ECONOMY

Bosnia may lose crucial aid due to budget crisis

BANJA LUKA, Bosnia-Hercegovina, (AFP) – Bosnia may lose critical important foreign loans and face a financial crisis if the 2002 budget is not adopted over the weekend, a senior international envoy warned yesterday. If the Bosnian Parliament does not pass the 2002 budget «this weekend, the country faces serious financial difficulties,» Donald Hays said here after meeting Bosnian-Serb President Mirko Sarovic. Hays is deputy to Wolfgang Petritsch, an Austrian diplomat who heads the international administration created to oversee the implementation of non-military provisions in the 1995 US-brokered accords that ended the 1992-1995 civil war. «There are over $100 million in standby arrangements and loans from the World Bank and IMF (International Monetary Fund) that are pending,» Hays said. He stressed that the adoption of the budget as well as a bill on the allocation of Bosnia’s share of funds from former Yugoslav assets are conditions for the loans. Parliament is to convene in an extraordinary session today to discuss a bill on the allocation of 156 million convertible marks (78 million euros or $71 million) received from former Yugoslav funds. Bosnia, a former Yugoslav republic, declared its independence in 1991. The budget is also expected to be debated at today’s session. Hays warned that both the World Bank and IMF have made it «very clear that budgetary decisions that justify loans… must be made by the elected leaders of this country and cannot be imposed.» The Bosnian Parliament has so failed to adopt the 2002 budget because of opposition from Bosnian Serbs. They have refused to back it because of a provision providing funding for a legal agent to handle a suit Bosnia filed before the International Court of Justice against neighboring Yugoslavia charging aggression during the 1992-95 war. The regime of ex-Yugoslav President Slobodan Milosevic supported Bosnian Serbs during the war. Bosnia is now divided into two semi-independent entities; the Bosnian-Serb Republika Srpska and the Muslim-Croat Federation. The entities are linked with weak central institutions.