Unemployment linked to politics in BiH

06/03/2013

Experts say the government must follow through on efforts to curb unemployment.

By Anes Alic for Southeast European Times in Sarajevo -- 06/03/13

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The unemployment rate in Bosnia and Herzegovina has reached its highest point in six years. [AFP]

The unemployment rate in Bosnia and Herzegovina (BiH) reached a record high of 44.4 percent in 2012, the second-highest unemployment rate in Europe. Experts say the government's first step toward alleviating the situation is to follow through on job-creation policies in spite of the ongoing political upheaval.

The government has drafted several strategies to reduce unemployment, but none have been successful. The latest, devised by the previous government, sought to employ 20,000 new workers annually from 2012-2014. But the strategy has not been implemented.

Alija-Remzo Baksic, director of the Association of Employers of BiH, told SETimes there will be little progress unless authorities pass companion laws and regulations.

"Those strategies have to be followed by concrete measures, incentives and privileges for employers and investors, both domestic and foreign" Baksic said.

But jobs through foreign investment are slow to come. The political instability scared off investors, especially since 2010 when a post-election stalemate saw the country without any functioning authority for more than a year.

Almir Pestek, deputy director of the Sarajevo Economic Institute, said that the constant political chaos, lack of functioning institutions and the lack of adequate decision-making makes BiH a high-risk country for investors.

"The inflow of foreign investment in BIH has fallen drastically in recent years, and the credit rating was recently downgraded," Pestek said. "All of this crisis has impacted the labour market."

Sarajevo resident Almir Cehic has been officially unemployed since 2003. Now in his early 30s, he has held numerous jobs which have been off the books and thus did not provide benefits.

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Such arrangements skew unemployment statistics. There are an estimated 200,000 people who are officially jobless, but are working off the books.

"I have worked as a waiter, a carpenter, and in a furniture factory, but that was all illegal as none of the employers would register me so they could avoid paying taxes, or paying for my health insurance and social security. Being on the bureau, I do have some benefits from the state," Cehic said.

Though BiH is still far from gaining EU membership, citizens and authorities alike seem to be hoping that will be the key.

"Being a member of EU could help a lot to reduce the unemployment rate. However, we are at least a decade away from membership, and this problem must be addressed immediately," said Amir Spaho, chairman of the Bosnian Association of Unemployed.

This content was commissioned for SETimes.com.
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