The effects of the financial crisis at the local level in BiH April 2009

Survey coverage: 16 municipalities

Topics covered Profile of the municipality Impact of crisis on the local private sector Impact of crisis on the public sector Evidence of broader social impact Perception of longer-term opportunities in light of potential crisis Degree to which municipal authorities are monitoring the economic and/or social impact

Findings: Observation of private sector Private sector slowdown (all); Suspension or termination of employees recorded (most); Wood and metal processing particularly badly affected; Cessation of construction projects and lower demand for permits & capital loans(some); Decreasing consumption (all);

Findings: Observation of public sector No job losses in the public sector; salary reductions and delays in 9 and expected during the year in 4; Municipal budget reductions expected (10 to 30%); Lack of sufficient resources for CSWs (all); Role of remittances is perceived to be significant. Entity responses: RS govt request to municipalities for programme of means to mitigate effects of crisis – initiative has been taken to develop economic strategy & will establish FDI unit FBiH – ad hoc information sharing on impact among municipalities

Findings: Social Impact Some evidence of labour migrants returning Particularly vulnerable; families with children, elderly, IDPs, collective centre residents Increasing levels of vulnerability predicted due to less resources Decrease in remittances assumed from decrease in consumption Some evidence of increased social unrest, crime & discontent; linked with increasing domestic violence.

Findings: Ability to assess crisis Very little access to information to monitor social or economic changes Generally not collecting data or utilising existing data Some ad hoc attempts to assess through taxation data Generally, information gathered = anecdotal Tendency to link downturn to political problems in BiH rather than broader crisis One municipality, however, has budget to develop programme to mitigate consequences of crisis

Conclusions & Long-term opportunities Despite presence of number of other industries in municipalities surveyed – agriculture seen as main area for future potential employment generation Lack of strategic approaches to harnessing investment Better skills to assess the situation clearly needed in municipal authorities