Economic Policy as a Determinant of Development and More Efficient Business Operation in the Republic of Srpska

Abstract

The Republic of Srpska needs a developing economic policy in order to make it a key determinant of more efficient business operation. The present economic policy is far from being like that, as it is more recession like given that it does not determine development yet. The economic policy of the Republic of Srpska has failed to perform its function years and especially for the incoming 2016, when, in addition to previous scope of welfare, which was defined as a target, it set to itself an additional goal to also finance pensions from the Budget in the coming period. The RS Government has gone even further and has even praised in public that in 2017 the Public Health Service would also be financed from the Budget, which will most certainly place an additional burden to an already strained Budget of the Republic of Srpska, whose 1/5 has been regularly replenished by using resources of International Monetary Fund. The Republic of Srpska, unlike many other countries worldwide, has abandoned Bismarck social insurance system and has adopted the Beverage system which is rarely applied worldwide. Such occurrence appears only when an economic system of a parent state cannot finance social rights out of its operations. Unfortunately, it has happened to the Republic of Srpska. Thus defined objectives and economic policy created in this way would not provide any positive growth rate, higher employment level, abatement of public debts nor cutting the deficit in any country, let alone in the RS. The said arguments will additionally contribute to poor living standard of citizens i.e. the citizens would experience even worse conditions than today, while only a small number of them would live in abundance. Such poor condition was not only caused by the global economic and financial crisis, but the culprits should be sought among those who have poorly planned, managed and spent scarce financial resources of the RS. Economic policy of the Republic of Srpska should spawn certain indicators, which would become a determinant of development and better business operation. It would considerably benefit to greater wealth of the Republic of Srpska and provide better living standard of its citizens.