Nezavisne novine: The Governments of BiH are getting into debt in order to pay their own salaries, what is a very risky economic policy, has been claimed by Fuad Kasumović, Deputy Minister of Finance and Treasury of BiH.
He explains how BiH will save 40 million KM in the budget of the Institutions of BiH, without reducing the salaries to policemen, soldiers and low-ranked civil servants.
How will the Council of Ministers of BiH ensure the saving of 40 million KM, which is an obligation overtaken by the agreement with the MMF (International Monetary Fund)?
The Parliament has already adopted changes of the Law on Salaries, by which it ensures keeping the basis at the last year’s level. This will ensure saving of around eight million KM. We will save almost the same amount of money on paying remunerations for various commissions, whose members have been earning a lot of money, even though there was no such basis for it. We will reduce the expenditures for trips, procurements and some other spending in order to save those 40 million KM. I believe that we will do this without any problems, because there is a room for savings.
Whose salaries will get reduced by planned savings?
Everyone’s whose salary gets over 2.000 KM, or to those whose coefficient for calculation of salaries is four or more. This will surely ensure significant savings and I support these measures.
Does it mean that salaries of soldiers, policemen, employees, low-ranked civil servants, of whom there are the most, will not be reduced?
Yes, exactly. Salaries of soldiers, policemen and majority of civil servants will not be reduced. That is just, because they cannot endure the same burden as ministers, deputy ministers and directors of institutions. I repeat that there will not be a linear reduction of salaries for all the employed in civil service.
Why the Council of Ministers of BiH does not make a budget rebalance?
I support the reduction of expenditures to the smallest possible level, but we do not need to go into the budget rebalance, nor we are going. Story about rebalance is an effort of representatives of the RS to ensure a better starting point for planning the budget for 2010. If we were to adopt the reduced budget for this year, it would be a basis for conversations for budget for next year. By that, we would come to a situation that the country gets less money for next year, and that is not good.
Why the country should not have a smaller budget when all the government levels have smaller revenues?
The state budget is very strict and money is being used for paying the external debt and financing institutions. From the other side, entities and other government levels have a huge administration; support is being bought by huge social allocations and grants. When we come into a situation that there is less money, then the most savings should be where the biggest administration is. It is time for politicians to sit down and agree on how big administration we are able to pay for, because if we continue with a current policy of constant indebting, we will not get far.
Agreement with the MMF is also indebting. Does it mean that you do not support conclusion of this agreement?
Citizens of BiH must be aware that the country, meaning all the government levels, indebts itself in order to ensure the salaries for itself. That is not just, nor realistic, and therefore I cannot support such policy. Agreement with the MMF is a credit by beneficial conditions, but it is still a credit. Our policy seems like a family, which has the incomes of 1.000 KM, and it spends 3.000 KM. It ensures the difference by a credit, and then it does not owe 2.000 but 2.500 KM, because it must pay the interest rates as well. I am not against indebting of country, but I think that this money should not be spent on administration. I am not interested in any kinds of political disagreements and this is not directed towards anyone, but I simply warn that we are going to destroy ourselves. If we get into debt, then the credits should be spent on investments, development, assistance to economy, but not on administration. That is a very bad economic move and policy.
Did not the BiH governments already take the credits for infrastructural projects, and then they did not know how to spend that money?
True. We have taken 1.5 billion KM of credit from different international financial institutions for big infrastructural projects, but have not withdrawn the money. Because of that, we have paid by now 33 million KM of interest rates for unused funds. This is also vey bad. Responsible for that are the ministers, who are not able to prepare the projects, but they go into debt right away, and later on, they think of the ways how to spend the money.