Bosnia and Herzegovina is finally at peace but there are still some threats to its stability. What is your outlook for the long-term stability in the region?
I see things a little bit differently. There are some conflict-points that have appeared. With what happened in September 11th in Washington and New York, USA, nothing is the same as before 11 September. So, from a global point of view, we are in a latent instability. This refers especially to certain regions. For example, two days ago there was a problem again in Ireland. Unfortunately, there are problems in the Basque region of Spain, and also in the Balkans when we speak about Europe. The Balkans is in a phase of appeasement, for sure. Bosnia is in peace and our purpose is to keep it that way. So, we are in peace, taking care of regional relations as well as taking part in the fight against terrorism. I think that the bacillus of terrorism should be understood very seriously. There was a war here and we know very well what it means. It's true that the region is still not stable. Surely that's the territory of Yugoslavia. Here I think of Kosovo, and I hope that relations between Serbia and Montenegro will be established in a correct way and also I think of Macedonia. I hope that the International Community will have the strength to find a good solution together with the people and citizens of these parts of the Balkans.
In Bosnia and Herzegovina things are getting better radically, especially regarding some processes that have been made. These processes can be mainly developed in two directions: making state institutions stronger in all segments where it's necessary and return of refugees to their homes. And, of course there is the third factor as well that has a very important impact on stability of Bosnia and Herzegovina and that is punishing of war criminals regardless of their backgrounds. Believe me, Bosnia and Herzegovina is in transition like many countries in the Southeast and Central Europe. The war that happened here slowed us down in these processes because Bosnia and Herzegovina as a state was, by GDP, far above other countries. The war devastated many assets, this especially refers to economy resources, then 1.5 million of people left their homes and all that should come back to a normal level. Help from the International Community was really abundant, especially in reconstruction of the infrastructure. Many people were killed, many children, a lot of economy capacities were destroyed. In such circumstances we rebuilt the economy and at the same time we are in a transition period. So, it's a hard task.
USAID was one of the principal donors for Bosnia and Herzegovina and its reconstruction process. What are the relations between this country and the United States?
Relations between Bosnia and USA are very good. I have just had a conversation with the manager of USAID, Mr. Edvard Kadunc. Besides technical help for the reconstruction of the capacities, USAID was very much engaged in the process of privatization. Along the USAID, other organizations like GTZ from Germany, the European Union and the World Bank were involved in this process as well. USAID and the government have made an agreement to organize together a press conference where we would show what has been done till now and what purposes we have for future. The support received from USAID for the stabilization process is irreplaceable.
The level of infrastructure is still one of the issues in which the Government must work on. What further work is needed to improve the infrastructure?
We have to get involved very fast in the accession to the European Community and that's from the aspect of road traffic, railway traffic, transmission of electric power and telecommunications. Corridor 5C already goes through Bosnia and Herzegovina and it connects Ploce- Sarajevo- Doboj- Samac- Osijek- Pest. Also, Bosnia and Herzegovina has connection with corridor 10 that goes from Jesenice through Zagreb, Belgrade, Skopje toward Bulgaria and then to Istanbul. The corridor 14 is the river Sava that makes a great deal of natural boarder in the north of Bosnia. And in future Sava will be integrated into waterway in Europe. Actually, this involves the whole system, Rhine- Maine- Danube. With this, we would have a direct connection from the North Sea to the Black See. We have already started to build, on our own highway network, a highway long of 11 km on this corridor and that's from Sarajevo to Podlugovi.
What is the role of your government in helping these projects?
Most of these projects are on the state level and let's go back again to the World Bank and USAID; now we are concluding an agreement for financing transport of electric power and USAID participates in this project for 80 %. That's about 230 millions USD. For the electric sector we have the law on electric power, then the regulatory commission, companies for transmission and independent operators that will manage the system that will all be on the state level.
| It's the same with telecommunications. All three operators that exist in Bosnia and Herzegovina can cover the whole territory of the country. For example, mobile clients from Herzegovina can go to Republic of Srpska and have roaming and vice versa. Also, since September, telecommunications from Sarajevo will cover 80% of the territory of Bosnia and Herzegovina. Why am I speaking about infrastructure? because these are the foundations for all events that will follow.
What progress has been made regarding privatization in Bosnia and Herzegovina?
The process of privatization is evident. We expect that this year will be the key year of the process. If we speak only about Federation and value of about 18 billions of convertible marks, 50% have already been privatized through public registration of stocks. In April there will be the last circle of the registration of public stocks. That means that the process will be done in the autumn. Also, we will have bidding offers that will be done in collaboration with the International Community. I believe that tender sale, which will occur soon, will be efficient and will become an accelerator of the transitional processes.
What have you specifically done to attract foreign investors to Bosnia and Herzegovina?
There are a lot of steps that should be made and that we have already made. There is the FIAS (Foreign Investment Administrative Study) that was financed by USAID and the World Bank. This study pointed out what had to be changed in the legislature and a great deal of that work has been done or started. You know, three things are needed for a successful privatization: political stability, legal security and transparency. That's why you are here. The bidding offer will be very important because it's a "cash sale". We have already sold some public assets. First was the cement industry in which partners from Germany and Austria participated. Then we have completed privatization of the banking sector in the Federation just before the New Year. We had an extraordinary collaboration with the World Bank and IFC (International Finance Corporation). That process is already finished.
What are the next steps regarding privatization of the rest of the economy?
Our policy this year is to implement a stimulus to employment and to development of the agriculture sector. For example, these are specific steps, indeed. Stimulus to the agriculture will be done in cattle breeding, then agronomy, fruit growing and wine growing. There will be some funds from the budget as well as help through the development programs. We count on about 95 millions convertible marks. It's important that we have a Central bank and a stable currency. So, for example, life expanses in the first 11 months of this past year in comparison with the year before were less for 0.1 % , which is very important information. You know that we are under currency board and that our KM (convertible mark) was directly connected to the DM (German mark), and now it will be connected to the EURO. Also, this past year, bank revenues from savings increased a lot and in the Federation it amounts about 1.6 billion convertible marks. That means that there is money, only we have to stimulate an interest for this money to be invested in business.
What would be your message to the readers of Forbes global and to foreign investors about business opportunities in Bosnia and Herzegovina?
Our primary goal is to attract FDI. It's not only for foreign accumulation that is to come here but also for new technology and joining the global economy directions. Bosnia and Herzegovina will soon, I hope, join NATO. I also hope that it will get into the European Council in a month or two. Later on it will approach an agreement on support that is one step of approaching the European Union, Partnership for Peace and Euro-Atlantic integration. We have to work hard to accomplish these goals and foreign direct investments first come through the process of privatization. This is small country of 3.6 million inhabitants, geographically a Central European country and very rich one as you can see; we have sea, rivers, forests, people who work hard. We have to overcome the war and its consequences as soon as possible. Tensions are almost gone except in some rare cases and Europe should embrace us, we belong to it.
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