EBRD to raise support to Bosnia private sector

The European Bank for Reconstruction and Development (EBRD) said late Friday it wants to help Bosnia shift from post-war reconstruction to investment to develop its neglected private sector and revive privatisation.
"Now the time has come to grow the economy, to invest in the private sector, and this is a challenge we have," EBRD President Jean Lemierre told Reuters in the central town of Visoko.
The bank's total investment in Bosnia will reach 300 million euros ($367.9 million) at the end of the year. It has invested mostly in public sector infrastructure projects so far.
Lemierre said investment in private enterprise was needed since generous international assistance in the aftermath of the bloody 1992-5 civil war was diminishing.
"We see the situation today as certainly better, and we see also a need for change," he said.
But Lemierre also warned that the authorities would have to improve the business environment and simplify a complex administrative system to attract foreign and local investors.
"Investors need a system they understand and which is not too complicated, which does not create too many difficulties when they want to create jobs and new activities," he said, adding the ERBD's priority was to support small companies.
Under the Dayton accords ending the civil war, Bosnia is split into two autonomous parts, a Muslim-Croat federation and a Serb republic.
The EBRD, the development bank for eastern Europe and the former Soviet Union, has extended via local banks over 25,000 loans to micro-businesses and 300 loans to medium-sized firms in Bosnia.
One of its beneficiaries, Dzemil Ugarak, who owns a company producing PVC doors, windows and frames in Visoko, said he was spending 40-50 percent of his time dealing with bureaucracy.
Lemierre said the state needed to provide an efficient system for entrepreneurs because "these are the companies which are going to create jobs and activity".
He said the bank would continue to support Bosnia's public sector through projects of reconstruction of roads and railways.
A 50 million euro agreement on reconstruction of a road connecting the northern city of Banja Luka with Croatia would be signed in December, when the EBRD will also organise a regional conference on transportation in Sarajevo, he said.