Dear Supporters of Mission Without Borders,

I wanted to share the following with you. It simply gives some insight into the economic struggles of our field countries in these times of the Global Financial Crisis (GFC). The affects on the poor we serve and those who minister to them as staff and volunteers of Mission Without Borders are profound and far reaching. We would appreciate your continued prayer, financial and practical support during this difficult time. The following is from the mentioned website.

http://www.balkaninsight.com/ 

The World Bank is urging Bosnian leaders to undertake critical economic and social reforms “with or without” the assistance of the Bank and IMF. This, as a loan arrangement agreed with the IMF comes under increasing pressure.“It is of paramount importance that Bosnia and Herzegovina fully implements the measures it has committed to pursue under the stand-by arrangement with the IMF. Failure to do so would give a serious blow to the country’s credibility, the chances of a fast recovery, and would seriously endanger public finances, including transfers for the most vulnerable categories,” local media quoted the World Bank’s country director for Southeast Europe, Jane Armitage, as saying.

The warning is particularly directed at the Croat-Bosniak (Bosnian Muslim) Federation, whose parliament backed down in the face of violent social protests on Friday, agreeing to shelve a planned 10 per cent cut in war veterans’ and invalids’ social stipends.

In line with the IMF deal, agreed earlier this year, Bosnia’s state, entity, cantonal and municipal budgets face serious cutbacks for Bosnia to receive tranches of a 1.2 billion euros loan from the IMF, crucial to stabilising the country’s finances. The Federation is the only Bosnian public administration yet to comply with the requirements of the loan agreement. After Friday’s protests, the Federation Parliament passed an urgent decision not to make the planned cut to veterans’ and invalids’ payments. Federation Premier Mustafa Mujezinovic, said this move was “crazy” and contravened the deal with the IMF.

For years, international experts have warned the Federation that its social system is corrupt, poorly-targeted, unfair and ultimately unsustainable. Yet no government has proved willing to risk a major confrontation with the war veterans’ associations, which are believed to have grown into one of the most influential local interest and lobbying groups. “The World Bank management commended the Bosnia and Herzegovina authorities for designing measures to stabilise budgets and cope with the impact of the global economic crisis. These measures […] allowed Bosnia and Herzegovina to obtain financial commitments from the IMF and other international financial organisations, including the World Bank,” the Bank said in a press release.

The release underlined that the Bosnian budget deficit in 2009 was projected to reach around one billion euros, if no measures were taken to reduce it. “Bosnia and Herzegovina has some hard choices to make to balance expenditures with available resources, promote economic growth and protect the most vulnerable,” the statement read. “These reforms are necessary, now more than ever, in a country with one of the highest levels of expenditure on these benefits as a percentage of GDP in Europe and the central Asia region. Reforms are necessary with or without the IMF and the World Bank,” the statement quoted Armitage as saying. “Leaving things as they currently are, is not only unsustainable but also unfair. A larger share of funds spent on social and veteran programmes benefits the richest fifth of the population [rather] than the poorest fifth.” she claimed.”

This entry was posted on Tuesday, November 3rd, 2009 at 3:38 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed.