AFP, November 28, 2002
Bosnia needs urgent economic reforms
BANJA LUKA - The Bosnian economy, still recovering from the devastating 1992-95 war, needs urgent reforms to strengthen the private sector and avert crisis, a senior international official says.
"Unless reforms are made to jumpstart the private sector to convert Bosnia into an export orientated economy and steps are taken immediately, this country will be faced with significant upheaval in the economic sector," said Donald Hays, chief aide to Bosnia's top international envoy, Paddy Ashdown.
He added that exports from January to July this year amounted to 1.1 billion convertible marks (550 million euros, 545 million dollars), while imports amounted to 4.3 billion convertible marks (2.15 billion euros, 2.13 billion dollars).
"As a result Bosnia's current deficit stands at 17% of the GDP (gross domestic product) and the country is faced with the servicing an external debt of 2.5 billion euros," he said, adding that "those who argue that the economy is stabilising in the country are simply uninformed."
The International Monetary Fund had forecast "public debt to rise in Bosnia to 71% of Gross National Product by the end of 2003," Hays added, following talks with Bosnian Serb authorities.
He said that he urged Bosnian authorities to undertake steps to improve the efficiency of the custom service and tax collection, warning that between 1.2 billion and 1.5 billion convertible marks in taxes and customs were not being collected in the country due to corruption and inefficiency.
Bosnia is comprised of two semi-independent entities - Serb-run Republika Srpska and the Muslim-Croat Federation - each having its separate custom service and tax department, as well as parliament and government.
The entities are linked with weak central institutions.