FBiH Invested 30 Million KM in Tourism, With No Results!

The Federation invested nearly 30 million marks from the budget in tourism development between 2006 and the end of 2012, but an audit found that this did not contribute at all to improving conditions for tourism development, according to the performance audit report on Tourism Development Support in FBiH, the Bosnian news agency Patria (NAP) has learned.

Namely, Federal auditors scrutinized the multi-year financing of various projects through the FBiH Ministry of Tourism and Environment and concluded that the invested money did not yield expected results, and that this sector of the economy in BiH is still struggling.

- The success of tourism development is closely linked to the country's image, its political and economic stability, as well as the quality of transport infrastructure and IT services. The tourism sector impacts many other service sectors and manufacturing industries, such as the food industry, construction, and financial services. However, after the audit, it was concluded that the activities and measures undertaken in the past period have not contributed to improving the conditions for tourism development in FBiH – the document published by the FBiH Audit Office concluded.

According to the audit, the tourism sector in BiH and FBiH is still in its early stages of development, based on data showing its share in BiH's GDP and employment, and the number of tourist arrivals/overnights. The tourism sector's share in GDP is 2.47%, which is significantly lower compared to the global tourism share (9.4%), it is stated.

- When it comes to competitiveness in travel and tourism, BiH ranks 90th out of 140 ranked countries worldwide. Between 2006 and 2012, approximately 30 million KM in incentive grants were allocated from the FBiH Budget for tourism development. However, although the FBiH authorities have taken certain activities to improve conditions for tourism development, what still characterizes the tourism sector in BiH/FBiH is the low average length of stay for guests (which is 2 days) compared to the average tourist stay in Europe (9.7 days), as well as the low utilization of accommodation capacities (15%) – the auditors point out.

Similarly, World Economic Forum reports mention BiH as a negative example of progress in tourism development and as one of the three least attractive destinations in Europe.

According to research by tourism experts, there are several obstacles that negatively affect tourism development. This primarily relates to the country's political and security situation, underdeveloped transport infrastructure, unfavorable tax policy, as well as non-compliance with legal regulations for tourism. The FBiH authorities are criticized, as NAP reports, for not monitoring the results of funded projects, but only their financial correctness.

Auditors assess that the approved projects have not substantially contributed to tourism development.

- The implementation of incentive allocations to beneficiaries according to existing criteria does not stimulate tourism development. The existing oversight of the expenditure of incentives for tourism development does not provide sufficient, reliable, and relevant data on the basis of which comprehensive monitoring and evaluation of the effects of incentives can be carried out, both on individual incentive beneficiaries and on the entire tourism sector – they conclude in the performance audit, NAP reports.