Nezavisne novine: BRISEL – The Republic of Srpska showed it self as more dynamic, economically healthier and reform wise more determined part of Bosnia and Herzegovina. This was an agreement of the participants of the talks at the 4th economic dialogue between BiH and the European Commission.
“While Banja Luka was commended for its restrictive budget policy and decrease of public expenditure and public debt, as well as for successful ongoing privatization, the Federation of BiH and BiH were warned to pay attention to increase in public expenditure”. This was said by one of the participants of the talks.
The Delegation of the RS, led by the minister of finances, Aleksandar Džombić, presented to their partners in Brussels all the achieved economic results of the RS in the previous year with the message: “Our Address Is Europe”. On previously established demands of the EC for fulfillment of the set economic parameters, financial team of the RS was giving answers point by point.
“The RS can be satisfied with what has been presented in the Brussels”, minister Džombić said for the “Nezavisne”.
According to Džombić, the secret of better results of the RS in comparison to the FBiH lies in the better implemented privatisation and reform of direct and indirect taxes.
“Results are not the same in the whole of BiH. The RS is moving faster in all reform processes in comparison to the rest of BiH. We have movement of public expenditure in BiH from 42 to 47 per cent of the GDP, and in the RS it falls from 40 to 37 per cent of the GDP. That is because we behave very restrictively and we create preconditions for further reforms. Through the reform of direct taxes we made additional fiscal relief, by excluding taxes to lowest salaries in the RS. We used surplus in incomes from introduction of the VAT, using it to service internal debt of the RS and that is why our debt fell from 60 to 40 per cent. Of course, the growth of the GDP also contributed to that. They did not do that in the Federation of BiH”, said Džombić.
“We also presented the success in the process of guillotine of regulations and defined further steps in this direction, and all with an objective of improvement of ambiance for domestic and foreign investors. We also presented the future model of economy courts in the RS, which in our opinion should be a key in settling economy disputes and creation of favorable economy ambiance”, said Džombić.
The European Commission in the following period set as priorities fiscal strengthening, further decrease in public expenditure, development of internal audit and management of public assets and decrease of administrative measures for business so economy ambience would be as attractive as possible for investors.
“After these talks, it can be said that the RS did a good job”, concluded Džombić.
FBiH in problems
There are announcements that the Federation of BiH will be in problems and it is uncertain whether it will be able to execute its obligations on the basis of the achieved incomes. That in the short run cannot create consequences for the RS, because we the matter under control, said Aleksandar Džombić, minister of finances of the RS.
But if, as Džombić explains, in long term public expenditure in the rest of BiH is not decreased, that could endanger the whole fiscal ambience in BiH and endanger condition in the RS as well.