Hasić: Flood loans are favorable, but BiH is already deeply in debt

The donor conference in Brussels for the flood-affected areas in BiH and Serbia was assessed as very successful. We received one billion and 586 million KM in donor aid for priority reconstruction and another 82.3 million KM for regional projects, writes the Patria news agency.

However, most of the funds are credit debt, and economic analysts are now warning that BiH will have difficulty escaping debt slavery. Duljko Hasić, an economic analyst, told NAP that the loans promised at the donor conference are very favorable, with low interest rates, grace periods, etc., and in addition, unlike before, they will also be invested in the real sector.

- Regardless of the favorable conditions, this will certainly further affect BiH's borrowing, which in the previous period had a truly characteristic relationship in terms of borrowing, without a specific strategy for taking on debt funds. So, these loans are not the issue, but rather the ones previously taken to patch up budget reserves – said Hasić.

He further notes that it is known that every citizen is indebted by several thousand marks, so we are already in debt slavery.

- Previous loans were taken on unfavorable terms. In the period from 2008 to 2013, BiH's debt doubled, and the only source of funds is the IMF, and the money taken is used for only one purpose: patching up the budget, which is unsustainable – added Hasić.

This economic expert warns that without directing funds to the real sector and development projects, there is no prosperity.

- It will be even harder to repay loans, given that BiH's borrowing maneuverability space has narrowed. Very soon, creditors will reach for collateral in BiH, in other words, for what BiH has, they will take pledges, mortgages, the telecommunications sector, the energy sector, because with such a strategy and the number of unemployed, nothing else can happen – added Hasić.