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While waiting for the Money of IMF: Can BiH experience the Greek Scenario?

Diaspora Money magazin.baBehind us are turbulent parliamentary sessions, which resulted in new relationships within both homes and returned the representatives of the SNSD back into the Parliament.

The story of the indebtedness of BiH is current again, as well as the growing impact on the pockets of our citizens. It is still uncertain when and whether there will be a new tranche from the IMF, and for how long our budgets can actually wait.

The public debt of BiH is constantly growing. By the end of last year, it exceeded the amount of 12 billion BAM. It includes the total external debt in the amount of about 9, 5 billion BAM, including the credit arrangements with the IMF, the World Bank, the European Investment Bank. However, that is no reason to stop with new indebtedness. New debts are generally justified as the support of the Reform Agenda, although they are primarily used for patching of budget holes.

“Foreign investors will not see fertile ground here if we do not make a step forward in road infrastructure,” said Barisa Colak, the Chairman of the House of Peoples of the Parliament of BiH.

The cooperation between BiH and the IMF lasts for 20 years. Before this, we had four arrangements in the amount of 986 million SDR, or more simply about 2, 5 billion BAM. The last deal, which is worth more than a billion BAM, was ambitiously announced as the support to reforms, the private sector, increase of employment and stability of the budget, but it brought higher taxes. Stable budget and new taxes are a guarantee for new funds from global creditors.

However, the priority is the priority. These resources are primarily important for the budget, in order to avoid painful cuts. Aware of the necessity for the functioning of the government, the representatives of the opposition in the RS and the FBiH did not support the new indebtedness. A new situation in this Parliament is that deputies from the ranks of the SNSD are very active in the last couple of days. With their help, a set of laws necessary for the continuation of the credit arrangement was adopted in the House of Peoples by the urgent procedure.

Although politicians were warned even earlier that this is not a good way of financing the construction of highways because increasing the price of any energy source causes the chain increase of prices in the economy. And this is not the only request. As we can see from the famous Letter of Intent, the requirement for new IMF arrangement included the administration, the sale of public enterprises, etc.

The Reform Agenda might bring reforms, but not a safer and easier life for our citizens.

(Source: N1)

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