prijava
SARAJEVO, December 25 (FENA) - There are disagreements with both the Federation of BiH and the Republika Srpska regarding a new arrangement with the International Monetary Fund (IMF). A compromise of all parties will be necessary to reach an agreement. We are ready to start the talks again at any moment. Andrew Jewell, the IMF's resident representative in Bosnia and Herzegovina, said this in an interview with Dnevni Avaz, commenting on the fact that no agreement had been reached on the Letter of Intent and the three-year arrangement with the IMF.
The financial organization said a few days ago that no agreement had yet been reached with the BiH authorities on a new three-year extended arrangement due to a lack of consensus on reforms that should be part of the program. Due to that, the loan arrangement worth 1.5 billion KM is pending. Disagreements come at a time when all economies are battling the aftermath of a coronavirus pandemic and a new arrangement would be of great help to entity budgets.
“The response to the pandemic was initially very effective in controlling the spread of the virus. However, the ‘lockdown’ in the spring has left strong effects on economic activity, and a lack of coordination between authorities is hampering the recovery. The banking sector has shown resilience thanks to the protective layers of capital and liquidity that have been created in recent years,” says Jewell.
He claims that they have confidence in their currency in BiH thanks to the currency board arrangement.
“Looking ahead, we believe that greater support is needed for both the population and businesses to ensure a sustainable recovery. Measures could include further wage subsidies, reducing the tax burden on labor, expanding unemployment benefits and improving credit guarantee programs,” Jewell points out.
When asked how much are BiH authorities aware that certain reforms are necessary to be implemented before the arrangement, he replied that the authorities were aware of the reforms they were asking them to implement under the new program.
“These reforms are not difficult to implement from a technical point of view, nor are they ‘economically painful’. Moreover, these reforms can be implemented quickly and would benefit the people of Bosnia and Herzegovina. Furthermore, many of these reforms would bring BiH closer to the candidacy status. But, as I have already said, a compromise will be needed to reach an agreement on the program,” Jewell told Dnevni Avaz.
(FENA) L. N.
