VISIBLE RESULTS OF ECONOMIC INCENTIVE POLICIES IN SRPSKA

In Republika Srpska, BAM 45 million has been planned for incentives this year, while BAM 99 million has been allocated so far. Simplified procedures for investors have shown that Srpska is a safe place for investment...

Interview by: Radenko KUPREŠAK BANJA LUKA, JULY 21 /SRNA/ - Republika Srpska has been recognised as a safe place for investment, and simplified investment procedures have attracted interest from both domestic and foreign investors, while the effects of economic incentives are visible through increased production, Minister of Economy and Entrepreneurship Radenko Bubić said. In an interview with SRNA, Bubić said that the effects of the incentive policy are also reflected in the procurement of new equipment and the improvement of technological processes, stressing that BAM 45 million has been earmarked for these purposes this year. Bubić stated that a total of BAM 99 million has so far been allocated for incentives in Srpska, stressing that the number of businesses applying to public calls issued by the relevant ministry is increasing, which, as he said, shows that the incentive policy pursued in Srpska so far has been successful. "This year, we adopted a new law on incentives. There are three types of incentives - incentives for the promotion and improvement of the competitiveness of small and medium-sized enterprises, for which around BAM 5.5 million has been allocated this year, and investment incentives, for which BAM 23 million has been allocated," Bubić said in an interview with SRNA. Bubić added that a recent regulation also established incentives for wage increases, allowing businesses to receive a refund of total salary contributions on the amount of the pay rise. DOING BUSINESS WITH THE EU BECOMING MORE DIFFICULT Speaking about the state of the economy in Srpska, Bubić stressed that developments in this field in the surrounding region are being monitored, noting that the economy of Srpska is closely linked to the EU. In recent years, he said, doing business in the EU has become more complicated, while economic activity has also declined since the outbreak of the Russia-Ukraine war. "The cause is the war-related developments, but primarily the increase in energy prices and the loss of some markets. Since the economy of Srpska is tied to the EU, especially Germany, Austria and Italy, business conditions have become more difficult," Bubić said. He stressed that inflation and rising prices have further complicated business operations in Srpska, resulting in increased costs. SIMPLIFIED PROCEDURES Bubić believes that simplifying investment procedures in the economy of Srpska is one of the measures contributing to the interest of both domestic and foreign investors. "It is not the only measure; tax policy, energy prices, the geostrategic position of Republika Srpska, as well as road infrastructure, which is being seriously developed and renovated, are also important," he said. Bubić assessed that Srpska is a safe place for investment and that this has been recognised, as evidenced by the fact that production facilities of the companies MAHLE and Iskra have been opened in Laktaši in recent years, that Perutnina is significantly expanding its capacities, and that there are indications of production expansion at Hemofarm and Banja Luka Brewery. He stated that the backbone of the economy of Republika Srpska consists of the mechanical engineering and electrical industries, the IT industry, wood processing, and the textile and leather industry. He pointed out that the wood industry in Republika Srpska has great potential because it has basic resources, namely raw materials available in this area, but that work needs to be done on increasing the level of product finalisation so that it is not only sawn timber and split wood that are exported. "We need to produce furniture, panels and other elements that are important for domestic final production in the wood industry, but also for buyers around the world," Bubić stressed.