OWNER OF SUCCESSFUL COMPANY Mehmed Polimac: Loans are not investments, BiH can do better with its resources

SARAJEVO, (Patria) - General Director of the international consulting firm Polimac Company Mehmed Polimac, an expert in the field of energy, speaks in an open interview for the Patria News Agency about current problems in BiH, the economy, and the future of BiH, which he sees in its own personnel and natural resources.

Polimac Company was founded in 1996 and provides consulting and advisory services in the fields of energy, infrastructure, geodesy and geomechanics, business management, legal and financial consulting. They work in numerous countries around the world and are recognized in the business world. 

“Bosnia and Herzegovina is a country with a thousand-year tradition. The Romans ruled in BiH, they are no longer here. The Ottomans were in BiH for 600 years, they are no longer here, Austro-Hungary was in BiH, it is no longer here. The former Yugoslavia was in BiH, it is no more, but Bosnia and Herzegovina exists and will always exist. It is a country that has the best attributes, it has four seasons, a temperate continental climate, it has rivers, seas, lakes, but no snakes longer than 1.5 meters. We have mineral resources: coal, salt, lead, gold, and others. We have absolutely everything. It is the only country in Europe that, besides the richest forestry, also has the Perućica rainforest. We have all the possibilities for the best and most beautiful life.”

Polimac points out that BiH is currently in a difficult state. He reminds that in 1974, BiH was stronger than Japan in the chemical industry. 

“Now we are where we are. Energoinvest was a company where Siemens and General Electric waited for four months to get an appointment with the late Emerik Blum. In Sarajevo alone, there were over 50,000 engineers, technicians, good and skilled craftsmen. We had construction companies that worked all over the world and were the most recognized. Subcontractors for Hidrogradnja included Enka, Strabag, and others. The war happened, but the personnel survived. The only real resource is personnel. Machines, equipment, you can buy those,” said Polimac. 

He is concerned about the current situation in BiH. 250,000 people have left the country, and Polimac estimates that another as many working-age and reproductive population will leave in the next five years, which will make BiH a country of the elderly and social benefits. A particular problem is the emigration of educated personnel, and BiH already has a problem with a shortage of carpenters, joiners, drivers, good craftsmen, and even doctors whose education is paid for by taxpayers. 

He points out that when talking to foreign investors, he states that BiH is the safest country for investment. He explains that no debts remain owed to any foreign company. 

“BiH has MIGA, a department of the World Bank and the UN, where foreign investments are 100% guaranteed against political risk. BiH is an extremely rich country, but also extremely indebted. By some measures, we currently have far more deposits in banks, these are domestic banks with foreign investors, than we have credit debt. Unfortunately, this money sits as rotten money, and we do not reinvest it. This path can be opened in the following way: Open a development and commercial bank owned by the state of BiH that will absorb this money, we will offer an interest rate under certain conditions, and depositors who invest 100,000 KM or more will have their investments guaranteed by the state of BiH or the Federation. We will not need to take the Deposit Insurance Agency. So, whoever invested money and made it available for investment in public works, the guarantee of the return of their money is the same as the guarantee we give to the World Bank or the EBRD. We have 100 percent certainty,” says Polimac. 

In this way, the money of the BiH diaspora would also be attracted, says Polimac, claiming that this could amount to 50 billion KM. He stated that this would work on the example of the construction of the Prenj tunnel. 

“If we have given the state the opportunity to withdraw these funds, or if it is a joint venture or public-private partnership, then we say we have a certain interest, which is 1.5 percent. If there is a profit, we will share it fifty-fifty,” says Polimac.

This successful businessman, who has agreed projects for the next ten years, states that borrowing can never be an investment, as is often presented in public discourse.

“Now, for the Sarajevo-Belgrade road, we borrow six billion, that is not an investment. If we borrow two billion and build a thermal power plant in Tuzla, which is necessary for us, but the owners of that thermal power plant will be the Chinese for the next 20-25 years until we repay the loan. They have taken all possible guarantees. I responsibly claim that this could have been done much better, provided that we needed a thermal power plant. We could have done revitalization. I ask who will repay this money. There will be no one to do it. In the next 20 years, there will be no one to give birth to children, and we will remain here,” says Polimac.

He explains that Janez Kopač, Director of the Energy Community Secretariat, is not an enemy of BiH and that the Energy Community is stronger than the European Union.

“They only pointed out transparency and asked if we could repay these loans. I claim that Elektroprivreda BiH will be indebted, and its annual repayment will be 300 million KM. It cannot repay that. We should have the most expensive electricity,” says this energy expert. 

Separate Economy and Politics

Polimac states that he believes politics and the economy should be separated in such a way that everyone does their part of the job.

“The state and economic entities can only be managed by proven people and those who have created new values. We have the opposite situation where the director of a public enterprise earns a salary of 2,500 to 4,000 KM, and you have given him trust and responsibility, that you can always imprison him, for four billion as in Elektroprivreda, BH Telecom. And you have representatives, ministers who are servants of the people, who earn 5,000 KM, and are absolutely not responsible for anything.”

In conversations with representatives of the international community, he alludes to introducing accountability for elected representatives. 

“Any representative who denies BiH in Parliament or in their public statements must automatically leave Parliament, assemblies, and so on. Someone cannot come to the Presidency, nor to Parliament, and say 'there is no Bosnia and Herzegovina,' while the citizens of BiH are duly paying for it.” 

Introduce the possibility of a referendum 

Although politically inactive, but very well-informed about the political situation in BiH, Polimac states that his goal is to introduce the possibility of holding a referendum on certain issues in the BiH Constitution.

“I believe that in the economy, there should have been a referendum for all our borrowings exceeding 500 million KM. Let the citizens decide. Someone is authorized to indebt us, and for that, future generations will not be able to repay, and no one is responsible,”

For example, the question could be posed in Republika Srpska, the Federation, Brčko District: “Who is for unconditional entry into NATO?

“The aggregate is within BiH. If it is a total of 52%, no one has the right in the name of the citizens of BiH to sit down, four people, and discuss. We have decided where we are going, and they are just signatories. Another question is who is for unconditional entry into the EU?” says Polimac. 

Absurdity with water imports and excise taxes

We must know what a domestic product is; it is absurd that we import drinking water worth 200 million KM, and we are third or fourth in Europe in terms of water resources.

“The state of Slovenia has passed a law according to which no private company can obtain a concession for water and water areas except the state. I think we should not import water. 

This successful businessman claims that the minimum wage in BiH can be 1,000 KM. 

“Instead of 75%, let the state take 30% and it can survive. The first obligation, besides love, is to pay taxes to the state. Those who do not pay taxes, I would introduce a penalty of life imprisonment and a ban from any business. In our country, the biggest debtors are public companies. Financial discipline must be introduced, primarily for state-owned companies. Citizens cannot pay the debts of public companies. We have good legislation, but it must be equal for everyone,” says Polimac. 

A particular problem is the excise tax funds that are not used for road construction.

“When I buy fuel for a lawnmower, I pay excise tax as if the lawnmower were driving on the highway. In Austria, anywhere, when you fill up fuel on the highway, you pay excise tax. When you fill up outside, you don't. We now have several hundred million KM unused, and we are still seeking a loan from the EBRD,” says Polimac, adding that BiH needs domestic intelligence to lead it. 

Finally, this businessman has a message for both politicians and citizens. 

“BiH deserves a much better future, citizens deserve a better future, they need economic and social security.”