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Background The public is poorly informed about privatization and the transition to a market economy. It is vital that citizens understand their rights and responsibilities in this regard. Public information programs and materials need to be developed and disseminated to a wide audience, including refugees. There is insufficient funding to develop and distribute these materials, especially to countries sheltering refugee populations. Madrid Commitments, Objectives Privatization is a central element of a market economy. Develop and disseminate broadcast materials for public education. Present situation - progress to date Over the past two years the USAID funded project has forged relationships with TV, radio and print media outlets throughout Bosnia and Herzegovina. A numerous Public Service Announcements have been produced and aired by over 46 TV and 129 radio stations, as well as a number of innovative semi-monthly television shows that have been produced in conjunction with the largest TV stations in the Federation and the RS. This comprehensive media campaign coupled with a large-scale information distribution program has been instrumental in informing citizens about their roles in the privatization process. The inclusion of displaced persons and refugees in the process remains problematic. The agencies charged with implementation of information programs are under staffed and under funded, and there is no inter-entity mechanism for DPs and refugees that may undermine the process and erode public support for privatization. More emphasis needs to be placed on developing sustainable communication structures for these agencies to communicate with DPs and refugees living beyond the borders of the country. For OHR email addresses and other contact information, please click the Contacts heading. USAID: Mike Kerst Funding needs |
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Managed by the Federation Privatization Agency (FPA) in the Federation and the Directorate for Privatization (DFP) in Republika Srpska, the project will focus on a wide range of public service programming and broadcast materials for all segments of the BH population, including refugees and displaced persons. Additional information, Remarks: Funding is needed in both the Federation and Republika Srpska to accompany privatization for the completion of the entire process.
Background At present there is no regulatory agency for joint stock companies or for securities in general, in either Entity. The transition to a market economy in each Entity will require a strong, autonomous agency to protect investors and ensure enterprise compliance with rules on corporate registration and governance and on securities issuance. Moreover, a regulator is needed for two key privatization institutions -- share registry and privatization investment funds. Without strong regulation, the early capital markets development could well suffer problems similar to Russia and the Czech Republic, as unscrupulous persons take advantage of new systems with weak controls. The Commission will ensure that capital markets meet the essential prerequisites are transparent, safe, fair, open, and efficient. Madrid Commitments, Objectives Privatization is a central element of a market economy. Develop and equip the securities regulatory agency of each entity. Present situation - progress to date The project will provide needed technical assistance, hardware, software and training for the operations of the securities regulatory agencies. Required by the legislation of each Entity, the Securities Commissions need to be operational before privatization begins in order to regulate the development of privatization investment funds, management companies, and share trading. The development of the Commissions could be in two phases, which would allow for the training and growth of these institutions. The first phase would concentrate on the regulation of management companies and share trading. The second phase would first cover oversight of investment funds and cover the conversion of privatized companies to joint stock companies under a strong commercial enterprise law with modern corporate governance provisions. The Federation Securities Commission is partially funded, has five active commissioners, and is developing detailed regulations and procedures from the first phase. In the RS the Commission has not been appointed nor funded yet. For OHR email addresses and other contact information, please click the Contacts heading. USAID: Mike Kerst UK Embassy: Debbie Tomlinson Funding needs |
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Additional information, Remarks: -
Background There is no share registry institution to serve as an independent control of ownership. In other transition economies, this has proved a problem, as shareholders' names have been fraudulently added and subtracted from ownership rolls. This could be a problem where company-held registers of shares purchased under the previous program ("Markovic program") have been destroyed. Absence of an independent share registry weakens confidence in ownership in joint stock companies, as well as, discourages investors from taking part in the privatization process. Madrid Commitments, Objectives Privatization is a central element of a market economy. Develop and equip a share registry institution in each entity. To facilitate share trading, develop a clearing and settlement mechanism and a depository. Present situation - progress to date The project will provide needed hardware, software, technical assistance and training for the operations of a share registry agency, as well as the related activities of clearing and settlement and a depository in each entity. Mechanisms are needed to facilitate delivery of shares against payment, hold the assets and cash until transactions are completed, and record the transactions. In FBiH, the Management Board, the Director and the Deputy Director of the Share Registry have been appointed. For OHR email addresses and other contact information, please click the Contacts heading. USAID: Mike Kerst UK Embassy: Debbie Tomlinson Funding needs |
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Additional information, Remarks: The project will be implemented by a private sector firm (to be confirmed).
Background The project will develop a system for share trading, based upon the size of the market, to include the development of other intermediaries such as trade associations, investment funds, credit rating agencies, and brokerage houses. The proper mechanism for trading securities in the immediate post-privatization environment will be identified. This project will provide an opportunity for a phased introduction of a market trading system. Madrid Commitments, Objectives Privatization is a central element of a market economy. Develop an equitable trading system for shares of private companies. Present situation - progress to date Although citizens in both entities will soon receive shares through the privatization process, there are no systems to trade the shares, to cash out or to buy in. An organized and regulated system is required with intermediaries who can ethically facilitate the process. For OHR email addresses and other contact information, please click the Contacts heading. USAID: Mike Kerst UK Embassy: Debbie Tomlinson Funding needs |
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Additional information, Remarks: -
Background Neither Entity has sufficient budget to provide the skilled personnel needed for implementing the privatization process, either at the headquarters of the Federation Privatization Agency (FPA) or the Republika Srpska Directorate For Privatization (DFP) or at the regional or cantonal agencies. Madrid Commitments, Objectives Privatization is a central element of a market economy. Provide local expert services to implementing agencies in each entity for rapid and transparent Implementation of privatization at the regional level. Present situation - progress to date The agencies lack staff to perform many of the services and cannot compete in the job market with civil service salaries for skills that are in short supply. This could lead to poorly implemented privatization or stopping the process altogether. For OHR email addresses and other contact information, please click the Contacts heading. USAID: Mike Kerst Funding needs |
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Needed in both entities. Additional information, Remarks: In each region, the privatization implementing agency will be supported with contracted staff with special skills not available in the normal range of expertise of civil servants, i.e., accountants, business consultants, lawyers, media experts and information systems technicians. Business consultants would help with privatization plan development at companies, which cannot prepare plans (in which case, the agency is required to provide one in its place). Other support services to be provided to regional privatization agencies would include contracted media specialists for public education efforts, accountants and lawyers for finalizing program proposals and transferring property, and information systems experts to keep the dematerialized auction and voucher offer system operational. A different support matrix, some more limited and others more extensive will support each region, depending upon skills available, government support, and industrial base.
Background Corporate governance in BiH companies is a new concept. The old system encouraged decisions based on politics and connections, not for increasing shareholder value in the company. Unless new owners coming out of privatization are active owners interested in changing management and ownership ethics, then privatization may be just another case of new owners with old mind sets. Active investment funds could play a key role in changing the corporate ethics and management practices, but because of the length of time needed to turn around the companies coming out of privatization, they will have difficulties meeting operational costs in the first years to sustain their efforts. Madrid Commitments, Objectives Privatization is a central element of a market economy. Provide operational support to privatization investment funds and investment funds so that they can be the driving force for company restructuring in the post-privatization era. Present situation - progress to date Provide technical assistance, training, and operational cost support to privatization investment funds (which will become investment funds once auctions are completed). This assistance will focus on how funds pick sound companies, chart company performance, and influence management when performance is not up to expectations. Essential to the success of the project is a medium-term horizon that allows the investment fund time to manage new techniques and build a quality portfolio. The FBiH Securities Commission is reviewing draft Privatization Investment Fund licensing, books and records and inspection regulations, which the Commission expects to issue shortly. For OHR email addresses and other contact information, please click the Contacts heading. USAID: Mike Kerst UK Embassy: D. Tomlinson Funding needs |
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Late 1999 as privatization investment funds are established in both entities. Additional information, Remarks: -
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