ABSTRACT
This case study chapter evaluates the Russian economic influence in Bosnia and Herzegovina. Russian economic presence is concentrated in the Republika Srpska (RS) entity on the back of the close political ties established between the Kremlin and the Republic’s President and former Prime Minister, Milorad Dodik. Russia has consistently been the largest foreign investor in the entity and the fourth largest in Bosnia and Herzegovina as a whole over the 2005–2016 period. Meanwhile, the Russian corporate footprint in RS is concentrated in just five companies, which, however, are all in the energy, banking, and pharmaceutical sectors, encompassing a significant part of the regional economy’s value-added. Also, Bosnia and Herzegovina is 100% dependent on Russian gas supply, and Russian companies control the country’s two refineries – both located in the RS entity. Thus, by nurturing the quasi-authoritarian government of RS politically, financially, and economically, Russia has enhanced its ability to influence the entity’s institutions, which has bottlenecked the decision-making process on the central level and derailed Bosnia and Herzegovina’s integration in NATO and the EU. Russian influence through state capture is facilitated by internal factors, such as high levels of corruption, fragmented decision-making, and complex inter-ethnic political balances.
