What reform or initiative is most needed to help create jobs in the BiH economy? No 5.

Adisa Bećiragić,  Jajce

The question of buying domestic products has become a matter of national pride and elementary decency. If you transfer the problem to the level of ‘high politics’ and ‘the state’, it is necessary to cut the enormously high taxes and payroll as well as the level of income tax, you need to introduce a zero rate of VAT on basic foodstuffs and medicines, you need to shorten the registration process for new businesses. We are a country that has great natural resources, but we neither know how to keep them nor use them effectively. Thus, the state, through the budget, gave someone the ability to gain a year of experience, but that is not the ‘real deal’. I believe that any change in the law can help to get these resources to open of the factories for the production of water, halal food – for which demand is high on the global market, and furniture, etc. One of the local paradoxes here is that we export logs and import furniture while our factories that produce furniture are decaying and workers are starving.

Bojan Marković, Vitez

In order to help the struggling private sector of the economy, the Government needs to perform several interlinked actions. First, it needs to reduce the number of people employed in its enormous administrative apparatus. Second, it needs to change its attitude towards state owned companies in a similar manner: so instead of selling their equity for short-term financial gain whilst preserving control, it should instead sell control stock, thus giving up control since it has proven incapable of managing them effectively, due to corruption and nepotism. Third, it should reduce the level of unpaid taxes, especially in its parfiscal part, and finance those budget lines from the revenue gained from VAT, create a progressive system of income tax that taxes different levels of income proportionally. Furthermore, accounting standards for small business sector need to be significantly simplified in comparison to the rules and procedures larger businesses need to adhere to. Moreover, Government should increase taxation burden imposed on import and trade sector of the economy, and direct that income towards helping productive and exporting companies. Finally, job creation should include helping start-ups, and we are in a great need of better small entrepreneur policies.

Jasmina Skopljak, Visoko

BiH is one of the countries with the highest rate of unemployment in Europe. Significant problems are the high tax rates, the level of administration and the ‘informal’ market, the undeveloped private sector that has the potential to create new jobs. In this regard, necessary reforms in this sector are crucial as as well as in the educational system – such as in adapting the curricula so that students can acquire the required skills – given that the existing inadequate education system is unable to sufficiently prepare young people for employment. The current level of high taxes on labour also fails to create the right level of incentives to create new jobs. Particular attention should be paid to legislative reforms, especially those related to the changes and adoption of new legislation in this area, in order to make it easier for companies to get registered and to invest. In particular, it isnecessary to reduce the time and cost of registering companies). Along with these legislative reforms it is necessary to strengthen the fight against corruption. Initiatives should focus on strengthening the economic sector in BiH and to those branches of the economy where BiH has the potential, in other words tourism, agriculture, energy and mining. Special attention should also be paid to the timber industry given that BiH is one of the most densely wooded countries in Europe – circa 53% of land area is covered by forests – and this is the basis for the development of the timber industry.