Blow to BiH's Financial Stability: Political Puppets to Lead Central Bank of BiH to Dodik's Delight!

By: Amina Čorbo-Zećo

In the shadow of the arrest of the President of the Court of BiH, Ranko Debevec (which is indeed news) and Osman Mehmedagić (which has become a practice), little is being said in public about the events within a very important institution for the state of BiH - the Central Bank of BiH.

Namely, at the 35th extraordinary session of the Presidency of BiH, at the initiative of the member of the Presidency of BiH, Denis Bećirović, the new composition of the Supervisory Board of the Central Bank of Bosnia and Herzegovina (CBBH) was unanimously appointed. The mandate of the outgoing Supervisory Board expired on August 11, 2021.

At first glance, it seems like a logical sequence of events, if we know that the mandate of the existing Supervisory Board expired back in 2021.

However, precisely because of the importance of an institution like the Central Bank, not even international institutions, such as the World Bank, made any problems, and the reason is that the CBBH was a stable institution, and with it, the state of BiH in financial terms.

The decision on the appointment of new members has not yet been published in the Official Gazette of BiH, but it is already known that the new composition of the Supervisory Board consists of Prof. Dr. Jasmina Selimović, Prof. Dr. Mirza Kršo, Prof. Dr. Danijela Martinović, Prof. Dr. Darko Tomaš, and Prof. Dr. Radomir Božić, at least according to the announcement from the Cabinet of the member of the Presidency of BiH, Denis Bećirović.

Bećirović was the initiator of the session, and his proposals, Selimović and Kršo, are also candidates for the position of Governor of the CBBH.

However, by appointing people who are in a conflict of interest (Jasmina Selimović on the Supervisory Board of Raiffeisen bank), as well as the fact that politically suitable individuals were appointed (Kršo is an advisor to Bećirović, and Tomaš is the mayor of Prnjavor (SNSD)), the Presidency of BiH has shown that laws and rules are no longer important, but only agreements that can weaken the Central Bank and endanger the financial stability of the state.

It is no secret that Milorad Dodik, Tomaš's boss, wants exactly that.

When it comes to conflict of interest, it is very easy to find information that Tomaš is a shareholder in two microcredit organizations.

The Law on the Central Bank of BiH prioritizes the independence of this institution.

“Within its powers established by this law, the Central Bank is completely independent of the Federation of Bosnia and Herzegovina, Republika Srpska, and any public agency and body. In order to objectively implement its tasks, unless otherwise stipulated by this law, the Central Bank shall not receive instructions from any other person.

The independence of the Central Bank must be respected, and no one may unlawfully seek to influence any member of the Central Bank's body who makes decisions in the performance of their duties to the Central Bank, nor to interfere with the activities of the Central Bank,” states Article 3 of the Law on CBBH.

Who in their right mind in this country still believes that Tomaš and Božić will not follow Dodik's instructions? How did we reach a situation where members of the CBBH Supervisory Board are appointed in a highly non-transparent manner.

For years, the story about the exploitation of surplus funds of the Central Bank of Bosnia and Herzegovina has been emphasized. On one hand, Milorad Dodik is playing very dangerous games for the state of BiH, and on the other hand, there is the Central Bank.

Dodik requested that the CBBH distribute funds to the entities in BiH so that they could invest them in the economy. Then, during the coronavirus pandemic, he sought this money to form commodity reserves, and when that also failed, he tried to obtain the money to mitigate the consequences left by the coronavirus pandemic.

The Central Bank strongly resisted all of this, while also ensuring that IMF funds were distributed according to procedures, and that money was not printed or that the Development Bank of FBiH was not collapsed, which were also the wishes of SNSD.

Therefore, it must always be kept in mind that Dodik desperately wants money, especially now, at a time when his EU funds and infrastructure projects are blocked and when RS's huge debts are coming due. So far, it has been shown that everything given to Dodik is used in the fight against the state of Bosnia and Herzegovina, and the 'troika' has so far not had adequate responses to such a policy.