Key goal and priority of the Government of Republika Srpska in 2018 is economic recovery while all the proposed measures have only one objective – to be an impetus to a new economic cycle, says Minister of Finance Zoran Tegeltija.
Republika Srpska Minister of Finance Zoran Tegeltija says the priorities in 2018 will be to unburden the economy, abolish parafiscal charges and gradually take over the burden of maternity leave and reduce labour costs.
In an interview with Srna, the minister notes that the commitments were laid out in the Economic Reforms Programme and that they will give a fresh impetus to the local economy.
“We have decided to start relieving the economy by financing maternity leave and reimbursing the leave by the Health Insurance Fund and keep curbing parafiscal charges.
“We also plan to cut labour costs and have clearly defined that we will do it at the Entity level only as we didn’t manage to do it the way we defined it in the Reform Agenda for Bosnia and Herzegovina due to obstructions at the State level,” Tegeltija explained.
The key goal and priority of the Government of Republika Srpska in 2018 is economic recovery while all the proposed measures have only one objective – to be an impetus to a new economic cycle.
Tegeltija stresses the health care reform as very important and says the second stage is in progress – introducing health institutions into the treasury system – which will significantly improve fiscal discipline in the sector.
“The pilot project is implemented in collaboration with our colleagues from the USAID and we expect to see first health institutions incorporated in the treasury system by the end of the year and the work will continue next year,” says Tegeltija.
The main obstacles to growth and competitiveness were identified after a thorough analysis of every sector in Republika Srpska, in accordance with the guidelines given by the European Commission.
Those hurdles are the cost of labour, a number of non-tax charges, health sector which accumulates unsettled liabilities, and poor efficiency of public administration and local self-government.
There is also low productivity and the lack and drain of labour force faced by more and more manufacturing companies and service companies.
Tegeltija puts emphasis on the insufficiently competitive business sector which is facing insolvency and poor links between education and labour market.
According to him, the Government will focus on those areas with the end goal of producing economic growth with a strong impact on the quality of life in Republika Srpska.
Tegeltija says the Entity started the previous year without any unsettled obligations from the Reform Agenda, but that there were no indications that obstructions would be removed with the adoption of reforms at other levels of government to allow for unobstructed enforcement of reforms.
He recalls that arrangements with the World Bank and numerous investments, primarily in infrastructure, namely all funds that were supposed to give positive effects for economic growth were jeopardised, not including extremely favourable loans from the International Monetary Fund with long repayment periods.
“When we take into account that Republika Srpska, ‘thanks to’ its representatives making up the opposition, lost considerable resources and that we managed to compensate them on our own, we don’t have any reason to be unhappy,” said the minister of finance.
He underlines that farmers and social categories were paid what was owed to them, that many things were built and many investments were made and that new manufacturing plants were opened.
In 2017, activities focused primarily on economy and labour market, which now has a positive effect on GDP growth and great sensitivity was shown towards the oldest population in Srpska, which dates back to when the Pension and Disability Insurance Fund was incorporated in the Entity budget.
“From the financial point of view, we knew that incorporating the PIO Fund into the budget would produce liquidity problems in the short term but we managed to fix it very quickly and I can now say it was an excellent move,” asserts Tegeltija.
The minister submits that many key structural reforms have already been implemented and says he is satisfied with the cooperation with social partners concerning the adoption of crucial financial documents.