While the authorities in both entities are borrowing billions of marks, citizens are left with unclear answers – where that money ends up and who will return it. Republika Srpska has already reached almost 40 percent debt in relation to GDP, while the Federation of Bosnia and Herzegovina is formally half as “lighter”, but with serious questions about non-transparent spending.
Economists warn that the problem is not debt per se, but unproductive borrowing that does not bring growth, but only deeper dependence and a greater burden for taxpayers.
According to available data, at the end of 2024, the Republika Srpska achieved a gross domestic product of 17.1 billion KM, while its public debt reached 6.7 billion KM, which corresponds to a debt of 39.18 percent of GDP.
In the same period, data from the Government of the Federation of Bosnia and Herzegovina show that the GDP of the FBiH was 34.4 billion KM, and the total debt was 6.872 billion KM, which makes a relative indebtedness of 20.51% of GDP. This confirms that the debt burden in the RS is almost twice as high as in the Federation.
About 73.5 percent of the total debt of the FBiH consists of external liabilities in the amount of 5.054 billion KM, while the remaining part refers to the internal debt of 1.818 billion KM, mainly through long-term securities and loans from commercial banks. The largest part of external debt is related to international financial institutions, including the World Bank, the European Investment Bank and the EBRD.
Who borrowed for what, will the citizens of FBiH pay for BH Telecom’s investment
Zoran Pavlović, an economic analyst from Banja Luka, points out for Faktor that it is not a problem when entities take on debt, if it is for investment.
– The problem is, let’s say in the RS, that the Government borrows excessively and does not invest. There is already a plan for RS to borrow over two billion KM in the next year, which is an additional problem and will put citizens and businessmen in a disadvantageous position – says Pavlović.
He emphasizes that the situation in the Federation of Bosnia and Herzegovina is different and that the Government of the Federation of Bosnia and Herzegovina borrowed 350 million euros on the London Stock Exchange in order for BH Telecom to buy BH Telemach, and claims that this investment is good.
– That money will be invested, money is also planned for the cantons, so that borrowing makes sense – concludes Pavlović.
Did the FBiH Government lie and directly put citizens in debt?
However, Igor Gavran, an economic analyst, thinks otherwise.
He claims for Faktor that the FBiH Government, when borrowing on the London Stock Exchange, did not mention BH Telecom or Telemach at all, nor would it make any sense because a public company is not financed in such a way, but primarily with its own funds or, if necessary, with its own debts and not with the government’s.
– So, either the Government lied about the purpose of that money, and in addition directly indebted all the citizens of the Federation of Bosnia and Herzegovina in the interest of only one of the public companies (I honestly don’t believe it, but who knows), or that was not the case and this indebtedness is (as announced) completely inappropriate, i.e. classic covering of budget holes and inappropriate spending – points out Gavran.
He adds that the eventual purchase of Telemach by BH Telecom is a mistake.
– Calling something an investment will not correct it because investments can also be wrong and missed, but at least they should directly harm “only” the public company, and not the entire entity (although it is all related, but depending on the extent of the damage, it may be possible to avoid a direct impact on the budget) – concludes Gavran.
The problem is that there is no data on borrowing
Muharem Karamujić, a professor at the Faculty of Economics in Sarajevo, claims for Faktor that the problem is that the entities are getting more and more indebted, and the economy is not growing.
– So, it is about unproductive borrowing. That is borrowing for general consumption and administration, and that is unproductive – says Karamujić, adding that borrowing is not bad if the standard of living increases. in Bosnia and Herzegovina this does not happen.
– One should not be against borrowing if that money will be spent on productive investments, but “patching budget holes and general spending” cannot be supported. That is evil – emphasizes Professor Karamujić.
He points out that, when it comes to borrowing by the Federation of Bosnia and Herzegovina, the biggest problem is that there is no accurate data on it.
– It is not the biggest problem that we assume, but it is hidden here, otherwise the FBiH Government says all the time that they are following the plan, but they do not tell us why they are in debt. Because of this, we as a population cannot measure the efficiency of our Government, that is, the efficiency of borrowing on our behalf. We had to insist that they tell the population what and how they get into debt, because every mark they take is our mark, not theirs – says Professor Karamujić.
He explains that BH Telecom cannot borrow money from the citizens of the Federation of Bosnia and Herzegovina without them knowing it, that they do not have concrete data, a feasibility study, Faktor writes.
– It is very difficult to comment on anything because it is an extremely unprofessional way of working and it must not be accepted as such. They cannot do whatever they want with our money, and they are doing it now – claims Professor Karamujić.
He says that the Federation of BiH cannot be compared with Austria, Germany, they are thousands of light years away.
– We cannot borrow like they do, and use that money for general consumption and administration. There is a general manipulation at work that is not new, but it is good that the citizens are becoming more aware and now we are rapping, but it is still not enough as we need to ask. It’s our money, no one can borrow money for you without you knowing. This is our money, we will pay for it from taxes, politicians will not. We have to be good hosts, it’s not a problem to invest, the problem is to waste money, it’s better to give charity to someone. Those in power not only do not know, but also manipulate us. We have a tragic combination of ignorance, bad intentions and crime – Professor Karamujić concludes.
