PAYMENT UNDER THE PINE-TREE

Agrement between the Federal and the Government of the Republic of Srpska

*The fist step towards establishment of payment operations between two B&H entities - Settling of accounts in German marks, at a point between Sarajevo and Sokolac*

AIM Sarajevo, July 1, 1996

Should the last week's agreement between the representatives of the Federal and the Government of the Republic of Srpska be carried out, during the first week of July, the initial step towards establishment of payment operations between the two B&H entities can be expected. According to the official statement, "for the beginning, all payments will be directed through the Office of the Federal Bureau of Payment Operations in Sarajevo and the Service for Payment Operations of the Republic of Srpska in Sokolac".

The two offices should carry out clearing operations once a week by "physically sending German marks" to each other depending on whose balance will be in the black for that period. In other words, accounts will be settled in cash and in German marks, at some point between Sarajevo and Sokolac the coordinates of which will remain a secret for the public for understandable reasons.

Flow of money between payment systems of the two entities will be the first crack in the internal B&H border established by arms and fortified administratively and politically, which was so far an impenetrable barrier for the economy. Indeed, it is a public secret that during the entire war between Herzeg-Bosna and the Republic of Srpska, despite all the sanctions, a trading connection existed through which, for instance, oil "oozed" all the time, as an exceptionally profitable commodity.

"Cooperation" between individuals from the territory controlled by the Army of B&H and those from the Republic of Srpska can be put into a single word - smuggling. Although completely illegal, it was not insignificant, nor is it today. Sarajevo, for instance, is full of cigarettes which without any doubt used to arrive, and still do, through the "good offices" of somebody's "partners" from the Republic of Srpska. Therefore, this is also as one would say a "commodity with high tariff rate", meaning that it should significantly participate in the entities' income collected through taxes. Instead, money is flowing straight into the pockets of smugglers and profiteers on both sides.

This must have been one of the factors, though certainly not the only one, which induced reaching of the decision to establish interethnic cooperation in payment operations. After all, such a move was announced two months ago after the meeting of three prime ministers (Federal, Republican and that of the Republic of Srpska) in Banja Luka. At the meetings held around the world, declarations could also be heard about the necessity of establishing railway transportation, mutual trade and telecommunications connections. A visit of a high B&H Government delegation to Belgrade was also announced, for the purpose of discussing such agreements, but so far nothing is happening in this respect.

Observed in such a context, the agreement on legal transfer of money between the two entities, even if it were in German marks, is a significant step forward. Because one should not forget that there have been proposals that everything should begin by mediation of a bank or institution outside B&H borders. Introducing a mediator would mean considerable expenses. In any case, enough strength and a minimum of confidence was afforded to cooperate - directly.

Unfortunately, in a primitive way. German marks will be carried in a bag and payments made on a meadow or under some pine-tree, at the time when Sarajevo University is being linked to the international computer network, the Internet, when both entities are in contact with the whole world by satellite telephones.

There is reason to believe that this time too, the saying that money makes the world go round will come true. If nothing else, in order to settle accounts and see who will carry the bag to the meeting-place and German marks in it, representatives of the offices from Sarajevo and Sokolac will furst have to exchange information. This part, hopefully will not be done at some meadow, and should imply at least a telephone or a telefax contact, as anywhere else in the business world. Therefore, there is reason to believe that at least a single telephone line between Sarajevo and Sokolac will be established - as the beginning of cooperation in the sphere of telecommunications.

Technical support to the beginning of cooperation will probably be sooner and more readily resolved once the joint decision on establishment of the first channel between the two payment systems has already been reached. Unofficially, it is possible to hear that initial experience acquired on the road Sarajevo-Sokolac will condition how soon new arrangements would be made concerning payments between entities in the regions of Banja Luka and Tuzla.

In the next few days, the first payments via the official channels between the two B&H entities should be expected to take place. Normally, this should also imply the announcement of the beginning of creation of joint key economic institutions which would operate on the entire territory of the state of Bosnia & Herzegovina, as prescribed by the Dayton accords. It is becoming evident that interests can and must be coordinated - today in payment operations, tomorrow in telecommunications perhaps.

It would be a humble, but valuable beginning of reintegration of the fragmentized economic space of B&H. The ultimate outcome will depend on the rate at what self-centred ethnic groups become aware of it and accept it, and this would mean a step further away from the pine-tree and the meadow and return into the world of computers, global networks and modern technology.

IBRAHIM POLIMAC