Press Releases
Council of Ministers of BIH Holds Its 178th Session
11/12/2019
Vijeće ministara Bosne i Hercegovine
FUNDING ACTIVITIES UNDER BIH-SERBIA CROSS-BORDER COOPERATION PROGRAMME
The Council of Ministers defined a Proposal Agreement on Funding activity programme of cross-border cooperation Bosnia and Herzegovina-Serbia for 2018 between the European Commission, Bosnia and Herzegovina and G0vemrnt of the republic of Serbia, worth EUR 2,352,941.
The European Union contribution doe 2018 was EUR two million, and EUR 352,941 will be secure by the grant beneficiaries, mostly lower level of authorities.
The aim of the Programme is to advance the socio-economic development in border areas between Bosnia and Herzegovina and the republic of Serbia.
The total estimated value of the Programme over the mid-term 20018-2020 is EUR 6,832,529, of which the EU participates with a grant worth EUR 5,800,000, while EUR 1,023,529 is to be co-financed by the grant beneficiaries.
The programme includes 31 municipalities in Serbia and 67 municipalities in Bosnia and Herzegovina. The deadline for the Agreement realisation is 12 years, i.e. the operative implementation term is six years from the Agreement taking effect.
The Ministry of Finance and Treasury will provide the Proposal Agreement with Platform for its conclusion to the BIH Presidency for further procedure, and the Director of the Directorate for European Integrations was proposed for the BIH signatory.
EUR 19.5 MILLION GEAANT BY GERMAN GOVERNMENT FOR ENERGY EFFICACY
The Council of Ministers of BIH defined a Proposal Financial and Project Agreement between the KfW, Frankfurt am Main (KfW), and Bosnia and Herzegovina (Beneficiary) - represented by the Ministry of Finance and Treasury - and Federation of Bosnia and Herzegovina, represented by the Federal Ministry of Finance and Federal Ministry of Spatial Planning (Project Implementation Agency), in amount of EUR 9,500,000.00 – Energy Efficacy in Public Buildings Project, with Platform for its conclusion.
The session defined a Proposal Financial and Project Agreement between the KfW, Frankfurt am Main (KfW), and Bosnia and Herzegovina (Beneficiary) - represented by the Ministry of Finance and Treasury - and Republika Srpska, represented by the Ministry of Finance and Federal Ministry of Spatial Planning, civil construction and Ecology (Project Implementation Agency), in amount of EUR 10 million – Energy Efficacy in Public Buildings Project, with Platform for its conclusion.
The aim of the projects is to secure energy efficacy of public buildings with affordable costs, targeting an improvement of citizens’ living conditions.
The grant funds for these projects were secure by the Government of the FR Germany.
The separate Proposal Agreements will be provided to the BIH Presidency, and the Minister of Finance and Treasury was proposed for the BIH signatory.
IMPLEMENTATION OF SARAJEVO – BELGRADE – SARAJEVO HIGHWAY/FAST ROAD PROJECT
The Council of Ministers of BIH defined a Proposal Agreement between the Council of Ministers of Bosnia and Herzegovina and Government of the republic of Serbia on cooperation for realisation of a Highway/Fast Road Construction Project, accompanied by a negotiations report. The agreement defines the activities coordination on the Project of construction of the Sarajevo-Belgrade-Sarajevo highway-fast road, activity plan for construction of an inter-state bridge on the Sava River, at Sremska Rača - Rača site, the joint highway/fast way point on the Bosnia and Herzegovina border.
In accordance with the Agreement, the two states agreed to arrange the activity plan concerning the construction of a new border crossing at Kotroman – Vardište site.
The Proposal Agreement will be provided to the BIH Presidency for further procedure, and the Minister of Communication and Transport was proposed for the BIH signatory.
MODERNISATION OF HYDRO-POWER PLANT “ČAPLJINA”
The Council of Ministers of BIH endorsed the Ministry of Finance and Treasury initiative for negotiations for conclusion of a Loan and Project Agreement between the KfW, Frankfurt am Main, and Bosnia and Herzegovina, represented by the Ministry of Finance and Treasury (Borrower), Federation of Bosnia and Herzegovina, represented by the Federal Ministry of Finance and Power Utility of Croatian Community of Herzeg-Bosnia, jsc Mostar (EP HZHB) (Project Implementation Agency) in amount of EUR 15 million _ Rehabilitation and Modernisation of Pump-Accumulation Hydro Power Plant “Čapljina”.
The aim of the Project is to prolong longevity of the “Čapljina” Pump-Accumulation Hydro Power Plant, i.e. to replace worn out equipment and modernisation of 40-year old facility.
An increase of power generation is expected along with increase of availability of the hydro power plant for additional service provision to the BIH electro-energy system (EES) and Serbia/Croatia/BIH block.
An indirect benefit of the project will be to the local community, as well as all users of EES in Bosnia and Herzegovina. He local community will have a more stable revenue in terms of reimbursements from generated power, due to less blockages, while all EES users will benefit more stable and higher quality power supply.
INITIATIVE ENDORSED FOR STRENGTHENING OF FLOOD PROTECTION IN RIVER SAVA BASIN
The Council of Ministers of BIH endorsed the Ministry of Finance and Treasury initiative for negotiations for conclusion of Finance Contract (Republika Srpska flood protection measures) between Bosnia and Herzegovina, the Republika Srpska and European Investment Bank, in amount of EUR 19 million.
It is the second phase of the Republika Srpska Flood Protection Measures Project implementation, within which construction of embankments will be continued in this Entity. The aim is to increase considerably the resilience to floods in priority areas in the River Sava Basin.
The total value of the Project implementation phase is EUR 41,83 million, and with EUR 19 million EIB loan funds, EUR 22.08 million will be secured from internal contribution and other sources.
REGULATIONS ADOPTED
The Council of Ministers of BIH adopted a regulation on looks and way of use of protected mark of origin, geographic origin mark and guaranteed traditional speciality food mark.
The regulation arranges the looks and way of use of the protected sign in Bosnia and Herzegovina, and ways of the sign issuance.
This way the harmonisation is made with a regulation of quality systems for food products, primarily in view of terms of protected marks.
The Council of Ministers of BIH adopted a Regulation on amendments and supplements to the Regulation on methods for bee honey and other bee products control, for the reason and harmonisation of the existing bee honey quality control methods with international standards.
The Regulation sets conditions about the contents of bee honey and other bee products on their placement to market, thus protecting consumers’ rights to get exact and clear information of the food the consume.
The Regulation supplements include HPLC method for defining sugar contents in bee honey.
The BIH Food Safety Agency prepared amendments and supplements to the regulation based on a proposals by entities in food industry and laboratories engaged in bee honey and other bee products control, in addition to relevant market changes by application of new methods for bee honey control.
The Council of Ministers of BIH adopted a regulation on fruit juices and similar human nutrition products, thus harmonising it with the relevant European acquis.
The Regulation protects consumers and creates equal conditions to producers, in order to promote their competitiveness.
The regulation consists of five annexes precisely defining names of products, features, allowed contents and production processes, raw materials, special tags or marking of certain products. Provisions were also made for fruit nectars. As well as for certain quality requirements of fruit juices and gruel.
ODA ASSISTANCE IN BIH INCREASED FOR ALMOST 70 % LAST YEAR
Members of the Forum for Coordination of Development Partners in Bosnia and Herzegovina allocated total EUR 726.67 million of official development assistance (ODA) in 2018, of which EUR 205.09 million were grants and EUR 520.48 million were loans; EUR 298.86 million or 69.9% more than in 2017.
This was indicated in the Ministry of Finance and Treasury Report “2018 Development Partner Activities Review”, adopted by the Council of Ministers of BIH.
The largest lenders were the European Investment Bank (EIB), European Bank for Reconstruction and Development (EBRD), World Bank and Germany, while the European Union, United States of America/USAID, Switzerland and Sweden/Sida secured the majority of grant funds.
The major share of international development aid In 2018 was allocated to the transport sector 5%, competitiveness and innovations 17%, and democracy and governance 8%. The Ministry of Finance and Treasury will continue further strengthening of cooperation with development partners in Bosnia and Herzegovina for more effective use of ODA assistance, in accordance with priorities of Bosnia and Herzegovina and principles defined in the Global Partnership for Effective Development Cooperation, The report will be publishes at the Ministry of Finance and Treasury and Forum for Development Partners Coordination web-sites
BIH CoM MID-TERM WORK PROGRAMME 2020-2022 ADOPTED
The Council of Ministers of BIH adopted a Mid-Term Work Programme 2020-2022, as a plan platform for a high quality development management, with accepted amendments initiated at the session. It is a review of mid-term goals with monitoring indices, the realisation of which 55 institutions, reporting to the Council of Ministers of BIH will contribute to the realisation of a “BIH Strategic Formwork”-identified general and strategic aims.
The strategic development aims are macro-economic stability, development of competitive economic environment and human resources, increase of industrial competitiveness, promotion of culture and creative sectors, even regional development, environmental management improvement, faster agriculture and energy capacities development, focused to renewable energy sources, energy efficacy and rural development, increased employment prospects, education inclusiveness promotion, poverty reduction, health care promotion, and acceleration of transition process.
The Programme includes a tabular view of relevant Action Plan, accompanied by breakdown of laws and regulations, including development-investment projects/programmes with financial review by mid-term goals.
The general development principles are connected to the Strategy Europa 2020 and Strategy South East Europe 2020, including development principles: integrated, smart, sustainable, inclusive growth and growth-oriented management principles.
The Mid-Term Work Programme of the Council of Ministers of BIH will be issued at the Council of Ministers of BIH and Direction for European Integrations web-sites.
RATIFICATION
The Council of Ministers of BIH defined a Proposal Decision on Ratification of a Grant Contract (Corridor V c RS – part I) between Bosnia and Herzegovina and the European Bank for Reconstruction and Development, connected to an investment grant from the European Joint Fund for Western Balkans, worth EUR 12.0 million.
Defined was also a proposal Decision on ratification of amendment of the International Criminal Court Rome Statue (Kampala Amendments).
The separate Proposal Decisions will be provided to the BIH Presidency fur further procedure.
REPORT ON BIH FISCAL SUSTAINABILITY ADOPTED
The Council of Ministers of BIH considered and adopted Information on fiscal sustainability for Bosnia and Herzegovina, prepared by the Directorate for Economic Planning of BIH.
Bosnia and Herzegovina, compared with other transition countries, is moderately indebted, i.e. the public debt level relative to GDP is 37%, which is the sustainable debt level. Other than this, the general government sector has marked budget surpluses over the previous years, which supports the sustainable fiscal policy of Bosnia and Herzegovina.
The surplus made and sustainable public debt level brought to another favourable sustainability indicator, namely decreased need for financing.
What might be identified as a possible risk for fiscal sustainability of Bosnia and Herzegovina in the mid-term are the following: economic growth, budget balance, increase of direct Entity debt share in total foreign debt, increase of public debt servicing, especially the domestic one,, interest burden, interest rates, foreign exchange rate risks, refinancing risk, as well as the credit rating.
2.3 % ECONOMIC GROWTH
The Council of Ministers of BIH took note of Information on macro-economic trends for January-June 2019, estimating the economic growth of Bosnia and Herzegovina at 2.3%.
The slowdown of economic growth in relation to the previous year is largely a consequence of weakening of economic trends in international economy, primarily with the European Union countries.
Employment growth continued, so in June the average number of employed persons was 815k, or 2.3 % more than last year.
For the first seven months of this year, collected was 9.1 billion of public revenues, or 4.7 % more than in the same period last year.
2018 BIH STATE AID REPORT ADOPTED
The Council of Ministers of BIH adopted a State Aid in Bosnia and Herzegovina Report for 2018, which indicates its reduction relative to the previous two years, and a positive indicator is that the available state aid to all economy (horizontally) predominates over the sector one (vertically).
The state aid allocated in BIH 2018 totalled KM 289,991,741.00, and it was for 9.4% or KM 30,103,007.00 lesser in relation to year 2017, and for 15.01% or KM 51,241,483.00 lesser in relation to 2016.
According to the State Council of State Aid of BIH, the state aid share in GDP BIH in 2018 was 0.88%, in 2017 it was 0.99 %, and in 2016 it was 1.10%.
Simultaneously, the state aid in 2018 was KM 82.12 per capita, as decreased for 9.4% in respect to 2017.
The state aid in industry and services sectors (horizontal + vertical + regional) was accorded in an absolute amount of KM 72,031,001.00, thus participating with 24.83% in total allocated state aid in 2018.
The agriculture and fishing sectors in 2018 got the state aid in an absolute amount of KM 167,773 or more than 57% of total allocated state aid in 2018.
The state aid of a smaller value participates in total allocated aid with 11.9% and it amounts to KM 34,794,647.00, while the state aid provided for service providing of general economic interest participates with 5.3% in total allocated state aid in 2018 and it amounts KM 15,392,943.00.
Among the kinds/instruments used for the state aid allocation predominating were subsidies/incentives, irreversible assistance and grants, with 87.47 % total share in the allocated state aid.
FULL EU MEMBERSHIP – STRATEGIC PRIORITY OF BIH
The Council of Ministers of BIH adopted a “Bosnia and Herzegovina – Development Report – 2018 Annual Report”, drafted by the Directorate for Economic Planning of BIH.
An economic growth was made in Bosnia and Herzegovina in 2018, with a decrease of unemployment and decrease of public debt.
One among priorities of Bosnia and Herzegovina is to set-up single economic space to remove obstacles to free movement of goods and services.
A full EU membership is one of the strategic priorities of Bosnia and Herzegovina. The launching of reform processes, active participation in economic dialogue with the EC and EU member-countries, support to adoption of Global Programme for Sustainable Development by 2030, adoption and implementation of new RJU framework, development of sector strategies, as well as effective and professional public administration, rule of law, and combating corruption are the key challenges to be tackled with on the road, reads the Report, among other things.
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