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The Ambassadors of the Peace Implementation Council’s Steering Board note
with concern that the financial situation in the Federation is grave and
continues to deteriorate. The Standby Arrangement reached between the IMF and
the Bosnian authorities represents the most viable response to the deteriorating
situation. However securing the funding available from the IMF Standby
Arrangement (and from other IFIs), as well as from the European Union, requires
the Federation authorities to promptly deliver on the commitments made under the
terms of the International Monetary Fund’s Standby Arrangement, which include
reformingpublic spending, in particular the system of cash transfers to
individuals and families. We are concerned that a failure to pass
necessary legislation in the near future will start to imperil BiH’s potential
to access this external funding, starting with the World Bank’s Development
Policy Loan programme which is due to be considered shortly by the World Bank’s
Board of Directors.
The current system is not only financially unsustainable and economically
inefficient, but is also socially inequitable, and does not follow the
needs-based approach most commonly used in the EU member states. It denies
effective support to those most vulnerable. This situation needs urgent and
thorough review.
The PIC Steering Board Ambassadors call on Federation authorities to support
the reforms advocated by the World Bank and the IMF. These difficult economic
steps require strong and far-sighted leadership from all political
representatives in the Federation Government and Federation Assembly. The
Ambassadors of the Peace Implementation Council’s Steering Board urge relevant
parties to work quickly and constructively together to deliver these reforms.
The Ambassadors of the Peace Implementation Council’s Steering Board also appeal
for public understanding and solidarity over these necessary reforms. Time for
action is very short and the cost of inaction would be high for all segments of
society.
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