Republika Srpska President Milorad Dodik. Photo: GEORG HOCHMUTH/EPA

The Chamber of Commerce in Bosnia’s Serb-dominated entity Republika Srpska told BIRN that emigration was hitting economic development, after an International Monetary Fund report cut its growth forecast for 2018 due to the number of people leaving the country.

“We miss workers of all profiles and it is slowly becoming an obstacle to development,” the Chamber of Commerce said.

The IMF report, published last week following the first review of the country’s extended agreement with the global financial body, also said that Bosnia and Herzegovina is the country second worst-hit by emigration in the Balkan region, after Macedonia.

“A slowdown in productivity growth since the global economic crisis, and continued emigration, particularly of the young and educated – driven, in large part, by limited job opportunities at home – affect the country’s economic potential,” the IMF said in the report.

The report also warns that “the demographic crunch in the labour market is a real threat to Bosnia’s long-term growth prospects”.

Bosnia and Herzegovina has no data on emigration, which is why the IMF’s warning should be taken seriously, economists said.

Losing workers means losing the potential for development, said economist Predrag Dudukovic.

“However, you cannot blame people because they are going in search of a better life when you have not done anything to offer them better conditions to stay here,” Dudukovic told BIRN.

“Just asking them to stay is not enough to keep someone in the country. It is not possible to pay the bills or purchase food from promises and appeals,” he added.

The IMF report said that complex and inefficient administrative structures, a fragmented economic space, and high political and regulatory uncertainty exacerbate the high cost of doing business.

It said that the country’s economic problems are exacerbated by the low birth rate and the high level of emigration by young and skilled people.

The Republika Srpska government said that it was aware of the problems caused by people leaving.

“We are working with employers to increase salaries and keep good workers,” Zeljka Cvijanovic, the entity’s prime minister, told Bosnian media.

But Republika Srpska’s President Milorad Dodik insisted that the issue of emigration was exaggerated and that people are increasingly returning to the entity.

“Some people chase me for days, even when I’m at basketball practice, to help them to get their old jobs back – jobs they left six months ago to get to Germany,” Dodik told Bosnian media.

The IMF report also pointed out that Bosnia has one of the widest income gaps with the EU among Eastern European countries – a gap that has not narrowed significantly over the past decade and a half.

“Despite emigration, the unemployment rate is persistently high (over 20 per cent), with youth unemployment above 40 per cent,” it said.