Innovations in Poverty Eradication in Bosnia and Herzegovina

Many still remember Bosnia and Herzegovina as the site of violent conflict during the Yugoslav wars of the 1990s. Today, however, the country ranks as an upper-middle-income economy and continues to slowly make its way towards European integration. Despite this progress, Bosnia and Herzegovina still faces significant structural economic challenges. Around 16.9% of the population lives below the poverty line, and foreign direct investment (FDI) has declined since 2023. The economy still relies heavily on traditional sectors such as manufacturing, as well as remittances from its large diaspora. At the same time, the country is developing several emerging sectors. Since 2022, EU-backed programs have supported tourism, entrepreneurship and job creation to move toward poverty eradication in Bosnia and Herzegovina. In the age of artificial intelligence and digital innovation, these sectors offer new opportunities for economic growth and diversification.

Who Does Poverty Most Affect?

The Borgen Project spoke with Amina Hadžić, Youth Advisor to the EU Delegation in Bosnia and Herzegovina. She explains that “unemployed individuals, particularly young people entering the labor market for the first time, as well as pensioners who often survive on very low monthly incomes” face the highest risk of poverty. She also highlights that “rural populations are highly exposed to economic hardship due to limited employment opportunities and weaker infrastructure compared to urban area.” Other vulnerable groups include single-parent households, people with disabilities and Roma populations.

These inequalities reflect strong rural – urban disparities. Around 19% of people living in rural areas experience poverty, compared to just 9% in urban areas. Children in rural regions also face higher levels of deprivation, particularly in access to early childhood education, internet and basic sanitation.

Weak infrastructure drives a lot of this inequality. In many rural areas, communities lack reliable access to essential services; some households still transport water using tractors or horse carts because they cannot access stable water supply and sanitation systems. These conditions directly impact quality of life and restrict economic opportunities.

At the same time, structural challenges in the labor market worsen poverty. While the overall unemployment rate in Bosnia and Herzegovina stands at around 12.6%, youth unemployment exceeds 28% in 2025. Informal employment accounts for more than 23% of total employment, leaving many workers without stable income or social protection.

Systemic issues, such as Bosnia and Herzegovina’s fragmented governance structure and unequal access to social services, reinforce these challenges and prevent many people from accessing economic opportunities and public services.

With nearly half of the country’s population living in rural areas, these conditions clearly show that the government must advance innovations in poverty eradication in Bosnia and Herzegovina. This means expanding infrastructure, especially water, sanitation, education, transport and digital connectivity, to reduce poverty and drive long-term development.

Infrastructure as a Foundation for Development

International organizations and local authorities have started to address infrastructure gaps between rural and urban communities. In rural areas, limited access to water remains a major issue. Projects financed through the Western Balkans Investment Framework and the European Investment Bank now expand water and sanitation systems. For instance, a €2.1 million grant supports the construction of wastewater and water systems, bringing reliable services to 93,000 people.

These investments already deliver results. In the village of Gajevi near Šamac, workers built an 18-kilometer water network that now provides 146 households with stable access to drinking water for the first time. Residents no longer struggle with chronic shortages and unsafe conditions.

Transport infrastructure also plays a key role in reducing regional isolation. The World Bank supported the construction of the 36-kilometer Neum – Stolac road, which opened in 2022. The new route reduced travel time from 90 minutes to just 25. Improved connectivity between the country’s only coastal municipality and inland town now supports tourism in Neum and creates new opportunities for businesses and agriculture in Stolac. As one local hotel owner noted, the road “opens up a million possibilities.”

 These projects show how infrastructure investment can improve daily life while unlocking economic potential.

Digital Innovation and Civic Participation

Beyond physical infrastructure, the digital and IT sector is emerging as one of the key innovations in poverty eradication in Bosnia and Herzegovina. As Amina Hadžić emphasizes, “digital innovation and the development of the IT sector represent one of the most promising opportunities for economic growth and youth employment in Bosnia and Herzegovina.”

International partnerships have accelerated this transformation. In 2024, Bosnia and Herzegovina joined the Digital Europe Programme, which allows the country to participate in EU-wide projects focused on artificial intelligence and advanced digital skills. The programme also supports the creation of Digital Innovation Hubs, which help businesses, especially small and medium-sized enterprises, strengthen their digital capacities and integrate into the European digital economy. 

Bosnia and Herzegovina’s efforts have improved digital skills, raising the share of individuals with above-basic digital skills by 6.8% .

More broadly, these initiatives expand access to entrepreneurship and innovation, particularly for young people. Training programs in coding, digital marketing and software development create new employment opportunities that do not depend on local labor market constraints.

Digital tools also improve access to public services and civic participation. The UNDP has supported platforms such as eCitizen, which allows residents to communicate directly with local authorities and access services more efficiently. Similarly, the eNewborn (ePorodilja) system simplifies access to social benefits for new parents, while Digital Pulse helps small businesses evaluate and improve their digital readiness. These tools increase transparency, strengthen public services, and encourage citizen engagement. Platforms such as YourCO2 (TvojCO2.ba) also promote climate action by connecting individual behavior to environmental impact.

Towards Inclusive Growth

Bosnia and Herzegovina still faces deep structural challenges, but recent developments show how infrastructure investment and digital innovation can reduce poverty. New water systems, roads, and public services improve living conditions and reduce regional inequalities, especially in rural areas. At the same time, digital tools expand access to employment, education and civic participation. 

However, digital innovation alone cannot solve these challenges. Without reliable infrastructure, education and inclusive policies, many people will remain excluded from these opportunities. Bosnia must therefore invest in both physical and digital systems to ensure that development reaches all communities. 

As the country continues its path toward European integration, it must combine infrastructure development with digital transformation. Together, these approaches can drive innovations in poverty eradication in Bosnia and Herzegovina, promote inclusive growth and build a more resilient and equitable future.

– Inès Maudire

Inès is based in Paris, France and focuses on Technology and Solutions for The Borgen Project.

Photo: Flickr