Bosnia PM rejects criticism on slow economy reform

SARAJEVO, Jan 12, 2000 -- (Reuters) The prime minister of Bosnia's Muslim-Croat federation was on Tuesday quoted as rejecting criticism about the slow pace of free market reforms but also urged local authorities to speed up privatization.

Prime Minister Edhem Bicakcic told the Onasa news agency that comments last week by an independent think-tank that Bosnia's Serb republic - the country's other autonomous entity - was ahead with reforms were groundless.

"... the federation achieved much bigger economic growth in 1999 than the Serb republic," Bicakcic said.

Fuelled by a $5.1 billion Western aid package, the federation economy has seen double digit growth each year since the 1992-95 conflict ended but total output still stands at only about 40 percent of the pre-war level.

Analyst James Lyon of the International Crisis Group think tank on Sunday said the West has seen much more progress in the Serb republic thanks to its reform-oriented prime minister, Milorad Dodik.

Western peace officials often urged the federation to do more the speed up privatization and reform of the financial sector or risk losing financial aid.

The U.S. government in December suspended its assistance to the federation privatization program saying it was too slow.

The sell-off of some $15 billion worth of state assets in the federation - including banks, enterprises and apartments - started last year but only a fraction of them have been sold so far.

Bicakcic said local authorities in charge of privatization would be urged to speed up the process or be replaced.

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