Profiteering in murky waters without punishment: Why are BiH authorities not protecting their citizens from constant and unjustified price hikes?

(Patria) - Bosnia and Herzegovina is already feeling the direct economic consequences of the war in the Middle East, especially through rising fuel prices and a general wave of price increases. Unfortunately, this trend will not stop only at energy sources, but will spill over to almost all other products and services.

An additional problem is the "profiteering in murky waters" used by traders and the simultaneous lack of reaction from the competent authorities, which is why the citizens of Bosnia and Herzegovina regularly bear the brunt of the crisis, stated economic analyst Igor Gavran in an interview for the Patria News Agency (NAP).

Prices will continue to rise

Gavran emphasizes that fuel prices in Bosnia and Herzegovina began to rise even before it was justified. And in the coming period, he expects this trend to continue due to the actual increase in fuel prices imported into our country.

- Consequently, it is very likely that prices of other products and services will also rise, both due to the actual increase in costs and due to the usual abuses by traders who use every opportunity as an excuse to further increase prices, even when there is no real basis for it - says Gavran.

He says it is ungrateful to predict what will happen next, as it depends on when "the US and Israel will stop their aggression against Iran," which, among other things, would lead to an immediate, and then a long-term, drop in oil prices.

- And when it comes to price hikes in Bosnia and Herzegovina, I fear that even when the aggression ends and hostilities cease, and price increases stop at the global level, the price increases might continue in our country, as has been the case so far - said Gavran.

According to him, no one in the authorities in Bosnia and Herzegovina is trying to prevent such abuses. Inspection work is minimal, and price control laws are minimally used - the essence is that consumers are always the biggest losers.

- Bosnia and Herzegovina could certainly improve these mechanisms. Certain amendments to the price control laws are also in procedure. However, the key problem is not the lack of a legal framework, the key problem is the lack of will, awareness, and intention of the authorities to take action.

There are not enough inspectors, inspections themselves are not enough, but all of this can be resolved and supplemented and improved if something is missing in the regulations, if there were the will. But there is no such will. The only thing we see is the will of the authorities to increase VAT revenue collection. Therefore, price increases suit them because they always increase these revenues as well - points out Gavran.

He emphasizes that it is quite clear, based on the profit indicators of trade centers in BiH, especially the leading ones, and especially the largest trade chain in Bosnia and Herzegovina, that the abuses are not sporadic, but systemic and enormous.

- Their profit growth is such that it cannot be explained by anything other than unrealistically high prices and high margins. Margins in stores in BiH are far higher than in normal countries. And this practice continues and will continue until it is prevented systematically - states Gavran.

He reiterated once again that the responsibility lies, above all, with the authorities who allow it.

- This is no longer even "profiteering in murky waters"; it is so clear to everyone that the prices of numerous products and services have nothing to do with reality or actual costs. We have media promotions of owners, who are declared billionaires and praised for some great successes in their business.

And this is not about any success; it is about classic abuse of position, about robbing customers and achieving completely unrealistic and abnormal profits and gains that are not justified by successful business, but by unrealistically high prices and extremely high profit margins - warns Gavran.

Abuses can be prevented

He drew a parallel between the Russian aggression against Ukraine and the war in the Middle East, emphasizing that both conflicts have led to an inevitable rise in prices everywhere in the world, and therefore in our country.

- We initially had some objective factors that influenced product prices on the world market. However, when these factors were exhausted, or when world prices began to decrease again, we did not see a corresponding decrease in BiH; instead, price increases continued.

The war in Ukraine was used as an almost inexhaustible excuse for price increases, even when there was absolutely no basis for it. We had situations where apartment prices increased during that time and were justified by price increases due to the war in Ukraine, which was completely unrealistic and abnormal.

We imported almost nothing from Ukraine, or very few products, yet it was constantly mentioned as a reason for price increases. And this is something that is happening now. Of course, the increase in fuel prices will be objectively conditioned by the increase in fuel prices on the world market.

However, what is not objective is that the prices of everything else are immediately increased, regardless of the extent to which the actual increase in costs applies to these products. I fear that this is what awaits us. And we come back to the same thing - it's all up to the domestic authorities.

All of this can be prevented. Abuses can be prevented. However, if this does not happen, we will have the same situation as with the war in Ukraine, where prices that were increased under that excuse do not go down, but only continue to rise, and additional excuses are found as to why this is the case - said Gavran.

In any case, he adds, tourism is currently one of the sectors most affected by the war in the Middle East in BiH due to a drastic decrease or almost complete absence of visitors from the Arab/Muslim world to our country. However, Bosnia and Herzegovina could also see an opportunity to serve as an alternative tourist destination to the war-torn Middle East.

- Namely, those who, for example, from Western countries planned to travel to Dubai or the Middle East, at least some of them might come to BiH. Not because we offer similar experiences, quite the contrary. People simply travel, they want to discover new destinations when the ones they planned are not safe. And why wouldn't some of them end up in Bosnia and Herzegovina?

Frankly speaking, Bosnia and Herzegovina has many advantages over the Middle East region. What will you do with an artificial settlement in the desert that has nothing in it, no tradition, no history, no culture, no real value. You only have glitter, skyscrapers, and everything absolutely artificial.

In Bosnia and Herzegovina, you have natural beauty, natural values, history, culture. Definitely, those who have not yet discovered Bosnia and Herzegovina will now have the opportunity to do so - points out Gavran.

Reconstruction of Iran

The consequences for Bosnia and Herzegovina, the analyst continues, are certainly negative, although some isolated positive effects are possible, but the effects on consumers will largely be determined by what the domestic authorities will do.

- They usually do nothing in favor of citizens, but there is always a first time - so we will see. What is definite is that the focus should primarily be on ending the war. All of this we are talking about, these negative economic effects, all of it is unimportant, marginal, and symbolic.

It is simply not even worth mentioning when we compare the immense sacrifices, suffering of the Iranian people, Iranian civilians, and citizens of other countries as a consequence of the American-Israeli aggression.

It is regrettable that we still have illegal aggressions and bullying behavior from countries like the United States of America and Israel, and that no one in the world is essentially stopping it.

We can only hope that this war will at least exhaust them to such an extent that they will look at their own capabilities a little differently in the future, and that we will have fewer such cases of aggression - emphasizes Gavran.

He also adds that companies from Bosnia and Herzegovina will likely have the opportunity to participate in the damage repair in Iran after the war ends. However, this again depends on whether the BiH authorities will behave correctly and reasonably, which is currently not the case.

- Currently, for some private reasons I don't know, Bosnia and Herzegovina is trying to position itself on the side of the aggressor, and this could, of course, extinguish our possibility of participating in the reconstruction of the Islamic Republic of Iran, which has always been a friendly country to us, for all time - concludes Gavran in an interview with NAP.

(D. Kovač)