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Bosnia's Federation seeks IMF help on supervision of state-run firms

Author Iskra Pavlova
Bosnia's Federation seeks IMF help on supervision of state-run firms ruskpp/

SARAJEVO (Bosnia and Herzegovina), September 17 (SeeNews) - The government of Bosnia's Federation entity has asked the International Monetary Fund (IMF) for technical assistance in the improvement of supervision at state-controlled companies, an IMF official said.

In response to the call, an IMF mission is planned to visit Bosnia in December for consultations on compiling a list of all firms controlled by the Federation's government, on supervising their financial results, on improving their management structure and determining the fiscal risk, the IMF resident representative to Bosnia, Andrew Jewell, told Bosnian state-level radio and TV broadcaster BHRT over the weekend.

Jewell said that the government of Bosnia's Serb Republic entity is also considering asking the IMF for similar technical assistance.

The Federation and the Serb Republic are the two autonomous entities that make up Bosnia.

"Many SOEs [state-owned enterprises] are performing poorly, which is now evident in the case of Aluminij and mining companies Zenica and Breza," Jewell said, adding the transparency and supervision at such companies are inadequate.

Mostar-based aluminium producer Aluminij shut down operations on July 10 after its power supply was cut off due to swelling unpaid bills. The company, which employed 900 people and had numerous suppliers and other cooperating units, had been in persistent trouble over high prices of electricity and raw materials.

Similarly, the future of brown coal mining companies Zenica and Breza seems uncertain after years of operating at a loss. Their employees held hunger strikes earlier this month to press demands for the payment on wage arrears and for better management and working conditions.

There are some 550 state-owned companies in Bosnia, employing some 80,000 people, according to an IMF report cited by BHRT. The outstanding debt of these companies totals some 8.0 billion marka ($4.5 billion/4.1 billion euro), including 3.5 billion marka of overdue taxes to the state.

(1 euro = 1.95583 marka)