Bosnian Federation’s president appoints four new ministers

Bosnian Federation’s president appoints four new ministers
By bne IntelliNews October 29, 2015

The president of the Bosnian Federation, Marinko Cavara, has approved the appointment of new ministers from the Alliance for a Better Future (SBB), which recently joined the government after the previous coalition split in June. The SBB has been given four key ministries including the ministry of energy.

The crisis within the ruling coalition was precipitated by the decision of the Democratic Front (DF) to quit amid a spat over the management of state-controlled companies. While this has not seriously affected the Bosnian Federation, the larger of the two entities that make up Bosnia & Herzegovina, the government has faced serious financial and political challenges in the past two months. The vacant posts at the two ministries have been filled just as an International Monetary Fund (IMF) mission arrives in Bosnia, which is also aiming to apply for EU membership by the end of this year.

Cavara approved the appointments of the four new ministers on October 28, the day after their nomination by SBB leader Fahrudin Radoncic, according to the government website. The appointments were later endorsed by the parliament.

Nemir Dzindic will become the federation’s new energy minister, Vesko Drljac has been appointed deputy prime minister and social policy minister, Edita Djapo tourism minister and Zlatan Vujanovic trade minister. They will replace four former ministers from the DF in Fadil Novalic’s cabinet.

Cavara told the parliament that he expected the incoming ministers “to give their best as new government members in these hard times”, according to a statement on the SSB’s website. “They took over the responsibility for positions that are not the most attractive, which is worthy of praise,” Cavara added.

At a press conference after the ministers’ appointment, Dzindic outlined his plans for the energy sector, saying he would focus on nine ongoing projects, singling out the construction of Block 7 at the Banovici thermal power plant, an SBB statement said.

He also announced plans for the re-organisation of the 26 state-owned industrial companies. “These are mainly companies that have great difficulty in all business segments. We'll do a rational reorganization of these companies, and very likely in the field of defense industry,” Dzindic said.

His appointment comes shortly after Novalic confirmed oil major Royal Dutch Shell would not proceed with a planned oil and gas exploration project in the Bosnian Federation. Banja Luka is now looking for an alternative investor, and a consortium comprising Croatian oil and gas company INA and Hungary’s MOL is reportedly interested in replacing Shell.

Banja Luka is reportedly close to reaching an agreement with banks to obtain BAM200mn (€102mn) that the entity was originally expecting to receive from the IMF. However, Bosnia’s last arrangement with the Fund was suspended due to the lack of reforms in the country, affecting the governments at national and entity level. The Federation was forced to revise its 2015 budget to compensate for the lack of funds.

Meanwhile, an IMF mission arrived on October 28 in Bosnia to start new talks on possible €1bn new loan agreement.

The Novalic cabinet has also been working with the government of the country’s smaller entity - the Republika Srpska - and with the national government on the 2015-2018 Reform Agenda, required for its EU accession process. The two entities have started talks on coordinating their legislation as a first step in implementing the agenda.

In August, the Federation government was able to persuade parliament to adopt a new labour law, which was required by the EU as part of the Reform Agenda, despite not having a majority in parliament.

The DF withdrew its support from the government on June 4 following Novalic's decision to propose a change in the procedure for appointing managers at state-controlled companies. Under to the new rule, approved at a government session on June 4, managers will be appointed by the government rather than the minister responsible for that sector.

This was a particularly contentious issue for Bajrovic as the most attractive state-owned companies including aluminium smelter Aluminij are under the control of the energy ministry. The government has said it is considering selling its stake in Aluminij, but has not initiated a privatisation procedure so far.

Initially, the two parties that remained in the coalition - the hardline Croatian Democratic Union of Bosnia and Herzegovina (HDZ BiH) and the Party of Democratic Action (SDA) - said they would not seek a new partner. However, after losing their majority in the parliament they agreed to form a new coalition with the SBB.

The SBB is a centre-right party, founded in 2009 by Radoncic, who is also the founder and owner of Dnevni Avaz daily. In the June political crisis, the SBB was one of the parties pushing for Novalic’s resignation. Among the parties represented in the federation’s parliament, it is the most acceptable new ally for HDZ BiH and SDA given its pro-EU stance.

Following the 2014 general elections, SDA leader Bakir Izetbegovic refused to cooperate with the SBB due to a personal disagreement with Radoncic, but the two leaders ultimately managed to set aside their personal issues to form the new government.