Promoting inclusive development in rural areas through systemic transition

Herzegovina's tourism sector presents significant development opportunities, yet current market systems remain fragmented and unevenly distributed across the region. While tourism represents one of the few growing economic sectors in Bosnia and Herzegovina, many local government units with strong cultural and natural assets struggle to translate these advantages into sustainable employment and income generation.

The Herzegovina-Neretva Canton recorded 537,885 overnight stays, but destinations like Stolac, Jablanica, and Ravno together registered only 3,000 overnight stays, illustrating the concentration of benefits in limited areas.

High unemployment rates, particularly affecting women and youth who are often confined to informal or low-paid work, drive considerable and continued out-migration from the region. Local institutions possess limited capacity to facilitate tourism-linked value chains, while coordination mechanisms remain person-dependent and vulnerable to disruption.

The project addresses these challenges through a Market System Development (MSD) approach implemented across four strategic locations in BiH’s Herzegovina region: Konjic, Jablanica, Stolac, and Trebinje. Working with core public institutions including Prvi korak Konjic, Jablanica Museum and Memorial Complex, Radimlja Stolac, and Agro Fund / Tourist organisation Trebinje, the intervention focuses on strengthening tourism-linked value chains and improving institutional capacity at the local level.

Key activities include developing the Neretva Corridor 360° initiative to upgrade rafting infrastructure and safety systems, establishing the Jablanica Living Museum as a business development hub, creating the Stolac Stone and Oil Corridor to integrate heritage tourism with olive oil production, and implementing the Herzeg House Story & Market program to digitalize business operations and expand producer capacities.

Caritas Switzerland leads the implementation alongside its partner LINK Regional Clinic, which provides systematic support for market development, regional branding, and diaspora engagement initiatives.

Overall goal: Improved economic perspectives and inclusive and sustainable livelihoods with more income opportunities and jobs.

The project fosters measurable regional economic development. Tourism-linked enterprises and participating businesses are expected to increase performance, market reach and turnover through enhanced products, services, and business models.

Local producers, women, and youth will gain access to skills development and support services enabling their improved participation in tourism value chains.

Strengthened coordination between public institutions and private sector actors shall enable sustainable mechanisms for ongoing tourism sector development.

The project is based on Caritas Switzerland’s “Advanced Market System Approach”, building on and further advancing impact and results of the predecessor project implemented as a pilot from 2022 until 2025. Systematic use of the MSD approach will ensure that benefits extend beyond direct participants, thus creating conditions for continued growth in tourism-linked employment and income opportunities throughout the Herzegovina region.

The project further emphasizes climate-smart and circular economy practices, helping small and medium enterprises and local institutions build resilience while improving operational efficiency.