In 2014, the European Union in BiH presented the “Compact for Growth and Jobs” which includes a number of recommendations for BiH authorities. In your opinion, what is the most important economic reform that Bosnia and Herzegovina needs to undertake?

• 15.03.2015.

Goran Emkić,  Tuzla The BiH economy requires major reforms to render it competitive on international markets. In my opinion, we should focus public interventions on local production. For example, by introducing tax incentives for all locally produced products. This could be further enhanced with disincentives for importers. Another important measure could be cancellation of pre-war debt and the boosting of incentives for start-ups.

Tvrtko Milović,  Kiseljak It is a paradox that BiH has amongst the highest unemployment rates compared to EU members, and at the same time a disproportionately expensive labour force. A reform to change this, and thereby attract greater foreign direct investment, should focus on labour law reform with the aim of reducing labour costs. The first thing we need to do is to reduce the fiscal, especially para-fiscal, levies that raise the cost of labour and render BiH uncompetitive. The high cost of labour acts as a disincentive to investment or forces companies into illegal employment. As part of the labour reform, hiring and firing must be made simpler. The current situation leads to distortions in the market where the best employees are undercompensated or unemployed while poor employees are over-compensated or remain in employment where they should be released. This is why foreign investors are fleeing from BiH even before they start the realization of planned investments. There are no serious political obstacles in the way of such reform. It is in the interests of employers and all good employees. Bosnia and Herzegovina must become attractive for good employees and create conditions that motivate poor employees.

Amer Bahtijar, Mostar The most important economic reform needed relates to law enforcement, such as tax collection, etc. Such reform entails a systemic fight against corruption. It is certain that hundreds of millions of euros each year remain in private pockets, and the pockets of those who are bribed not to undertake tax inspections. The problem is exacerbated by a judicial system that does not punish tax evasion. This demonstrates the link between tax compliance and the fight against corruption. There are allegations of corruption at the highest levels as we see in the case against the former director of the ITA. Proper tax collection would lead to several hundred million euro of additional revenue. This would put the state in a position to finally start the process of economic stabilization and development.

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