Economic and Financial Dialogue in Brussels Provides Set of Concrete Recommendations for Bosnia
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Economic and Financial Dialogue in Brussels Provides Set of Concrete Recommendations for Bosnia

Representatives of the EU Member States, the Western Balkans and Türkiye, the European Commission and the European Central Bank, as well as representatives of the central banks of the Western Balkans and Türkiye met for their annual economic policy dialogue in Brussels on 16 May. As part of the dialogue, recommendations were drawn up for participating countries, including BiH.

The meeting took place in the context of recent adverse shocks, including the economic impact of Russia’s war of aggression against Ukraine, which participants agreed required appropriate policy responses.

The joint conclusions took note that Bosnia and Herzegovina’s Economic Reform Programme (ERP) 2023-2025 was submitted with a very significant delay on 20 March 2023. This delay and weak compliance with ERP requirements have impeded proper assessment of the policy plans to address country’s economic challenges, and raised doubts about commitment of stakeholders responsible for delays. The government’s determination and ability to tackle the identified structural challenges will determine in the year ahead the potential for maintaining economic resilience and boosting inclusive growth, competitiveness and jobs creation, while accelerating the transition to a greener and more digital economy for meeting increased external market pressures. The recovery would also benefit from further efforts to tackle corruption and improve the rule of law.

In this context, a set of recommendations were made for BiH, inviting its authorities to, inter alia:

Provide support to vulnerable population to help them cope with increasing costs, including increased energy prices, increase capital spending for public investment projects and accelerate their implementation, and ensure effective exchange of taxpayer information amongst tax authorities aiming to increase efficiency of tax collection.

Tackle the issues and risks related to state-owned enterprises and strengthen ERP preparation, fiscal accounting as well as capacities in the areas of macroeconomic statistics, regional accounts, labour force survey and government finance statistics, and increase efforts to improve the coverage and timeliness of all statistics.

Carefully assess and analyse price developments, including a timely publication of CPI weights and developing and publishing core inflation series. Strengthen further the reporting and risk management frameworks across the banking system, further reduce institutional and legal obstacles to NPL resolution, reduce data gaps in particular as regards the real estate sector and initiate setting up a single resolution fund. Safeguard the integrity of the currency board arrangement and the independence of the Central Bank.

Further simplify business registration, licensing and permitting procedures and harmonize them across the country with a view to digitalising them in the near future. Adopt the law on electronic identity and trust services for electronic transactions with a single supervisory body in line with the EU acquis and ensure that the Indirect Taxation Authority begins implementing the authorised economic operator (AEO) concept and starts preparations for joining the Common Transit Convention. Strengthen the governance of public enterprises, allocate adequate human resources to the central oversight units in both entities and prepare a report on the contingent liabilities related to public enterprises and a strategy to manage these fiscal risks.

In line with the Green Agenda for the Western Balkans and the Energy Community Treaty, adopt and begin implementing a single integrated energy and climate plan for lowering carbon emissions, adopt State-level legislation for electricity and gas and ensure the full harmonization of laws at entity- level in these areas to prevent further delays in the opening and operating of the energy market and establishment of a day-ahead electricity market.

Strengthen the coordination mechanisms within the country as regards employment policies and establish an inter-ministerial task force involving relevant ministries, their agencies and stakeholders to develop and finalise a Youth Guarantee Implementation Plan, adopt it, and initiate its implementation. Develop a system to monitor and forecast the skills needs in the labour market to facilitate the alignment of the education and training systems and of reskilling and upskilling provision to labour market needs. Improve access to early childhood education and care services towards children/families with vulnerable backgrounds and in rural areas.

Source: Sarajevo Times