Đonlagić: The FBiH Budget Proposal for 2016 is a "Leap into a Hole Deeper Than One Billion KM"

The head of the DF Club in the House of Representatives of the FBiH Parliament, Dženan Đonlagić, called the FBiH Budget Proposal for 2016 a "leap into a hole deeper than one billion KM", reports the news agency Patria.

The budget proposal for next year was presented to the deputies in the FBiH Parliament today and amounts to approximately 2.6 billion KM. More than one billion KM will be spent on repaying FBiH debt, close to one billion KM will be spent on current expenses, while only 6 percent of the budget will be spent on the development of the Federation.
Such a budget was assessed as catastrophic by the opposition.

 Destruction of Public Enterprises 

- The budget proposal for 2016 only confirms the thesis that the current Government, no matter how much it tries to emphasize it, is not a reformist government, but a government of continuity, which is catastrophic for our public economy - warned Đonlagić.

- There is no shift from a consumer budget to a development budget. And there cannot be one when an economic and budget policy based on the devaluation and destruction of public enterprises has been pursued for 20 years - added Đonlagić, who is also a professor at the Faculty of Economics in Sarajevo.

He said that the model of managing public enterprises, adopted in the summer of 2015 by the then unconstitutional FBiH Government, composed of SDA – HDZ BiH, does not exist anywhere in the world of a market economy.

- Proof that things are continuing as before is the latest injection, for who knows what time, of 22 million KM into the transfer to Željeznice FBiH as a chronic loss-maker. It's like pouring water into a bottomless barrel.

Subsidizing public enterprises without prior depoliticization and corporatization is a utopia.

More Money for Political Parties

Similarly, it is a fact that in the FBiH budget we have a trend of declining public revenues from the segment of participation in dividends and profits of public enterprises. This proves that the concept of depoliticizing public enterprises, which DF continuously and persistently advocates for, as a turning point in the way of governing, and which unfortunately has not been introduced into the work of the FBiH Government this time either, is the initial remedy for the beginning of the revival of the domestic economy.

Today, capital transfers in the FBiH budget are a meager 1.35 percent. In translation, there are no investments and no development. But, on the other hand, in the Budget Proposal, we found an item that represents an investment in politics. It is shocking that the SDA, HDZ, and SBB of the federal government have proposed an increase in budget allocations for coalition political parties from 1.9 million KM in 2015 to 3.6 million KM in 2016.

The Prime Minister, Deputy Prime Minister, and ministers seem to have been good students, as they have all included themselves in the budget under the item - current reserve, in the amount of 5.1 million KM, which is more than, for example, the allocation for science.

They will spend this money as a personal discretionary budget, without any criteria, which has no economic basis.

Abandon New Borrowing

The hole in the federal budget is over a billion KM deep, and a patch is being sought through new borrowing. For illustration, in the Draft Budget of the FBiH for 2016, out of the total budget of about 2.5 billion KM, 1.2 billion came from debt repayment and interest.

Compared to 2006, when VAT was introduced, until today, the total public debt has tripled.

In the end, the economic policy in the country must be urgently changed by abandoning new credit borrowing. The time has come to return the issues of inequality, disenfranchisement, and poverty to the center of economic thought in BiH.

If borrowing continues, and it seems it will, the story will end with the sale of remaining public enterprises majority-owned by the FBiH, such as BH Telecom, and EPBiH and EP HZ HB.

Before that, the public should ask the question, who and why is avoiding the reform of our public enterprises - warned Đonlagić, writes Patria.