Herzegovina Region is located in the southern and south-eastern part of Bosnia and Herzegovina and it covers an area of 12.276 km² or 24% of B&H territory. Herzegovina borders Bosnia in the north, Monte Negro in the east and the Republic of Croatia (Dalmatia) in the south and in the west. It has an exit to the Adriatic Sea at the coastal part of border with the Republic of Croatia in the Neum-Klek Bay in a narrow zone of indented coast 24.5 km long. The access to the Adriatic Sea makes Herzegovina Region a specific region within B&H with great potential for development of tourism and economy in general.
The city of Mostar with over 100.000 inhabitants is the largest economic centre in Herzegovina Region. Other important economic centres in Herzegovina include Trebinje, Konjic, Široki Brijeg and Livno. Mostar is 130 km away Sarajevo, the capital of Bosnia and Herzegovina. The distance between Mostar and Croatian regional centres is: Dubrovnik 180 km, Split 160km, Zagreb 430km. Belgrade, the capital of Serbia, is 530km away from Mostar.
The number of inhabitants is estimated at over 450.000 (the precise number of inhabitants is impossible to determine given that the last census was in 1991.), or 12% of the total B&H population. The ethnic composition of Herzegovina is made up of Croats, Bosniaks, Serbs and members of other ethnic groups.
The population belongs to the Dinaric Ethnic Group and three nationalities have been differentiated: Croats, Serbs and Bosniaks. Difficult living conditions and numerous wars have caused population migrations. The last war has caused severe demographic changes with long-lasting consequences.
When talking about density of population in 1991 there were 994 populated locations with 127.000 households. An average family had 3, 97 members. There are no present day statistical data with similar information and serious research needs to be conducted to determine the real situation in the region.
It has been estimated that the average population density has been reduced from 44, 08 inhabitants per km² in 1991 to 38, 29 inhabitants per km², which testifies of the constant departure of inhabitants. Compared to the entire B&H (population density 74, 2 inhabitants/km²) the region is relatively poorly populated.
Administratively, the Herzegovina Region comprises of 23 municipalities in both entities (The Federation of B&H and the Republic of Srpska). 16 municipalities from 3 cantons are in the Federation of B&H (Herzegovina-Neretva canton, West Herzegovina canton and Herzeg-Bosnia canton), and 7 municipalities are from East Herzegovina (The Republic of Srpska).
Geo-strategically speaking, Herzegovina is at a crossroad of two main communication routs of regional, national, international (B&H-the Republic of Croatia) and European character, which determines its present as well as its future position in this part of Europe. Both traffic routs are of equal importance, but the north-south transversal is given more priority. As a link between sea and mainland this rout, which runs through the Neretva valley, is the end of European communication vertical known as Corridor V-c (Baltic-Adriatic). The second communication axis, the Ionian direction, stretches along Adriatic coast and connects Europe through Balkans with the Near East.
The road network connects the region with neighbouring states, the Republic of Croatia and Monte Negro, and the rest of Europe. The rail network connects Mostar to Sarajevo and the port Ploče on the Adriatic coast in Croatia. This port is build specifically to accommodate the needs of Bosnia and Herzegovina and presents a natural transport entrance and exit to the state and the region itself.
The only railway line in the region runs along the Neretva valley and its entire stretch is in Herzegovina-Neretva canton. It was built as a narrow-gauge line during the Austro-Hungarian rule at the end of 19th and beginning of the 20th century. Having been modernized in 1966, it became a standard-gauge line (European standard) and it was entirely electrified all the way to Sarajevo. Through Sarajevo and the junction in Doboj it is connected to the European railway network. This railway line can connect the region through Sarajevo to the west (via Zagreb) and to the east (via Belgrade).
The air traffic functions through the only regional airport in Mostar located in the south Mostar basin in the settlement of Ortiješ, which is only 6 km away from Mostar and 30km away from Međugorje. The airport is licensed for international air-traffic.
Medium and small enterprise (SME) is the most important and vital segment of economic or unique economic space in the Herzegovina Region. Out of the total number of employed persons in Herzegovina, the SME sector employs 65 to 70% of people.
There are about 18.000 economic subjects in the region. The structure of the existing SME sector in Herzegovina is of a service and trade character and the remaining 5% is of a manufacturing character. This sort of an SME structure is unfavourable due to a small number of manufacturing SMEs. Import rate is five times higher than export rate and the unemployment rate is estimated at 34%.
Considering the potentials of natural and produced resources in the region there is a realistic chance of developing new primarily manufacturing SMEs.
The existing strength of SMEs in the Herzegovina Region is a high level of service and trade SMEs. Various natural resources and the availability of quality workforce represent a vital and perspective strength of SMEs as well. A further advantage is the entrepreneurial spirit that needs to be developed, strengthened and encouraged by various EU proven instruments in order to become one of the principal supports for the development of the entire region.
Considering that SMEs are present in the all the major economic sectors in the region: industry and light industry, agriculture, trade, energy supply and tourism, we could say that the main task and role and the overall responsibility of SMEs in the region is to take over the strategic position of further developing the region. Development of SMEs, specifically manufacturing SMEs, needs to become the ultimate goal of both regional and local development plans for it is the only realistic area left for further growth and development with the ability to absorb the high unemployment rate using all the potential and comparative advantages of the region over domestic and neighbouring foreign business environment. Manufacturing SMEs are the only remaining engine with enough strength, potential and responsibility to drive the region closer to EU integration processes. This fact needs to be accepted and we need to act uniformly towards achieving that goal as a unified economic area of the entire Herzegovina Region.
Agriculture plays an important and strategic role in the economic development of the Herzegovina Region. It should be a key segment of economic development. Natural resources such as climate, land and water ensure high potential for developing various primary agricultural productions. That production is and will be in synergy not only with food processing industry but with other economic sectors as well including economy and markets of neighbouring regions and regions of the neighbouring states.Geographical position, on the other hand, ensures good links with costal and continental markets allowing quick and cheap transport, which in itself further emphasizes natural resources. The identified priority focus areas in primary agricultural production are:
1. agricultural production (specified cereals, cattle feed, potato) in mountainous areas;
2. tobacco with slightly changed tobacco type, new land parcelling and new technologies as an indigenous Herzegovina product (Herzegovina rolled tobacco "škija", tobacco for pipes);
3. production of fruit, wine and seedlings;
4. production of vegetables, medicinal and aromatic herbs, spices and seeds;
5. floricultural production;
6. gathering herbs and fruit in nature;
7. cattle breeding, small cattle, fish-farms (river and sea fish), production of honey;
8. rural production, small dairy farms, production of indigenous agricultural products using raw materials produced in the region and autochthonous cultivar and technologies including production of organic food.
Tourism in this region deserves special attention and provides opportunities for its development. If we impartially consider true values, but also objective imperfections and disadvantages of the Herzegovina region, and take necessary steps towards resolving such issues through expert and long-term strategies, we can gradually achieve positive results and turn tourism into one of the principal supports of economic development in the region.
The geographical position of Herzegovina, its mild Mediterranean climate, exit to the Adriatic coast and its hinterland provides ample opportunity for development of summer tourism. The existing tourism development trends do not include exclusively selling "sunshine and sea", but tourists rather demand well-planned and organized additional tourist attractions such as cruising, rafting, hiking, visiting historic sights, etc. Herzegovina region can ensure such tourist offer not only to those who visit Neum, but also to tourists coming to southern Croatia. Rafting on the River Neretva, Boračko Lake, Jablaničko Lake, tours of Hutovo blato, the Trebižat River, visiting cultural and historical sights in Mostar, Blagaj, Trebinje, Široki Brijeg, Čapljina, Rama and other parts of the region are only some of the natural resources which provide an opportunity of qualitative development of summer tourism.
The specific quality of this region is the ability to simultaneously develop winter tourism in the area of Blidinje and Kupres famous for their rich and diverse flora and fauna that have earned this area the title of "botanical garden of Europe".
Religious tourism is also one of the rare advantages of Herzegovina placing it at the very top of world famous religious tourist sights. There are plenty of extraordinary valuable religious and cultural monuments in this area belonging to different religions, the most important ones undoubtedly being an Orthodox Church cut in solid rock, fourth in the world by the value of its frescos, Roznamedžijina and Karađozbegova Mosque in Mostar, Franciscan Monastery in Šćit, Monastery in Humac, Monastery in Trebinje, Islamic pilgrimage house in Blagaj, fortress in Počitelj, Monastery in Široki Brijeg, as well as numerous other valuable sights worth showing.
Međugorje is a world famous Christian pilgrimage sight, a meeting point of various civilizations and religions that has been visited by over one million pilgrims during the past 25 years.
This area is not only rich in religious and historical monuments, often partially ravaged by time, but also in other monuments and archaeological excavation sights.
Indispensable part of tourist offer of Herzegovina is by all means The Old Bridge and the authentic old part of Mostar dating from Otoman period and attracting tourists from all over the world. Also important are the remains of the town of the first ruler of the region after whom Herzegovina was named- the fortress of Herzeg Stjepan Kosača. Then there is the art colony in Počitelj and some forty Illiric settlements and Roman roads near Livno. Herzegovina is widely famous for its tombstones "stećci", the first written records and the so called "stone sleepers" that many a great poet from the region has mentioned in poems and songs. It is worth mentioning Roman excavation sites near Čapljina studied by world-famous archaeologists and of course Humska ploča, a written stone block, necropolis in Mokro, Diva Grabovčeva, etc.
High concentration of cultural and historic monuments and sights and an abundant wealth of natural beauties are rare in the world and present a sound foundation for perspective development of religious and cultural tourism throughout the year.
There is an increasing tendency in the world to develop rural tourism and this area abounds in natural resources and rare potential. At the moment rural tourism is still on the margins of our thoughts and actions. Rural tourism provides an opportunity for presenting autochthonous products from Herzegovina such as meat and dairy products, gastronomic folk-cuisine specialties, quality vines, rare fruits which because of their specific type of cultivation and processing can justly be called "original Herzegovinian products"
Industry in Herzegovina has a long and strong tradition. In the former Yugoslavia, Herzegovinian industry was very strong and made the basis of the former economic system and employed about 80% of the population. It was divided into several main branches: metal treatment and processing industry and agricultural industry, with strong agents such as Soko Mostar, Konjic Igman, Aluminum Mostar, Feal Siroki Brijeg, Tools facory Trebinje, UNIS, Hepok Mostar, Winery Čitluk etc.
Nowadays, Herzegovina is characterized by increasing and faster development of SMEs with significant levels of local and international investments. Resources that are at Herzegovina's disposal are very important and can only be activated through the formation of an efficient private industry in all segments, which would favorably influence the further development of SMEs in Herzegovina. Concearning these opportunities for industrial development in Herzegovina are extremely large. Outline of modern industry in Herzegovina is created mainy of metal processing, construction, manufacturing and food processing and agricultural industries.
Herzegovina is one of the top regions in B&H, and as we know, among the top regions in the EU, according to the installation of very powerful energy sources and energy and potential that has not been used as such. The current strength of the energy system is in the production of hydroelectric power, with great experience and tradition, then the proven power management and satisfactory infrastructure. Hydroelectric energy is a renewable resource and clean way of producing electricity. As confirmation of the power system in Herzegovina is the fact that a part of electricity is exported. Opportunities in this sector are great and the fulfillment of certain preconditions may strongly participate in the strategic economic development of the region. Among the greatest opportunities can be included increase of electricity export, then to develop and build a new alternative energy sources using wind and sun, which could strongly contribute to the development of SMEs in the region. Of course, the comparative advantages of regions in terms of energy compared to the immediate and wider environment should be maximized.