Domazet: Economic crisis can easily turn into a financial one

SARAJevo, (Patria) - Anto Domazet from the SDP Economic Council and economic expert assessed that the FBiH Government is not managing the crisis but is lagging behind it.

"After the expiry of the corona law, the Government found itself in a vacuum, as if it didn't know the effects of that law and had no ideas what to do. What is now observed as a problem is the lack of vision, lack of leadership, and the lack of trust of the citizens in this Government. A good government benefits both those who support it and those who are against it. Now we have a bad government that yields no results. The Government is showing an inability to create public good in order to reduce the effects of the crisis," said Domazet.

Domazet says that the recovery from the crisis on the global stage will be neither fast nor easy.

"In BiH, this circumstance will be burdened by internal problems, lack of leadership, and lack of political consensus on how to move forward," said Domazet.

The SDP BiH concept envisages three measures: urgent interventions (corona law 2), measures related to creating more favorable conditions in the business environment, and thirdly, structural changes to accelerate recovery.

"Recovery will not come by itself, it requires major changes, and if we are not aware of this, then we are greatly mistaken. This is about a new normal that must resolve three key problems for BiH: accelerate the development of the private business sector, base economic growth on exports, and thirdly, emphasize investments instead of consumption. To this, we should add the need for accelerated digitalization, accelerated strengthening of institutions related to healthcare, education, strengthening other elements of competitiveness, and attracting investments, which has proven on a global scale to be better to have production units of large European companies in Europe than in China or other transatlantic countries. Who is taking care of this? We have a situation where our Government is as if in hiding, our Parliament acts as if in hiding. This is an unacceptable situation, and it must change. We face a difficult period when the economic crisis can turn into a financial crisis, which means that due to the lack of necessary measures, a wave of new job losses, increased unemployment, bankruptcies, and insolvencies of both companies and citizens will occur, which will also threaten the banking sector," said Domazet.

He added that a dark scenario awaits us if measures are not taken without delay.

"We have data that deflation is occurring in BiH, prices are falling by 1.3 percent in the first six months of this year, which means that consumer pessimism and business pessimism are growing. This is the most obvious proof of distrust in the current government. The time is fast approaching when answers will have to be given about macroeconomic agreements and assistance. This will be money that will be conditional on deep reforms, which will affect the political elite in power, which will require them to fulfill the promises they make to both the business community and citizens," said Domazet.