That Bosnia and Herzegovina is on the threshold of a demographic collapse is not a new story. The authorities have been listening to worrying data for years without a concrete reaction. At least until now. This week’s decision of the Government of the Federation on the creation of the Strategy for Demographic Development and Recovery of the Federation is the first step, if any. But is it too late for it?
How to solve the consequences of depopulation? Economic expert Faruk Hadžić spoke about how important it is to act systematically and strategically in Dnevnik 2.
We have no alternative but to achieve demographic growth through a better economic policy, and this is a process that we must actively follow. We are late, because this is a measure that should have been taken 15 years ago, according to Hadžić.
“Today we feel all the problems and consequences of not making important decisions and seriously dealing with the issue of demography. We should not expect that the problem of demography can be solved in a few years because it will take decades to reach the stage when we can expect the first positive effects of demographic changes”, he points out.
However, he adds that there is room for optimism, but we should work systematically and not expect that the problem can be solved in a year. He cites as an example the pronatal policy, which is one of the strategic goals and in order to give some positive result – 20 to 25 years should pass.
“If we have as a result of such a measure the birth of children, that child – on the condition that he stays in Bosnia and Herzegovina – will only enter the labor market in 20-25 years”, explains Hadžić.
In this context, he points out that the problem of labor shortage is already present and that employers are looking to import labor, and that the government will have to make some difficult decisions in the political sense if we want to have a higher level of economic development in the years to come.
“When you don’t have enough workers – you can’t start even a higher level of economic activity. Direct foreign investments mean nothing to you because you don’t have workers to work. That is why the authorities must also think about other strategic directions, such as the controlled import of workers and greater cooperation with the diaspora through the creation of programs that will lead to our people returning to BiH”, says Hadžić.
He adds that there is a special segment that needs attention, namely a large number of inactive people who can enter the labor market under certain incentives.
When it comes to the set of fiscal laws, the adoption of which is announced by the end of the year, Hadžić points out that this is the most serious reform of the tax system so far. It has been talked about for almost ten years, but now we have to implement it, he says.
“When you look at, for example, October this year and October 2019, the Federation has a difference of 4,000 to 5,000 more in the total number of new employees. In the last four or five years, regardless of the corona, we have not had a new number of workers who contribute to the economy”, says Hadžić.
He concludes that this tax reform will relieve labor and wages, which will directly lead to their growth, and thus to the possibility of slowing down emigration and providing an opportunity for faster economic recovery.
