IMF: Loan agreement with Bosnia will likely require comprehensive reforms

NEWS 30.11.2020 15:00
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Source: EPA

The International Monetary Fund (IMF) will likely demand reforms regarding state-owned enterprises, health sector, financial sector, etc., during ongoing talks with Bosnian officials concerning the 1.5 billion Bosnian marks (approx. €570 million) loan agreement announced earlier this month, IMF representative Andrew Jewell told N1 Monday.

“The conditions that are associated with these funds have not yet been finalized. However, we anticipate that the program will seek reform of state-owned enterprises, the health sector, financial sector, public procurement, public financial management and digitization,” Jewell told N1.
Answering the question from the open letter which Bosnia's leading economists addressed to him and the Fund, Jewell said the IMF does not credit local communities, but they do support reforms at the said level. Their interlocutors are strictly entity and state-level authorities, Jewell said.

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In the letter, experts also raised the issue of Bosnia's foreign debt. N1 asked how much has Bosnia borrowed so far from this institution and how much it still has to repay, to which the IMF representative said:

“Bosnia and Herzegovina's current debt to the IMF through the Stand-by Arrangements, Extended Arrangement and Rapid Financing Instrument totals to some SDR 1.315 billion (equivalent to about €1.6 billion at today's exchange rate). Of this amount, the current debt is SDR 392 million (about €470 million), the rest was repaid.”

Bosnia's top economy experts wrote to the IMF on Monday, warning them against the loan of some 1.5 billion marks, saying it will only be used fo cover current budget spending and the preservation of social order, instead of helping the economy and implementing critical reforms.