Bosnia Budget Faces “Imminent Collapse”

With excessive public spending and without available instruments to mitigate the growing economic and social crisis, the budget in the Bosniak (Bosnian Muslim)-Croat Bosnian entity of Federation, will “collapse imminently ” within the next five months, the Bosnian Croat leader has warned.

In addition to his grim warning, the leader of the strongest Bosnian Croat party, the Croat Democratic Union, HDZ, Dragan Covic, said that because of political obstruction in Federation's legislative and executive bodies, the Federation's government should be reconstructed as soon as possible, local media reported on Tuesday.

Local media carried other alarming reports on Tuesday, including stark warnings from several top trade unions and syndicates, which have demanded immediate and urgent measures to battle a fast-approaching recession.

“This time we will not threaten but promise workers’ revolution unless we see immediate measures and results on the implementation of our requests,” reads an open letter sent by the Union of metal workers to the Federation's government, parliament and chamber of commerce, demanding an immediate meeting.

“We all have to jump to our feet, declare a state of emergency and seek solutions,” Edhem Biber, the president of the Unions of Syndicates of Bosnia and Herzegovina told media. He said that his organisation has prepared a set of proposed measures, which will be sent to Bosnian leaders today. Among other measures, the plan proposes a stark reduction of salaries in the country’s cumbersome and expensive administration. 

All union representatives as well as economic experts agree that the set of measures, which was adopted by Bosnia’s state government, the Council of Ministers, last Friday, is too little and too late to mitigate growing economic and social troubles in the country.

One of the leading Bosnian economists, Fikret Causevic from the Sarajevo Economic faculty, told Balkan Insight that the adopted action plan is more a “wish list” and an “inventory of what is already in the government’s scope of work” and “contains only few concrete measures”.

Over the past three-four months, more than 18,000 Bosnians have lost jobs in the country and abroad after reduced demand has cut production and has led to canceled contracts. Budgets in all the country, but especially in the Federation, are struggling to keep up with ever-expanding demand for pensions and social payments, while social unrest is already significantly rising. Yet local leaders continue to ignore all warning signs and continue fighting for political domination or control over the most lucrative public companies.

Adding a new grim note to the already dire situation, media reported on Tuesday that another person has committed suicide, apparently motivated by the worsening living standard in the country.