Dnevni avaz: The Mission of the World Bank in BiH and the Directorate for Economic Planning (DEP) have done the analysis of economic situation in our country with the proposal of measures for its moderation.
In that analysis it has been recommended to the domestic governments not to relax, because the crisis comes through a banking sector which lacks money for crediting the economy seriously hit by crisis, and through the reduction of exports and transfers from abroad which are around 17% of domestic gross product (DGP).
At beginning of March, the Council of Ministers has adopted 16 measures for moderating of consequences of economic crisis on economy in BiH.
The chief of the World Bank in BiH, Marco Mantovanelli, in the interview for "Avaz" says that by that document domestic governments have got recommended to keep stability of banking sector.
-According to what I have seen, governments have done it by a list of measures. Besides that, we have pointed out that it is needed to keep a level of public investments for which it is hard to find sources of financing – Mantovanelli has said.
Assistance to budgets
Does that mean that the World Bank has funds ready for BiH?
– We currently have 280 million dollars approved for BiH and can talk with the BiH governments on quickening of their implementation. There is also a sum of around 270 million dollars and we have talked with the governments that they could use that money to credit small and middle business and providing of assistance to budgets in the amounts which should be determined. But, that is conditioned by signing the engagement with the IMF and solving of huge social allocations, which are not coming to those to who need it the most. Additional funds will also be directed to building of local infrastructure and floatation of Sava river.
Ho to find the funds needed for investments then?
– The Law on Accises on tobacco and gas is a good way for collecting of funds, which will not impact domestic producers. Besides that, it is needed to reduce allocations from budget for social giving which is a huge burden, and money should be directed to investments. There are also some other financial institutions ready to offer funds by convenient conditions.
Did the Council of Ministers accepted recommendations of the World Bank and DEP and did it harmonize them with adopted measures?
– Measures adopted by the Council of Ministers and entity governments have our recommendations inserted, which is really good. If those measures remain only on paper and do not become concrete activities, then there will be big problems.
Economic experts claim that measures of the BiH governments are not clearly précised. They do not have exclusive competencies, no concrete timelines until when they should be implemented. Do you think that is a huge lack?
– I am worried because those documents should be operational. Very soon, there should follow another step, in which should be determined names, dates and target values, which should be achieved by these measures. In these documents there should be more coordination between all the government levels and activities directed to social giving only to those who need it the most.
For now – nothing from lower interest rates
Do you think that commercial banks in BiH have room and should reduce their interest rates on credits for economy and citizens?
That is a very complicated question. Unfortunately, banking sector is globalized, so the interest rates do not depend on local level. Sources of financing are very expensive and height of interest rates in BiH depends on that. As long as we have such situation in the world, there will be no drastic reduction of interest rates. I do not defend banks. Interest rates on credit are high, but they are high on deposits as well.
Countries in region negotiate with the International Monetary Fund on financial assistance in order to moderate the attacks of crisis. If they establish an engagement, they will get an open door by other financial institutions for assistance as well. Should BiH get into that kind of engagement?
– Yes. As far as I know, the Fiscal Council has decided to enter the negotiations with the International Monetary Fund and we strongly support that engagement, because it would also bring the assistance from other institutions, by including the World Bank as well
Already for several weeks, at global plan some positive things are happening; huge growth of value of shares and approvals of financial funds of the US Government for recoveries of banks. Do you think that this is perhaps a beginning of recovery from crisis?
– I would really love that it is, but it is too early to talk about it. News which come from the US are very positive. Exchanges react positively, but analyses, especially those related to the central and east Europe, talk that crisis will be very long.