Balkans.com Business News / BiH

The Executive Board of the International Monetary Fund (IMF) completed the third review under a two-year Stand-By Arrangement (SBA) with Bosnia and Herzegovina (BiH) on a lapse-of-time basis.[1] The completion of the review enables the disbursement of an amount equivalent to SDR 33.82 million (about €38.9 million), which will bring total disbursements under the arrangement to SDR 169.1 million (about €194.4 million).The economy is showing tentative signs of recovery and modest growth of 0.5 percent continues to be projected for 2013. External and domestic risks to the growth outlook, however, while reduced, remain substantial.The SBA remains on track. All end-March 2013 performance criteria (PCs) were met, although data to assess the criterion on the non-accumulation of domestic arrears by the general governments of the Federation of Bosnia and Herzegovina and the Republika Srpska are not yet available, due to delays in reporting by lower levels of government. In light of this difficulty and the fact that there is no indication that this PC was not met, the Executive Board approved a waiver of applicability of this PC. Continued progress was also made in implementing structural reforms aimed at strengthening public financial management and tax administration, and safeguarding financial sector stability.The SBA with BiH was approved on September 26, 2012 (see Press Release No. 12/366) in an amount equivalent to SDR 338.2 million (about €388.9 million, or US$508.6 million).bne/IMF

The mobile market in Bosnia and Herzegovina has seen a number of significant developments in recent years that has increased competition and accelerated development of services in the country. Wireless data services are becoming more established, with operators extending investment outside their historical concession areas. Meanwhile, the introduction of mobile number portability will put downward pressure on prices and should result in an increase in total subscriptions. Meanwhile, in the wireline market there has been some consolidation, creating converged service players that should challenge the incumbents. There is also the prospect of the privatisation of some of the state holdings in the sector, with reported interest from major telecoms groups in the region. These developments are ushering in a brighter era for the market, which in 2013 still remains a laggard in the region in terms of service penetration for mobile and broadband, with relatively high prices and little progress on VAS.Source: Fast Market Research

Bosnia’s biggest utility EPBiH has shortlisted Japan’s Hitachi, a Spanish-led group and a Chinese consortium to build a 450 MW coal-fired unit at its Tuzla plant. EPBiH chose the three bidders out of 11 international firms and consortia which had applied to build the unit at the Tuzla plant, at an estimated cost of around 1.65 billion Bosnian marka ($1.1 billion), an EPBiH spokeswoman said. The project will be one of the largest investments in the Balkan country’s ageing energy infrastructure, where outdated coal-fired plants face rising consumption, Hurriyet Daily news.

Tahrir Square, Taksim Square, and now, Sarajevo's Bosnia-Herzegovina Square. Thousands of Bosnians formed a human chain there last week, refusing to let parliamentarians leave until they broke a stalemate that prevented vital identity documents from being issued. After years of unrelenting political deadlock, have Bosnia's long-ignored citizens finally awaken?The answer is at best, maybe. It remains to be seen whether upset over identity numbers, which are essential for birth certificates and passports, has touched a wellspring of suppressed anger as in Turkey and Egypt or is merely an episodic burst of desperation.Surely, popular anger will intensify as government inaction has now taken a tragic turn (the infant denied treatment in Germany because the parents could not obtain a passport has died.)On the other hand, defying international efforts to stimulate civil society, the Bosnian public Serbs, Croats, and Bosniak Muslims alike has mostly sat back and watched passively for nearly two decades as wartime-era politicians have squabbled while exploiting their positions for personal and party gain.Indeed, the elites in Bosnia are easily the least accountable in the Balkans, which is a notable achievement in a region with little tradition of actually seeking the views of voters. Bosnia's parties function as corporations without shareholders, divvying up their influence over an array of Socialist-era enterprises and public utilities while they squabble along ethnic lines.These parties exist for the revenue that they can absorb, maintaining their grip on power through a combination of patronage, manipulation of the media, and populist messages that still resonate strongly in deeply divided Bosnia. If ever a besotted country deserved the government that it has, it is Bosnia, which has continued election after election to fall for cheap nationalist theatrics and send the same parties, indeed the same leaders, back to office. If he could have visited Bosnia, Abraham Lincoln might well revise his maxim that "You can't fool all the people all the time."What's more, even if the identity number protests prove to be a true "Bosnian Awakening", such a movement cannot by itself bring about the change that Bosnia desperately needs. This is because the country remains in the grips of deep ethnic divisions, which the protests only threaten to aggravate.To recap, the mess over identity numbers is caused by the insistence of Serb representatives on a special prefix that will distinguish their entity, Republika Srpska, from the central state a variant of the core dispute that brought Bosnia into three-and-a half-years of war.Rather than consider modifying their position in the wake of public outrage, RS leaders have seized on the protests as evidence that Sarajevo is "unsafe" for Serbs, continuing the wartime and post-war narrative that a strong Bosnia threatens Serb interests.Sadly, despite the polarization that has been painfully obvious in Bosnia since the war ended in 1995, a seductive theory took hold among foreigners a decade ago that Bosnia's progress hinged on giving these same feuding, venal politicians "ownership" over their destiny, displacing the international supervisor who had prodded the parties into post-war state building.In 2006, the then High Representative, Christian Schwarz-Schilling, embraced the ownership theory and announced that he would no longer intervene to overcome intransigence by the country's politicians. This self-emasculation proved Bosnia's turning point. The country's progress in building effective, representative institutions precisely the kind necessary to join the EU immediately went into reverse in the face of unrelenting assault, chiefly from the RS leadership. The result has been economic decay and political stagnation, presided over by a crony, multi-ethnic political establishment.The downward spiral at the central level has cast its shadow over the unwieldy Federation of Bosnia and Herzegovina, the entity that links divided Croats and Bosniaks, diminishing the incentive to pursue reform there as the country's central institutions continue to unravel. A recent, US-sponsored conference elicited valuable suggestions on reforming the Federation entity, but that there are no indications of serious commitment to realizing the reforms.Four years ago, Washington also tried its hand at sparking interest among Bosnia's Serb, Croat and Bosniak leaders in reforming critical flaws in the country's constitution, but that effort also went nowhere. Apart from these efforts and the occasional high level visit, international policy in Bosnia has mostly been on auto-pilot with Brussels relying on Bosnia's presumed interest in joining the EU as the mainstay of its policy, while American officials still exhort the country's politicians to mend their dilatory ways.The embarrassing standoff in front of the state parliament which trapped a group of visiting bankers considering investing in Bosnia should serve as a wake-up call. Policy makers must grasp that if the protests take hold, the result is not likely to be quiet reform, but heightened inter-ethnic tensions.This is because the protests are mostly a Bosniak affair. Bosnia's Croats and Serbs remain alienated physically and politically from the state capital, Sarajevo. At the same time, ignoring those Bosniak protestors risks an insidious form of alienation among Muslims, who may lose hope altogether in an EU future.Brussels must finally shelve the blithe notion that Bosnia can continue to drift while the EU dangles the remote carrot of eventual membership. Instead, as she has done so effectively in Kosovo, EU foreign policy chief Catherine Ashton must become personally engaged.But Ashton will need a strategy to dismantle the sclerotic party and governing structure that maintains its stranglehold over Bosnia, perpetuating ethnic division. Instead of the cookie-cutter approach, Brussels must finally craft a stabilization and association plan for Bosnia that is grounded in reality.The country simply does not have and cannot produce on its own a fully functioning state and political system; and the existing Stabilization and Association policy, devised in Thessaloniki ten years ago, works only with countries that have such a system.Seizing on the shared interest of Bosnians in joining the EU, it is Brussels which must supply the critical incentive to reform, linking with absolute clarity and resolve Bosnia's internal political and administrative functionality with meaningful rewards on its EU prospects.bne/Transconflict

EU statistics agency says Bosnia and Herzegovina has the lowest GDP per capita of 37 European countries examined.Bosnia and Herzegovina has the lowest Gross Domestic Product, GDP, per capita and the lowest Actual Individual Consumption, AIC, of 37 European countries, according to a report by the EU statistics agency Eurostat.The research covered all EU member states, plus Switzerland, Iceland, Norway, Croatia, Macedonia, Serbia, Turkey, Montenegro, Bosnia and Albania.Based on preliminary results for 2012, Bosnia's GDP, expressed in Purchasing Power Standards, PPS, is only 27 per cent of the EU average, while Bosnia's AIC is 36 per cent of the average.At the end of last year, the official number of unemployed persons in Bosnia was 550,574, 44.4 per cent of the working-age population, the highest number ever recorded.A GDP that is 72 per cent lower than the EU average puts Bosnia last overall on the list, behind all other countries from the Western Balkans.Albania is not far behind Bosnia, with a GDP that is 30 per cent of the EU average, while Serbia and FYR Macedonia are both on 35 per cent and Montenegro is on 42 per cent.Croatia, which is going to become an EU member state on July 1, is the richest country in the region. Its GDP is 61 per cent of the EU average. This puts Croatia above two existing EU member states, Romania (59 per cent) and Bulgaria (47 per cent).Luxembourg has the highest GDP level among the EU member states at 271 per cent of the EU average. By Kenan Efendic, BIRN, Sarajevobne/BIRN