Speeches
ADDRESS BY CHAIRMAN OF THE COUNCIL OF MINISTERS AT THE VIENNA ECONOMIC FORUM
09/28/2009
Vijeće ministara Bosne i Hercegovine
I would like to use this opportunity at the very beginning to thank Mr. Ehard Busek President of the Vienna Economic Forum, who has recognised the potentials of Bosnia and Herzegovina.
Today’s discussions focus on investment possibilities in the areas of infrastructure, finance and energy, which is extremely attractive and topical subject because of the enormous importance foreign investments have in every transition country. Bosnia and Herzegovina is not an exemption here, for FDIs represent the only right way of revitalising economy. My wish is that today’s conference send messages of positive economic climate and potentials of B-H, together with messages to investors that B-H is ready for further economic development and that it is a secure place for placement of investments and money.
Due to its rich natural resources, Bosnia and Herzegovina is a country which is very attractive to foreign investors, who will work together with domestic economic entities towards the promotion of economic development in B-H.
Bosnia and Herzegovina is a country which marked a dynamic economic growth over the past several years. The average real GDP growth in 2003-2008 was over 6%. Over the same period, we also noted an increase of industrial production, employment and foreign reserves. The achieved economic growth came as a direct result of the reforms undertaken, complemented by a favourable external environment.
Unfortunately, the global economic crisis left no country intact, Bosnia and Herzegovina either. Its consequent economic growth slowdown is already clearly certain. Aware of possible consequences thereof, the Council of Ministers of B-H, along with the Entity Governments, has taken a series of measures to preserve macroeconomic stability and enable further economic growth.
As a support to the perseverance of macroeconomic stability, we have made an agreement with the IIMF concerning USD 1.2 billion arrangement for a three year period, 2009-2012. The aim of the Programme is the perseverance of fiscal sustainability and financial sector stability.
Authorities in Bosnia and Herzegovina at all levels undertake numerous reforms aiming development of both market and civil society, to help us become a part of the EU sooner.
The results of these reforms are proven in a gradual improvement of business environment in the context of facilitation of business making by economic entities. A special attention is paid to the attraction of foreign investment, as is to inciting domestic ones. An encouraging data for all reform makers, as for potential investors, is that this year, B-H has improved its Doing Business ranking for facilitation of economic entities’ business making. Also encouraging are the World Bank assessments that even during the crisis, SEE countries have continued improving their business environment.
Ladies and Gentlemen,
The investment ambient in Bosnia and Herzegovina is getting improved and gradually aligned to European trends. Let me emphasise that the investment possibilities are considerably better than is the perception of them by both domestic and international public. Data on the scope of foreign investment of EUR 701 million in 2008 and EUR 204 million in the first half of this year support that fact. The overall scope of foreign investment to Bosnia and Herzegovina in period 1994-2009 amount to EUR 5.5 billion, of which 33% was invested into production, 22% in banking sector, 14% in telecommunications, 12% in trade, 2% in transport etc.
I am convinced that the participants of this eminent meeting will have a chance to learn about competitive advantages offered by Bosnia and Herzegovina in regard to various kinds of possibilities for cooperation on infrastructural projects, energy sector, banking sector, agriculture, civil construction etc.
I would like to draw your attention primarily to major possibilities and resources in the energy sector. Namely, estimations suggest that only 40% of usable hydro-energy in Bosnia and Herzegovina is currently used. An Energy Sector Study identified hydro-energy potentials of overall capacity of 1824 MW in the Federation of B-H and 1177 MW in Republika Srpska, which totals about 3000 MW. This represents a significant resource and many of these power plants have got prepared their feasibility studies, preliminary projects or financial studies. Utilisation of this potential fits into the energy policy of the European Union. Bosnia and Herzegovina, in addition, has a good potential for development of small hydro-power plants. Mentioned Energy Sector Study found out that the potential of the planned small hydro-power plants is almost 300 MW, while future potential might reach as much as 1000 MW.
Also, I would like to mention other important infrastructural projects, such as development of Corridor V c, railway network reconstruction, navigation on the Sava River, establishment of the SEE Regional Fire Fighting Centre and Regional Insurance Mechanism against Natural Disasters.
We are aware that from the point of important investment in energy sector, as well as in other sectors, a regional approach has better chances for success. Investment attraction is an issue that has outreached national borders, while ago. I believe that countries of the region must show more sense for cooperation both in political and in economic domains. For that very reason I tabled an initiative to the Secretariat of the Regional Cooperation Centre, based in Sarajevo, for the establishment of the South-East European Investment Bank. Having regard of the economic challenges faced by countries in the region, as well as of the European Commission announcements of its commitment to prioritise economic development and regional cooperation through joint projects in its new strategy for SEE countries, I considered this to be the right time for such an initiative.
Rightly for the reasons I have just mentioned, the strategic course and priority of Bosnia and Herzegovina is the development of regional cooperation in order to achieve a progress by countries individually, and by the region as a whole, and reach, in all segments, the standards necessary for the integration into European structures, with a special focus on the regional capacities development. The potentials are here, it is on us to use them. I believe that today’s conference served as a firm incentive for an action in that direction.
Thank you for your attention!