The world is facing a new economic storm, a serious warning has come from the International Monetary Fund (IMF). The IMF forecasts are based on the decline of the world economy as a whole, primarily the United States (U.S.) and China. The pandemic, inflation, supply disruptions in the global market contributed to that. The same market is threatened by new problems, already visible increased energy prices, and the political crisis in Russia and Ukraine, where energy is becoming the main weapon. What is the fate of Bosnia and Herzegovina (BiH) in an uncertain global market?
Namely, the emergence of the covid-19 pandemic initiated the decline of the world economy, primarily due to the severance of relations between people, supply chains, and the interruption of production. And that’s not the end. On the stage of achieving political goals, everyone uses what they have. For some it is weapons, and some use powerful weapons, energy, and energy sources. This can be a big problem for many countries, but also for BiH. The consequences of interrupting the regular supply of energy, far more expensive, can be catastrophic.
“If the price of energy goes wild, all these smaller countries will fall, all those businesses based on significant energy consumption will fall. Even today we have the problem of warming Sarajevo and others who use gas. Beware, the economy will lose its ability to produce in the long run,” said Zeljko Ricka, a professor of economics.
The pandemic has ravaged the world, according to IMF data. From the fact that an additional 70 million people have fallen into extreme poverty, it will result in cumulative economic damage – almost 14 billion dollars by 2024. The current games of the great powers, such as Russia, will not contribute to the improvement of the situation, although there is enough Russian gas, but not political reasons.
“I believe these things are connected, they are very concentrated on Ukraine and whether there will be a war or not, and they do not pay attention to those connections that are not seen right away between the crisis, this political, military–strategic, and the crisis when it comes to the energy sphere in the gas sphere, “Srecko Djukic, former Ambassador of Serbia to Belarus said.
Although not significant, Russia and Ukraine are BiH’s trading partners. The volume of trade exchange with Russia last year amounted to 318 million marks. That amount with Ukraine is significantly lower and amounts to 42 million marks. All this can affect BiH, even though we are a small country. Once again, the citizens would feel the consequences of expensive energy who are also affected by the current inflation.
There are no instruments of macropolitics that would suppress the negative consequences, as economists believe. The fear is justified, they say, even from greater economic damage, and the reaction of the dormant competent institutions is inevitable.
“We should try to prepare, if possible in accordance with the available budgets, in accordance with certain systems of commodity reserves for possible deeper economic crises, which are again linked to infarct effects, for price increases,” emphasized Admir Cavalic, an economic analyst.
Political problems are a blow to the global economy, and in that chain, not even the BiH market would not be an exception, because the lack of exports and the fall in GDP only mean the continuation of the impoverishment of an already rather poor country.
E.Dz.
Source: BHRT
