This government is worse for BiH citizens than the coronavirus

(Patria) - Double fear is the way of life for most of Bosnia and Herzegovina in the last twenty days. The coronavirus is claiming its first victims, and their number will unfortunately inevitably increase.

At the same time, the BiH economy is already feeling the consequences of this scourge. A few days ago, the Prime Minister of the Federation of BiH, Fadil Novalić, stated that 3,543 workers have been laid off in this part of the country. Layoffs are also occurring in the Republika Srpska entity. The first to be hit are workers in tourism, hospitality, the wood processing industry...

"Our society entered this global crisis already impoverished. A decline in industrial production was recorded in the last quarter of 2019. We don't have a middle class, we have the rich and the poor. We had war and post-war profiteers, and now we will have virus profiteers. Well, my dear people, a liter of chlorinated water is being sold for as much as 15 KM," says Svetlana Cenić, an economic expert, for DW.

The DW interviewee points out that the BiH economy had major problems even before the coronavirus pandemic. "First of all, the BiH economy has structural problems. The economy functioned despite, not thanks to, the government. When you look at what the entity governments and the Council of Ministers have done to mitigate the consequences for the economy, it is too little. Most health and related supplies can be produced in BiH. Gowns, blankets, soaps, paper towels, disinfectants... all of this is imported, which is devastating. The adoption of the budget at the state level was recently blocked, which is inexplicable.

This government is worse for BiH citizens than the coronavirus. Citizens need to be told that a very difficult period awaits them after we defend ourselves from this scourge. A state of emergency was introduced in RS on Saturday (March 28), and the current ruling clique has absolute power, which is not good.

The government at all levels will misuse the coronavirus for a long time, blaming the pandemic for all the economic collapses that follow," emphasizes Cenić and adds: "New borrowings await us, new arrangements with the IMF. We will beg this institution, agree to all their demands, and take out new loans that generations and generations will repay."

BiH was largely dependent on long-term arrangements with the International Monetary Fund (IMF) even before. In the domestic public, this institution is perceived negatively, as someone who siphons money out of BiH.

Academician Muris Čičić, one of the economic authorities in BiH, commented on the current situation in an interview with Deutsche Welle. "BiH is not over-indebted, although the impression is that the Republika Srpska entity could soon find itself in that situation. They are sliding into that state with their economic policy," says Čičić.

According to him, political circumstances in BiH have a great impact on the economic situation.

The problem is political instability

"The situation in BiH is specific, ever since the signing of the Dayton Peace Agreement. When an economic strategy is created, consideration is given to ethnic groups, entities, neighbors... and that is not good at all. The problem is political instability and poor management of macroeconomic relations. The suitable, not the capable, are chosen. In that case, the economy suffers," pointed out Čičić.

When it comes to the IMF, Čičić believes that the role of this world organization is important for the BiH economy.

"When there is no money for social categories, the blame is placed on the IMF in the BiH public. I think that is a wrong perception. Why? The IMF lends to BiH on favorable terms, but they insist on knowing how these funds will be spent. In a way, the IMF plays the role of the government in BiH and insists that money be spent rationally, not to extinguish social fires. An institution like the IMF upholds liberal economic philosophy, the so-called Chicago School, characterized by strict austerity measures to stabilize the budget. These measures, as a rule, not only in BiH, affect the socially vulnerable categories of society. Precisely this segment of society is an important voting base for every government, so the IMF will insist on necessary austerity measures for a long time to come," concluded Čičić.

And it is precisely these socially vulnerable categories of society who most fear that future generations in BiH will fall into debt slavery due to the IMF and loans, especially after the coronavirus pandemic.