(Fixes typo in paragraph 3)

Daria Sito – Sucic

TESANJ, Bosnia (Reuters). Bosnian business owners are currently struggling to cope with instability at home and slow economic growth. As a result of Western sanctions against Russia, they fear that the West will obstruct a key market.

Bosnia has experienced its worst political crisis in decades since the Balkan wars ended. The Bosnian Serbs are challenging the state institutions of the country as part of their long-term bid to seize power, aided by some tacit Russian support.

It is located hundreds of miles away from Ukraine. However, NATO and EU – who have doubled their peacekeeping forces in Bosnia to prevent instability – warn that war could bring even more instability.

According to the Vienna Institute for International Economic Studies, a slower economy is expected to grow by 2.5% this year. This compares to 4.8% in 2021. It also represents the lowest economic growth in the region. The risks of further decline are increased as sanctions against Moscow bite.

Adisa Karahodzic is the General Manager of Koteks, a textile and leather manufacturer in Tesanj’s northern region. She stated that 35% of their rawhide production was being aimed at the Russian market via our Italian partners.

Karahodzic claimed that her company is already seeing a decline in production after January. This was due to foreign partners being scared off by the militarised police parade, which marked an illegal holiday in Bosnian Serb territory on Jan. 9.

    “They have been calling and inquiring about a possible war, and some managers had postponed scheduled visits to approve new orders fearing they could get stuck if something happened,” she said. “After the coronavirus outbreak, it’s just a matter of bouncing from crisis to crisis.”

    Calls for sanctions on the country’s autonomous Serb Republics following Bosnian Serb leader Milorad Dodik’s threats of pulling the region out of the national military, tax system and judiciary as part of his secession bid are stoking businesses’ fears.

    The EU, which is Bosnia’s largest trade partner, has warned that 600 million euros ($656.5 million) worth of projects that were already agreed for Bosnia’s Serb Republic will be halted unless the Serbs resume work in state institutions.

    “My hair goes up when (EU) sanctions are even mentioned,” said Dragutin Skrebic, who owns footwear producer Skrebic Company in the town of Teslic, which exports all its products to European buyers.

    He said he was already struggling with rising prices of raw materials and unreliable transportation in the wake of the Ukraine war.

He told Reuters that he didn’t know where it was heading and said, “We have absolutely no clue. We need a prophet.”

($1 = 0.9140 euros)

(This article refiles to fix typo at paragraph 3)