”This inflation, although initially conditioned by external influences, is now experiencing various phases and forms and it is difficult to predict how this will move in the future. In general, we can expect a continuous rise in prices,” Anto Domazet, Professor Emeritus of the University of Sarajevo, claims in an interview for BHRT.
”I think that inflation in Bosnia and Herzegovina (BiH), as a small country, cannot be controlled. You cannot fight inflation. You can only fight sporadically. For example, with the increase in food production. You can fight price control to a certain extent. But the key area in which governments need to act is to fight the effects of inflation. And especially through social policy. Of course, through economic policy as well,” says economic expert Anto Domazet.
Abolition of excise duties on oil and oil derivatives
Domazet is against the abolition of excise duties on oil and oil derivatives, because such a move by the state, he believes, would deepen inequality in society. Almost all the effects of such a move, he argues, would benefit those with the highest salaries, that is, those who drive the most cars and spend the most.
”If we reduce excise taxes, we lose that money. There is no money for socially disadvantaged people. That is why I believe that this measure is ineffective. It will not help anything, because inflation will continue, it will affect people in the price of food, and it will affect people in many other things. Will we then drop taxes there indefinitely, or will we say that it is going its own way? And we need to help the people who are most affected, we need to direct money to them for cash payments, because that is what can get people in need the most out of trouble,” Domazet believes.
What is “reindustrialization” and why do we need it?
The salvation for BiH is reindustrialization, says Professor Domazet and explains that our country needs to strengthen industrial production through modernization, innovation, and production for export. Reindustrialization would ensure employment and profile the country’s education system based on the needs of modern technologies. The application of digitalization, the application of decarbonization, and the application of a green economy in industrial development would be ensured.
”In the research that I did, there are many industrial companies, with foreign or domestic capital, that have the highest level of technology. However, these are individual cases. We have to make it a mass phenomenon. That we in industrial zones have promising companies, which after being introduced into this market, after reaching certain capacities, expand, increase capacities, employ, invest and thus increase our exports, thus increasing our competitiveness, income, people’s salaries and living standards,” evaluates Professor Anto Domazet.
What is the fate of the Refinery in Brod – Only God knows!
”The Bosanski Brod Oil Refinery and the Modrica Oil Refinery, as part of Energoinvest before the war, were an integrated entity that aroused great interest on a European scale. The refinery in Bosanski Brod was on the way to modernization, and capacity building, while the Modrica refinery was on the way to finalizing its large investments in the production of base oils, paraffin, and high-quality motor oils. War, aggression, physical destruction and severance of business ties, loss of technological continuity, market continuity led to the fact that with the entry of the new owner, the current situation was quite poor,” says Anto Domazet, who before the war was one of the leaders of the then powerful Energoinvest.
”The investor who came did not make the necessary efforts. As we can see, the situation is miserable and that is the strategy that is called “disinvestment” in the textbooks. Meanwhile, the debt figures attributed to the refinery are fantastic, at interest rates that are fantastic. Who will cover it? How will it end? Only God knows that,” Anto Domazet concludes.
E.Dz.
