During the last meeting with the management of the International Monetary Fund (IMF), the Chairman of the Council of Ministers expressed regret that Bosnia and Herzegovina (BiH) does not currently have an arrangement with the IMF. At the same time, experts believe that we are not able to fight the existing debts either. The forecasts are that we can expect the next arrangement only next year.
The economy of BiH is currently not able to repay the current public debt, which amounts to 13 billion BAM, according to economist Zijad Dzaferovic. If we know the structure of public debt spending, he says, there is no need for a new arrangement with the IMF.
”What BiH citizens and BiH economists fear is the way they service such high debts. Who will ultimately service this debt? The IMF is also concerned, as are the citizens of BiH, that the transfer of powers from the state level of the Indirect Taxation Authority (ITA) to the entity level is announced, which would further aggravate this issue,” Zijad Dzafic points out, full professor at the Faculty of Economics in Tuzla.
Economists believe that the problem is not indebtedness, but how those loans will be used. If they are used for administration and unproductive or low-productive activities, they believe, in that case, it is better not to borrow.
”We have access to these funds with a low-interest rate, especially in this environment of high inflation, which is likely to increase so it is a great time to borrow, but again not at any cost,” says Muharem Karamujic, a full professor at the Faculty of Economics in Sarajevo.
Most countries in the world, including BiH, can enter into an arrangement with the IMF at any time if the mutual conditions set by the IMF are met. At the moment, there is no reason to conclude a new arrangement with the IMF, according to economic analyst Admir Cavalic. He says it is an election year and we have not prepared a set of socio-economic reforms that we should implement in the short term.
”I think that the next arrangement with the IMF can be expected only in 2023, and that is logical because probably the IMF plans to have a new government or to have a new configuration of government with which it could prepare certain reform packages, structural economic reforms, with the aim of achieving higher rates of economic growth,” Cavalic states.
BiH’s cooperation with the IMF so far has no positive side. What we promise the IMF in the letter of intent – we do not realize at the end of the arrangement, says the editor of the portal Kapital.ba Sinisa Vukelic. He believes that the authorities do not need a new arrangement, because there is money thanks to the enormous income from the price increase in the market.
”When those domestic sources of income that are temporary dissapear due to inflation. If that happens, then they will have to make an arrangement with the IMF again and it will probably be an arrangement like all the previous ones – you get the first tranche, you promise a lot of things, but in the end, you don’t fulfill what is needed and that arrangement is terminated,” Vukelic points out.
BiH clearly lacks clear goals and ideas, experts say. Information technologies, tourism, production of healthy food are important highly productive economic activities for which there is a demand in the world, and which need to be specialized in BiH, BHRT writes.
E.Dz.
