BOSNIA'S ECONOMY INSECURE, STILL CLOSED OFF FOR FOREIGN INVESTORS

ZAGREB/BRUSSELS, Aug 7 (Hina) - The economic situation in Bosnia- Herzegovina is still rather pale -- after more than five years and five billion dollars spent on efforts to implement the Dayton peace agreement, Bosnia-Herzegovina is still on the fringe of economic transition which ought to have begun back in 1996. A report issued Tuesday by the International Crisis Group estimates that the country which finally managed to capitalise peace urgently needs extensive economic reform. The ICG stated the international community was not efficient enough in distancing Bosnian politicians from state-owned companies, which resulted in a failed attempt of a fast and effective privatisation and creation of an independent economic space in the entire country. Before it tried to carry out numerous economic reforms necessary to render Bosnia attractive for foreign investors, the international community turned its attention towards building institutions and strengthening the ability of the country's government to acquire funds from various sources. The ICG asserted that now it is most necessary to remove the hidden causes of corruption and tax evasion, especially irrational surtaxes and business regulations which stimulate "underground" business activities. While the international community is turning away from Bosnia- Herzegovina towards its eastern and southern neighbours, Bosnian politicians and international organisations should urgently tend to the increasingly weaker economy, still dependent on foreign assistance. Without the creation of an atmosphere attractive to home and foreign investors, the fate of Bosnia-Herzegovina is questionable, the Group claims in the report. (hina) lml