It is time to free Herzegovina's economic potential from the shackles of politics

As we read the headlines about the collapse of Aluminij Mostar, we sympathize with the workers whose lives depend on this company, workers who have strived to keep the company running, despite everything. The cantonal and federal authorities should do everything in their power to mitigate the impact on the families of these workers. 

Although the company faced difficult market conditions, with high costs of alumina and electricity, there are other additional reasons for its downfall. The painful truth is that Aluminij has been slowly declining since production resumed in 1997 after the war, because its purpose became to benefit political parties, rather than the workers and the economy of Herzegovina. Now we see the logical consequences of mismanagement, the price of which is paid by the workers and their families. This is not the first time politicians have been allowed to bankrupt a company, nor will it be the last if something does not change. The managers of Aluminij, working for their political masters, instead of adapting to difficult market conditions, created the current situation where workers are suddenly left without the employment on which they and their families depend.   

This will be a difficult time for many in Herzegovina who depended on Aluminij, as well as for related companies. But the people of Herzegovina are strong, and Herzegovina's economy has many promising sectors: agricultural products, plantations and vineyards, beautiful cities, villages, rivers and mountains, and most importantly, talented people ready to do quality work for which thick envelopes or party membership are not required, but people are rewarded for what they do. The tourism sector of BiH is already recording a 13% annual growth, and Mostar Airport lies unused. It takes a few days to explore the beauties of Herzegovina, but now most visitors come for one day, benefiting Croatian bus carriers, not hotels and accommodations in BiH. Mostar Airport would easily attract many more flights and tourists if it were not under party control and if it operated under a concession agreement like most airports in the region. According to data from the United Nations World Tourism Organization, tourism revenue in BiH in 2017 was 1.4 billion KM, and it can – and should be – even higher.

It is time for Herzegovina and its people to benefit from legitimate business. Unfortunately, especially its leaders continue to block reforms and measures to improve the business climate. Instead of blocking progress, they should play a leading role in reducing labor contributions, increasing tax collection efficiency to reduce the grey economy, investing in electricity production, and taking other steps that would put Herzegovina on the path of faster economic growth. 
 
This story is constantly repeating across Bosnia and Herzegovina, to the detriment of talented people in this country. The IMF has compiled a list of about 550 state-owned companies in Bosnia and Herzegovina, which account for more than 20% of GDP. Most of these companies are in a difficult financial situation, and they account for almost 70% of tax and contribution debts in the public sector. For the vast majority of them, there is no reasonable reason for them to be owned by the authorities, except to allow political parties to control them. Under the control of political parties, both the workers in these companies and the economy of BiH are threatened with collapse. The remedy for all this is complete transparency regarding the financial situation and debt of all state-owned companies, and complete depoliticization, including hiring managers based on expertise, not political affiliation. While some companies, such as those responsible for public utilities, should remain public, numerous other state-owned companies need expert management, which would be achieved through concessions or public-private partnerships, as well as an influx of investment through quality sales to a private entity as a partner with experience in a particular industry. This would then generate new jobs, new investments, new technologies, new growth. 

Let's not waste time, let's improve the business climate to enable companies to start working and create new jobs; let's also work together to improve the education system that will produce experts capable of taking on the jobs of the twenty-first-century economy. Technology parks in Mostar, many talented young people building their careers in the IT sector, prove that this is also a promising growth sector for Bosnia and Herzegovina. Work on the real development of the economy in Herzegovina, so that young people do not go elsewhere to find a chance for themselves and escape nationalist rhetoric. Citizens of BiH deserve better than "business as usual".

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* The author is the Ambassador of the United States of America to BiH / Photo Armin Durgut / Pixsell.hr