The value of Bosnia and Herzegovina’s (BiH) defense industry exports has increased by a staggering 400% over the past ten years.
According to data from the Foreign Trade Chamber of BiH, when it comes to weapons and ammunition, as well as their parts and accessories, along with explosives and pyrotechnic products, exports amounted to 112.125.766 BAM in 2014, while last year they reached 561.501.223 BAM.
The main export products, as stated by the Foreign Trade Chamber of BiH, are ammunition and explosives (more than 65%), gunpowder and detonating cords (more than 27%), and military weapons and parts (around 7%).
“The increasingly successful performance of BiH’s defense production industry has certainly been enabled by the rising demand in the global market. This sector of industry, with the exception of the decline in 2020 caused by the pandemic, has been experiencing constant growth,” the Foreign Trade Chamber of BiH stated.
Military-political analyst Djuro Kozar says that most defense industry factories are located in the Federation of BiH (FBiH).
“The defense, or military industry in the FBiH, has significantly advanced because substantial investments have been made primarily in the production of ammunition, especially in the factory in Konjic. Additionally, a lot has been done on mortars and the production of small-caliber rifles. These exports go to both Western and Eastern countries. Why? Because, for example, the ammunition produced in Konjic is made for Kalashnikov rifles, which are of Eastern origin, as well as for M16 rifles, which are of American production. So, ammunition can be produced for both,” Kozar explained in a statement.
He expects exports to continue growing in the coming period, especially after the European Union’s (EU) decision to invest 800 billion euros in arming the militaries of its member states.
“All of that cannot be produced solely in the factories of EU member states. This will undoubtedly affect those outside the EU as well, including BiH’s military industry,” Kozar emphasizes.
Economist Igor Gavran highlights that the defense industry has always been a major opportunity for BiH and one of its most significant industrial sectors, but it was neglected for years and decades after the war, and one could even say it was deliberately destroyed.
“Part of the reason was the pressure from the so-called international community, specifically Western countries, arguing that ‘we don’t need it,’ which essentially meant they didn’t want competition for their own defense industry. As a result, there were instructions to banks not to grant loans to the defense industry. Since the defense industry was not privatized to the same extent as the rest of the economy, it could have been more easily saved from collapse if the responsible authorities had wanted to, and today we would have much more than we do. However, on the contrary, the authorities not only neglected it but often actively worked on its destruction,” Gavran points out.
However, he adds that despite years and decades of destruction, some companies have survived and, fortunately, are now once again successfully developing.
“Of course, it is tragic that the surge in demand is driven by periods of war and paranoid rearmament even in parts of the world where there are no wars. But that is not our responsibility, and we must seize this opportunity both for economic interests and for our own security because only our own defense industry guarantees security in case of need. Relying on others is a guaranteed failure,” Gavran says.
The Foreign Trade Chamber of BiH states that the capacities of existing companies are full, and further investments in expanding capacities and new production programs are necessary for better export results.
“Most companies have stated that their production capacities are fully booked for the current year,” the Foreign Trade Chamber of BiH reported.
Main export products are 65% – Ammunition and explosives, 27% – Gunpowder and detonating cords and 7% – Military weapons and parts.
