In less than a month, the Republika Srpska (RS) will have to pay off a debt of almost 400 million BAM. The leadership of the PDP believes that Milorad Dodik will therefore engage in new borrowing, so the question is whether the new negotiations with the International Monetary Fund (IMF) are in the service of saving the budget of the RS.
The bonds that the RS sold on the Vienna Stock Exchange come due on June 28th, and by the end of the year, they will have to pay back more than one billion and 200 million BAM of debt from the sale of bonds on different stock exchanges.
Given that this is a fairly large amount of money, the question arises as to how the authorities in the RS will solve this problem.
One of the possible scenarios is the confiscation of companies whose majority owner is the Government with a minimum participation of 51 percent, which is prescribed by the clause of the contract that refers to the consequences in case of non-payment. Another solution, which the opposition believes will happen, is taking new loans to pay off the old ones.
“Everything you do always comes at a cost, if you take loans without really investing in development but spend them on other things, it is normal that there will be problems when you have to repay those loans. It is evident that this is happening now in the RS and that they will try to solve it by taking new loans. This is not a solution to the problem, but a postponement because the new loans will come due at some point,” said PDP parliamentarian Mladen Bosic.
The IMF and the debt of the RS
The IMF announced at a conference two days ago that the authorities of Bosnia and Herzegovina (BiH) have expressed interest in new borrowing, but that the official loan request has not yet arrived. They did not want to say who exactly asked for a new loan, but they pointed out that the Federation of BiH (FBiH) is in a slightly better financial situation than the RS.
Mladen Bosic was asked what he thought about this and how much the talks between the BiH authorities and the IMF were actually related to Dodik’s problem of lack of money to pay off debts.
“BiH is the guarantor of all loans at the end, and both the FBiH and the IMF have their share in this. I don’t know if it is in anyone’s interest for the RS to take on as much debt as possible, but remember what happened when Ceausescu was falling, he tried to get out. This is a very serious issue and has serious political consequences,” he stated.
PDP President Branislav Borenovic pointed out that the consequences, due to the lack of money to pay back debts, will be felt most by the budget of the RS Government.
Namely, the goal of IMF loans is precisely to maintain the liquidity of the budget.
“The consequences for the budget revenues are that they will not be able to finance all the obligations they have in the budget year, and we will see what this means for those who live on the budget. It is likely that some categories of the population will experience a financial blow. Mostly budget consumers who are less visible will bear the brunt of these repercussions,” said Borenovic.
The PDP points out that Milorad Dodik could now very easily agree to loans on extremely unfavorable terms in order to pay back those debts, but they claim that in the end, everything will backfire on him, Klix.ba reports.
E.Dz.
