offering an online course in conjunction with the Burch

University.

66 | DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) USAID.GOV

Research shows, however, that the current education system cannot produce enough workers to meet

IT sector demand in the next 30 years. In addition, because of the low level of technical skills and a low

number of university graduates, 60 percent of IT companies must train new employees for four to six

months to bring them up to the required level of IT skills to do their jobs.

332

Considering that the IT

industry has been growing 10 times faster than the rest of the BiH economy, the problem of digital skills

within the BiH workforce is expected to

worsen.

333

At the same time, the IT sector

faces issues with IT workforce outflow. This

challenge stems from a broader brain drain

that BiH is experiencing. Current migration

flows from BiH are characterized

predominantly by the emigration of highly

skilled people.

334

According to the 2021

Global Cities Talent Competitiveness Index,

BiH ranks 132nd among 134 countries in

talent retention.

335

One of the biggest

challenges in attracting and retaining an IT

workforce within government institutions is

that BiH must comply with compensation

policies that make them less attractive

employers compared to those in the private

sector. Of 18 government institutions that

were asked whether they have issues with

attracting and retaining IT employees, all confirmed that they are facing this challenge. The record-high

brain drain causes enormous economic losses. Every work-capable person who emigrated from BiH

represents, on average, more than 25,000 USD of future annual GDP that could have been generated if

they were productively employed in BiH.

336

To combat brain drain and retain their employees, IT

companies are offering better employment conditions, higher salaries, and attractive benefits.

337

On the other hand, BiH’s comparative advantage for attracting investments into the IT sector builds on

a relatively low cost of labor, a time zone that at least partially overlaps with its most important

markets, and proficiency of IT experts in multiple European languages.

338

Diasporans are especially

332

UNDP. (2020). Analiza potrebnih vještina za softversku industriju.

https://www.ba.undp.org/content/bosnia_and_herzegovina/bs/home/library/razvoj/analiza-potrebnih-vjetina-za-

softversku-industriju-u-bosni-i-her.html

333

Ibid.

334

Efendic, A., Babic, B., Rebmann, A. (2014). Diaspora and Development: BiH.

https://doc.rero.ch/record/235757/files/30Diaspora_and_development_-_BiH.pdf

335

INSEAD (2021). The Global Talent Competitiveness Index 2021: Talent Competitiveness in Times of COVID.

https://www.insead.edu/sites/default/files/assets/dept/fr/gtci/GTCI-2021-Report.pdf

336

Westminster Foundation for Democracy. (2020). Cost of Youth Emigration from Bosnia and Herzegovina.

https://www.wfd.org/wp-content/uploads/2020/06/Cost-of-Youth-Emigration-from-BH_official_version-1-1.pdf

337

IOM. (2022). Emigration of Health and Information and Communication Technology Professionals from Bosnia

and Herzegovina: Challenges and Opportunities.

https://bih.iom.int/sites/g/files/tmzbdl1076/files/documents/emigration-of-health-and-information-eng.pdf

338

Government of Sarajevo Canton. (2021). Canton Sarajevo Development Strategy 2021-2027.

http://zpr.ks.gov.ba/sites/zpr.ks.gov.ba/files/strategija_razvoja_ks_2021-

2027._strateska_platforma_nacrt_prosirena_verzija_0.pdf

The Challenge of Brain Drain

According to the 2021 wave of NSCP-BiH, one in five

BiH citizens considers leaving the country, whereas

every third citizen who considers leaving BiH already

took some concrete steps towards emigration, i.e.,

applied for a job, education, or scholarship, submitted

residence visa application, collected information about

moving abroad, etc. Young people, more often than

adults, consider leaving the country (44 percent versus

14 percent, respectively). High unemployment and poor

living conditions are not the main drivers of emigration

in BiH. Instead, the main reasons why citizens consider

emigrating include: (i) access to better public services

(91 percent), (i) systemic corruption in BiH society (89

percent), (iii) better opportunities in life for their

children (88 percent), (iv) helping people/family by

sending help from abroad (84 percent), and (v) feeling

that their rights and freedoms are violated in BiH (79

percent).

USAID.GOV DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) | 67

interested in investing in the IT sector.

Diasporans perceive that the IT sector offers the

best prospects in terms of job creation and

income generation and is a low-hanging fruit for

investment, considering the IT sector does not

require large capital to start a business, unlike

some other sectors (e.g., metal processing).

However, investing in BiH is difficult, even for

the hardy investor. While the Law on the Policy

of Foreign Direct Investments,

339

allows foreign

investors to invest in any type of business in BiH

except the military, entering the country’s

market is challenging. BiH often ranks far lower

than its neighbors in ease of doing business, due

in part to the onerous procedures for starting a

new business. Aside from opaque public

procurement procedures and state-owned

monopolies,

340

other major challenges include “endemic corruption, complex legal/regulatory

frameworks and government structures, nontransparent business procedures, insufficient protection of

property rights, and a weak judicial system.”

341

Compounding an already arduous investment process,

the political challenges between RS and FBiH and the fact that entities have jurisdiction over their

respective financial sectors

342

mean that BiH does not constitute a single economic space.

343

This reality has a direct bearing on BiH’s EU ambitions. The EU Digital Agenda focuses on “creating

secure digital spaces and services, creating a level playing field in digital markets with large platforms and

strengthening Europe’s digital sovereignty.”

344

Given BiH’s trajectory towards EU membership, it is

unclear how this may affect the character of BiH’s digital outsourcing sector, or whether Western

Balkan countries may adopt data-sharing arrangements in the short term.

339

Official Gazette of BiH, No. 4/98, 17/98, 13/03, 48/10, 22/15

340

Bertelsmann Stiftung. (2022). The Bertelsmann Stiftung’s Transformation Index (BTI). Bosnia and Herzegovina

Country Report. https://bti-project.org/en/reports/country-report/BIH

341

U.S. Department of State. 2021 Investment Climate Statements: Bosnia and Herzegovina.

https://www.state.gov/reports/2021-investment-climate-statements/bosnia-and-herzegovina/

342

Fintech (World Bank)

343

Berelsmann Stiftung. (2022). Business Transformation Index (BTI). Bosnia and Herzegovina Country Report

2022. https://bti-project.org/en/reports/country-report/BIH

344

Ratcliff, C., Martinello, B., Ciucci M., Sofsky, F., Kaiser, K.P. “Digital Agenda for Europe.” European Parliament.

Published on January 2022. https://www.europarl.europa.eu/factsheets/en/sheet/64/digital-agenda-for-europe

Investment from the BiH Diaspora

According to the BiH Ministry of Human Rights and

Refugees, the BiH worldwide diaspora numbers about

2 million people in more than 50 countries. However,

the diaspora’s potential for supporting the country’s

socioeconomic development has not been fully

exploited.

USAID/BiH has been supporting diaspora investors

through its economic growth portfolio and diaspora

continues to be one of the strategic programming

priorities of the Mission. The USAID-funded Diaspora

Invest Activity, which closed in 2022, catalyzed the

economic contributions of the BiH diaspora to foster

the country’s socio-economic development by

engaging with the diaspora investors in a structured

way, providing incentives for diaspora investment, and

establishing local platforms for business services and

investment facilitation.

68 | DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) USAID.GOV

ANNEX A. METHODOLOGY

The BiH DECA was conducted by USAID/BiH’s Monitoring and Evaluation Support Activity

(MEASURE II), which put together a seven-member team which included five research specialists

(MEASURE II staff) and two digitalization specialists —one international and one local—with technical

expertise in digital infrastructure, access, media, governance, and digital financial services (DFS).

MEASURE II was able to adapt the National Survey of Citizens’ Perceptions (NCSP-BiH), one of its

annual products, to generate public opinion data about DECA-relevant issues. In addition, MEASURE II’s

prior support and familiarity with USAID/BiH and its 2020–2025 CDCS helped ensure smooth and

efficient adaptation of the DECA process and outputs to the needs of USAID/BiH. The results of the

DECA are expected to inform future USAID/BiH programs.

METHODOLOGY

The BiH DECA included the following four components:

1. USAID/BiH engagement: USAID/BiH designated its Digital Development Advisor as point of

contact (POC) within the Mission. This POC was responsible for leading communication with

the DECA implementation team, helping identify key informants, and reviewing relevant

documents during planning, analysis, and report-writing stages. The POC also attended selected

interviews during the interview stage and helped organize a virtual introduction and

presentation of preliminary DECA findings at USAID/BiH.

This modality of engagement with USAID/BiH was essential for ensuring the research team’s

understanding and alignment with USAID/BiH’s priorities, but it also helped in reaching target

interviewees and achieving the desired mix of interviewee profiles.

2. Desk research: The desk research used a standardized template the USAID/Washington

DECA team created, organized around four pillars (Mission priorities and background, digital

infrastructure and adoption; digital society, rights, and governance; digital economy). The

research team reviewed over 200 documents published by USAID/BiH and its IPs, government

institutions and agencies, international organizations, civil society, academia, and media.

Specifically, the desk research included three components:

a. quantitative analysis of open-source data and indices to produce regional comparisons

(e.g., GSMA, World Econom

ic Forum, International Telecommunication Union, and

Varieties of Democracy);

b. internet research guide

d by high-level questions under each pillar about the state of

BiH’s digital ecosystem; and

c. review of USAID/ BiH’s CDCS, funding allocations, and digitally relevant programming.

A complete list of reviewed documentation is provided in Annex C. The desk research was shared with

the USAID/BiH POC prior to the start of the key interviews stage and it was used to inform the

interview guides.

USAID.GOV DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) | 69

3. Key informant interviews (KIIs): In close cooperation with USAID/BiH, the research team

compiled a list of target stakeholders across the private and public sectors, academia, civil

society, international organizations, government institutions and agencies, and within

USAID/BiH. An initial set of KIs were identified through USAID/BiH networks, with additional

KIs added during the research process and via referrals from completed interviews. The

research team regularly evaluated the list of scheduled interviews to ensure that the mix of KIs

is modified to fill identified gaps.

Exhibit A-1 presents the KIIs arranged by sector. The KIs were approximately evenly balanced between

the government on the state, entity, cantonal, and local level and the private sector. The private-sector

KIs included prominent IT and e-commerce companies, business associations, among others.

Exhibit A-115. Summary of key informant interviews

In observance of the public health restrictions related to the COVID-19 pandemic, the KIIs stage was

conducted virtually, mostly via the Zoom platform. The team held 87 KIIs and two focus group

discussions (FGDs) with 122 participants in total (some interviews were attended by two or three

interviewees). The research team typically conducted two to four interviews per day. All KIIs/FGDs

were attended by at least two team members, a lead interviewer and a notetaker. To improve the

conditions for triangulation of findings, the interview teams were not fixed, with team members changing

their partners and roles. The questions for each KII were drawn from the question bank which was

developed prior to the start of the KII stage, but the questions were tailored as needed based on the

profile of the given KI and information obtained in previous KIIs.

National Survey of Citizens’ Perceptions in BiH (NSCP-BiH): Relevant findings from the latest

wave of the NSCP-BiH (2021) were integrated into the DECA research process to fill gaps, confirm

findings, and illuminate individual-level perspectives on BiH’s digital ecosystem. The NSCP-BiH is an

annual survey (conducted since 2015) that explores citizens’ perceptions and experiences related to a

broad range of questions, including governance, the judiciary, elections, corruption, civil society, the

70 | DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) USAID.GOV

media, education, inter-ethnic relationships, violence, social inclusion, and emigration. The survey is

conducted with a nationally representative sample of 3,000 respondents. The seventh survey round was

conducted in January and February 2022, and it included questions about the BiH digital ecosystem:

satisfaction with online public services, ownership and use of digital devices, internet, and DFS. The

analysis of the responses has been integrated into the DECA report.

ANALYSIS

During the first phase of the DECA (desk research), the research team acquired a broad overview of

the state of the digital ecosystem in BiH. In order to fill in the gaps in knowledge and understanding that

were left following the desk research, the DECA team collected information from selected KIs.

During the interview stage, the research team conducted debriefs at least twice a week. These meetings

not only ensured that all team members were briefed on each interview but also facilitated the

identification and triangulation of emerging themes that were then tested in subsequent interviews.

Midway through the interviews, the team identified primary themes and commenced preliminary

synthesis of findings. Thematic coding was the main method used to analyze interview transcripts and

notes, and it was complemented by triangulation of findings within the research team.

Upon completing the KIIs, the team convened to revi

ew the identified main themes, triangulate findings

and confirm their validity against interview notes and complement them with the NSCP-BiH data. The

findings were organized, and the draft report was structured around the three DECA pillars (digital

infrastructure and adoption; digital society, rights, and governance; and digital economy).

LIMITATIONS

The DECA team employed different approaches to mitigate various potential research biases and ensure

the report’s findings are generated in a timely and objective fashion. The following summarizes the

limitations encountered and MEASURE II’s mitigation efforts:

Team members’ digital expertise: The majority of the team members were research specialists

with at best lay person’s understanding of digitalization issues. This limitation was to a considerable

extent overcome through the advice and guidance of two external experts – one international, one

local, who not only directed the efforts of the team’s generalist members, but also effectively

complemented one another. The two digitalization specialists also led or participated in a large majority

of most important or technically most intricate interviews. The team also made an effort to utilize prior

experience of its members by assigning the members with relevant backgrounds to each of the

DECA pillars.

Response bias: The assessment te

am triangulated data across multiple data sources, including KIIs,

NSCP-BiH, and the literature reviewed, to verify and enhance the credibility of findings and provide a

more comprehensive overview of challenges and opportunities for strengthening the digital

ecosystem in BiH.

Limitations related to ensuring potential KIs’ buy-in for participation in the research: A

large portion of KIIs were selected through USAID/BiH networks and partially complemented by

accessing the informal networks of the team’s two digitalization experts. Special efforts to reach KIs

USAID.GOV DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) | 71

from outside the capital of Sarajevo were relatively successful, although not as much as the virtual

format of interviews would allow.

Interviewer bias: Interviewers’ conduct and actions may lead KIs to respond in a certain way.

Therefore, the interviewers were trained to ask questions in a non-leading way. The assessment team

also made sure that respondents understood that their candid opinions were most highly appreciated

and ensured that respondents know that their responses would not be attributed to them and that their

identity would not be released.

Inability to conduct in-person KIIs due to the COVID-19 pandemic and related safety

measures: Because of the COVID-19 situation, the majority of KIIs were held in an online format.

72 | DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) USAID.GOV

ANNEX B. DEFINITIONS

Definitions from USAID Digital Strategy 2020-2024 unless otherwise mentioned.

Civil Society Organizations (CSOs): CSOs represent a wide array of stakeholders: community

groups, non-governmental organizations (NGOs), labor unions, indigenous groups, charitable

organizations, faith-based organizations, professional associations, and foundations.

Computer Emergency Response Team (CERT): group of security experts who respond to

cybersecurity incidents.

345

Critical Infrastructure: Critical infrastructure is an asset or system which is essential for the

maintenance of vital societal functions. The damage to a critical infrastructure, its destruction or

disruption by natural disasters, terrorism, criminal activity or malicious behavior, may have a significant

negative impact for the security of the European Union and the well-being of its citizens.

346

Cybersecurity: The prevention of damage to, protection of, and restoration of computers, electronic

communications systems, electronic communications services, wire communication, and electronic

communication, including information contained therein, to ensure its availability, integrity,

authentication, confidentiality, and non-repudiation.

Cyber Hygiene: The practices and steps that users of computers and other devices take to maintain

system health and improve online security. These practices are often part of a routine to ensure the

safety of identity and other details that could be stolen or corrupted.

Data Privacy: The right of an individual or group to maintain control over, and the confidentiality of,

information about themselves, especially when that intrusion results from undue or illegal gathering and

use of data about that individual or group.

Data Protection: The practice of ensuring the protection of data from unauthorized access, use,

disclosure, disruption, modification, or destruction, to provide confidentiality, integrity, and availability.

Digital Divide: The distinction between those who have access to the internet and can make use of

digital communications services, and those who find themselves excluded from these services. Often,

one can point to multiple and overlapping digital divides, which stem from inequities in access, literacy,

cost, or the relevance of services. Factors such as high cost and limited infrastructure often exacerbate

digital divides.

Digital Economy: The use of digital and internet infrastructure by individuals, businesses, and

government to interact with each other, engage in economic activity, and access both digital and

nondigital goods and services. As the ecosystem supporting it matures, the digital economy might grow

to encompass all sectors of the economy—a transformation driven by both the rise of new services and

entrants, as well as backward linkages with the traditional, predigital economy. A diverse array of

345

Technopedia. "Computer Emergency Response Team", accessed June 2022,

https://www.techopedia.com/definition/31003/computer-emergency-response-team-cert

346

European Commission. "Critical Infrastructure", accessed June 2022, https://ec.europa.eu/home-

affairs/pages/page/critical-infrastructure_en

USAID.GOV DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) | 73

technologies and platforms facilitate activity in the digital economy; however, much activity relies in

some measure on the internet, mobile phones, digital data, and digital payments.

Digital Ecosystem: The stakeholders, systems, and enabling environment that together empower

people and communities to use digital technology in order to gain access to services, engage with each

other, or pursue economic opportunities. A digital ecosystem is conceptually similar to, but broader

than, a digital economy. Although certain aspects of the digital ecosystem have country-wide reach,

other features differ across geographies or communities. The critical pillars of a digital ecosystem

include (1) a sound, enabling environment and policy commitment; (2) robust and resilient digital

infrastructure; (3) a capable workforce and digital service providers (e.g., both public and private

institutions); and (4) empowered end users of digitally enabled services.

Digital Identity: The widely accepted Principles on Identification

define identity as “a set of attributes

that uniquely describes an individual or entity.” Digital identification (ID) systems often require registering

individuals onto a computerized database and providing certain credentials (e.g., identifying numbers,

cards, digital certificates, etc.) as proof of identity. Government actors can set up these systems to

create foundational, national ID programs, or donors or non-governmental organizations (NGOs) for

functional purposes to identify beneficiaries, e.g., for humanitarian assistance and service delivery.

Digital Literacy: The ability to access, manage, understand, integrate, communicate, evaluate, and

create information safely and appropriately through digital devices and networked technologies for

participation in economic, social and political life. This may include competencies that are variously

referred to as computer literacy, information and communication technology literacy, information

literacy, and media literacy.

Digital Trade (or E-commerce): According to the World Trade Organization, the production,

distribution, marketing, sale, or delivery of goods and services by electronic means.

Disinformation: Disinformation is defined as false information spread with the specific intent to deceive,

manipulate, or influence behavior. It differs from misinformation because it requires malign intent.

E-government: E-government has been employed to mean everything from “online government

services” to “exchange of information and services electronically with citizens, businesses, and other

arms of government.” Traditionally, e-government has been considered as the use of ICTs for improving

the efficiency of government agencies and providing government services online. Later, the framework

of e-government has broadened to include use of ICT by government for conducting a wide range of

interactions with citizens and businesses as well as open government data and use of ICTs to enable

innovation in governance.

347

Hate Speech: The use of speech to make direct attacks against an individual or a group of people

based on a series of protected characteristics, such as race, ethnicity, nationality, religion, sex, sexual

orientation, gender identity, and physical or mental ability.

347

United Nations, E-governance, accessed June 2022, https://publicadministration.un.org/egovkb/en-

us/about/unegovdd-framework

74 | DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) USAID.GOV

Gross National Income: The gross national income (GNI), previously known as gross national

product (GNP), is the total domestic and foreign output claimed by residents of a country, consisting of

gross domestic product (GDP), plus factor incomes earned by foreign residents, minus income earned in

the domestic economy by nonresidents.

Internet Service Providers (ISPs): ISPs include both fixed-line and wireless technologies. Wireless

ISPs operate over unlicensed spectrum. ISPs include both small, local services and global providers.

Misinformation: Misinformation refers to any false or inaccurate information, such as rumors and

hoaxes. Social media platforms are regularly used to spread misinformation.

Mobile Network Operators (MNOs): MNOs provide cellular voice and data services. MNOs

provide internet services through wireless technologies, operating over licensed spectrum. Many

companies, such as BH Telecom or M:tel, are both ISPs and MNOs, because they offer both fixed and

mobile internet services.

USAID.GOV DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) | 75

ANNEX C: LITERATURE

Action Plan of the Council of Ministers of BiH for the Implementation of the Initiative “Open

Government Partnership“ for the period 2019–2021.

https://www.opengovpartnership.org/members/bosnia-and-herzegovina/#current-action-plan

Agency for Statistics of BiH. Census of Population, Households and Dwellings in BiH - Final Results.

2013. https://www.popis.gov.ba/popis2013/doc/RezultatiPopisa_BS.pdf

Agency for Statistics of BiH. Use of Information and Communication Technology in BiH.

https://bhas.gov.ba/data/Publikacije/Bilteni/2021/IKT_00_2020_TB_1_BS.pdf

American Chamber of Commerce in BiH. White Paper – Strategic and Action Plan for Overcoming the

Problems of Business Community in BiH and Obstacles to the USA Investment in BiH.

https://amcham.ba/uploads/files/AmCham-BiH-White-Paper-Action-Plan-

952829e94940ec442d87b0d346879ce6d109a64e.pdf

Anti-corruption plan 2016-2017.

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https://www.source.ba/clanak/Haris/569118/Procitajte-sta-znaci-ukidanje-roaminga-na-Balkanu--Gdje-

cete-moci-jeftino-pricati-tipkati-i-koristiti-mobilni-internet

South East European Network for the Professionalization of Journalism (SEENPM). Media Trust in the

Western Balkans: Together Apart. 2021. https://seenpm.org/wp-content/uploads/2021/09/Resilence3-1a-

Media-trust.pdf

The Atlantic Initiative. Exploring Ethno-Nationalist Extremism in BiH. 2021.

https://atlanticinitiative.org/wp-content/uploads/2021/07/Exploring-ethno-nationalist-extremism-in-

Bosnia-and-Herzegovina.pdf

The Digital WB6+ Initiative. The Impact of Digital Transformation on the Western Balkans. 2018.

https://wb6digital.files.wordpress.com/2018/01/wb6-study.pdf

The GLOBSEC Vulnerability Index: Evaluating susceptibility to foreign malign influence in 8 Central

European & Western Balkan countries. Accessed May 11, 2022.

https://www.globsec.org/publications/the-globsec-vulnerability-index-evaluating-susceptibility-to-foreign-

malign-influence-in-8-central-european-western-balkan-countries/

USAID.GOV DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) | 85

The Ombudsmen for Human Rights of BiH. Special Report on Hate Speech in BiH.

https://ombudsmen.gov.ba/Download.aspx?id=321&lang=EN

The Sarajevo Stock Exchange. Share issue profiles. Accessed June 2022. http://www.sase.ba/v1/en-

us/Market/Issuers-Securities/Issuer-profile

The University of New York in Prague. International Media Assistance in BiH: Lessons Learned.

December 2013.

Tomić, Stefan. A Comparative Study: Populism in Bosnia and Herzegovina and Serbia. 2020.

Vladisavljev, Stefan. “China’s ‘Digital Silk Road’ Enters the Western Balkans.” June 2021. China’s ‘Digital

Silk Road’ Enters the Western Balkans - BFPE English

Vajzović, Emir; Hibert, Mario; Turčilo, Lejla; Vučetić, Vuk; Silajdžić, Lamija. Media and Information

Literacy: Learning design for the digital age. 2021. https://fpn.unsa.ba/b/wp-

content/uploads/2021/04/MEDIJSKA-I-INFORMACIJSKA-PISMENOST-DIZAJN-UCENJA-ZA-

DIGITALNO-DOBA_e-izdanje-1.pdf

Vajzović, Emir. Media and Information Literacy: Research and Development. 2020.

https://fpn.unsa.ba/b/wp-content/uploads/2020/12/MEDIJSKA-I-INFORMACIJSKA-PISMENOST-

ISTRAZIVANJE-I-RAZVOJ_e-izdanje-1.pdf

UNDP. Analysis of Skills Needed by the Software Industry in BiH. 2019.

https://www.undp.org/bs/bosnia-herzegovina/publications/analiza-potrebnih-vje%C5%A1tina-za-

softversku-industriju-u-bosni-i-hercegovini

UNDP. Digital Transformation in the Public Sector in BiH Project (2020-2024). 2020.

https://info.undp.org/docs/pdc/Documents/BIH/Digital_transfromation_prodoc.docx.pdf

UNDP. “ICT sector as a strategic opportunity for advancement of economy in BiH.” Accessed May 11,

2022. https://www.undp.org/bosnia-herzegovina/news/ict-sector-strategic-opportunity-advancement-

economy-bih

UNDP. Kanton Sarajevo: Digitalna Uprava 2.0.

UNDP. Smart City Initiative. Accessed May 27, 2022. https://www.undp.org/bosnia-

herzegovina/projects/smart-city-initiative

UNDP Strategic Plan 2022-2025. UNDP Strategic Plan 2022-2025 | United Nations Development

Programme

UNDP. The World Bank. EU. Roma at a Glance: BiH Fact Sheet. 2018.

https://www.undp.org/eurasia/publications/regional-roma-survey-2017-country-fact-sheets

UNESCO. Assessment of media development in BiH: based on UNESCO’s media development

indicators. 2019. https://unesdoc.unesco.org/ark:/48223/pf0000371223

86 | DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) USAID.GOV

UNICEF. “Mapiranje IKT Resursa Osnovnih I Srednjih Škola U BiH.” March 2022.

UNICEF. Social Impacts of COVID-19 in BiH: Second Household Survey. 2021.

https://www.unicef.org/bih/media/6251/file/Social%20Impacts%20of%20COVID-19%20in%20Bosnia%20an

d%20Herzegovina.pdf

UNIDIR. Cybersecurity Policy. Bosnia and Herzegovina - Cyber Policy Portal

United Nations Office on Drugs and Crime. The effects of the COVID-19 pandemic on trafficking in

persons and responses to the challenges. https://www.unodc.org/documents/human-

trafficking/2021/The_effects_of_the_COVID-19_pandemic_on_trafficking_in_persons.pdf

USAID. Digital Literacy Primer. How to Build Digital Literacy into USAID Programming.

USAID. FinTech Partnerships Playbook: How donors can pursue private sector engagement to

strengthen digital finance ecosystems. April 2019.

USAID and DAI. Digital Ecosystem Framework. August 2021.

https://www.usaid.gov/digital-

development/digital-ecosystem-framework

USAID’s Bureau for Development, Democracy, and Innovation (DDI). Artificial Intelligence Action Plan.

May 2022.

https://www.usaid.gov/sites/default/files/2022-08/USAID_AI_Plan_05122021.pdf

USAID/BiH’s E-Governance Activity. Regulation/Procedures or Amendments to E-Harmonized

Legislation. March 2022.

USAID/BiH’s Energy Policy Activity. Report on Gap Analysis Regarding BiH Cybersecurity Regulations

and Policies and its Compliance with ENC and EU Regulations. January 2021.

USAID/BiH’s INSPIRE Activity. Trafficking in persons – court case analysis. June 2022.

USAID/BiH’s Monitoring and Evaluation Support Activity. Assessment of BiH E-governance and E-

administration. 2018.

https://measurebih.com/uimages/MEASURE-BiH20E-Governance20E-

Administration20Assessment20Final20Report2012Dec2018.pdf

USAID/BiH’s Monitoring and Evaluation Support Activity. Brief Media Assessment Update. 2020.

https://www.measurebih.com/brief-media-assessment-update

USAID/BiH’s Monitoring and Evaluation Support Activity. Diaspora Assessment. 2021.

http://measurebih.com/uimages/Diaspora20Assessment.pdf

USAID/BiH’s Monitoring and Evaluation Support Activity. Gender Analysis for BiH: 2019 Follow-Up.

2019. https://measurebih.com/uimages/Gender20Analysis20201920Follow-Up20Final20Report.pdf

USAID/OTI. Media Landscape Profile – Bosnia and Herzegovina. June 2021.

USAID.GOV DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) | 87

U.S. Department of State. 2021 Trafficking in Persons Report: BiH. 2021.

https://www.state.gov/reports/2021-trafficking-in-persons-report/bosnia-and-herzegovina/

Webalkans PLtform. EU funded research shows polarized public trust in the media in BiH. 2021.

https://webalkans.eu/en/news/eu-funded-research-shows-polarised-public-trust-in-the-media-in-bih/

Westminister Foundation for Democracy. Cost of Youth Emigration from Bosnia and Herzegovina.

2020. https://www.wfd.org/wp-content/uploads/2020/06/Cost-of-Youth-Emigration-from-

BH_official_version-1-1.pdf

Why Not Association: Cvjetićanin, Tijana; Zulejhić, Emir; Brkan, Darko; Livančić-Milić, Biljana.

Disinformation in the online sphere, the case of BiH. April 2019.

World Bank. (2019). Enterprise Surveys: Bosnia and Herzegovina.

https://www.enterprisesurveys.org/content/dam/enterprisesurveys/documents/country/Bosnia-and-

Herzegovina-2019.pdf

World Bank. FinTech Innovations in the Western Balkans: Policy and Regulatory Implications & Potential

Interventions. April 2020. https://www.jbs.cam.ac.uk/wp-content/uploads/2020/08/2020-ccaf-fintech-

innovation-western-balkans.pdf

World Bank. The Global Financial Inclusion Data/Global Findex – BiH. 2018.

http://datatopics.worldbank.org/financialinclusion/country/bosnia-and-herzegovina

World Bank. Western Balkans Regular Economic Report – Greening the Recovery. 2021.

https://www.esap.online/observatory/pubs/29/world-bank-western-balkans-regional-economic-report-

no-20-fall-2021-greening-the-recovery

World Bank. Women, business and law 2022 – BiH.

https://openknowledge.worldbank.org/handle/10986/36945

World Economic Forum. The Global Competitiveness Report. 2019.

https://www.weforum.org/reports/how-to-end-a-decade-of-lost-productivity-growth

Xinhua Silk Road Information Service. Huawei aids BiH in building smart city. 2018.

https://en.imsilkroad.com/p/118790.html

Zurovac, Lj. Mosig, L, Madoleva S. Konrad Adenauer Stiftung. Media Outlets in BiH. Accessed on July 26,

2022. https://www.kas.de/en/web/balkanmedia/media-outlets1

Zulejhić, E. Research: Misinformation in the election process in BiH. 2021. https://zastone.ba/istrazivanje-

dezinformacije-u-izbornom-procesu-u-bih/

88 | DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) USAID.GOV

ANNEX D. LIST OF RELEVANT LAWS/POLICIES/REGULATIONS/STRATEGIES

LAWS/POLICIES/REGULATIONS/STRATEGIES RELATED TO THE DIGITAL ECOSYSTEM

1. LAW ON

COMMUNICATIONS IN

BIH 2003

This Law regulates communications in Bosnia and Herzegovina, and the establishment and work of the Communications

Regulatory Agency of Bosnia and Herzegovina in accordance with the Constitution of Bosnia and Herzegovina, which

provides for the establishment and operation of common and international communications facilities. According to the

Law, communications include telecommunications, radio, broadcasting and associated services and facilities.

LINK

2. LAW ON ELECTRONIC

SIGNATURE 2006

The law regulates the use of electronic signatures in legal operations and other legal actions, as well as the rights,

obligations, and responsibilities in relation to electronic certificates (verifications).

LINK

3. LAW ON ELECTRONIC

LEGAL AND BUSINESS

TRANSACTIONS 2007

This Law regulates the legal framework for an electronic legal and business transaction, which includes the provision of

ICT services, the obligations of service providers, the conclusion of contracts, and the responsibility of service providers.

LINK

4. LAW ON ELECTRONIC

DOCUMENTS 2014

The Law applies to all public institutions, legal entities, and entrepreneurs whenever they participate in activities that

include using equipment and programs to produce, transfer, download, and maintain information in electronic form.

LINK

5. LAW ON TAX

ADMINISTRATION 2005

This Law introduces an obligation and regulates the tax administration on the territory of BiH.

LINK

6. POLICY OF ELECTRONIC

COMMUNICATION

SECTOR OF BIH 2017-

2021

The policy has set goals that need to be achieved in the sector of electronic communications and deadlines and has

identified the institutions in BiH for their realization.

LINK

7. BROADCASTING POLICY

2006

The policy of the broadcasting sector in BiH provides guidelines for implementing the provisions of the Law on

Communications and the obligations prescribed by European conventions and regulations of the European Union (EU),

also referred to as “directives.”

LINK

8. THE INFORMATION

SOCIETY

DEVELOPMENT POLICY

2017–2022

The Policy defines activities that focus on further and accelerate the development of the ICT sector in BiH. The Council

of Ministers of BiH is responsible for implementing the Policy. At the same time, the Ministry of Communications and

Transport of BiH is accountable for monitoring the implementation in cooperation with the entity and Brčko District

competent institutions.

LINK

9. THE INFORMATION

SECURITY

DEVELOPMENT POLICY

OF BIH INSTITUTIONS

2017–2022

The Policy defines a set of documents that are the basis for implementing information security management systems in

the institutions. The policy treats the areas of information security management by the ISO/IEC 27001 standard.

LINK

USAID.GOV DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) | 89

LAWS/POLICIES/REGULATIONS/STRATEGIES RELATED TO THE DIGITAL ECOSYSTEM

10. THE INFORMATION

SOCIETY MANAGEMENT

POLICY 2017-2022

The policy defines organizations’ relationships to information assets. In this context, its primary purpose is to inform

managers, technicians, and users about the essential requirements for protecting information assets, including those

attributes to people, hardware, and software resources and data.

11. LAW ON PROTECTION

OF SECRET DATA 2005

The Law regulates coon bases of a single system of designation, access to, use, keeping, and protection of confidential

data from unauthorized disclosure, destruction, and abuse within the competence of BiH, entities, and other levels of

government structure of BiH pertaining to public security, defense, foreign affairs or intelligence and security activities,

declassification of such information, and security clearance procedure and issuance of security authorization to access

confidential data.

LINK

12. LAW ON INTELLIGENCE

AND SECURITY AGENCY

2004

In line with the Law, the Intelligence and Security Agency was established, responsible for collecting, analyzing, and

distributing intelligence to protect the security, including sovereignty, territorial integrity, and constitutional order of

Bosnia and Herzegovina.

LINK

13. LAW ON THE

PROTECTION OF

PERSONAL DATA 2006

The Law on Protection of Personal Data covers the protection of personal data in the territory of Bosnia and

Herzegovina processed by all public institutions, as well as by natural and legal persons, less otherwise specified.

LINK

14. FREEDOM OF ACCESS

TO INFORMATION LAW

OF BIH 2003

The purposes of the Act are a) to acknowledge that information in the control of public authorities is a valuable public

resource and that public access to such information promotes greater transparency and accountability of those

authorities and is essential to the democratic process; b) to establish that every person has a right to access this

information to the greatest extent possible consistent with the public interest and that public authorities have a

corresponding obligation to disclose information; and c) to enable every natural person to request amendment of, and to

comment on, their personal information in the control of a public authority.

LINK

15. LAW ON THE PUBLIC

BROADCASTING

SERVICE OF BIH 2005.

The Law regulates the Public Broadcasting Service of BiH and, in particular, the issues of its registration, activity, and

organization.

LINK

16. LAW ON GENERAL

ADMINISTRATIVE

PROCEDURES 2002.

The Law determines the rules of administrative procedure to which the administrative bodies act, directly applying the

regulations and deciding on the rights and obligations or legal interests of natural persons and other parties.

LINK

17. BIH ELECTION LAW

2013.

This law shall regulate the election of the members and the delegates of the Parliamentary Assembly of BiH and the

members of the Presidency of BiH. It shall stipulate the principles governing the polls at all levels of authority in BiH.

LINK

18. STRATEGIC

FRAMEWORK OF

PUBLIC

ADMINISTRATION

REFORM IN BIH 2018–

2022

The primary purpose of the PAR Strategy is to create and sustain a public administration capable of delivering quality

services to citizens and businesses, which would operate on the principles of good governance and ensure the

implementation of reforms required in the European integration process.

LINK

90 | DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) USAID.GOV

LAWS/POLICIES/REGULATIONS/STRATEGIES RELATED TO THE DIGITAL ECOSYSTEM

19. STRATEGY FOR THE

ESTABLISHMENT OF

THE BIH CERT 2011

This document indicates the necessity and justification of the establishment of BIH CERT, provides guidelines whose

monitoring will result in the successful functioning of BIH CERT, and forms a strategic framework defining short-term and

midterm goals of BIH CERT.

LINK

20. BIH STRATEGY FOR

COMBATING HUMAN

TRAFFICKING (2020-

2023)

The strategy emphasizes the necessity of defining BiH policies to combat human trafficking for the next four-year period,

with particular attention to the planning of strategic goals and measures to prevent, suppress and combat various forms

of human trafficking.

LINK

21. FBIH STRATEGY FOR

DEVELOPMENT 2021-

2027

Recognized the importance of digital literacy – the FBiH will organize training programs, provide budget funds for free

and paid programs, develop action plans for digital education, and conduct awareness-raising campaigns on the need to

acquire digital skills.

LINK

22. FBIH STRATEGIC

PROGRAM FOR THE

SAFETY OF CHILDREN

IN THE DIGITAL

ENVIRONMENT FOR

THE PERIOD 2021-2024

The aim of the program is to ensure the protection of the youngest population from risks in the online world.

LINK

23. FBIH LAW ON

ELECTRONIC

DOCUMENT 2013

The Law regulates the right of federal and cantonal administrative bodies, local government authorities, companies,

institutions, and others to use electronic documents in business activities and in administrative proceedings in which

electronic equipment and programs can be used in the production, transmission, reception, and storage of information in

electronic form.

LINK

24. FREEDOM OF ACCESS

TO INFORMATION LAW

OF FBIH 2001

The Law regulates access to information for the purpose of:

1. Establishing that information under the control of a public authority represents a significant public good and

that public access to information promotes greater transparency and responsibility of public authorities, which

is necessary for the democratic process,

2. Determining that every person has the right to access public information, in accordance with the public

interest, and that public authorities have a corresponding obligation to communicate information,

3. Enabling any person to request changes and comment on their personal information under the control of a

public body.

LINK

USAID.GOV DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) | 91

LAWS/POLICIES/REGULATIONS/STRATEGIES RELATED TO THE DIGITAL ECOSYSTEM

25. RS LAW ON

ELECTRONIC

DOCUMENT,

ELECTRONIC

IDENTIFICATION, AND

CONFIDENTIAL

SERVICES IN

ELECTRONIC BUSINESS

OPERATIONS 2008

The law regulates the use of electronic signatures in legal operations and other legal actions, as well as the rights,

obligations, and responsibilities in relation to electronic certificates (verifications).

LINK

26. RS LAW ON CRITICAL

INFRASTRUCTURE 2019

The Law regulates the critical infrastructure of the RS, essential sectors of infrastructure in the RS, critical infrastructure

management, obligation to prepare risk analysis, security plan of critical infrastructure facilities, cooperation in the field of

critical infrastructure, handling of protected data, supervision over the implementation of the law.

LINK

27. RS LAW ON

INFORMATION

SECURITY 2019

This Law regulates measures for protection against security risks in ICT systems, responsibilities of legal entities, and use

of ICT systems.

LINK

28. FREEDOM OF ACCESS

TO INFORMATION LAW

OF RS 2001

The Law regulates access to information for the purpose of:

1. Establishing that information under the control of a public authority represents a significant public good and

that public access to information promotes greater transparency and responsibility of public authorities, which

is necessary for the democratic process,

2. Determining that every person has the right to access public information, in accordance with the public

interest, and that public authorities have a corresponding obligation to communicate information,

3. Enabling any person to request changes and comment on their personal information under the control of a

public body.

LINK

29. RS LAW ON TAX

PROCEDURE 2020

This Law governs the organization and competencies of the Tax Administration of the Republic of Srpska, rights, and

obligations of taxpayers, the tax procedure, payment of tax liabilities, regular and enforced collection of tax liabilities, as

well as other forms of termination of tax liabilities, tax audit, special audit, legal remedy procedure and supervision in the

tax field in the Republic of Srpska.

LINK

30. RS STRATEGY FOR THE

DEVELOPMENT OF

E-GOVERNMENT FOR

2019–2022

The strategy represents the continuation of intensive activities started in 2008 on the preparation and adoption of the

Strategy for the Development of the Electronic Government of the Republic of Srpska for the period 2009-2012, as well

as a series of activities implemented on the normative, technological and personnel modernization of the electronic public

administration system) in the Republic of Srpska.

LINK

31. BRCKO DISTRICT LAW

ON ELECTRONIC

SIGNATURE 2015

The law regulates the use of electronic signatures in legal operations and other legal actions, as well as the rights,

obligations, and responsibilities in relation to electronic certificates (verifications).

LINK

92 | DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) USAID.GOV

ANNEX E. RELEVANT DONOR PROJECTS

NO. DONOR NAME OF THE PROJECT DURATION AREA OF SUPPORT

BUDGET

(USD)

1. UNDP DigitalBIZ project (Initiation Stage

ended May 31,

2022)

Provides support for the digital transformation of the economy

through the necessary policies and regulatory changes, capacity

development, as well as the development of infrastructure for

technology transfer and fostering innovation.

463,700

2. UNDP,

Government of the

United Kingdom,

Government of the

Netherlands

Digital Transformation in the

Public Sector Project

2020–2024 Support governments and institutions across all levels to undergo

a digital transformation, through enhanced capacities for

transparent and effective policy-making, knowledge and resource

management.

5,000,000

3. UNDP IT Girls – The rationale behind the IT Girls initiative lies in the cross-cutting

commitment for the participation of women and girls in the labor

market and their equal involvement in all career directions

outlined in frameworks for the protection and promotion of

women’s rights and national policies and legislation in BiH.

4. UNICEF GIGA Initiative 2019 Giga, an initiative launched by UNICEF and ITU in September

2019 to connect every school to the Internet and every young

person to information, opportunity, and choice, is supporting the

response to COVID-19, as well as looking at how connectivity can

create stronger infrastructures of hope and opportunity in the

“time after COVID.”

5. GIZ Strengthening Innovation and

digitalization in SMEs in Bosnia and

Herzegovina

2019–2022 Support SMEs in developing strategies for innovation and

digitalization, and also provide assistance in the implementation of

specific projects.

2,500,000

6. EU EU4Business 2018–2022 With the aim of strengthening BIH’s economy, the EU4Business

project stimulates the development of entrepreneurship, export-

oriented sectors, tourism and agriculture.

16,100,000

7. EU and EBRD Go Digital Programme 2022 Help SMEs invest in the digitalization of their businesses, alongside

other investments to improve productivity, operational efficiency

and resilience

8,500,000

USAID.GOV DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) | 93

NO. DONOR NAME OF THE PROJECT DURATION AREA OF SUPPORT

BUDGET

(USD)

8. OSCE Mission in

BiH

Cybersecurity Programme – Support to development of a harmonized strategic cybersecurity

framework, establishment of Computer Emergency Response

Teams (CERTs), and capacity building to fight cybercrime.

9. Development

Facility of the

European Fund for

Southeast Europe

(EFSE DF)

Programme to support the digital

transformation of microfinance

institutions

2022 The program assesses the digital readiness of the MFIs, diagnoses

organizational constraints, develops a business strategy for digital

transformation, and delivers a digital road map and action plan for

each of the institutions

10. Swiss SDC MarketMakers 2021–2026 The program strengthens underperforming market functions in

the IT and Business/Knowledge-Process-Outsourcing (BPO/KPO)

sectors in BiH. MM induces economic growth in private

companies and contributes to create new and better jobs. MM

further supports youth employment and entrepreneurship by

improving conditions for self-employment, business creation and

freelancing. Helped create a website to promote employment in

the IT sector: http://www.itkarijera.ba/

2,414,598

11. RCC Digital Transformation – Support effective implementation of the Digital Agenda for the

Western Balkans through CRM, and Alignment of WB Digital

Agenda with EU Digital Single Market principles and practices and

relevant European strategies

12. WB Digital Highway for West Balkans

The Balkans Digital Highway initiative aims to improve access to

high-speed broadband services nationally and regionally, in and

between participating countries, by setting up a regional wholesale

broadband network over OPGW infrastructure of the

participating TSOs. Thanks to the outcomes of the Project, the

TSOs will be able, in collaboration with each other, to offer

seamless wholesale broadband services cross-border and across

participating countries.

16,600,000

MONITORING AND EVALUATION

SUPPORT ACTIVITY (MEASURE II)

Fra Anđela Zvizdovića 1

UNITIC Tower B, Floor 21

71000 Sarajevo

Bosnia and Herzegovina

Phone: +(387) 033 941 676

[email protected]