What are currently the main challenges of your Ministry?
At this moment, the greatest challenge for this Ministry is the construction of a highway from Gradiška to Banjaluka. This will practically be a highway connecting Banja Luka, as the Capital of Republika Srpska, with the highway across Croatia, and connecting us with the Central Europe. This road would be 40-45 km long, according to the analysis done so far; the construction of such a highway would cost about 150 million USD. Assessments done before show that there are two roads in Bosnia and Herzegovina that fulfill the economic criteria required in Europe for such construction, and that are Sarajevo - Zenica road in the Federation of Bosnia and Herzegovina, and Banja Luka - Gradiška road in Republika Srpska, that I mentioned before, what proves that the construction of this highway would be economically justified. To explain why I quoted this as the greatest challenge - for Republika Srpska the funds required are pretty high, and the challenge we are faced with is to find an investor. We have some contacts with European companies, and we are in negotiations also with some American companies. The contracts will be made based on concession, where we would agree that the investors build the road, and then use it and manage it for a certain period as compensation.
Do you mean that there is a possibility of cooperation with American companies?
Yes. We are interested in the cooperation with them. Why not? We are completely open in this regard.
What is the current state of the road network?
Unfortunately the overall network of roads in Bosnia and Herzegovina is very under developed. Practically Bosnia and Herzegovina, and Republika Srpska within it, does not have any highways. The best road is this one from Banja Luka to Gradiška, but it is only 12 km, and it cannot be called a highway. The network was practically not being developed since the year of 1990 till today, just maintained. The loans we have now and the ones that are announced for the following period will be used only for the reconstruction of the existing network. One of these loans will, I hope, be the loan of the World Bank, we expect the continuation of negotiations and signing of pre-contracts in Washington D.C. Republika Srpska met all the requirements for this loan, but I think there are still some problems in the Federation, as they still have not passed the law on roads, and we are waiting the adoption of this law, in order to proceed with the negotiations.
Is it absolutely necessary to have the laws adopted in the Federation for Republika Srpska to work on its development?
Good question. Usually when credits are given to Bosnia and Herzegovina, state level, in most cases it is by the World Bank, European Bank for Reconstruction and Development and European Investment Bank, that the requirements apply to both entities, but the allocation of funds in all these cases is completely independent both in the Federation and in Republika Srpska. Concretely speaking, we applied with our projects completely independently. When loans are the issue, we are still fighting for the one that we do not consider fair to be corrected. To be precise, the World Bank issues loan according to the following principle: one third for Republika Srpska, and two thirds for the Federation of Bosnia and Herzegovina; that is the political principle. We are fighting for a realistic, economic principle, based on the length of roads in the both entities, as, ultimately; it is all Bosnia and Herzegovina. We succeeded to impose this principle in the field of railroads, so the loan contracts signed with European Bank for reconstruction and Development and the European Investment Bank give 60% of the loan to the Federation of Bosnia and Herzegovina and 40% to Republika Srpska, as that is the ratio of railroad tracks in the entities.
Do you find that there are some political limitations in funding your development?
That is not always the case. For example, next week I will attend negotiations with the European Bank for Reconstruction and Development in London related to reconstruction of telecommunication systems only in Republika Srpska. Moreover, there are no conditions of guarantees, banks, government, etc.
What is the situation with the telecommunication network in Republika Srpska?
Compared to global standards, pretty weak. We have about 50% of coverage with fixed phone lines, a little less coverage with mobile telephone network, but we have initiated pretty ambitious projects for the development of both fixed and mobile networks, and this year we already have some results that promoted us in contracts with the EBRD in the sense that they are now negotiating really affordable loans only for Republika Srpska. If you take into consideration that GSM network started only two years ago in Republika Srpska, by the end of January we will have about 200.000 users, and our plan is to have 400.000 users by the end of 2002, what in the population of 1,300.000 in three years a satisfactory growth. In the following two or three years, we plan to reach a level of 30-35 phones per 100 persons, what would require significant investments in the network, as we have a huge rural area that is not easy to cover.
What about the development of mobile network?
As I already said, by the end of January we shall have about 200.000 of mobile network users, and by the end of next year 400.000. Further on, according to the license issued by the Communication Regulatory Agency of Bosnia and Herzegovina, we have the obligation to develop the mobile network also in the Federation of Bosnia and Herzegovina, namely we have the obligation to cover 80% of the territory of the Federation of Bosnia and Herzegovina in the following three years; so, we are preparing for this development as well. These days we are in negotiations with the representatives of the telecommunications, i.e. it is still under PTT (postal services), from Sarajevo about mutual support for this development, because they also have the obligation to cover 80% of the territory of Republika Srpska in the following three years. This way the CRA planned to develop competition on the state level, in order to have the two providers that are operating now offering more efficient and less expensive services.
What opportunities are there in the privatization process?
We have announced two tender competitions for the selection of a partner for telecom assessment, one for the overall telecom and the other only for mobile network. We have two approaches. We think it would be better to find a partner for the overall telecom, and the interest is greater for the mobile communications, and from these two approaches we shall try to find the better version: to find a partner that would provide more funds, in the same time offering better guarantees for future investments in the development of the Telecom Srpska. | How significantly is the reconstruction process moving forward?
Unfortunately the reconstruction of the economy does not have positive dynamics. We still have a negative trend. But the Government of Republika Srpska is preparing a concept that anticipates change of this trend to positive in the first trimester of next year. This year we are on a quite specific position. First of all there was the issue of over 400 million KM from the last fiscal year, and our budget for the last year was 800 million KM. Practically all the banks are in a very difficult position. Besides we are still on the very beginning of our voucher privatization process, we had to extend the deadline for three times, so the admission was completed mid April, after that we had the period of establishment of new executive structures of over 800 enterprises, and we needed time for all that. We were in a vacuum, where we did not precisely know who was the most responsible for further development of enterprises. This process is mostly completed, and we have the condition for further development. Until this process was completed, we could not start with the next step of privatization, the one that brought income to the government. This process has now started, and we hope that next trimester we shall have the conditions needed for the economic growth.
What legislative framework has been put in place to secure foreign investments?
Ten days ago, the Government of Republika Srpska adopted one draft law, the law on foreign investments, and the other, the law on concessions, was discussed and will be reviewed. I expect this law will also be adopted on the next government session and that we shall be able to forward them both to the Assembly. I believe the Assembly shall pass them within the next two months. These two laws should be sufficient guarantee for possible foreign investors. This legal framework is prepared, and there is framework of this sector that Ministry of Transport and Communications is covering, especially telecommunications. The investments there are pretty huge, and the investors want guarantees for their investments.
What do you think Republika Srpska needs to attract foreign investors?
These two laws will significantly improve the legal framework, and more asserted struggle against corruption. Better political stability, though I think that Republika Srpska improved its image during the last year. Our institutions are functional, and on meetings we have with our Sarajevo colleagues, Republika Srpska is quoted as a positive example, including the field this Ministry is covering. On the meeting we had with the Minister for Civil Affairs and Communications there were our colleagues from the federal ministry and OHR as well, and everybody agreed that our agency for roads is functioning more efficiently and can serve as an example to the federal agency. Also on the meeting in the OHR that was held last week and attended by parliamentary groups from both entities and the state level some colleagues from the federation said they were envious how easy we reach agreements in Republika Srpska on legislation. It is logical, as they have ten cantons, what makes the situation complicated. In the field of telecommunications, in Republika Srpska Telecom functions separately from postal services, what is still not done in the Federation; ,so Republika Srpska is politically the most stable part of Bosnia and Herzegovina. I hope that the stability will even improve after the next elections.
What is your assessment as far as the railroad network is concerned?
There is a huge project of reconstruction of railroads in Bosnia and Herzegovina ahead of us. We have the support by EBRD and EIB, and we have signed contracts on three year financing. This year World Bank's credit starts being realized, and in four years railroads will be in the condition they were in before the war, what would enable us to integrate railroads into the European network. Then, there is a great challenge to make our railroads meet European standards. That would require great investments, as we wish to be a part of the European network. Europe is turning to railroads as safe and inexpensive transportation means. This is the way Bosnia and Herzegovina is turned to. We have plans to construct two main directions: corridor 5C Šamac-Adriatic Sea, that would connect us with Hungary and the rest of Europe, and parallel corridor 10C, that goes through Republika Srpska, connecting Serbia and Croatia, i.e. Zagreb and Zvornik.
How long will it approximately take for the integration in the European Union?
Practically, the visa for European integration is the admission in the Council of Europe, and we shall get this visa, I hope, on the January session of the Council of Europe in Strasbourg, and then the opportunities will be open for us. It will depend on us then if the other integrations will happen in three, five or ten years. It will happen as soon as we realize that we should accept European standards, and the Government of Republika Srpska is completely open to it. I personally feel that this is the essential issue for long term of not just European orientation of Bosnia and Herzegovina, but its political stability as well. The international community is present here, and there will be misunderstandings here in the future, but I hope that this fact alone is enough to disillusion everyone who thinks they can solve anything by war here. The lesson learned the hard way turns us towards the negotiations and towards Europe.
Our integration into Europe in both Federation of Bosnia and Herzegovina and Republika Srpska is based on keeping the young generations here and on offering them complete communication with Europe and the World. They should be offered education in the US, England, France, Spain, etc. and offer them jobs here, opposed to the current situation when people graduate from universities here, and then can hardly wait to go and work abroad. There is a slogan, created in the young part of the Government: I'm only waiting to graduate, and then to emigrate.
We hope that the future of Republika Srpska is in the generations of tomorrow living and working here.
I also hope so. That is the reason of my involvement in the politics. It was hard for me to go away from my original profession. I am a teacher at the Faculty of Electrical Engineering that is the profession that made me recognizable worldwide, not the politics. When the war was finishing, I had the same dilemma as the current Prime Minister, and some other people who are now in the Government, we thought of two options: whether to leave this country, or to start political carriers. We chose the later!
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