IMF urges realism on Bosnian Federation

Alex Kruger

Monday, 11 September, 2000

The International Monetary Fund has warned Bosnia's Muslim Croat Federation that it will lose $150m of funding unless it reforms its pension laws.
The IMF and the World Bank say this could mean economic collapse.
The upper house of the federation parliament is due to vote on a package of proposed amendments on Tuesday.
The proposals have already been rejected by the Lower House which wants to increase the basic pension by 38%.

In theory pensioners in the Muslim Croat Federation should get just over a $100 a month.
In practice they may have to wait several months for their money as the government has been in arrears for most of this year.
Earlier in the year, the Federation Government, World Bank and the office of the high representative worked out a proposal for reforms, guaranteeing a minimum monthly pension and leaving the total payout unchanged.
However, the lower house of the Federation parliament rejected the amendments in a vote last Friday.

Investors wary
Now it is the turn of the upper house to vote.
Unemployment already stands at 40% and imports exceed exports by a ratio of five to one.
The international organisations in Bosnia say that no new sources of revenue have been identified to pay for the proposed increase.
And they have warned the federation government that it risks driving away foreign investment unless the laws are changed.

Original article