BALKAN POLITICAL CLUB

REVISION OF THE B&H MTDS (PRSP) AND THE POSITION OF THE BIHARNET - B&H ACADEMIC AND RESEARCH NETWORK IN

DEVELOPMENT PROCESSES

B&H Council of Ministers, EPPU-Office for Monitoring and Implementation of MTDSM.Sc. Azemina Vukovic, Head of the Office

Sarajevo, May 6-7, 2006

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THE B&H MID-TERM DEVELOPMENT STRATEGY 2004-2007 (PRSP)

The process of adoption of B&H MTDS 2004-2007(PRSP) has been completed in March 2004.

The main goals of the MTDS are:

1. Create conditions for sustainable and balanced economic development

2. Reduce poverty3. Accelerate EU integrations

Key documents• Mid-Term Development Strategy (PRSP)• Mid-Term Expenditure Framework (MTEF)• Public Investment Program (PIP)

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Activities of the EPPU - Office for Monitoring and Implementation of MTDS (PIMU)

In May 2004 CoM B&H decided to organize EPPU - PIMU as a part of the Office of the Chairman of the BiH Council of Ministers;

The EPPU-PIMU activities include: Work with governmental working groups, Monitoring and implementation activities, Statistics related activities, Coordination of preparation of the short-term and long-term development

strategies, Formulation of policies and priorities for donor community Aid coordination activities Cooperation with ministries on state and entity level Cooperation with Directorate for European Integrations and other bodies of B&H

CoM Cooperation with NGOs Social sector activities Poverty reduction activities Impact assessment Relations with media Preparation of conferences and other important meetings related to policy

decision making Training activities

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In October 2005 the third semi annual Report on implementationof MTDS (PRSP) has been completed. It was the basis for therevision of the Strategy. The revision process needed to:

I. Analyze and present up-to-date progress;II. Re-evaluate defined goals and priorities of the MTDS;III. Identify general key priorities and priorities from the

budgetary perspective;IV. Reaffirm governmental commitment to the key policies

that currently require additional attention;V. Update information related B&H Poverty profile.

THE AIMS OF THE REVISION OF B&H MTDS

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I. ANALYZE AND UP-TO-DATE PROGRESS

• Economic growth is in line with plans of B&H MTDS and in some areas higher than expected

• In period of implementation of MTDS, there was decrease of poverty, but the decrease is smaller than expected, which could be consequence of 60% implementation of measures from the MTDS AP

• Poverty is widespread and includes, apart from unemployed, also employed people, especially in informal sector

• Private investments are in line with planned, but concerning thing is consumer crediting

• Liberalization of trade has negative impact on trade deficit, while bad coverage of imports with exports as one of the most significant problems B&H is facing

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ANALYZE AND UP-TO-DATE PROGRESS(2)

• There is certain progress in transparency (for instance, treasury system) but there are problems with extra-budgetary funds and sub-entity levels

• Collection of revenues improves, even though it is too early to claim that such trend would continue in the future

• Public administration expenditures are high, mostly due to inability to save through reforms of education, health, social protection

• There is certain progress in establishing of state level institutions, necessary for better functioning of B&H and access to EU

• Centralization of tax collection improved financing from the state level

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II. RE-EVALUATION OF DEFINED GOALS AND PRIORITIES OF THE B&H MTDS (PRSP)

• Monitoring pointed to the fact that the types of problems in B&H are still identical as in the beginning of implementation of the MTDS measures,

• The progress has been made and, in comparison to the time when B&H started with implementation of MTDS measures, the problems differ in intensity – and they are smaller,

• The main goals identified in B&H MTDS are still actual. Revision offered better prioritization of the priority measures and activities,

• Monitoring process showed that it is necessary to mobilize all participants in the process to accelerate realization of defined priority measures.

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III.GENERAL KEY PRIORITIES AND PRIORITIES

FROM THE BUDGETARY PERSPECTIVE

The main goals defined in MTDS must remain the same:1. Create conditions for sustainable and balanced economic

development,2. Reduce poverty,3. Accelerate EU integrations

The strategic national priorities:1. Maintain macroeconomic stability,2. Increase private investments,3. Restructure economy,4. Increase employment and improve links between human

resources and labor market,5. Improve social protection system,6. Modernize Bosnian society

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IV. REAFFIRM THE COMMITMENT TO THE KEY POLICIES - PRECONDITION FOR FASTER REFORMS

• Political will for overcoming problems

• Accepting B&H reality

• Respecting adopted legal regulations

• Increasing responsibility and efficiency of decision makers in all areas

• Establishing mechanisms for sanctioning those who obstruct reform processes

• Better inter-sectoral cooperation

• Faster implementation of already adopted laws and continuous and quality measuring of effects of implementation

• Faster and more flexible reaction to spotted problems

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REAFFIRM THE COMMITMENT TO THE KEY POLICIES- PRECONDITION FOR FASTER REFORMS (2)

• Providing continuous economic growth with the goal of increasing employment, poverty reduction, and increase of social inclusion

• Greater participation of labor market in creation of policy for defining educational needs and needs in training system

• Raising awareness about need for development of human resources as basis for poverty reduction, economic and social progress

• Greater participation of youth in all social activities

• Development of capacities for access and equal participation in European and world processes and integrations

• Providing support for strategic economic fields in which B&H has comparative advantages

• Development of research and science as integral part of entire social-economic development of the country.

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V. POVERTY PROFILE: RECENT DATA, INDICATORS, POLICY, IMPLICATIONS

According to the latest data from the LSMS, 17.8% of the population (or about 681,000) lived below the general poverty line in 2004. This is a reduction of 8.7% from the level of 19.5% in 2001, suggesting that the poverty rate has been declining at just under 3% per year. The headline target set in the original MTDS was for a reduction in poverty of 20% over the four years from 2004 to 2007, equivalent to a decline of about 5% per year This suggests that BiH is making progress at a rate that is about 60% of that set out in the original MTDS.

Eradicating Poverty through Economic Development what means:-Transfer of property from the government to poorer members of society-Rapid progress on improving the climate for businesses employing the poor-Effective labor market and product market liberalization-Transfer from informal “gray” to formal economy

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THE POSITION OF THE BIHARNET – B&H ACADEMIC AND RESEARCH NETWORK

IN DEVELOPMENT PROCESSES

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ORGANIZATION AND FUNCTIONING OF THE BIHARNRT

• The BIHARNET has been established in 1998. The founders were B&H universities that existed in this time: Sarajevo, Banja Luka, Tuzla, Mostar, Sveuciliste Mostar;

• The financial resources were provide by donor’s project (EU and Slovenian Government);

• The BIHARNET was functioning very well in the period when financial resources existed- by the end of 2000;

• In the period when BIHARNET was in function all universities and libraries in country were inter-connected and international link B&H to TEN-155 was in faction as well;

• When the donor’s project was finished, B&H didn’t ensure the financial resources for functioning of the Nren and in 2001 BIHARNET was disconnected;

THE MAIN PROBLEM WAS: BIHARNET HAS BEEN ESTABLISHED ONSTATE LEVEL WHILE EDUCATION AND RESEARCH WERE

ORGANISED AND FINANCED ON ENTITY LEVEL

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The BIHARNET’s POSITION IN DEVELOPMENT PROCESSES IN B&H

• Even though BIHARNET is not functional, relevant B&H institutions proposed it at ministerial meeting in Brussels in 2001, as first priority of B&H related to higher education and science that has to be resolved.

• On the basis of this decision, BIHARNET is involved in UNESCO, EU projects from FP5 and FP6 and SEEera net program .

Besides that

BIHARNET has been recognized as development need of B&H in the MTDS (PRSP) and European Partnership activities;

BIHARNET has also been recognized in B&H IT strategy; In action plan for realization of MTDS (PRSP), it was defined that

issue of BIHARNET is to be resolved in first half of 2005, and that conditions for normal functioning must be created

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CURRENT SITUATION OF BIHARNET

• Universities in B&H are not inter-connected or connected to the GEANT;

• Coordination body which includes all universities, users of academic network, is not in function any more, and it limits exchange of information;

• It is very difficult to get information on available human resources at the universities that are willing to participate in the different projects and because of that B&H is not able to use all available resources;

• Technical level of equipment at universities is very low while available financial resources for increasing the quality of equipment are very limited, which affects capability for participation in international project activities;

• The laws on higher education and research and development on the state level have not been adopted so development of higher education and science is limited to small parts of the country (entity and cantons), which reduces possibility for creation of “critical mass” for starting of research and development processes in academic community and the country as a whole.

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CURRENT SITUATION OF BIHARNET

• The Higher Education Law and research and development Law are also preconditions for resolving the BIHARNET’s problems;

• Economic situation in the country is also very complex; capacities and

needs of institutes are very limited as well as needs of industry, which is not stimulating for research and development of science;

• Complex organizational structure of the country slows down processes of implementation of reform activities in the areas they exist (higher education), while in the area of science strategies of development do not even exist;

• Almost all personnel of BIHARNET has, considering that there are no funds for their work for almost THREE years, left the institution; the three remaining members of staff can barely respond to the duties.

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BH, EU AND CEE PERSPECTIVES

• B&H is committed to become member of the EU family of democratic countries;

• Accelerating the EU integration process is recognized in BH MTDS as well as in revised document as one of the main goals;

• The full legal membership in the EU will reflect on all political and economic aspects of life;

• The process of European integration demands the complete adaptation of policies, institutional frameworks and the legal system in order to achieve European standards in all fields;

• In 2005, BH prepared the Strategy for the integration of BH in EU, the BH CoM adopted the decision on the second priorities of the European partnership;

• The national and sectoral priorities from the MTDS (PRSP) revised document are also in correlation with these EP priorities;

• The EU membership require existence of NREN. Unfortunately our decision makers are not aware of the importance of this network and because of that B&H needs help to resolve this problem important for the development of the country.