Karamujić: The FBiH Government is on the completely wrong track, it will suffocate our economy

(Patria) - It's the end of the year, and the Economic and Social Council of the Federation of Bosnia and Herzegovina is discussing a new decision by the FBiH Government on determining the minimum wage, now according to the level of professional qualifications.

At the same time, the authorities continue to borrow and accumulate debts without any real effect or accurate data on where that money ends up.

Regarding how good and well-thought-out the economic decisions of the FBiH Government are, and what the BiH economy can expect with the continued increase in taxes and financial levies, Professor Muharem Karamujić from the Faculty of Economics at the University of Sarajevo spoke about for the show '7Plus' on Hayat Television.

- We have talked several times about what the FBiH Government is doing. At the beginning of this year, we had an increase in the minimum wage, and unfortunately, everything we said then happened, which is not surprising at all. My first comment then was that there is no economic study assessing that proposal and what the Government wants to achieve with it, which is crucially important.

You need to know what the proposer expects. Instead, we got various stories, and what we warned about happened. Economics is a science, and as such, it has many laws. The approach is identical to when you go to a doctor; he examines you first, establishes a diagnosis, and then gives you a way to be treated - says Karamujić.

It's the same with economics, he continues; laws have no exceptions, rules do, but laws don't.

- Today's situation is the consequence of these laws. If you have an economy that is under attack and towards which the state is quite hostile, from the difficult registration of a company to a whole host of what they say are around 3,500 parafiscal levies, very expensive payment transactions, in a word, a hostile environment. That is an internally hostile environment.

In addition, you have an external one. Germany, which is the economic engine of the EU, has been in recession for the last two and a half to three years. And it should be reminded that new value comes from our economy, not from administration or the sales sector, banks, administration. These are sectors that manage and use the value generated by the economy.

Therefore, we have an economy that is attacked both from the outside and from the inside and is crying out for help. Instead, there is a new tax burden. In the first year of economics, and at my faculty and all faculties worldwide, it is taught that when the economy is under attack, it needs help, and when it is in full force, you can burden it a little with taxes and reduce its momentum.

In our current situation, under such attacks, our economy needs help, it needs to be eased so that it can remain competitive. Instead, with an economy under such attacks from both outside and inside, burdening it with new taxes and levies that it cannot bear means suffocating it - emphasizes Karamujić.

He also analyzed the effects achieved by the FBiH Government with last year's minimum wage increase.

- So, what is the result of the FBiH Government's measures? The best parameter is the number of employees. If we compare the results from October this year and October last year, we have 4,000 fewer employees. If you look at the data from October two years ago, you see that the economy, which was, let's say, left alone then, had 6,000 more employees compared to last year.

The same was true a year before that, when there were 6,000 more employees in October compared to the previous year. So, when the economy takes care of itself, the number of employees increases by 6,000 annually, and after these interventions and moves by the FBiH Government, we have not only lost that growth of 6,000 newly employed but also lost another 4,000 jobs.

Therefore, we have lost at least 10,000 employees this year. When you have workers and companies that are in crisis but are alive, you can help them, but when you destroy them, kill them, you can no longer help them - concluded Karamujić.