THE IMPACT OF WARS ON THE ECONOMY OF THE EUROPEAN UNION AND BOSNIA AND HERZEGOVINA

Abstract

Current local and regional wars—such as the conflict between Russia and Ukraine, as well as wars in the Middle East—are causing noticeable changes in the global economy, regardless of their geographic distance. The aim of this research is to demonstrate that although these wars occur far from Bosnia and Herzegovina and the European Union, they exert a dominant influence on financial flows, global supply chains, and established trade routes for goods and services. Given the current state of global markets, the hypothesis is that external factors may now affect the functioning of the economy and trade networks in the EU and BiH more than ever before. Countries possessing energy resources, wheat, or other key production inputs exert dominant influence—regardless of their geographic location—and changes in their domestic markets can have global repercussions. The events unfolding today are driving up inflation, triggering population migrations, and prompting searches for alternative sources of energy and raw materials, often under significantly costlier and more complex transportation conditions. This paper employs secondary analysis as its research method.