Many in Bosnia doubt elections will tackle a dysfunctional economy

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  • Dividing nationalist posturing dominates election campaign
  • Ethnic and family ties drive politics, thwarting real reform
  • Businesses say excessive taxes and red tape are holding back the economy
  • ‘They don’t care,’ says business leader of government

ZEPCE, Bosnia, September 26 (Reuters) – As nationalist rhetoric dominates campaigning for Bosnia’s October 2 elections, many doubt the vote will usher in leaders who would focus on reforms to tackle a dysfunctional economy and unlock the deadlock. country’s path to membership of the European Union. .

Since the 2018 elections, progress towards liberalizing the economy and improving the rule of law has stalled as the Serbian, Croatian and Bosnian ruling parties exchange threats with an intensity not seen since the war devastating 1990s in Bosnia.

The post-war autonomous Serb entity of Bosnia has often scolded the work of its weak central government, Croats threaten to “reorganize the territory” where they live, and Bosnians – who fought Serb and Croat separatists for war – warn that they will defend Bosnian state integrity at all costs.

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“It is very difficult to imagine the possibility that the current political elites will change because the political system and the ethno-nationalist institutions are firmly entrenched,” said Asim Mujkic, a professor at the University of Sarajevo.

Bosnians will vote for new Serb, Croat and Bosnian members of the country’s inter-ethnic presidency as well as for deputies to national, regional and cantonal assemblies.

The Dayton Peace Accords that ended the 1992-95 war established an ethnic quota system at many levels of government, making Bosnia the country with the most government officials relative to its population .

Bosnian lawmakers have the highest salaries in the Balkan region and many benefits, but the number of laws passed to tackle the practical issues of market reform, employment, poor rule of law, corruption and organized crime is disproportionately low.

Young people emigrated en masse, disillusioned with a political system based on ethnic and family ties.

“Political influence in Bosnia is exclusively negative and it is rarely possible to find positive effects of politics on the economy,” said economist Igor Gavran.

According to the United Nations Population Fund (UNFPA), around 300,000 people have left the landlocked former Yugoslav republic of 3.5 million since the last census in 2013.

In March, the International Monetary Fund estimated Bosnia’s unemployment rate at around 30%, but that does not include a vast gray economy that employers have created to avoid paying high taxes.

Foreign investment has been scarce in recent years due to political instability and Serbian threats of secession, varying between only 400 and 500 million euros per year.


Ruling parties routinely reject laws aimed at easing tax and regulatory burdens on businesses and citizens, such as proposed laws reducing excise duties on fuel and VAT on basic foodstuffs in March but never approved.

Bosnia recorded an annualized inflation rate of 16.8% in August, one of the highest in Europe, partly due to the war in Ukraine.

Employers say they have had to cope alone with soaring transport and raw material costs, labor shortages caused by emigration and the absence of legal provisions for foreign workers.

“Since December 2021, the price of fuel has increased by more than 50% but we have no response from the government,” said Edin Causevic, director of international transport company Frigosped in the central town of Zepce.

“They do not care.”

Causevic said Bosnian international carriers are not compensated for the fuel excise tax they pay abroad while being hampered by bureaucracy at Bosnian border crossings.

“Not a single measure that they (ruling parties) have instituted has made our business easier,” said Nagib Mujkic, director of Tisa Komerc, a producer of metal and plastic components at Zepce.

“I often wonder if they do it intentionally or because they lack knowledge.”

None of the business figures interviewed by Reuters believe the situation will change after the election.

“It’s ridiculous that there are few businessmen on these lists of candidates (for elections), unlike those who are used to living off the work of others. People who could contribute to a society better are not there (in politics),” Mujkic said. said.

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Reporting by Daria Sito-Sucic Editing by Mark Heinrich

Our standards: The Thomson Reuters Trust Principles.

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