BUSINESS

Roundtable on Structural Reform in Context of Stand-By Arrangement with IMF

The Center for Policy and Management (CPU) organized yesterday in Sarajevo a roundtable entitled “Road to Recovery: Fiscal Stability and Structural Reform in Context of 4th Stand-By Arrangement with IMF”.

In the framework of the initiative “road to recovery”, CPU organized a roundtable in order to present structural reforms in accordance with the commitments through an arrangement with the International Monetary Fund (IMF), and viewed the reforms necessary in order to create a favorable business environment and competitiveness in BiH.

“We had a mission audit that was conducted last week in Sarajevo and Banja Luka. Our assessment indicates that there have been small increases in macroeconomic growth of one percent that it is not expected that there will be a substantial increase, having in mind the economic crisis in Europe’’, said one of the participants of the roundtable, the Resident Representative of IMF in BiH Ruben Atoyan.

He believes that because of these circumstances, the government would not be able to provide a fiscal stimulus to the overall situation.

According to him, because of this there should be a focus on structural reform and analyzing the private sector as a field that could provide a bigger incentive and consider investments in various business operations.

“Regarding fiscal consolidation, we are satisfied with it. Basically, all quantitative criteria are met for now, and we expect that in this segment the situation would develop how it was originally planned for the stand-by arrangement”, said Atoyan.

Regarding the cross-border savings, he estimated that the maximum has been achieved so far so that now there should be more perspective on fiscal consolidation to rely on some structural savings.

“That will definitely be something that would be in our focus in future work within the framework of IMF and our program”, said Atoyan.

CPU Board Member Goran Miraščić spoke of the increase in competition in the BiH economy, measures that are necessary in that path, unburdening the economy, etc.

“Everything is tied directly to the letter of intent that was drawn from the 4th stand-by arrangement that the BiH authorities signed with the IMF mid-September last year, concerning the structural determinants that are aimed at reducing the issuance of welfare and veteran protection and directing those funds where they are most needed. It would bring to order the system of veteran benefits through adoption of a new comprehensive law on retirement under favorable conditions, regarding the FBiH. In the RS they are working on the problems connected to the health care sector and its financing’’, said Miraščić.

From this tax reform follows, because it is about increasing the level of competitiveness.

“The main way to raise the level of competitiveness is to decrease taxes, or reduce contributions. It would be an illusion to expect that these contributions decrease, and that somewhere else we do not find compensation for that same amount of revenue in order to make up for this reduction’’, said Miraščić.

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