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Economic Task Force Secretariat
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Annualized growth rates* (excl. net wage) | May-98 | June-98 | July-98 | Aug-98 |
Average net wage (kM) | 318 | 319 | 329 | n/a |
Retail price growth | 5.6% | 4.3% | 3.3% | 3.7% |
Cost-of-living growth | 6.1% | 3.7% | 2.9% | 3.1% |
Real wage growth | 14.9% | 19.2% | 19.6 | n/a |
Industrial Production growth | 35.8% | 23.7% | 40.5% | 32.6% |
(Source: Federation Statistical Institute & OHR Estimates)
* Growth of indicator from month in 1997 to month in 1998.
Republika Srpska (RS)
Annualized growth rates (excl. net wage) | Mar-98 | Apr-98 | May-98 | June-98 |
Average net wage (kM) | 147 | 129 | 123 | 128 |
Retail price growth | 12.2% | 28.6% | 30.4% | 35.0% |
Cost-of-living growth | 14.4% | 37.2% | 36.7% | 36.6% |
Real wage growth | 150.6% | 118.1% | 94.1% | 106.2% |
Industrial Production growth | 34.0% | 25.5% | 29.7% | 31.8% |
(Source: RS Statistical Institute & OHR Estimates
Federation economic performance continued to be quite strong through July/August. Price inflation stayed at below 4%, real wage growth remained high, and industrial production continued its strong recovery. No new data is available for the RS.
(More information on this subject can be obtained by:
the OHR Economic Department, Mr. B. Roberts, Tel: 447275 or at
the IMG Economic Section, Mr. P. Hulshoff, Tel: 666273)
The key reform task of liquidating the old National Bank of BiH (NBBH) is proceeding slowly and with great difficulty. The liquidator of the NBBH, whose liquidation plan was approved by BiHıs Presidency, ordered a freeze of NBBH assets on 16 July. The Federation Government and Payments Authority (ZPP) were illegally continuing to refuse to freeze the assets of the NBBH through early October. As noted in the August issue, an asset freeze is necessary for the liquidation to be carried out. Liquidation of the NBBH is essential in order to safeguard the functioning of BiHıs currency board.
Some progress has been made. Non-governmental depositors whose money had been placed in the NBBH have been paid off at full face value. The OHR and other international organizations will continue to exert all possible pressure on the Federation Government and Payments Authority until the asset freeze ordered by the liquidator of the NBBH is properly effected.. The determination of the Federation Government and Payments Authority to illegally refuse to honor this freeze does not reflect well on their commitment to the development of healthy institutions essential for economic development.
However, OHR respects the decision of the Government of the Federation and trusts that this decision will allow the process of privatization to proceed.
The administrative part of the State budget continues to be correctly implemented as far as transfers from the Entities are concerned. Since June 1998, both Entities have transferred monthly their contribution to the State Budget to a bank account in the Central Bank. Then the Ministry of Civil Affairs and Communications distributes the funds to the beneficiaries included in the Common Institutions of Bosnia and Herzegovina (Presidency, Parliament, Council of Ministers, Ministries, etc.). Only the Ministry for Foreign Affairs has not implemented the budget, as political difficulties have prevented a final agreement within the Ministry on its internal staff and organisation.
The law establishes the Telecommunications Regulatory Agency (TRA), regulates international- and inter-entity communications and the so-called common facilities and lays down basic requirements and procedures for license applications for international and inter-entity telecommunications. Within the next six months the TRA will develop the terms and conditions with which operators must comply in order to obtain an operating license and thereby achieve full legal status.
It is now possible to revise, where necessary, the entity laws on telecommunications to bring them into line with the State law. The OHR intends to have a consistent package of legislation ready by the beginning of next year.
Preparations can now also be made for the establishment of the TRA. The EBRD will continue to provide assistance in this area by drafting an organizational structure for the parties.
Discussions are also ongoing concerning the funding of further work to be carried out in this sector. The main task to be carried out in the near future is a comprehensive assessment study of the postal sector on the basis of which a Master plan for the future development can be drafted.
(More information on these subjects can be obtained from:
the OHR Economics Department, Mr. E. MacKinlay, Tel:447 275)
As shown in the table, the number of dwellings being damaged/destroyed is estimated at 412000 (32% of the 1991 housing stock), out of which 146000 in the RS, 228,000 in the Federation and 38,000 in the ZOS. Multiplied by KM 15,000, the average cost for the repair of one housing unit, total costs for complete rehabilitation would equal KM 6.1 billion.
Hence, it can be concluded that the international community has so far financed app. 11% of the total funding requirements for bringing the housing stock back to its pre-war level, leaving a funding gap of KM 5.4 billion*. Although it was never anticipated that the IC would provide the financial means for a complete rehabilitation of the housing stock in BiH (which is neither the case in any other sector), this figure gives a clear indication what remains to be done.
[* The actual funding gap is somewhat inflated since data on donor funding prior to 1995 as well as private investments are not available and therefore not taken into account].
(Source of information: IMG Housing Unit)
For further information concerning this publication please contact: Paul Hulshoff, IMG - tel.: 666273 / 666020 Clement van de Coevering, OHR - tel.: 447275 |
Donor aid as per 1 October 1998 (59kB) | War Damaged Residential Buildings in BiH (30kB)
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