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The High Representative, Wolfgang Petritsch, today imposed a wide-ranging
package of laws and amendments to help strengthen BiH's State institutions,
build a sound and business-friendly economy in Bosnia and Herzegovina and
ensure the country's access to future international funding.
Some of the new laws -- the establishment of a new court for BiH at State
level, or trading standards -- were needed in order to meet European Union
deadlines. The amendments to pensions and labour laws form part of World
Bank conditions for the disbursement of its structural adjustment credits.
The package was imposed in close consultation with the World Bank and the
International Monetary Fund (IMF).
The package fulfils the requirements agreed by all parties at the Brussels
Peace Implementation Council (PIC) meeting in May 2000.
The High Representative has looked consistently to the country's political
leaders, in a series of emergency meetings in the last few weeks, to take
tough but necessary decisions that would have given people like investors
and pensioners some sense of security. He has been consistently
disappointed.
The High Representative also warned repeatedly that an EU donation of 1
million euros promised to help establish the State Court would be lost if
the law was not adopted before the end of 2000. The Council of Ministers
failed three times to discuss the issue.
The laws and amendments are as follows:
- A Law on the State Court of BiH has been imposed. At present, BiH
citizens have no judicial redress in areas within the competence of the
State of Bosnia and Herzegovina under the Constitution, such as passports
and ID cards, illegal immigration, human trafficking, inter-Entity crime and
foreign trade and investment. The Court will see the rule of law firmly
established at State level. It is also vital for foreign investors, who are
reluctant to put money into a country with no institution to settle legal
disputes related to foreign trade. The State Court is one of the conditions
in the "EU road map", which spells out the steps BiH needs to take in order
to qualify for a feasibility study for a Stabilisation and Association
Agreement between BiH and the EU.
- Amendments have been imposed to the Laws on Pensions and Disability
Insurance in the Federation and Republika Srpska. The High Representative
wishes to make clear that as a result of the amendments, pensions should now
be paid regularly. The law provides for a minimum pension of 117 KM per
month in the Federation and 80 KM per month in Republika Srpska. Improved
collection of pension contributions and a clamp down on illegal employment
by the Entity Governments would see pension levels increase. It is also up
to the Entity Governments to find the necessary cash to pay outstanding
arrears. The World Bank, which called for the amendments, will continue to
provide technical assistance.
- Federation law has been imposed to provide a framework to bring
about the merger of the government pension funds of Sarajevo and Mostar. The
merger, once the relevant audits have been completed, should make the
Federation pension fund more cost effective, ease labour mobility across the
Federation and will remove an illegal parallel structure. Again, the World
Bank will provide technical assistance.
- A package of six laws has been imposed to bring BiH's
standardisation, metrology, measuring and accreditation systems at State
level in line with those in the European Union (and is one of the economic
steps in the EU road map). These laws are essential to enable BiH to meet
international trading standards and compete in world markets. One example is
the EU's recent decision to lift tariffs on a whole range of goods from
countries in south-eastern Europe -- BiH has not been able to benefit at
present as many of its goods do not meet EU standards. The new laws will
help change this and are an important state building measure.
- Amendments have been imposed to the RS Labour Law which will reduce
the financial burden on companies in paying compensation to employees on the
so-called "waiting lists" (where employees' status at troubled companies is
in limbo) to the level adopted by the RS Government. This measure -- drafted
by the World Bank, the OHR and the RS Government -- is vital to revive
flagging businesses in the RS.
The reform package enables BiH to meet conditions for the release of a
second tranche from the World Bank's Second Public Finance Structural
Adjustment Credit (PFSAC-2), totalling $24 million for BiH. It also helps
BiH to keep the World Bank's Country Assistance Strategy to 2002 on track,
including potential access to $130 million in budget support over that
period.
However, the High Representative wishes to make it clear that such
interventions cannot carry on indefinitely. BiH faces stiff competition from
Croatia and Yugoslavia for decreasing international aid to the region.
The emerging economies of central Europe show that tough economic reforms
are well worth the struggle.
The High Representative calls on the authorities of Bosnia and Herzegovina,
elected in yesterday's ballot, to push ahead with dynamic, far-reaching
economic reform. Their first test will be the preparation of budgets for
2001 that should comply with agreed conditions. The High Representative
calls on the newly elected BiH authorities to meet the conditions of the
IMF's Standby Loan, which would send an important signal to investors
world-wide -- that this country is finally open for business.
OHR Press Release, Sarajevo, 12 November 2000
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