In a recent commentary on his blog, the Ambassador of the US to BiH Patrick S. Moon discusses investment and business development in BiH. He recommends five ways to promote business investment in BiH this year.
In his commentary entitled ‘’Making 2013 the Year of Business Investment and Economic Growth in BiH’’, Ambassador Moon suggests five ways to promote business investments in BiH this year based on what he knows from business people throughout BiH.
The first way is to simplify the procedures for establishing a business: ‘’ BiH should create country-wide one-stop shopsfor business registration and permitting to simplify, speed, and harmonize these processes across entity lines. Investors should be able to visit any location and register their business country-wide. Alternatively, this process could be accomplished very quickly using an internet website’’, wrote Moon.
The second way is to reduce the level of taxes and contributions: ‘’ Overly-burdensome employer contributions harm the competitiveness of BiH businesses and the attractiveness of BiH for investors. To encourage business, BiH could provide a period of tax reductions or tax breaks to new investors and start-ups. Over the long run, these steps will actually increase revenue for the government as businesses hire more employees. Efforts to improve tax compliance and privatize loss-making government-owned companies are also critical in order to boost government revenue and make it possible to reduce the level of employer contributions and tax surcharges to more competitive levels’’, said Moon.
The third way is to modernize labor laws: ‘’Current laws are inflexible and antiquated. Successful businesses need the ability to expeditiously hire and fire as business conditions and individual performance demand. In addition, the “workbook” system needs to be modernized or abolished altogether to give workers credit for all their experience, including unpaid internships and education, employment and training outside the country’’, proposes Moon.
The fourth way is to resolve commercial disputes quickly: ‘’ Investors avoid countries where contracts cannot be enforced and disputes resolved within a reasonable amount of time. Time is money. BiH should strictly enforce existing deadlines in the RS, Federation and Brcko District to speed resolution of commercial court cases and encourage mediation of business disputes to limit litigation and expedite their resolution’’, warns Moon.
And last but not least, the fifth way is to fight corruption: ‘’ When officials ask for extra payments to perform their duties, this adds to operating costs and business uncertainty. Everyone pays the cost in the form of higher prices and higher unemployment when businesses that refuse to pay are forced out of the market. BiH should adopt a policy of zero tolerance for corruption and ensure that resources are readily available to investigate, prosecute, and convict corrupt officials at all levels who attempt to solicit bribes from businesses. Fighting corruption is a long-term effort, but it must start somewhere. BiH needs courageous, inspired leadership to stop the culture of impunity associated with corruption’’, said the US Ambassador to BiH.
In this commentary, Moon also reminded that ever since he arrived in BiH, he has been calling on political leaders to create new jobs and to make economic development a priority.
‘’But I have seen practically no leadership, no action, and no positive responses. Instead, politicians have focused on inter-party bickering and failed to take simple, positive steps that could create jobs and spur economic growth. I have sometimes wondered whether they are more interested in creating jobs for party members than serving the needs of the business community and BiH’s many unemployed and under employed citizens’’, wrote the American Ambassador on his blog. He urges officials to connect with businesspeople, to listen to their problems and the opportunity to eliminate obstacles to business investments and economic development.
“This may not be easy, but it is critical for BiH’s future prosperity”, concludes Moon.
