What are the main guidelines of your policy?
The jurisdiction of the Ministry covers three sectors: the energy sector, which includes primarily electric energy, natural gas, oil and oil derivatives; the mining sector and the one of industry. The jurisdiction of the last sector is divided between the Ministry and the federal cantons.
In the sector of industry, besides the general set up of legislation and federal laws and creating the environment for economic development, we also manage big state owned companies. There are two companies in the Federation in the sector of electric energy and we manage both of them; we also manage all the coal mines in the Federation and we have the right to manage some big companies in the sector of industry, such as: "Energoinvest", "Unis", "Fabrika duhana Sarajevo" (tobacco factory), "Aluminium Mostar", "Agrocommerce". There are also companies that are managed by the competent ministries of cantons. The Federation is an entity consisting of 10 cantons and in many fields the competencies and jurisdictions are divided between the Federation and the cantons. The federation is one of two entities consisting BiH.
In the sector of electric energy and mining, we are in the final stage of producing a study and a program of restructuring, preparing for the privatization of these two sectors. We anticipate having them completed by the end of the first quarter of this year. Then we are going to adopt the action plan of the government in the implementation of these programs and the whole process will be supervised by the World Bank.
We have also prepared ourselves for the restructuring of the gas sector. Concerning the sector of oil and oil derivatives, it's going to be a classical commercial sector. The World Bank and USAID are in charge of preparing this study.
You also had a project with them worth 300 millionUSD?
Yes, that's correct it was the project called "Struja 3" (Power 3) that covers the whole BiH and it amounts 230 millions $. Besides the World Bank, the project involved the European Bank for Reconstruction and Development, the European Investment Bank and some European governments. The goal of this project is integration.
The production of your country already exceeds your needs, when there is a lack of energy at a regional level...
We are carrying out these programs to facilitate the export of energy. We want to prepare the transmission system to be able to easily export the surplus of electric energy. We already export it and we plan to increase the quantities in the future. Today, less than 50% of the installed capacities in the production of electric energy in BiH are used, because of the reduced consumption and reduced production; that means there is less consumption due to reduced production in other fields.
Production and restructuring of the electric sector is closely tied to the restructuring of the coal mines. That's why we are working on coal mine projects at the same time. In April this year, we will have the action plan of the government for the implementation of the restructuring while preparing for the privatization of the coal mines. The study is produced by the American firm "Marston & Marston", and the study of social care of the eventual surplus in manpower is done by the American Ministry of Work. The mines prepared their individual programs based on the previous study, and we are going to produce the government's program and the action plan based on all these documents. A consulting firm from Germany, called "DNT", is participating in writting the government's program and we are also getting assistance from the government of North Westfalia, one of the German republics.
We are preparing these sectors for the European market and the world. We'll pass the laws that will regulate the system and ensure our position on the world market. The law on electric energy is already in the parliamentary procedure and it anticipates the establishment of the state as a regulator, the state transmission company, several companies for production of electric energy and several companies for distribution, but it also anticipates the establishment of the market for electric energy. So, "Power 3" will help us integrate into the European energetic system with high quality in terms of transmission and regulation.
| How do you prepare the privatization of "Aluminium", one of the country's leading companies?
We have agreed with the representatives of the World Bank and the OHR to speed up the process of settling the ownership of "Aluminium" in order to prepare it for privatization as soon as possible. 'Aluminium" is in the group of eight companies that have the priority in the privatization process.
There must be a lot of potential buyers. How are you going to choose the right one?
We will accept the one who offers the best conditions in the terms of future development of "Aluminium", employment, price and ecology.
For the outsiders sometimes it's difficult to understand the political structure of the country. How do you work with your counter part in the RS?
It's also difficult for me to understand it, but unfortunately it's been imposed on us. The legal structure of the country is too complex and it slows down the economic development. Last year, after the new authorities came into power, the inter-entity relations have improved and the awareness of necessity of working together has improved too. BiH is already a small market; it would be tragic to divide it further. That's why we have to unify the market and then to integrate into the European market. I have to say that last year we have achieved good results in that regard. There is one indicator here and nowhere else in the world, that is an inter-entity turnover of goods and in the last year that turnover has increased 12 times.
The Council of Ministers and other common institutions of BiH have also strengthened up during last year. That helps us in unifying the market, even though we still face many problems. The main problem is the remains of the nationalistic way of thinking, but I believe we are going to overcome it and put economy before politics.
Do you see your Ministry as a potential link for integration of the country?
Certainly, I think this Ministry and the same Ministry in RS can contribute to the integration of the economic system of BiH. The sector of energy is a spine of any economic system.
Since you have been appointed Minister, what are the improvements you are most proud of?
I'm proud of what we have done on the integration of the economic system in the country and the integration into economic system of Europe. I was very happy when I realized that our products could be competitive on the European market. It's a great pleasure to take part in creating a competitive product for a wider market.
Last year, we achieved good results in export. In one year we increased the coverage of import by export by 29%! In this year we achieved a bad 40%, but for us this is a great progress.
Unfortunately, I have to say that BiH was the only republic in former Yugoslavia that had a surplus in the exchange of goods with other republics in Yugoslavia and with countries from abroad. It amounted 600 millions $ and now we are making only 40%. That's a proof of how much the war have brought us down.
Is the improvement of the terms of trade one of your major challenges?
Absolutely, this is the basic challenge. The next challenges of this Ministry are successful restructuring of the sectors and successful privatization in order to increase the competitive advantage of those companies and to increase export. Successful privatization will enable us to generate finances for faster employment and stabilization of the social funds.
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