The Habsburg Industrial Achievement in Bosnia-Hercegovina, 1878–1914: An Economic Spurt That Succeeded?

Abstract

In 1878 The Habsburgs exercised their rights under the Treaty of Berlin and marched an army of occupation into the former Ottoman provinces of Bosnia and Hercegovina. Between then and their expulsion in 1918, the Habsburg authorities attempted to weld their new province into the Austro-Hungarian polity and economy. Responsibility for governing Bosnia-Hercegovina was entrusted to the Common Finance Ministry. Its officials, especially during the administration of Count Benjamin Kalláy (1882–1903), saw their task as a “civilizing mission” and the Bosnian economy as clay to be worked according to their prescriptions. The developmental outcome of their endeavors forms the subject of this paper.

Forging the Nation‐centric World: Imperial Rule and the Homogenisation of Discontent in Bosnia and Herzegovina (1878–1918)

“…Most individuals employed in the administration and the state‐run industries were immigrant middle classes from other part of the empire (Lyon 2014:30) while the Bosnians and Herzegovinians, being mostly employed in low paid jobs, experienced no substantial benefits. Despite the impressive growth rates in industry this sector constituted only 5.79% of labour force while over 90 percent of population in Bosnia and Herzegovina were involved in agriculture (Palairet 1993:139). One of the key problems that Habsburg rulers inherited from the Ottomans was the issue of the land ownership.…”

“…The last Austro‐Hungarian census shows that the overall literacy rate for Bosnia and Herzegovina was only 12.16 percent (compared to the industrially less developed Bulgaria which had literacy rate at 42 per cent). In 1911/12 only 17 per cent of the eligible age group children were enrolled into primary schools throughout Bosnia and Herzegovina (Palairet 1993:151).…”

“…Building on the well‐established Ottoman fiscal and agrarian laws and the functioning road system 3 the Habsburg rulers have created a new model of administration, have built a wide network of railways, and have fostered the development of mining, forestry, food‐processing, carpet making as well as the tobacco and salt production. As Palairet (1993:138) explains: ‘The lack of infrastructure, markets, and industrial labour skills limited the attractions of Bosnia to private investors, so the administration embarked on a far more interventionist industrial policy than was ever pursued either in Austria or in Hungary’. This state‐led industrialisation relied mostly on the German and Austrian investors who developed an export centred economy.…”

“…This state‐led industrialisation relied mostly on the German and Austrian investors who developed an export centred economy. Consequently, the country experienced very high annual growth rate of 12.4 percent over the period 1881– 1913 (Palairet 1993:143). Although the country was the less developed part of the empire by 1907 Bosnia and Herzegovina was ‘three times as industrialised as Serbia in 1910 and five times as industrialised as Bulgaria in 1910/11’ (Palairet 1993:149).…”

“…3 3 The Ottoman administration has re‐organised and created a better administrative system in the country in the last period of its rule (1850–1876) (Palairet 1993:137). …”