Bosnia and Herzegovina

Digital Ecosystem Country Assessment (DECA) Report

The Bosnia & Herzegovina Digital Ecosystem Country Assessment (DECA) report outlines the key aspects of the country’s digital ecosystem and provides recommendations for the country’s growing digital connectivity infrastructure.

Although all three primary mobile network operators (MNOs) claim wide network coverage, enabling their consumer service throughout Bosnia and Herzegovina (BiH), each predominantly serves a specific ethnic group in the area of the country in which that group has a majority of residents. The infrastructure that the three dominant Internet Service Providers (ISP) inherited before the 1992–1995 war puts them in an advantageous situation over new market competitors, especially since there is no infrastructure sharing among ISPs. 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, and political turmoil has resulted in the absence of adequate legislation at the state and Federation of BiH levels

Digital divides persist to the detriment of older generations, women from rural areas, and Roma populations. This issue extends to the use of digital financial services (DFS). 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. Media freedom and the safety of journalists are hindered; however, both preventive and repressive institutional measures 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.

In late 2021, USAID/Bosnia and Herzegovina (BiH) tasked its Monitoring and Evaluation Support Activity (MEASURE II) to conduct a Digital Ecosystem Country Assessment (DECA) for BiH. The assessment was guided by USAID’s strategic priorities in BiH defined in the 2020–2025 Country Development Cooperation Strategy (CDCS) and included:

  1. Improving the impact of inclusive citizen engagement
  2. Strengthening governance effectiveness in targeted areas
  3. Strengthening social cohesion
  4. Boosting private-sector growth

Pillar 1: Digital Infrastructure and Adoption

  • Overall, connectivity infrastructure is strong, with 82 percent of the territory of BiH covered by mobile networks. 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.
  • 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, the obligation has proved to be financially burdensome for MNOs and has slowed down the growth trajectory of their businesses.
  • Due to the COVID-19 pandemic, citizens increasingly turned to digital technologies, especially in areas such as education, shopping, and banking, among others. Although not documented, digital divides exist to the detriment of older generations, Roma, and women from rural areas.
  • 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.

Pillar 2: Digital Society, Rights, and Governance

  • The polarizations in the media reflect those in society. 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.
  • 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, media and information literacy (MIL) remains modest, making citizens vulnerable to such misinformation.
  • 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.
  • 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).
  • DECA KIs agree that not all government services need to be digitized. The focus should be on the services that citizens use most frequently. From the perspective of businesses, KIs agree that the model should be the same – prioritizing those services most frequently used by business owners and market actors.

Pillar 3: Digital Economy

  • Modest digital transformation hinders accelerated private-sector growth. 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.
  • 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.
  • The IT sector in BiH is one of the fastest-growing sectors. Employment in this sector increased by 67 percent from 2015 to 2020, and in 2020 it accounted for 4.5 percent of BiH’s GDP.
  • 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.
  • 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.

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