A round table on the topic of “Budget Incentives and Development of Entrepreneurship in BiH” was held today in Mostar, organised by the Institute for Youth Development KULT and as a part of the “BH Business Site” initiative. Representatives of relevant institutions, of the governmental and non-governmental sector, discussed the financial support to the economy and the effect that the support has in the final, with particular reflection on the development of entrepreneurship in the Federation of BiH. The perspective and the less perspective branches of the economy in BiH were also discussed, as well as the distribution of funds among them. 


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''The data demonstrated that certain branches of economy that were listed as perspective in the strategic documents of the governmental institutions, remained neglected when it comes to budget, such as the IT sector, tourism, industry of wood, while other branches, which are also advocated to require an even greater support, such as agriculture, were the favourites. But we were not presented with the expected effect in these fields'' – pointed out Rusmir Pobri? from the Institute for Youth Development KULT.


The research conducted by the Institute for Youth Development KULT, as a part of the “BH Business Site Initiative”, indicated to a plummet in allocations for economic incentives in 2014 in comparison to 2013. The subject of the research was the manner of allocating funds.  


''Most of the institutions stated that they issue public calls and that they have criteria for awarding funds, but the assessment of the effect of funds was either not delivered by a vast number of the institutions or not conducted according to over 100 percent of them, and the funds are extremely significant and owned by tax payers'' – says Pobri?. Zdenko Peri? from the Federal Ministry of Development, Entrepreneurship and Crafts agrees that the monitoring of the post-award effect is the greatest problem. ''The aim of awarding incentives of our Ministry is to aid the development of small and medium businesses. In the past 12 years, the form of awarding incentives has changed several times. The problem remained the same. We still do not have a plan of monitoring effects and efficiency of awarded incentives'' – added Peri?.


During the round table, there was much discussion over the difficult position of businessmen in the Federation of BiH. Only in the area of Tuzla Canton there are around 11,500 businessmen, however, the incentives they are provided by the Federation and the Canton are small, or miserable, claims Željko Babi?, the President of the Business Chamber of Tuzla Canton.


''Concretely, the procedure of incentive commissions should be changed, the investments into firms that suffer losses should decrease, there should be less investment in Railroads or Mines and greater incentives provided for small businesses that hire one or two employees'', added Babi?.


The ''BH Business Site'' initiative is conducted as a part of the Civil Society Sustainability Project (CSSP) that is being realised by the Centres for Civil Initiatives (CCI) and the Centre for Promoting Civil Society (CPCD), which is supported by the US Agency for International Development (USAID) and the Government of the United Kingdom.


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After the Round Table was held in Sarajevo on the topic of “Budget Incentives and Perspective Economic Branches in BiH”, the discussion on incentives will continue in Mostar as well. 


What are the good practices, and which fields require improvement? What are the perspective branches of economy in Bosnia and Herzegovina? How will entrepreneurship develop in FBiH? 


The Institute for Youth Development KULT cordially invites you to attend the round table on the topic of “Budget Incentives and Development of Entrepreneurship in FBiH” that will be held on Wednesday, 7 October 2015 at Ero Hotel (at Dr. Ante Star?evi?a) in Mostar. Statements for the media are planned for 12.00 PM. 


Agricultural workers, employers, non-governmental organisations and representatives of relevant governmental institutions will discuss the budget incentives and development of entrepreneurship in BiH. 


In the past period, the public was presented with results of research on awarding budget incentives to economy in BiH that were the cause for the scheduled discussion. The research was conducted on the sample of 133 institutions and included more than 600 million BAM of allocated funds and indicated to a negative trend: a fall in allocations. Major delays in payment were noted and individual branches of economy that are evaluated as perspective by the public and liable governmental bodies, are in complete mercy of the budget. The research included the funds allocated for development of entrepreneurship in BiH – start-up capital for establishing a company, innovation, entrepreneurship education, entrepreneurial zones, etc. – less than 5% of the total economic incentives have been allocated for the purpose.



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The research of the Institute for Youth Development KULT, conducted as a part of the "BH Business Site" Initiative, demonstrated a plummet in allocations for economic incentives in 2014 in comparison to 2013. Namely, during the last year, 63,369,530 BAM less was allocated from the budget for economy in comparison to 2013. On this occasion, today in Sarajevo, a round table was held on the topic of "Budget Incentives and Perspective Areas of Economy in BiH", organised by the Institute for Youth Development KULT, and attended by representatives of associations of economists, relevant governmental institutions and NGOs.   


Rusmir Pobri?, Project Manager of "BH Business Site" presented the results of the research on awarding incentives to economy. "Following the data that was presented to the public in June of this year, and that demonstrated a significant plummet of allocations for economy, a research was also conducted among the economists and representatives of the professions that demonstrated incongruency with the manner of performing allocations and strategic commitments of the state towards the perspective areas of the economy. Namely, the perspective areas of economy such as the industry of wood, the IT sector and tourism were deprived of budget incentives while, at the same time, the areas that have the greatest sums allocated for, do not record any significant results" - emphasized Rusmir Pobri? from the Institute for Youth Development KULT. 


BiH economy, from the aspect of allocating incentives, as was concluded today by the participants of the round table, primarily requires a strategic approach and investments in the perspective areas of the economy that would result in opening new workplaces. The participants agreed that long-term work on transparency in awarding incentives is required, with determining liability, as of those who use incentives, so of the institutions that award them. It was especially emphasized that it is necessary, beside transparency, to introduce an efficient promotion of public calls for awarding incentives - all for the purpose of creating a culture of applying for incentives and creating new generations of entrepreneurs.


BiH economy would develop better, the participants agreed, if, during the development and implementation of the programme for allocating incentives, an analysis of the situation would be performed, along with planning with a wider circle of actors and conducting an assessment of the effect of the allocated funds. 


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Which branch of economy was allocated with the most, and which was allocated with the least of budget money in the past two years? Is allocation of funds fair?


Economists, employers, representatives of relevant governmental institutions and members of Network for Creating a Better Business Site in BiH will try to answer these questions at a round table on the topic "Budget Incentives and Prespective Branches of Economy in BiH".


The round table that is organised by the Institute for Youth Development KULT as a part of the "BH Business Site" Initiative will be held on Tuesday, 15 September, at Hollywood Hotel (IlidĹľa) at 10.00 AM.


In the previous period the public was presented with results of reseach on allocation of budget incentives to economy in BiH that are the reason for holding the scheduled discussion. The research was conducted on a sample of 133 institutions and it included over 600 million BAM of allocated funds. The research results demonstrated negative trends: a fall in allocations for incentives of high 19.5% in 2014 in comparison to 2013, great delays are evident in paying incentives and certain branches of economy that are evaluated as perspective by the international public and the authorities are completely left to the mercy of the budget.


 


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On that same day, a second conference of Network for Creating a Better Business Site will be held in which, among others, the Network members will discuss the action plan for developing entrepreneurship in Bosnia and Herzegovina.


"BH Business Site" is the initiative of the Institute for Youth Development KULT that gathers a wider number of actors from the business, public and civil sector. It was initiated for the purpose of contributing to resolving system issues in the employment sector, among others, and to use grounded and directed law and advocating activities to create a better business climate through significantly improved and budgetary strengthened support programmes for small and medium entreprenurships as well as through managing the distribution of different budget incentives to the economy. "BH Business Site" Initiative is implemented as a part of the Civil Society Sustainability Project in BiH (CSSP) that is realised by Centres of Civil Initiatives (CCI) and Centre for Promotion of Civil Society (CPCD), and which is supported by the US Agency for International Development (USAID). 


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As a part of the "BH Business Site" Initiative, the final stage of research on the country's financial support to BiH economy is being counducted.


Having gathered and analysed data delivered by incentive providers, of 139 governmental institutions in BiH with over 600 million BAM of funds awarded in 2013 and 2014, which was published in the mid-June 2015, the final stage of research aims to gather opinions and proposals of economic representatives in BiH. A query was sent to over 80 representatives of BiH economy - organisations, unions, associations, chambers, experts - for delivering their opinions on distribution of budget incentives for BiH economy, on perspective economic sectors that should be awarded funds and on suggestions to improve the process.


When the data is gathered and processed, an analysis of the state in this area will be made with a suggestion of precise guidelines for governmental institutions in providing financial support for the economy that will aim to improve the effect of the allocated incentives and new employment. The proposal of guidelines will be the subject of public discussion provided through organising round tables and work conferences in the following months with a wide circle of actors.


The results of the first part of the research entitled "Analysis of Budget Incentives to Economy in BiH" are available at: http://www.mladi.org/index.php?option=com_content&view=article&id=2152&Itemid=520&lang=ba


To emphasize, the results of the first part of research displayed a decrease in allocations for economy in 2014 for 19.5% in comparison to 2013, or of over 63 million BAM. Then, lower allocations of almost 30 million BAM were recorded in agriculture, with a triple decrease of allocations for perspective wood industry and a complete neglect of perspective areas of economy such as the IT sector for which no funds were allocated in 2014, or the mountain or sea tourism that recorded no financial incentives in the past two years.


The Institute for Youth Development KULT started the "BH Business Site" Initiative in order to contribute to solving system issues in the employment sector of BiH. The focus is primarely on the inadequate system of distributing budget incentives for programmes and active measures of fighting unemployment in BiH and burdening economy with an inadequate concept of paying taxes and high contributions to employees' salaries, which deterrs investing in development and creating new job vacancies.


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At the 9th regular Session of the Parliamentary Assembly of Una-Sana Canton, held on 24 July 2015, after discussing the Information about the State in the Areas of Economy of Una-Sana Canton for 2014, the Assembly of Una-Sana Canton accepted the conclusions that the representative of DNZ BiH (Democratic National Community of BiH) Kenan Keserovi? presented.


Namely, the proposal of the conclusions is based on the results of the research on budget incentives conducted as a part of the "BH Business Site" Initiative. In short, the adopted conclusions provide for:
1. the Ministry of Economy and the Government of Una-Sana Canton to plan an increase in allocations of funds for developing economy and entrepreneurship in the budget of Una-Sana Canton,
2. the Ministry of Economy of Una-Sana Canton to, prior to establishing the Programme of Allocation of Funds at the cantonal level, conduct planning of allocation of funds together with other liable institutions through public discussions and a wide circle of participants,
3. the Government of Una-Sana Canton to establish an interdepartmental working body (Government-Assembly) or separate working bodies (Government and Assembly) for monitoring implementation of allocated incentives and assessment of efficiency,
4. a special budget line for development of youth entrepreneurship in Una-Sana Canton to be introduced through budget amendment for this year and for 2016 within the Ministry of Economy of Una-Sana Canton and with the support of the Institute for Youth Development KULT.


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Results of the research conducted by the Institute for Youth Development KULT as a part of the "BH Business Site" initiative demonstrated that in 2014, 63,369,530 BAM less was allocated in assets for 2014 in BiH economy from the budget funds in comparison to 2013.


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As  a part of the "BH Business Site" initiative of the Institute for Youth Development KULT, the reseach on budget incentives that the governmental institutions allocated for economic development in 2013 and 2014 in the form of irrevocable (grant) and revocable (credit) funds was completed. The research includes 133 governmental institutions and over 600 million BAM in funds allocated for economic incentives in BiH. According to the Institute, the research indicated to the negative trend in budget support for the BiH economy.


"In total for economic incentives, the institutions that delivered data, planned 390,892,989.18 BAM for 2013, or 330,040,331.93 BAM for 2014, while the implemented incentives amounted to 325,606,866.42 BAM in 2013, or 262,237,336.36 BAM in 2014. The total sum of implemented economic incentives for both years is 587,844,202.78 BAM. So, there is a decrease in economic allocations of 19.5% in 2014", stated Rusmir Pobri?, the "BH Business Site" Project Coordinator at the Institute for Youth Development KULT. 


The research indicated that agriculture has the highest percentage of participating in the total economic incentives for both years with the participation of 54%. It is followed by industry with 18%, then services, enterpreneurship and crafts development and tourism.


For the agricultural sector a total of 316,270,974.91 BAM was allocated during two years, with 54,960,920.58 BAM in credit and 261,310,054.33 BAM in irrevocable funds. Agriculture participates in total incentives with 54%. In 2013, 172,663,619.88 BAM was allocated and in 2014, 143,607,355.03 BAM – a decrease of 29,056,264.85 BAM. The most represented sectoral area is dairy farming with 131,425,003.15 BAM (42%), crop farming with 32,461,223.48 BAM (10%), and viticulture the least with 259,752.00 KM (0.1%). Lesser participation is evident in beekeeping, poultry farming and water management. 


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Pobri? emphasizes that it is very interesting that there were no allocations for the IT sector, that has been the most requested profession in the last couple of years. The situation is similar in tourism.  


"Total allocations for tourism in 2013 and 2014 were 2,776,883.96 BAM – 1,331,230.15 BAM in 2013 and 1,445,653.81 BAM in 2014. The most represented sectoral areas are educational (34.6%) and sports tourism (27.6%), while mountain and sea tourism are not represented at all (0.0%). There is also low representation in eco, health and religious tourism (from 0.5 to 1.3%) in total incentives for tourism", added Pobri?. 


There are also examples of good practice found in 17 of 88 institutions that present bright examples. KULT representatives emphasize the example of Tešanj Municipality.


"I must emphasize the example of incentives for youth enterpreneurship in Tešanj. I believe that it is the most developed in that Municipality. Through those incentives and that programme, in two-years time, 14 new youth firms were established", Pobri? concluded.


Finally, the Institute for Youth Developmant KULT emphasizes that the institutions, as a part of the improvement recommendations, mostly select increase of funds for economic incentives and implementing processes of planning the distribution of incentives (coordination with other institutions and governmental levels, consulting potential users, etc.).


The results of the research will be used as one of the sources for developing an analysis of states in the area of distributing budget incentives to perspective economic sectors and will serve as a platform for creating precise directions to improve the process for all institutions that financially incite and stimulate economic development. 


"The "BH Business Site" initiative is conducted as a part of the Civil Society Sustainability Project (CSSP) realised by the Centres for Civil Initiatives (CCI) and Centre for Promoting the Civil Society (CPCD), supported by the US Agency for International Development (USAID) and the Government of the United Kingdom."


 

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