Massive government administration and insufficient budgets plague BiH

27/12/2012

Comprehensive reform is needed, and NGOs have increased their efforts to get it.

By Anes Alic for Southeast European Times in Sarajevo -- 27/12/12

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An electronic board displaying BiH government spending was recently installed in Sarajevo as a way of educating the public. [Anes Alic/SETimes]

Civil society is sounding an alarm that maintaining current government spending levels will bankrupt Bosnia and Herzegovina (BiH), and a comprehensive reform is needed immediately to preclude such an outcome.

"BiH has the most expensive public administration in Europe and it is unsustainable. The country has 13 governments, 180 ministers, 600 MPs and a huge bureaucracy serving them. This makes for a 70,000-strong bureaucracy army," Adis Arapovic, head of the Sarajevo-based Centre for Civil Initiatives, told SETimes.

The government is Europe's costliest, spending 500,000 euros an hour. Government salaries have increased 300 percent in the past four years.

While the government recently secured approval for the last 60-million-euro tranche of its 405 million-euro IMF loan, the funds are insufficient to cover the country's administrative expenses.

Politicians have repeatedly pledged to reduce excessive administration, but a comprehensive reform to restructure the political system will shake the foundations of the existing ethno-nationalist government structure they represent.

NGOs have increased their efforts to monitor public administration and offer officials' recommendations, as well as to educate the public in order to initiate reforms.

"Our research shows over 90 percent of citizens do not know even the most basic facts about public spending -- how budgets are created, who proposes them, who votes on them," Zoran Ivancic, chairman of the Bosnian think tank Centre for Civil Initiatives, told SETimes.

Establishing a transparent hiring processes based on merit is needed to ensure efficiency in the work of public administration, according to Srdjan Blagovcanin, executive director of the BiH branch of Transparency International.

"The situation in BiH is such that all other criteria for employment are more important than expertise," Blagovcanin told SETimes.

Nearly 66 percent of the governments' budgets are spent on wages and administrative costs, according Ivancic.

"People want jobs, opportunities to earn for food, but until now, we still have not found any budgetary funds for development," Ivancic told SETimes, pointing to a vicious circle.

While experts said the initial civil society efforts to highlight the issue and educate the public are commendable, they are not enough.

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"The international community has to be more involved and put pressure on local authorities to implement the promised reforms. It appears politicians do something on this issue only when conditioned by foreign financial institutions. As soon as the IMF tranche is paid [in January], the reforms are pushed aside until the next tranche is expected," Ivancic said.

Action is even more urgent because while the state budget is nearly unchanged from last year at 890 million euros, costs have increased substantially. Nearly 40 percent of the budget is allocated to service BiH's foreign debt, which is double of the sum last year.

Analysts said most of the IMF loan will be used to fill budgetary gaps to pay off previous loans, and the rest of the funds will cover administrative expenses.

"Not only does government increase overall budget spending, it fails to make public administration more functional or improve the quality of services it provides citizens," Blagovcanin said.

This content was commissioned for SETimes.com.
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