Bosnia’s jobless rate at 43 percent and rising

updated 11:09 p.m. ET March 28, 2009

SARAJEVO, Bosnia-Herzegovina - If anyone ever stood a chance of escaping the global financial crisis, it might have been Almija Muminovic.

Ask her how much she's got stashed in one of those teetering banks, and she looks puzzled, then breaks into a toothless grin. "That's so far away from me," says Muminovic, whose life savings — a few notes and coins — are stuffed beneath a mattress.

The 54-year-old widow, haggard after a life of hardship, ekes out an existence on a wind-swept hill overlooking Sarajevo. She had a milking cow, but had to sell it last month to make rent. Now she survives on a meager patch of vegetables and a $190 monthly pension.

Her struggle points up this harsh reality: When the global economy falters, there's really nowhere to hide. Least of all in Bosnia, where the unemployment rate — officially 43 percent and rising — is among Europe's highest.

Fourteen years after Bosnia's devastating 1992-95 war, the economy is still a wreck. Experts warn that it could get even worse, especially this year and next, as the world recession hammers away at the former Yugoslav republic.

In a new report, the World Bank offers what it calls "a gloomy picture": rising joblessness, shrinking exports and a reduction in remittances — the cash that Bosnians living abroad send home.

Like other economies in transition, Bosnia's "is almost certain to experience a drastic reduction in the rate of growth," it predicts, with real GDP growth set to plunge by 70 percent or more this year.

Bosnia's misery is manifold, but its staggeringly high unemployment is grabbing the most attention. Officials say 6,500 people lost their jobs in the last two months alone.

Many paid under the table
Officials caution that the 43 percent jobless figure includes the so-called "gray economy," in which people are paid under the table. Take all those unofficial jobs out of the mix, and the true jobless rate is closer to 22 percent: still nearly three times the U.S. rate.

And in Bosnia, jobless benefits are as scarce as openings. People who lose their jobs get health insurance for the entire period they're out of work, but only $133 a month in unemployment benefits — and that runs out after six months.

To be sure, there seem to be far more Bosnians working than the government data might suggest.

Wander the capital at 7 a.m., and you'll see streetcars stuffed with rush-hour commuters, boulevards jammed with Sarajevans driving new cars, and cafes packed with office workers jabbering on iPhones.

But in the countryside, there are heartbreaking scenes of abject poverty. It's the kind of suffering that puts a human face on Bosnia's leading economic indicators and its bleak prospects, at least in the near term, for prosperity.

Earlier this month, in the northwestern town of Prijedor, Dusan Puzigaca, 57, and his 52-year-old wife, Nada, committed suicide. The letter the despondent couple left behind cited their joblessness and their inability to repay loans.

Financial trouble is a common reason for suicide, and there has been a spate of such deaths recently. But the way the Puzigacas took their lives was telling: They drank large amounts of vinegar, police said, presumably because they couldn't afford sleeping pills.

MORE FROM EUROPE

Europe Section Front

World pays tribute to World War I fallen   Netanyahu, Sarkozy discuss reviving peace efforts Pilot charged with being drunk before flight Havel calls for deeper EU integration   Man convicted of Egyptian woman's court killing Britain mourns soldiers killed in Afghanistan Hacking ring caught in $9 million fraud Carbon storage? Not under my house! Vatican looks to heavens for signs of alien life Europe Section Front   Add Europe headlines to your news reader: