Donor Co-Financing Assessment for New Country Strategy
3. Government Priorities and Stakeholder Engagement
3.1. Government Reform Priorities
The country applied for EU membership in 2016 and aims to fulfil the 14 key priorities
necessary for opening the EU accession negotiations. The process identifies a comprehensive
roadmap for deep reforms in the areas of democracy/functionality, the rule of law,
fundamental rights and public administration reform.
The Economic Reform Programme 2020-2022 outlines the following medium-term objectives:
Fiscal stability - strengthening fiscal stability and its sustainability as the main factor of
overall macroeconomic stability.
Reform of public enterprises de-politicisation, increased sustainability and efficiency of
public enterprises, reform of public administration through digitalisation.
Tax reforms - reducing the tax burden on labour, lowering the contribution rate, extending the
taxable income base, and shifting the tax burden to higher income taxpayers. Improvement of
the tax system's administrative and institutional framework to reduce tax evasion.
Grey economy increasing supervision and stronger taxpayers' control to reduce the unfair
competition from the grey economy, and enforcing stronger tax discipline.
Energy and transport market reform - adopting the necessary legislative framework,
harmonised with EU Directives, for the development of a retail and wholesale energy market
and its inclusion in the regional and international markets. Fulfilment of obligations assumed
under the SEE Energy Community Treaty.
Agriculture improving the sustainability and competitiveness of agricultural production, and
enhancing the institutional systems and capacities to harmonise the legal framework in the
field of agriculture and rural development.
Business environment developing a quality infrastructure system, including domestic
conformity assessment bodies, to grow the internal market of BiH, and strengthen the
competitiveness of export-oriented companies, as well as pursue an overall improvement of
the business environment.
Health System Reform - establishing a fiscally viable system that will enable a more efficient
provision of health care services.
Research, Development, Innovation and the Digital Economy putting science and
technology in the forefront of economic recovery, supporting the private sector's expansion of
innovative capacities, and competitiveness of enterprises.
Education and skills - reforming the education system to increase its links with the labour
market. Promoting vocational training, higher education, and inclusion in the labour market,
as well as the development of key competences for lifelong learning at all levels of education
with a focus on entrepreneurial and digital competence.
European Bank
for Reconstruction and Development
3.2. Reform Areas Broadly Agreed with Authorities
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Promote digitalization as key enabler for private sector
development and efficiency gains in the banking sector.
Focus on increasing opportunities for youth to counter emigration.
Promote and support FDI into the Bosnian economy and help the
development of a business friendly environment.
Finance infrastructure projects and improve SOES' efficiency,
including through the mobilization of private sector investments.
Support municipal infrastructure projects in the field of
wastewater and waste management.
Support BiH's transition towards a greener economy, including
through investments in energy efficiency as well as increasing the
share of renewable energy sources.
3.3. Key Messages from Civil Society to EBRD
CSOs endorsed the Bank's BiH strategy priority of strengthening the
private sector role, including through upgrade of skills and
digitalisation. In particular, CSOs consider that EBRD should
support digitalisation targeted at both SMEs and digital skills
literacy for the population at large. In addition, economic and social
inclusion, especially of young people, is key to the country's
development.
Civil society representatives further endorsed the Bank's focus on
supporting key public infrastructure investments, including through
governance improvements. According to CSOs, the EBRD should
pay particular attention to issues related to governance and
corruption and take into account the political instability in BiH.
Civil society organisations moreover welcomed the Bank's support
for energy diversification away from coal and low carbon transition.
They highlighted that energy poverty is an area of concern that the
Bank could address more. CSOs would also like to see support for
Just Transition and investments in green infrastructure.
PUBLIC
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