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News 20 Apr 17

Bosnian MPs Vote on Law Package to Save IMF Cash

Parliamentarians are under fresh pressure to adopt a set of laws that will unlock a much-needed tranche of IMF money.

Igor Spaic
Bosnia and Herzegovina Parliament building. Photo: Parliament of Bosnia and Herzegovina

Bosnian parliamentarians, under urgent procedure, are due to vote on Thursday on a disputed set of laws which would raise excise taxes for fuel – and pave the way toward another instalment of a much-needed IMF loan.

The package is among the last unfulfilled requirements and contains draft laws on amendments to laws on excise duties, on payments to a single account and allocation of revenue, on the indirect taxation system and on deposit insurance banks.

It forms a significant part of the country’s Reform Agenda 2015-18, which aims to bring the country closer towards European Union membership.

However, for citizens, it means increasing the price of a litre of fuel by 0.15 Bosnian marks [0.08 euro cents] – which will pose an unwelcome additional burden on farmers among others.

The additional income is meant to help fund the construction of roads and highways.

Bosnia is composed of two semi-autonomous entities – the Federation, mainly populated by Bosniaks and Croats, and Republika Srpska, with a Serb majority. The two entity governments are the main beneficiaries of the IMF loan and rely on it to stabilize their budgets and finance their debts.

This is the second time Bosnia’s politicians are trying to push through the laws under urgent procedure, desperately trying to speed up the adoption process after an extended April deadline for adopting the laws was breached.

The outcome of the vote remains uncertain, however.

Representatives of the Alliance for Changes, a Serbian coalition in power at state level along with Bosniak and Croat Representatives, have consistently opposed adoption of the laws.

Bosnia’s Foreign Trade Minister Mirko Sarovic, from the Alliance, last week said the laws needed to be amended to protect farmers – who are already suffering the consequences of the implementation of Bosnia’s Association Agreement with the EU, which left them in a less competitive position.

The leftist opposition Social Democratic Party, SDP, is also not in favour, saying the ruling coalition has not yet defined how the income from the increase would be allocated.

There is even discord among lawmakers from the Party for Democratic Action, SDA, which has been the most vocal supporter of the law.

However, according to media reports, the speaker of the House of Representatives, Sefik Dzaferovic, from the SDA, on Tuesday said he expects the laws to be adopted.

If the issue was discussed under the normal procedure, lawmakers could demand amendments and a debate within the House of Representatives, which could significantly delay its final adoption and deprive the country of the IMF funds.

Lawmakers refused to discuss the laws under urgent procedure on April 5, despite pressure from the IMF and the EU delegation.

The next day, the IMF said its program in Bosnia would be significantly delayed, which would have negative consequences for the mobilization of external financing for infrastructure projects.

To save the laws and have them discussed in the House of Representatives again as soon as possible, the Council of Ministers – the state government - made minor changes and sent them again to parliament to be adopted, again under urgent procedure.

The House of Peoples adopted the laws on April 7, and now, again, it is up to the House of Representatives.

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