Hadžibajrić: We are not saving the budget but the economy, proposal to reduce rents until March 2021.

The consequences of the coronavirus pandemic on the economy and business are increasing every day. Business premises, hotels are closing, workers are being laid off, and turnover is weakening day by day. This would, in brief, be the state of the economy in the municipality of Stari Grad, which the municipal mayor, mr. Ibrahim Hadžibajrić, saw for himself today during a tour of several business entities.

Accompanied by acting municipal attorney Enes Smajlović, assistant for economy Aldiana Kavazović, authorized by assistant for civil protection Lejla Dizdarević, and assistant for public relations Almedina Porča, Mayor Hadžibajrić visited some of the long-term tenants of municipal business premises. Although many would say that hairdressing salons operate regardless of the corona, Vahidin Šabić, director of M Šabić Hair Salons, convinced us otherwise. According to him, when a family of four reduces expenses, hairdressing salons are the first to be cut, men get haircuts less often, and women style their hair themselves.

“Our turnover in July this year is 67% lower compared to July last year. The municipality is one of the few levels of government that reacted in time, which is very important. We are still waiting for all other aid,” said Šabić.

The craft industry has suffered significant losses due to the closure of shops and the coronavirus pandemic. Due to the fact that many people have lost their jobs, have reduced incomes, and face an uncertain future, they are increasingly reluctant to decide on additional expenses, including shoe repairs. Tufik Đurđević, a shoemaker, felt this firsthand.

“Turnover has dropped by 60-70%. People very rarely decide to come in for shoe repairs now. We don't know how long this will last... They helped us by exempting us from rent, and that means a lot... one should be grateful for even one mark, not for something else.”

The situation is no better in the textile industry, as confirmed by Esmira Kandić, director of Thara Koncept. Speaking about customers and turnover, she says that their customers used to buy clothes for the entire season, several items at once. Now it's one or no items of clothing. She added that there is a noticeably smaller number of people entering the shops at all, and the support they received from the local community has helped them greatly.

“When you have no turnover, your expenses continue, you have fixed costs such as rent, salaries, and so on... and when you have no income, and the Municipality makes it easier for you by waiving rent, it means a lot. The Municipality met us halfway, and we, as employers, were able to enable our employees to continue their normal lives,” Esmira explained.

The director of the company City Fashion, Samir Delić, also spoke about the problems in business.

“The drop in turnover is more than 50%. In June, July, and August, we were used to tourists coming to Sarajevo, and this year they didn't. As for the local community, they offered us a hand, they wrote off our rents, and from September we are getting back to work to save what can be saved. We are counting on the municipality to help us with this,” stated Delić.

Municipal Mayor mr. Ibrahim Hadžibajrić listened to all the problems faced by the entrepreneurs. As he said, the economy has suffered severe consequences, and revenues have decreased by between 60 and 70%. Catering facilities, hotels, hostels, everything related to tourism has been affected. Those who were supposed to help in that segment did not do so.

“At the next session of the Municipal Council, I will present a proposal to reduce all rents for business premises by 30% from October 1, 2021, to March 31, 2021. We hope that after that we will overcome this crisis and that this scourge will stop, that normal work will begin, and borders will open,” said Hadžibajrić.

The reduction of rents will also mean a decrease in budget revenue by about one million convertible marks, while the previous exemption of tenants from rent (March, April, and May) cost about two million marks. However, as Mayor Hadžibajrić says, the budget exists for the citizens.

“We should not be saving budgets here. We must save the economy, citizens, help the elderly, the sick, and the socially vulnerable, and all our attention in the coming period will be focused on that, and the budget is a variable category and we should not prioritize it. Citizens are the priority. Higher levels of government should also think this way because they have all turned to saving budgets, which is wrong because budgets do not exist for themselves, but for the citizens. Citizens need budgets, budgets do not need citizens,” stated Hadžibajrić.

The next session of the Stari Grad Municipal Council should be held on October 1, when it will be known whether the Municipal Council will accept the proposal of the municipal mayor for a new reduction of rents and support for entrepreneurs. Those who have not felt the consequences of the corona will be excluded from this benefit: the banking sector, pharmacies, and bakeries. The Municipality of Stari Grad reduced rents by 50% in March, while tenants were 100% exempt from paying rent in April and May of this year.