Bosnia searching for new deal with IMF

(MENAFN- The Journal Of Turkish Weekly) Bosnia is trying to obtain new financial support from the International Monetary Fund, IMF, although an existing arrangement remains blocked because of the slow pace of reforms.

Bosnia's authorities have launched a new dialogue with the IMF about another future arrangement with the international financial institution.

Continued financial support from IMF is crucial for Bosnia's financial stability, given its poor economic and social situation.

IMF support is also a key element of the EU's new initiative for Bosnia, which € following the green light given for the activation of Bosnia's Stabilization and Association Agreement € plans to use IMF funds to persuade politicians to undertake difficult reforms, a senior international official told Balkan Insight on Tuesday.

"For years, the IMF has been providing financial support to Bosnia under very weak conditions. That time has passed and no more money will be disbursed without very concrete actions being undertaken," this official said.

IMF payments to Bosnia in line with its current Stand-By Arrangement were blocked last September because Bosnia had not undertaken the required reforms.

It is widely accepted that local politicians stalled on reforms, fearing that they would spoil their chances ahead of the general elections last October.

An IMF mission arrived in Bosnia at the end of April and has since met officials from the state government - the Council of Ministers - as well as governments of Bosnia's two entities, the Federation of Bosnia and Herzegovina and Republika Srpska.

The IMF has used the meetings to assess the current state of affairs and discuss conditions for the release of the blocked sum of 150 million euro, as well as to open discussions about future arrangements after Bosnia's current Stand-By Arrangement expires in September.

Following meetings with the Federation entity premier, Fadil Novalic, on Monday and with the Chairman of the Council of Ministers, Denis Zvizdic, on Tuesday, the head of the IMF mission, Ron van Rooden, stressed that Bosnia's authorities face a number of complex tasks.

These include adoption of new labour and civil service laws, a reduction of the burden on wages, establishment of a single registry of social benefits' recipients, pension system reform, and simplification of the regulations for the business community.

Most of the reforms are seen as difficult and unpopular, but after many years of political neglect local experts and international officials believe Bosnian leaders have no alternative but to initiate them.

To make the process as painless as possible, EU, IMF and World Bank officials are expected to hold a high-level meeting with Bosnia's leaders next week, to start jointly developing a concrete action plan including the exact sequence of these reforms.

However, international officials still fear that some Bosnian leaders do not truly want to see Bosnia come closer to the EU as they would then risk losing all their current perks and even be forced to take responsibility for years of corruption.

For that reason, some international officials fear that Bosnia's political elites will find a way to politicize the upcoming reforms and again block the process.

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