”This inflation, although initially conditioned by external influences, is now undergoing various phases and forms and it is difficult to predict how it will evolve in the future. In general, we can expect a continuous rise in prices,” Anto Domazet, professor emeritus of the University of Sarajevo, says in an interview for BHRT.
”I think inflation in Bosnia and Herzegovina (BiH), as a small country, cannot be controlled. You can’t fight inflation. You can only fight sporadically. For example, with the increase in food production. You can fight price controls to some degree. But the key area where governments need to act is to combat the effects of inflation. And in particular by social policy. Of course, also through economic policy,” says economic expert Anto Domazet.
Abolition of excise duties on oil and oil derivatives
Domazet is against the abolition of excise duties on oil and oil derivatives, because such a decision by the state, he believes, would aggravate inequalities in society. According to him, almost all the effects of such a decision would benefit those who have the highest salaries, that is to say those who drive the most cars and spend the most.
”If we reduce excise taxes, we lose that money. There is no money for socially disadvantaged people. That is why I think this measure is ineffective. It won’t help, because inflation will continue, it will affect people in the price of food, and it will affect people in many other things. Are we then going to lower taxes there indefinitely or are we going to say that he is on his side? And we have to help the most affected people, we have to give them money for cash payments, because that’s what can get people in need out of trouble the most,” Domazet believes.
What is “reindustrialisation” and why do we need it?
The salvation for BiH is reindustrialisation, says Professor Domazet and explains that our country needs to strengthen industrial production through modernization, innovation and production for export. Reindustrialization would guarantee employment and shape the country’s education system to the needs of modern technologies. Application of digitalization, application of decarbonization and application of green economy in industrial development would be ensured.
”IIn the research I have done, There are many industrial companies, with foreign or national capital, which have the highest technological level. However, these are individual cases. We must make it a mass phenomenon. That we in the industrial zones have promising companies that, after being introduced to this market, having reached certain capacities, expand, increase their capacities, employ, invest and thus increase our exports, thus increasing our competitiveness, our income, salaries and people’s standard of living,” evaluates Professor Anto Domazet.
What is the fate of the Brod refinery – only God knows!
”The Bosanski Brod oil refinery and the ModrIhe Oil Refinery, part of Energoinvest before the war, was an integrated entity that aroused great interest on a European scale. The Bosanski Brod refinery was on the road to modernization and capacity building, while the Modrica refinery was about to finalize its major investments in the production of base oils, paraffin and motor oils from high quality. War, aggression, physical destruction and severance of trade ties, loss of technological continuity, market continuity led to the fact that with the entry of the new owner, the current situation was quite bad,” says Anto Domazet, who before the war was one of the leaders of the powerful Energoinvest.
”The investor who came did not make the necessary efforts. As we can see, the situation is miserable and this is the strategy called “disinvestment” in textbooks. Meanwhile, the debt figures attributed to the refinery are fantastic, at fantastic interest rates. Who will cover it? How will this end? Only god knows,” Anto Domazet concludes.