SARAJEVO, April 21 (Hina) - The International Crisis Group (ICG) called on authorities in Bosnia-Herzegovina to undertake urgent and concrete measures, assisted by the cooperation of the international community, to reform the
country's economic system and prevent an imminent collapse. In a report on the economic situation in Bosnia-Herzegovina and suggested measures to be undertaken urgently, issued in Sarajevo on Wednesday, this non-government organisation which analyses the situation in the region of the former Yugoslavia estimated that numerous expectations by foreign investors who had set aside funds for the reconstruction of Bosnia-Herzegovina had been let down. The ICG stated the goal of donors was to invest US$5.01 billion into the reconstruction of Bosnia-Herzegovina and structural reforms, so the country could transit from a communist system to capitalism. Foreign donations were expected to be
SARAJEVO, April 21 (Hina) - The International Crisis Group (ICG)
called on authorities in Bosnia-Herzegovina to undertake urgent
and concrete measures, assisted by the cooperation of the
international community, to reform the country's economic system
and prevent an imminent collapse.
In a report on the economic situation in Bosnia-Herzegovina and
suggested measures to be undertaken urgently, issued in Sarajevo on
Wednesday, this non-government organisation which analyses the
situation in the region of the former Yugoslavia estimated that
numerous expectations by foreign investors who had set aside funds
for the reconstruction of Bosnia-Herzegovina had been let down.
The ICG stated the goal of donors was to invest US$5.01 billion into
the reconstruction of Bosnia-Herzegovina and structural reforms,
so the country could transit from a communist system to
capitalism.
Foreign donations were expected to be gradually substituted by
private investments, which did not happen, and a large number of
domestic and foreign business people questioned by the ICG
expressed resistance to investing in Bosnia-Herzegovina.
The ICG assessed that ruling structures in all three ethnic groups
in the country followed the same policy and rules which had led to
the economic collapse of the former Yugoslavia.
Such policies discourage entrepreneurship and investments and as
long as they are prominent, international assistance, however
carefully directed, will be ineffective in creating a long-term and
sustainable economic development, the crisis group said in the
report.
Business people mostly point out problems they faced in the banking
system, bureaux for payment transfers, a loitering privatisation
process, high taxes, inefficient judicial system, corruption and
porous state borders.
The ICG suggested to politicians in Bosnia-Herzegovina to urgently
undertake serious reforms, with one of the first steps being the
annulment of bureaux for payment transfers and an improvement of
legal frames for foreign investments.
It was also suggested that the present taxes be substituted by an
equivalent to a value added tax and that rules regulating private
business should be reduced.
The need to establish a high-quality commercial banking system and
the application of a state law on customs tariffs, adopted on
February 11, were set as priorities.
Both entities in Bosnia-Herzegovina were suggested to remove the
existing trade obstacles and to centralise the customs service at a
state level.
Local bodies of authority were warned to immediately begin the
privatisation process.
(hina) lml