The story of a ‘young’ currency: The BAM

The story of a ‘young’ currency: The BAM

Twenty years ago, Bosnia and Herzegovina issued the first banknotes of the “Konvertibilna Marka” (Convertible Mark – BAM), otherwise known as the BAM, the country’s own monetary unit which unified the economic area of the entire state territory. On the occasion of the twenty-year anniversary since it was first introduced, the Central Bank of Bosnia and Herzegovina (CBBH) and the “BH POŠTA” (one of three companies responsible for postal service in Bosnia and Herzegovina) a company from Sarajevo recently promoted the 20 years of convertible mark postal mark, issued by the “BH POŠTA”.

The importance of this monetary unit was great because when the war ended, every side had a separate currency. Serbs in Republika Srpska used the Serbian Dinar (RSD), Croats used the Kuna (HRK) and the Bosniaks had the Bosanskohercegovački Dinar, not internationally recognised and in use just on the territories under Bosniaks’ control.

But, the German Mark (Deutsch Mark – DM) was (universally) accepted by all sides. It means that, prior to the Central Bank BiH issuing the BAM, four different currencies were in use; as a result,  it was impossible, for example, to pay for a coffee with Serbian Dinars in a coffee shop in Sarajevo.

The first CBBH Governor, Peter Nicholl, realised the chaotic reality when he came to Sarajevo in order to assume office. He suggested the unification of the… different currencies, something that proved impossible to the nature of things. However, thanks to the fact that politicians embraced the idea, negotiations kicked off so that specialists found a solution and would be able to issue new banknotes.

But the BAM did not come easy. Every decent suggestion was turned down because, each time, one of the three sides either the Serbs, the Croats or the Bosniaks would disagree. Quite interestingly, it was even suggested that vegetables could take centre stage… on banknotes, thus the pumpkin would be on the 10 BAM, the tomato on another but the plan soon fell through. Unable to think of other alternatives, and after having covered a long way to “nothingness”, Nicholl called Carlos Westendorp, the then International Community High Representative, to help politicians reach a solution. And he did.

Westendorp came up with the idea-decision which he actually imposed on the involved sides: writers and poets from all nationalities would be depicted on the banknotes. The Republika Srpska banknotes would have Serbs on and while the Federation banknotes, the Bosniak and Croat novelists and poets. There was no space to discuss the ‘tabled’ idea so, what politicians did was to say they agreed. In fact, the CBBH did not sort out the banknotes from RS and Federation BiH, so they were mixed and, after the first year of their use, citizens did not care anymore about the face that hid in their pockets and wallets.

The postal mark was printed on 10 000 pieces, with a nominal value of BAM 1,50. The author of this philatelic edition is Tamer Lučarević, the designer of the “BH POŠTA”. The latter also issued the FDC envelope on 150 pieces with a nominal value of BAM 2,00. The CBBH Governor, Senad Softić, said that the convertible mark is marking a significant ‘jubilee’.

“During all these years one thing was certain – the value of the convertible mark, expressed in euros, has never been questioned. The CBBH puts in and withdraws from the circulation the banknotes of domestic currency, convertible mark, while adhering strictly to the rule of the Currency Board as defined by the Law on Central Bank of Bosnia and Herzegovina. Therefore, we can say that the introduction of the convertible mark was not only good, but it was a decisive step in creating the (country’s) monetary system and maintaining the stability of the currency”, Softić said.

The General Manager of the “BH POŠTA”, Mirsad Mujić, expressed the pleasure of the company supporting this event.

“In co-operation with the colleagues from the CBBH we decided to issue the postal mark dedicated to the convertible mark, whose introduction across Bosnia and Herzegovina has confirmed that a stable monetary policy underpins all other stable issues in the country. This is a significant event for Bosnia and Herzegovina and all its citizens. The ‘BH POŠTA’ will continue to strive to be part of each success story -being positive and benefiting Bosnia and Herzegovina- as this anniversary is”, said Mujić.

The convertible mark is a legal tender in Bosnia and Herzegovina, and according to the Law on Central Bank of Bosnia and Herzegovina it is pegged to the euro; so every issued banknote has euro coverage…. / IBNA