Nezavisne novine: It is possible to ensure the additional 30 million KM from the budget of BiH for assisting the returners, but the representatives of the RS do not accept it even though it would not mean for the state more revenues from the unified account, has been said by Dragan Vrankić, Minister of Finance and Treasury of BiH.
He claims that money for investments should be found in the budget "because if we can be build in the entities, why cannot we on the state level".
"I support the decision on building the RS Government building. I wish the Institutions of BiH to have the same building. It would be logical for us to take the credit and make the building because the annual rate would surely be smaller than the rent", Vrankić explains.
He neglects the accusations that the Council of Ministers of BiH does not do anything on implementation of the agreement from Prud and says that the key question in BiH is the constitutional reform because now "we constantly have deliberations on who needs to do what".
NN: Will you recommend to the Parliament of BiH to reduce the budget by about 200 million KM and take it to about 1.4 billion KM which is a frame agreed in the Fiscal Council of BiH?
VRANKIĆ: Regardless of our wishes and demands, our reality is the Fiscal Council of BiH which has confirmed the frame that needs to be respected. We have prepared the budget incorporated in frames in the Fiscal Council. That proposal has been accepted by the Council of Ministers of BiH. The most optimal solution is not to change the frame of revenues from the unified account. When speaking of the frame of expenditures, then it is possible to increase it by 30 million KM for the refugees. We have the possibilities to find that money and that would be a compromising solution. My information says that this proposal will not be accepted by the RS delegates.
NN: Why is this increase not acceptable for the RS?
VRANKIĆ: They simply do not want to accept an increase of expenditures on the state level. That is more a question of political than it is of financial or economic nature. Additional 30 million KM we can ensure from the Central bank, one part from the transferred obligations, and one by an internal pre-allocation.
NN: Is the budget adopted by the Council of Ministers of BiH sufficient for normal functioning of the Institutions of BiH and fulfillment of conditions for progress towards the EU which speak of strengthening of capacities of country?
VRANKIĆ: When speaking of salaries and material expenditures, this budget is sufficient. When speaking of the joint investments with the international institutions, they are positioned, but this does not mean that they cannot be bigger. The problem is in investments because if we have 15 million KM of rent for residence of the institutions, then there is a question of capital building of the object. I have said earlier and now I repeat that I support the decision on building the RS Government building. I want the Institutions of BiH to have such building. There must be some money in the budget for investments because if we can build in the entities, why cannot we at the state level. It would ne logical to take a credit and make a building because the annual rate would surely be smaller than the rent and in ten years we would pay out the building. Also, the admission of people has been reduced. We have space for admission of about 600 persons this year, which can satisfy the criterions of development of institutions.
NN: Is BiH able to take the credit of about half a billion Euros in order to solve the problem of return?
VRANKIĆ: It is possible, because BiH is moderately indebted country. In this case, there is often being ignored the fact that any kind of realization of that credit must be included in the budget, which of course, increases its frame.
NN: How will you make up the revenues which will be reduced by abolishing the customs on a big group of products from the EU?
VRANKIĆ: We are well prepared for reduction of the revenues from customs. According to our dynamics plan, these revenues will until 2013. be reduced by about 400 million KM. We have earlier accepted that because the abolishment of customs has started in 2008.
The plan of collecting the revenues from the indirect taxes in 2008. has been exceeded by 2%. Achieved revenues are around 4.9 billion, and planned have been around 4.8 billion KM. In 2009. we have included a planned reduction of about 233.000.000 KM from customs. We have planned in the next year an increase of 4%, which we will achieve because we will increase the level of collecting the taxes, but also by the additional taxes which will be imposed by the Law on Accises.
NN: On which products will the accises be increased?
VRANKIĆ: Main goal of the Law on Accises is agreeing of our system of the high-tariff commodity with the European directives. Basic increase will be in the area of tobacco products, by which we will achieve an increase of revenues by about 220 million KM. By this Law we wanted to put all the producers in the same position. For example, we have stipulated by the Law the refund of accises on the fuel-oil for all kinds of consumers.
NN: How the governments of BiH intend to moderate the consequences of global financial and economic crisis?
VRANKIĆ: We have not had financial crisis. There was a period when an unnecessary panic was created, but the time has shown that we did not even have the financial crisis. When speaking of economic crisis, then its consequences are possible in BiH in a measure in which our economy has been involved in the world economy. Regarding the fact that our economy is not much involved in it, then that circumstance is easy.
The Fiscal Council of BiH has a big role in creating our answer to the consequences of economic crisis. It should not only decide how big will the budget increase be in the country, but it also needs to adopt the elements of macro-economic policy. The Fiscal Council of BiH must select the mechanisms for moderating the consequences. For example, we can moderate them by cutting the public spending. That is not enough for us to encourage the economy because with the reduction of spending, we must allocate the funds for encouragement, and a reduction of the VAT in order to attract the foreign investors. The guarantied fund with a half of billion KM is a clear message that the investments in BiH are safe.
NN: Why the Council of Ministers of BiH does not implement the agreement from Prud as it has been complained by one of its signatories?
VRANKIĆ: I do not think that we are not implementing that agreement. We have adopted certain decisions and have obligated the institutions to prepare the certain laws. We see that those institutions work on the implementation. In some cases it goes little harder, which has been shown in the problem with the Law on State Property. This is only one of the examples which speak of necessity of the constitutional reforms in country. We constantly have deliberations on who needs to do what, who can do what and similar. The constitutional reform would solve a list of issues and that is why I think that it is a key priority.
NN: The Council of Ministers of BiH has had very modest results last year. Would its reconstruction help the improvement of work effectiveness?
VRANKIĆ: When we speak of the agreement from Prud, then we have those who say that it is not good at all, and that it should not be implemented. We also have those who build the agreement. Those, who right away refuse something, to which they did not even give a chance, should say "we withdraw ourselves and give you a passive support in trying to make something." Such reconstruction is an acceptable option because I think that each agreement is a step forward, which is good regardless of how small that step is. In this case as well, we have the problem of constitutional arrangement of country, which is being created by a certain relation between political forces.