Bosnia was arguably the most ethnically diverse of the Yugoslav republics and the (plurality) Bosniak population (mostly Muslim) found themselves in the cross-fire of the war between Croatia and Serbia. It was in the interest of the Bosnian Croats and the Bosniaks to federate because the Bosnian Serbs had taken 50% of the territory. See wikipedia for maps of the ethnic distribution within Bosnia.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes