BH'S FOREIGN DEBT EQUALS US3.4 BILLION

SARAJEVO, Oct 20 (Oct)- Bosnia-Herzegovina's current foreign debt amounts to US$ 3.4 billion and the country's present economic woes could seriously jeopardise timely payment of the installments, the BH Foreign Trade and Economic Relations Ministry reported to the BH Council of Ministers on Tuesday. According to the Ministry, as of August 1998 the equity amounted to US$ 2.088 billion, with US$ 1.338 billion of interest. Deputy Foreign Trade Minister Nikola Grabovac said on Tuesday tat BH companies had to pay back their debt to foreign financiers by the year 2036. Although they lent the money on commercial terms, the financiers demanded guarantees from local banks, BH's two entities, and the BH Government itself, which must pay the loans back in case of the debtors' defaults. The three BH sides have agreed to pay back the debts they incurred during the war separately, Grabovac notes. BH still has not fully met its obligations to the Paris club of creditors. The final level of BH's indebtedness could be established by the end of October, after a definite agreement with the Paris club. Member countries of the Club said they were ready to write off 67 per cent of BH's debt accumulated before the war, which has been estimated at US$ 686 million. Grabovac pointed to several problems making the structure of BH's debt very complex. According to available data, BH's annual instalments will vacillate between US$140 million and US$150 million. Presently, the country's annual exports amount to meagre US$130 million, as opposed to imports of about US$ one billion. The wide gap between the two has so far been "patched up" by foreign donations. Grabovac warned that BH would not be able to pay back its debts unless it significantly boosted its GDP. The statistics show that BH's GDP presently amounts to only 15 to 16 percent of its 1991 GDP. "So far BH has not paid a single loan by what it produced, but always by the proceeds from new loans", Grabovac said. (hina) mr/ha