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EBRD issues new strategy for Bosnia & Herzegovina
Bosnia and Herzegovina’s economy is growing impressively, with annual rates
reaching on average 4-5 per cent in recent years, the EBRD says in its latest
country strategy, available on www.ebrd.com. But more progress towards reform,
tackling corruption improving public administration and judiciary services are
required, it says.
The strategy says the era of post-war reconstruction across the country,
supported by significant aid from the international community, is now coming
to a successful close. Reconstruction aid continues to fall from the highs of
the late-1990s, and foreign direct investment rising.
The majority of war-damage reconstruction has been completed, and the country
is encouragingly moving from one of aid-dependence to investment-led growth,
said Olivier Decamps, Business Group Director for Southern and Eastern Europe.
Bosnia and Herzegovina now has the challenge of attracting more investment,
and the only way to do that is by improving the investment climate to attract
businesses. The country is on the right path, but must push on with its reform
agenda, Mr Descamps added.
To promote its transition towards a market economy, the strategy says some of
the main challenges facing the country include:
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Privatisation and restructuring of enterprises and the removal of obstacles to
business in order to boost private capital, and rely less on donors and
remittances.
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Reduction of the size of the public sector and elimination of unnecessary red
tape and bureaucracy.
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Structural and institutional reforms in key infrastructure sectors such as
transport, energy, telecommunications, and municipal infrastructure as well as
the financial sector.
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Strengthening of state institutions and the creation of a single economic
space.
The EBRD is one of the largest investors in Bosnia and Herzegovina, having
invested around €350 million in 39 projects. Going forward, Mr Descamps said,
the Bank will continue to support the country’s economic reforms and will work
with the governments to help create a stronger investment climate.
EBRD priorities over the coming years will include support for:
Financial sector and small businesses, particularly small and medium-sized
enterprises and advisory services for small companies. In the financial sector
the Bank will consider mortgage lending, leasing, insurance, additional equity
investments and an increased use of syndication.
Corporate sector activities, where the Bank will support, among other things,
recently launched large enterprise privatizations by seeking to attract
foreign investors and providing financing.
Infrastructure investments, such as energy and telecoms, the municipal
infrastructure sector, initially with a sovereign guarantee, and especially
projects promoting regional integration. For example, in transport the focus
will be on railway rehabilitation, air navigation and further investments in
the road sector, helping boost trade and tourism on a regional level.
In carrying out these priorities, the EBRD will continue to work closely with
International Financial Institutions, the EU, the Office of the High
Representative, and the international donor community.
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