REALISING BOSNIA AND HERZEGOVINAS POTENTIAL SECTOR POLICIES Dragan Doko, Minister of Foreign Trade and Economic Relations SECTOR PRIORITIES AND PUBLIC

REALISING BOSNIA AND HERZEGOVINA’S POTENTIAL SECTOR POLICIES

Dragan Doko, Minister of Foreign Trade and Economic Relations

SECTOR PRIORITIES AND PUBLIC INVESTMENT PROGRAM

International conference on development of Bosnia and HerzegovinaCG Meeting on Bosnia and Herzegovina

Sarajevo, September 22 and 23, 2004

SECTOR POLICIES

Sector priority policies have been defined during the preparation of the BiH Medium

Term Development Strategy

Public Investment Program of BiH has defined priority projects in accordance with

determined sector policies

2

SECTOR PRIORITIES

Liberalization of the energy market:

To implement action plans of the entities for restructuring of the energy sector

To restructure the coal mines

To continue the liberalization of telecom market

To implement high education reform

To implement health financing reform

To establish an adequate social welfare system

To start pension system reform

3

SECTOR PRIORITIES

To adopt and implement new legal and institutional framework for the forest management

To ensure an adequate support to agriculture production

To define industrial policy of the country

To introduce system of electronic link with citizens (e-government)

To implement National plan for environment protection

To promote the road construction and maintenance management

To continue with railway transport reconstruction

4

WATER SUPPLY AND DEMINIG are HIGH PRIORTY OF THE SECTOR

Bosnia and Herzegovina is a territory with the largest number of landmines in Europe, what creates the difficulties for development of agriculture, forestry, industry, infrastructure and tourism

Around 55% of the population in BiH has an access to clear drinking water

Around 20% of the population has no access to sewerage management

To continue with major participation of domestic revenues in demining and water supply programs

To ensure donations for financing the priority projects of these sectors

5

PUBLIC INVESTMENT PROGRAM OF BOSNIA AND HERZEGOVINA 2004 - 2006 (PIP)

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OVERVIEW of the PUBLIC INVESTMENTPROGRAM OF BOSNIA ANDHERZEGOVINA 2004 - 2006 (PIP)

Portrays planned investments and is composed of prioritized development public investment projects for the time period 2004 to 2006

Includes per annum costing, sources of funding and budget counterpart funds, in the case of external funding

A three-year rolling plan and that will be updated each year

Reflects the needs at the State, Entity, Brčko District, Canton and Municipality levels to meet the country’s and sectoral policies, strategies and objectives

Is being used as an instrument for mobilizing resources – both domestic and external assistance

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CONTENTS of the PUBLIC INVESTMENTPROGRAM OF BOSNIA ANDHERZEGOVINA 2004 - 2006 (PIP)

It is a compilation of the projects contained in the Public Investment Programs of the BH Institutions, Federation of BiH, Republika Srpska and Brčko District

The projects are classified as following:

"New - High and Medium priority" Projects - No financing has been secured

"Committed" Projects - Received solid financial commitments for the time period from 2004 to 2006 - but disbursements have not yet started

"Ongoing" Projects - Funding was secured previously and is committed for the following period

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CONTENTS of the PUBLIC INVESTMENTPROGRAM OF BOSNIA ANDHERZEGOVINA 2004 - 2006 (PIP)

Projects of the Federation of BiH and Republika Srpska have been synchronized with the budget cycle, the assets needed for the first year being included in their respective budgets and they do not exceed the available assets defined by Entity Medium-term Expenditure Frameworks

Projects of the BiH Institutions are in compliance with the budget of the BiH Institutions for 2004, and are compatible with the Medium – term priorities of the Draft European Partnership for 2004

Projects of the Brčko District have been synchronized with the budget and expenditure plans of Brčko District

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PUBLIC INVESTMENT PROGRAM OF BiH(PIP) 2004–2006 ANDMEDIUM–TERM DEVELOPMENT STRATEGYOF BiH (PRSP) 2004-2007

PIP translates the sectoral priorities and strategies of the PRSP into concrete investment projects and PRSP-related sectoral capacity building projects

The projects included in the PIP are in line with the objectives of the PRSP and its sectoral priorities

In the forthcoming period, it is necessary to strengthen the mechanism for preparation and approval of public investment projects, in order to improve planning procedures. It should be a continuous task involving all competent institutions at all levels of government in BiH

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PUBLIC INVESTMENT PROGRAMMING PROCESS

The process started with needs assessment and the identification of projects by the BH Institutions, Entities, Brčko District of BiH, Cantons and Municipalities

The process involves two stages of selection: The first selection takes into account the compliance of projects with the

sectoral policies

The second selection process is carried out to make sure the projects are in line with PRSP objectives and priorities, as well as with the available resources

Preparation and design of individual Public Investment Programs 2004 -2006 at the level of BH Institutions, Entities and Brčko District, was carried out with the active participation of ministries from all levels of Government , with the technical assistance of UNDP

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PUBLIC INVESTMENT PROGRAMMING PROCESS

The preparation of the individual PIPs 2004 - 2006 included a process of project prioritization, carried out by Commissions for project prioritization, legally established at each level of government

PIPs of the BH Institutions, FBiH, RS, Brčko District were individually adopted by their respective governments

The four PIPs were consolidated to form the Public Investment Program of Bosnia and Herzegovina 2004- 2006

Public Investment Program of Bosnia and Herzegovina 2004-2006 has been adopted by the Council of Ministers of BiH

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PUBLIC INVESTMENT PROGRAM OF BiH 2004 - 2006

Planned investments by government level 2004 – 2006 in mill. €

BH Institutions 128

Federation BiH 481

Republika Srpska 264

Brčko District 114

Total for BiH 987

BH Institutions13%

Federation BiH48%

RepublikaSrpska

27%

Brčko District12%

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Overview of planned investments by sectors 2004 – 2006 in mill. €

Infrastructure 345

Energy 168

Water Management 121

Instit. Capacity Building 88

Other sectors 265

Total all sectors 987

Infractructure35%

Energy17%

WaterManagement

12%

Inst.Capacity Building

9%

Other Sector27%

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Overview by the project status 2004 – 2006 in mill. €

New projects - High priority 405

New projects - Medium priority

43

Committed projects 125

On-going projects 414

Total all projects 987

New ProjectsHigh priority

41%

New projectsMedium priority

4%

Committedprojects

13%

On – going projects42%

15


Overview by project types 2004 – 2006 in mill. €

Investment 833

Institutional 154

Total all projects 987

Investment84%

Institutional16%

16


Overview of planned investments 2004 – 2006 by years in mill. €

435

240

312

0

50

100

150

200

250

300

350

400

450

500

2004 2005 2006Planned Investments

in m

ill.

€

17


Overview of the financial resources for planned investments2004 – 2006 in mill. €

Project Self-financing 8

Gov. - Budget 174

Gov. – Altern.domestic finan. 23

Donations 121

Credits 661

Total 987

Gov. - Budget18%

Project Self - financing1%

Gov. Altern.

2%

Donations12%

Credits67%

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NEW PROJECTS


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Overview of NEW PROJECTS by sectors 2004-2006 in mill. €

Water Management 111

Infrastructure 145

Instit. Capacity Building 49

Environment 32

Energy 28

Other sectors 83

Total 448

Water Management 25%

Infrastructure32%

Inst.Capacity Building

11%

Environment7%

Energy6%

Other Sector19%

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Overview of NEW PROJECTS by project types 2004 – 2006 in mill.€

Investment 395

Institutional 53

Total 448

Investment88%

Institutional12%

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Overview of the financial resources for NEW PROJECTS2004 - 2006 in mill. €

Project Self-financing 5

Gov. - Budget 86

Gov. – Altern.domestic finan. 23

Donations1 41

Credits 2 293

Total 448

Gov. - Budget19%

Project Self - financing1%

Gov. Altern.

5%Donations

9%

Credits66%

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1 Out of which the secured donations amount to € 8 million2 Out of which the pledged credit amounts to € 8 million


Foreign funds needed for financing of the NEW PROJECTS in the period 2004 – 2006 amounting 318 mill. €

82

128

108

0

25

50

75

100

125

150

175

200

2004 2005 2006

Needed Funds

in m

ill.

€

Credits285 mill. €

Donations33 mill. €

23

OVERALL PLANNED INVESTMENTS 2004-2006


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Overall planned investments 2004 – 2006 amount 987 mill. €

Domestic sources 205

Foreign sources 782

Overall planned Investments2004-2006 in mill. €

987

Out of which:

Secured from foreign sources(for committed and on-goingprojects)

464

Lacking from foreign sources(for new projects)

318

mill. € 782

Domesticsources

21%

Foreignsources

79%Secured from

foreign sources

59%Lacking

from foreignsources

41%25

Documents

REALISING BOSNIA AND HERZEGOVINAS POTENTIAL SECTOR POLICIES Dragan Doko, Minister of Foreign Trade and Economic Relations SECTOR PRIORITIES AND PUBLIC