Bosnia’s economy is the least competitive in the Western Balkans and authorities must take urgent action to address the problem, business community warns. Bosnia is a "complicated and complex environment in which to do business... we have not seen a lot of progress in this area over recent years," the head of the World Bank mission in Bosnia, Marco Mantovanelli, said. "This economy is least attractive for an investor in the region," he added, urging the authorities to act "to improve the business environment and the overall competitiveness of the economy". In its recently published Global Competitiveness Report, which ranks countries against 111 different indicators, the World Economic Forum ranked Bosnia in 102nd place out of 139 economies observed.
The World Bank’s 2010-2011 "Doing Business" report ranked Bosnia in 110th place out of 183 countries in the survey. Mantovanelli highlighted the time and cost needed to register a business or to obtain a construction permit as worrying. Simplification of red tape should be a priority for Bosnia’s new state and entity governments, which are yet to be formed following October general elections, Mantovanelli said. This will not solve all the problems, but "it does not require a lot of funds... [and] is a necessary ingredient in the recipe for job creation in this country," he added. High payroll tax, equalling 69 per cent of a salary, is also cited a key impediments to job creation in Bosnia that also scares away potential investors. "Entrepreneurs in Bosnia cannot progress while being forced to carry such a huge burden... but the authorities do not talk to us about our needs," Remzo Baksic, from the Bosnian association of employers, said.
"They only talk to us when they want to show to some international organization that they consult with business community... but nothing ever comes out of it," he added. Representatives of the Foreign Investors Council, FIC, agree with Baksic's observation and stress that Bosnian authorities mostly fail to take business opinions into account. The FIC’s Sead Miljkovic said the council annually sends the authorities recommendations to make the country more business friendly, but they are usually ignored. Miljkovic said the FIC respects the fact that Bosnia has to deal with a complex administrative setup, including separate governments in the two autonomous entities, as well as a central government, linking the two, but this was not an excuse for the failure to resolve “purely technical” problems. "We understand that the country’s legal and political system is fragmented so we focus on technical issues... but there is no response," he said. "Capital is like a river; when it reaches a barrier, it changes course," he warned.
Miljkovic said the authorities had already adopted numerous development strategies and projects but these mostly gather dust in a government drawer. "We constantly hear talk about Bosnia’s competitive advantages in the energy sector but not one serious development project was implemented in this sector in the past 20 years," he noted. Continued neglect of problems faced by the business community can only result in further job losses, at a time when official unemployment rate is over 40 per cent, the owner of the country’s leading construction company, Faruk Sirbegovic, said. "The authorities know what needs to be done, we do not need new strategies,” Sirbegovic added. “They should just take out the old strategies, update them a bit if needed and start working".
News source Balkan Insight link: article
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