Incoming information claims that the minimum of BAM 900 is a burden on the economy?

As soon as the lowest salary was announced, the Union of Employers of the Republic of Srpska announced that there would be a departure of our companies to the Federation of BiH and the closing of jobs. No one even waited for the first accounting period, or a single salary to be paid, to see who has a problem with payment. The problem is not a higher minimum salary for businessmen, but the payment of salaries illegally. With a minimum of BAM 900, the Government has hit this segment hard among businessmen. I expect that in the coming period we will have fewer and fewer companies that pay part of the salary in envelopes and that workers will stop accepting salary payments in envelopes. Workers must also think about their pension, because it is not the same to receive 700 and 900 marks in the account. Although unfortunately, the workers are partly to blame because they agreed to receive part of their salaries in envelopes.

Will employers give up part of their profits and increase workers’ salaries?

Since 2019, the Government has had incentives to increase salaries. Ever since I have been at the head of the Ministry of Economy, I have noticed that we have a certain number of businessmen in Srpska who have extra profit, and yet apply for incentives to increase salaries for workers. So, even those who have extra profit want to receive incentives from the Government because they do not want to allocate a single mark of their profit for the workers and increase their salaries.

So how realistic is the story about the employers’ problems?

This is certainly a burden for certain economic entities, and we acknowledge it. On the other hand, it is not a huge number. By increasing the minimum salary, workers’ satisfaction will be higher as well as their productivity at work. It is certain that the outflow of labour force will also be smaller, because this increase will also contribute to the preservation of jobs. In the next 2-3 months, the Government will monitor businessmen and react with measures if necessary. Increasing the minimum wage will bring certain problems at the start, but it will have an effect in the long run. We will have higher salary for workers, we will save the labour force and reduce the payment of salaries in envelopes.

Will foreign workers replace local workers?

Our workers, if satisfied with their salary, can certainly be more productive than any foreign worker. Now it’s up to the employers to talk to the Government in order to have well-paid and satisfied workers, and this is how we will keep them in Srpska. The fact that the majority  of foreign workers are in construction, and may I remind you that the lowest salary is in construction, while the price per square meter in Srpska is one of the highest in the region.

Are foreign investors interested in investing in the RS?

Foreign investors are interested in investing in Srpska. Corona contributed to large companies from Europe withdrawing their plants from Asia and Africa, where labour is cheap, and because of the problem of transportation and the cost of it. Corona is welcome to those of us who are on the border of the European Union. We have a favourable tax policy, we are close to the EU, we have infrastructure and the lowest price of electricity. All this attracts business entities from the EU to invest in Srpska.

What incentives do we offer to foreign investors?

The Government has several types of incentives. Incentives for direct investments of special importance for example. This refers to business entities that invest in underdeveloped areas of the RS, where they employ up to 50 workers and invest five million marks. There is an incentive for those who employ over 100 workers and invest over ten million marks.

The Government provides incentives for justified investment of up to 30 percent. The only condition is that the worker’s salary must be higher than the average salary in RS. We also have an incentive to increase salaries; an incentive for direct investments, as well as for small and medium-sized enterprises. These are incentives for improving the competitiveness of our economy compared to the European.

On the other hand, what hinders the arrival of investors to Srpska?

One of the problems is that Srpska is negatively evaluated in international reports according to parameters related to the business environment. The Government is constantly working to change this image and to spread the proper information about Srpska. The data that is marketed to the international community comes from Sarajevo and is ten years old and does not reflect the true situation. The Government is working to promote the economy and why you should invest here. It is no coincidence that a few years ago, foreign magazines rated the Republic of Srpska as a destination worth investing in.

How much do local communities help attract investors?

Local communities provide free land and simplified procedures. In practice, investors do not pay for building permits or land. This pays off in the long run for local communities, because through taxes and contributions, money is returned to the local budget. The sheer speed of obtaining permits in a few days makes foreign investors decide to come to Srpska.

Can the Government, employers and the Trade Union be partners in discussions about the minimum salary?

We must be partners and equally bear the increase of the minimum salary, which is realistic. We had a reaction from the Union of Employers of the Republic of Srpska, which immediately recommended that our businessmen should go to the FBiH upon the announcement that the minimum salary would be BAM 900. I am against this kind of action. Our businessmen need to talk to both the Government and the Trade Union of the RS, which they have not done in the previous period.