Bosnia: Politicians Blind to Nation's Suffering

Soaring unemployment and falling investment is pushing Bosnia closer to the abyss, but politicians show little sign of even starting to come to grips with the crisis.

Bosnia: Politicians Blind to Nation's Suffering

Soaring unemployment and falling investment is pushing Bosnia closer to the abyss, but politicians show little sign of even starting to come to grips with the crisis.

Friday, 22 March, 2002

As Bosnia prepares to go to the polls in October, the politicians are bickering and dragging their feet even more than usual - obsessed with securing flashy but short-term victories ahead of the vote.


Their internecine party political warfare takes place against an increasingly dire economic background.


Only one family in eight in the Muslim-Croat Federation now earns enough for a reasonable standard of living. The situation is worse in the Bosnian Serb entity, Republika Srpska, where only one in every 25 families lives above the poverty line.


These grim findings were contained in the Anti-Poverty Action Plan, a document prepared by the ministry for foreign trade and economic relations in cooperation with the World Bank, which parliament is expected to adopt in June.


The hope is that among other things it will boost the local judiciary and create an affordable welfare system.


Bosnia's worsening poverty is linked to a steady fall in Western aid and a chronic lack of foreign investment.


None of the parties have addressed the roots of this problem. Instead, they trade accusations, offer unrealistic pledges and exploit the issue of poverty to secure the best position ahead of the autumn poll.


The statistics ought to give them cause for alarm. The country's GDP last year was set at 4.6 billion US dollars. This is less than 1,200 dollars per capita and puts Bosnia at the bottom of Europe's development ladder.


The unemployment rate is even more worrying. It runs at 40 per cent, the highest in Europe, compared to 22 per cent in Croatia, 12 per cent in Hungary, 15 per cent in Bulgaria and 10 to 12 per cent in Poland.


Statistics suggest each employed person in Bosnia is effectively supporting another four people.


There is no sign of significant improvement. The Federation registered 395,000 employed persons in late 1998 and 406,000 in January 2002 - a rise of only 11,000 in three years. In the same period, the number of registered jobless increased from 240,000 to 270,000. The real unemployed total could be as high as 300,000.


Even those in work usually cannot support themselves or their families. In addition, many salaries are paid irregularly and delayed. The government's cash shortage makes it impossible to cover the needs of vulnerable social groups such as war veterans, invalids and pensioners.


Poor financial discipline is another headache. Tax evasion is thought to run as high as 60 per cent. There are few incentives to pay up because taxes and social security contributions are prohibitively high, making up 70 per cent of higher salaries.


Overall, about 60 per cent of the people in the Federation and nearly 90 per cent in the Republika Srpska are struggling to survive.


The dire situation reveals how little the politicians have achieved since the last elections in 2000, when they promised new jobs, financial discipline, faster privatization and a better business environment.


Social policy issues appear bound to dominate the pre-election period, as protesters take to the streets to bring home their plight to the authorities.


But although the situation looks increasingly explosive, there is no sign of the political establishment changing its ways. They prefer to divert attention to secondary issues. Instead of working on concrete measures to banish poverty, they make promises about building the "road to Europe".


The fact that few Bosnian citizens have the money for a one-way ticket to the nearest EU member state escapes them. Their business class airline tickets, of course, are paid for by taxpayers. They may be in for a shock in October.


Ibrahim Polimac is a spokesman for the Federal Banking Agency and economic expert with the Sarajevo daily Oslobodjenje


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