IMF will not give up on labor law reforms in FBiH!

The International Monetary Fund (IMF) will not give up on amendments to the Labor Law in the Federation of BiH, which should make it easier for employers to hire new workers, while at the same time reducing the significance of collective agreements, the BiH news agency Patria (NAP) has learned from sources close to this international institution.

The IMF mission has been in Sarajevo for several days and is conducting the sixth review under the credit arrangement that BiH has with this international financial organization.

As we were told, an agreement on improving labor legislation, which the IMF considers to burden employers and slow down employment growth and investments, was already reached with the entity governments in the previous letter of intent.

The IMF is convinced that certain employees and trade unions have excessive privileges, and that the state must provide some incentive and relief to employers who alone can reduce unemployment.

However, this is a structural determinant, not an urgent measure that is a condition for the disbursement of a tranche. This means, NAP sources claim, that the deadlines for implementing these reforms can be negotiated. The deadline that was previously agreed upon has already expired, and the governments have not implemented this reform. Sources from the IMF warn that reforms must go hand in hand with patching budget holes.

- Negotiations with the entity governments are currently underway. It is not disputed that these changes must be implemented, but it is obvious that the governments need more time. We will see by the end of the negotiations whether everything can be extended further. But, we warn that it is in the interest of the authorities to implement these reforms as soon as possible - unofficial sources from the IMF mission told us.

It is not excluded that this reform will also be set as a condition for the seventh tranche of the loan, or be a reason for the current review of the arrangement not to end positively, and to be interrupted until the deadline for the implementation of labor law reform is specified.