Policy responses for Bosnia and Herzegovina - HSRM

Bosnia and Herzegovina

Policy responses for Bosnia and Herzegovina

6. Measures in other sectors

6.1 Measures in other sectors

Many MEASURES IN OTHER SECTORS beyond the immediate scope of the health system are being taken to prevent further spread of the virus. This section contains information on many of these areas, including border and travel restrictions and economic and fiscal measures, among others.

On 15 March, the Council of Ministers of BIH decreed that entrance into BIH was banned for citizens of 12 countries with ‘intensive transmission of coronavirus‘ (China, South Korea, Japan, Italy, Iran, France, Romania, Germany, Austria, Spain, Switzerland and Belgium). On 16 March, when both FBIH and RS separately declared a state of emergency, all foreigners were banned from entering the country and a mandatory 14-day period of self-isolation or quarantine was required for all incoming BIH nationals. Truck drivers entering BIH with essential goods and supplies were exempt from border quarantine: they would be allowed to reach their final destination in BIH but would be put under a special surveillance regime. With the support of the armed forces, border quarantine tents have been erected at some ground crossings and set into operation: as of 23 March these were effective at the border crossing Gradiska, with a capacity of 140. On 10 April, the Chief of the Monitoring Team for recommendations and measures during the extraordinary situation in RS noted that there is ‘a complete lack of seriousness on the border crossings in FBIH Entity’ for which he hoped ‘it is not a provocation for RS to bring its police units on inter-entity lines’. He commented that colleagues in FBIH were not taking seriously the set-up of quarantine tents, there were no doctors present at the borders and more so – there was a break in issuing self-isolation measures which was not only contributing to the rise of cases in FBIH but endangering citizens across BIH (https://www.oslobodjenje.ba/vijesti/bih/stevandic-neozbiljnost-fbih-provocira-izlazak-mup-a-republike-srpske-na-entitetsku-granicu-547638).  Following a decision by the Council of Ministers of BIH, international airports in BIH had been closed for all commercial passenger flights to BIH since 30 March until 30 April, which was subsequently extended to 1 June. However, they remained open for international goods and aid. As of 28 April, flights for repatriation of BIH and evacuation of foreign citizens were allowed on an exceptional basis (Rome, Stockholm, London, Istanbul), requiring prior permission from the Council of Ministers of BIH. As of 1 June, airports have been opened for passenger travel, and border crossings with neighbouring countries (Croatia, Serbia, Montenegro) opened for travel for citizens from these countries. Citizens of other countries could still enter BIH only on official business. Foreign nationals travelling for work-related purposes have been required to present the official invitation, as well as a negative SARS-CoV-2 PCR test, taken no more than 48 hours prior to crossing the border.

With the resurgence of new cases encountered in BIH after the re-opening of borders on 1 June, a number of cantonal Crisis Management HQs in FBIH urged BIH authorities to require negative PCR tests upon entry for anyone (including BIH citizens) who has been entering the country from high-risk countries, claiming that a number of new clusters in BIH could be traced to people who came back from abroad (16 June). Following reports of new cases which were ‘imported’ into Montenegro via BIH, on 18 June Montenegro endorsed a new measure that anyone coming from BIH had to present a negative PCR test result (since 29 June, a negative ELISA serological test has also been accepted). Slovenia followed with the same decision. However, strong public reactions and deliberations on reciprocity followed Croatia’s decision for mandatory 14-day quarantine (‘self-isolation’) of anyone coming from BIH (along with Serbia, North Macedonia and Kosovo) on 25 June. This came almost overnight and replaced the previous measure which required BIH citizens to show proof of fully paid accommodation in Croatia at the border, thus causing problems for those who already paid their bookings but now could not go to their summer vacation in Croatia (social media comments were along the already familiar lines which describe the Croatian tourism approach towards guests from BIH who are ‘numerous, but unwanted’ with feedback such as ‘our neighbours finally got what they wanted – payments from BIH without showing up; pay but don’t come’). After an exchange between the Ministers of Foreign Affairs of Croatia and BIH, where the reciprocal measures were announced, Croatia reversed its decision and allowed citizens of BIH/travellers from BIH entry without quarantine, with a pre-registration done online (30 June). Officially, BIH is not on the initial EU list of countries whose citizens are allowed entry for non-essential travel (https://data.consilium.europa.eu/doc/document/ST-9208-2020-INIT/en/pdf), and the Chairman of the Council of Ministers of BIH noted that BIH would act in a reciprocal way and keep its borders closed (30 June). Different associations and chambers reacted to this announcement, and the tourism offices in Herzegovina and the Minister of Tourism and Environment of FBIH urged the Council of Ministers of BIH to reconsider this decision as ‘BIH cannot afford that’.

On 10 July, Croatia decided to re-introduce mandatory self-isolation upon entry for entering non-EU citizens, this time clearly distinguishing between BIH residents holding Croatian passport (i.e. those with dual citizenship) who are exempted from self-isolation, and holders of BIH passport only who are practically not allowed to enter Croatia for a vacation. This has caused strong public reactions in BIH, with social media comments that the COVID-19 situation has evolved in such a way as to ‘recognize Croatian passports as a vaccine/immunity document’ (13 July).

Upon significant pressure, the Council of Ministers of BIH decided to open BIH borders to EU and Schengen area citizens who can show a negative COVID-19 certificate, not older than 48 hours prior to entry (15 July). That decision was very much welcomed by the representatives of tourism associations and businesses. However, the Minister of Tourism of FBIH also urged the Council to ‘correct a mistake’ in the decision and allow also the entry of Turkish citizens, as well as citizens of the United States into BIH. The Minister of Foreign Affairs of BIH reiterated that she hoped that the decision would be reconsidered to expand and include more countries, e.g. Turkey and the US, adding that BIH also needed its diaspora (17 July). On 27 August, the Presidency of BIH requested from the Council of Ministers of BIH to consider allowing entry of citizens of the USA, Russia, China and Turkey to BIH, under the same conditions that apply to EU and Schengen area citizens, i.e. with a negative SARS-CoV2 test not older than 48 hours. On 10 September, the Council of Ministers of BIH made a decision, effective of 12 September, allowing entry to BIH to all foreigners who are obliged to present a negative result of PCR SARS-CoV2 test not older than 48 hours. The citizens of neighbouring countries - Croatia, Serbia and Montenegro – are allowed entrance without testing, provided they are arriving to BIH directly from their countries of origin.
There have been no area lockdowns since the beginning of the outbreak in BIH. However, they have been considered as an option should viral transmission escalate.

• Mobility (transport)
o There are no restrictions from BIH on outgoing travel, only recommendations not to travel abroad by Ministry of Foreign Affairs. Borders with neighbouring countries (Serbia and Montenegro) were fully closed.
o Intercity travel by bus and train was suspended. As of 25 March, people can still travel in private cars. However, restrictions on internal travel away from the place of residence have been considered should community-based transmission escalate in communities.
o Official travel advice was not available as of 25 March.

• Economy
The monetary and financial system in BIH is stable. The Central Bank of BIH has 5.5 billion convertible marks (BAM) on its account: BAM 2.7 billion is a Reserve Requirement, while BAM 2.8 billion represents a surplus above the RR. This clearly indicates that the country’s banking system has a sufficient level of liquidity and there is currently no need for a further reduction in the Reserve Requirement rate. The Central Bank of BIH has a sufficient volume of convertible mark (BAM) cash, as well as euro banknotes, which means that it can meet the needs of commercial banks to supply citizens and businesses. The Central Bank of BIH has stated that commercial banks have significant cash reserves, which is a guarantee that all cash-related needs of the financial system will be met. Proposals were initially made to tap into the Central Bank reserves to deal with the crisis. However, the IMF, the World Bank and other institutions strongly advised against this (https://www.imf.org/en/Countries/ResRep/BIH), given that the existing arrangement has worked for many years and has contributed to a low inflation, financial stability, and confidence in the currency (ensuring that the BAM has a fixed exchange rate with the euro).

The Chairman of the Council of Ministers of BIH held a video-call with international financial institutions (2 April), estimating in a request that some EUR 600 million will be needed in BIH to respond to the pandemic and recover its health and economic sectors. He asked that the current arrangements and strategies for BIH be revised and adjusted in order to adequately and timely respond to the situation. He also noted that it is of utmost importance that Funds for Economic Recovery are set up at the entity levels (FBIH and RS), with the Council of Ministers of BIH retaining a co-ordination role.

On 11 April, in a meeting with the EU and US ambassadors, leaders of the 3 ruling political parties in BIH (DA, SNSD and HDZ) reached an agreement on the Letter of Intent for IMF, to unlock EUR 330 million immediately available for BIH through IMF’s Rapid Financing Instrument (RFI). The principles for distribution of these funds within BIH were agreed: 62% would go to FBIH and 38% to RS, while 0.5% from each of the entities of BIH would go for BD BIH (totalling 1%). Out of the FBIH’s cut, 50% would go directly to the 10 cantons of FBIH, while the exact distribution would be a matter of further discussion within FBIH. At the same meeting, an agreement was reached to form a Coordination Body to primarily deal with socio-economic measures during the pandemic. Initial statements note that members of this Body would be the Chairman of the Council of Ministers of BIH, two Prime Ministers of FBIH and RS, the Fiscal Council of BIH, and the Minister of Security and Minister of Foreign Trade and Economic Relations of BIH. On 16 April, the Council of Ministers of BIH generally adopted the above-mentioned principles of distribution, but failed to agree on the criteria for distribution within FBIH, in particular the direct disbursements to the cantons (cantonal population and the number of people employed in the private sector were proposed in the Parliament of FBIH). On 23 April, IMF transferred the approved 330 million euros to the Central Bank of BIH in three separate tranches, which would become operational upon the final approval of the distribution by the Council of Ministers of BIH. On 2 June, and after a lot of political back and forth, the Council of Ministers of BIH finally endorsed the decision on the distribution of IMF funds, as per previously agreed Letter of Intent percentages. However, while the decision stated that ‘61.5% goes for the FBIH with its 10 cantons’, the difference is that this decision did not mention how the funds would be distributed internally in the FBIH. Despite the endorsed decision and political agreement, as of 14 June these IMF funds have not yet been distributed across the cantons in FBIH, which means that some 25,000 companies and entrepreneurs which applied for subsidies to cover basic salaries and contributions for over 174,000 workers in FBIH are still not supported.

On 24 April, the World Bank approved USD 36.2 million financing to help BIH prevent, detect and respond to the COVID-19 pandemic. Over the period of two years (until June 2022), the World Bank would be working with respective line ministries in the governments of RS (Ministry of Health and Social Welfare of RS; 40% of total funds) and FBIH (Ministry of Health of FBIH, Ministry of Labour and Social Policy of FBIH; 60% of total funds) to strengthen healthcare delivery and health systems in response to COVID-19, and provide temporary social support and cash assistance for vulnerable households and individuals in RS and FBIH (an estimated 48,000 people).

Changes to the BIH Law on Procurement have been proposed to the Council of Ministers of BIH and the Parliament of BIH to enable an accelerated process of public procurement in case of emergency situations or circumstances, and in particular to speed up the procurement of medical equipment. On 21 May, amendments to the Law on VAT, stipulating a delay in payments by 20 days during the crisis and for a maximum of 6 months, were adopted in the Parliament of BIH, thus alleviating some of the impact of the economic crisis for business entities in the country. The Council of Ministers of BIH initially failed to form the Group for socio-economic response to COVID-19 at the state level (30 April), but then managed to agree on establishing the Group, to be chaired by the Chairman of the Council of Ministers of BIH (5 May). On 28 May, UNDP published its Economic Impact Assessment of COVID-19 in BIH report (https://www.ba.undp.org/content/bosnia_and_herzegovina/en/home/library/publications/EconomicImpactAssessment.html). On 2 June, the Council of Ministers of BIH held the first meeting of the Group for the socio-economic response to COVID-19, using the meeting to discuss how the group would work and function. The Chairman of the Council of Ministers of BIH noted in a statement that he ‘was looking at some projections for indirect taxes which point that these would be decreased by around BAM 260 million from the planned in 2020; these are the indirect taxes alone, and don’t include the expected losses of producers, transporters, etc’. With such projections, around 30,000 jobs would be lost, and 2-3 years needed for the country to recover. (16 June). On 22 October, the World Bank published its Western Balkans Regular Economic Report, which predicted: ‘In 2020, BIH is expected to slip into its worst recession in 25 years. Real GDP growth is projected to contract by 3.2 percent in 2020 because of the slowdown in the most productive sectors, a weaker external environment, and political uncertainty.’  (https://www.worldbank.org/en/news/press-release/2020/10/22/recession-deepens-in-bosnia-and-herzegovina-as-covid-19-pandemic-threatens-jobs-and-poverty-reduction-in-western-balkans).

Both RS and FBIH have adopted measures to freeze the prices of basic items to avoid price-gouging. Inspectors are monitoring the prices of certain products, including bakery products, dairy products, meat, eggs, salt, sugar, baby food, masks and disinfectants. Where companies do not comply with the decision on direct price control, they would face fines of between BAM 1,000 and BAM 20,000.

A whole set of labour protection measures have been put in place in both FBIH and RS and BD BIH, instructing employers to ensure that one working parent is enabled to stay at home with children under 10 years of age. The aims are to facilitate flexible working arrangements such as working from home, to reorganize working practices into two shifts, to reduce overall working hours and to improve the health and safety measures for employees at workplaces.

The Chamber of Commerce of RS was authorized to issue certificates confirming ‘force majeure’. With these certificates, local companies who have signed contracts with buyers from foreign countries would not have to pay penalties because of their failure to deliver their products by a certain deadline. According to Tax Administration data, over 23,000 people lost their jobs, with 15,000 people applying o the Bureau for Employment and 10,000 applying for financial assistance in FBIH (23 April). On 8 May, it was officially reported that 26,876 people were registered as unemployed in FBIH in the period 16 March – 5 May.  According to the data of the Banking Agency of FBIH, by 17 April more than 23,700 citizens applied for the announced moratorium on loan repayment. In RS, the Prime Minister of RS stated that official employment bureau data showed that 800 people lost their jobs in the period 1 March - 10 April (14 April). The Agency for Statistics of BIH recorded 209,802 tourist visits and 500,585 overnight stays in the first half of 2020, which is 65.6% and 70.6% respectively less than in the same period in 2019 (7 August).

Some measures in FBIH include preparation for changes and amendments to the Rulebook on the Application of the Law on VAT, the possible postponement of VAT payments, preparing incentive measures, and reducing income tax by 50%.

• State aid
The Government of FBIH adopted a new set of measures on 19 March in order to protect jobs, improve conditions for those made redundant, and to maintain the stability of the banking sector and the national Pension and Disability Insurance Funds. The Government of FBIH has announced that a special fund would be established to support export-oriented companies and companies from other sectors. A guarantee fund would be established as well, with its task being to maintain the solvency of companies. The guarantees were supposed to be issued through commercial banks.

The Government of FBIH also announced a moratorium on loan repayment for persons and legal entities for the next twelve months. They also established a coordination board chaired by the Minister of Environment and Tourism, which will also include key Government Ministers, representatives of the Cantonal Governments, representatives of employers and employees, and subject-matter experts.

On 3 April, the government of FBIH adopted ten measures which aim to mitigate the negative consequences the pandemic would have on the economy. The FBIH employers welcomed the measures but said they would not be enough. The ten government measures include:

1. subsidizing contributions for compulsory insurance;
2. all levels of authorities are allowed to reassign assets;
3. stability of all payments from the budget, pensions, veteran, social and other benefits are ensured by law;
4. businessmen are exempted from the obligation of paying profit tax in advance;
5. craftsmen are exempted from the obligation of paying profit tax in advance;
6. calculation and payment of default interest on public revenues shall be suspended for the duration of the emergency situation and 90 days after the situation ends;
7. all legal, civil, non-contentious and enforcement proceedings shall be suspended for the duration of the situation;
8. for any delays in payment of liabilities between business entities, interest on arrears shall be suspended;
9. statute of limitations shall be suspended for the duration of the crisis and 30 days after the situation ends;
10. and Guarantee Fund will be formed, for which the Government of FBIH will allocate a deposit in the amount of BAM 80 million.

The Government also allocated the funds from the 2020 Budget, intended to be given to cantons and municipalities and used for the recovery of the economy. The main point of contention of the proposal was the list of cities and municipalities in FBIH which were identified to receive government support in funding (a total of BAM 21 million) – mostly due to the set of criteria which had nothing to do with the number of COVID-19 cases, the strain on the health systems and expected losses. This would have led to having municipalities which have no reported COVID-cases receiving between BAM 700,000-1 million, with severely hit cities like Tuzla and Zenica not receiving anything. After strong reactions from almost everyone, the Government of FBIH, at an extraordinary session, annulled the foreseen distribution and redirected funding to the Stabilisation Fund.

On 17 April, the Government of FBIH endorsed re-budgeting the budget for 2020 to the amount of BAM 5.5 billion, primarily with the aim to create conditions for the announced Stabilisation Law/ ‘Corona law’. According to this law, BAM 500 million from the budget would be directed to the economic recovery fund. The Government of FBIH furthermore proposed 11 amendments to the Labour Law of FBIH. Among other things, employers whose services were closed during the imposed measures and whose revenues dropped by at least 35% would have the rights to dismiss workers or reduce their salaries. Employers would be able to give their workers paid leave of up to 20 days, unpaid leave of 20 days, or dismiss them for three months. If a dismissed worker is not called back to work after three months, their employment contract would be terminated. The Association of Independent Trade Unions of BIH rejected these proposed amendments straight away, stating that they ‘humiliate workers’. The workers union also protested strongly, stating that the amended Law “anticipates and makes easier for employers to dismiss workers, send them on unpaid leave or decrease their salaries” (27 April). The Minister of Finance of FBIH announced at the press conference that further re-budgeting would be needed, as the government expected a deficit of BAM 770 million (21 April). On 23 April, the House of Representatives of the Parliament of FBIH endorsed the proposed re-budgeting for 2020 and the draft Law on the mitigation of negative impact caused by the COVID-19 pandemic (Stabilisation Law), despite strong reactions from the opposition and despite additional last-minute amendments proposed by the Government (all were rejected). On 28 April, the proposed FBIH re-budgeting for 2020 for the amount of 5.5 billion BAM or an 11% increase against the planned 2020 budget was endorsed by the House of Peoples of the Parliament of FBIH as well. On 4 May, the Parliament of FBIH finally adopted the Law on mitigation of negative economic consequences of the COVID-19 pandemic. Economic and political analysts, as well as the political opposition, argued that the Law was ‘too little too late’, the Workers’ Union warned that the Law was inadequate and gave much space to employers to fire workers more easily (as the envisaged basic contributions are too low and ‘don’t pay off’),  while the Government of FBIH insisted that this was the first set of measures, and working groups would be formed to amend the law. On 1 June, following the decision to lift the state of natural disaster/emergency in FBIH, the so-called ‘Corona law’ started expiring, meaning that the private sector would have less than 60 days to apply for all the subsidies which took about two months to agree on. On 7 June, the Minister of Environment and Tourism and the Chair of the Coordination Board for Stabilization of the Economy and Mitigating the Negative Consequences of the Pandemic in FBIH noted that around 175,000 workers applied for contributions under the FBIH’s Corona Law. She confirmed that contributions would be issued for all companies whose incomes dropped by 20% and more.  The Law remains in force until the end of July, i.e. two months after ending the state of natural disaster. The Government of FBIH agreed on the second set of economic measures, colloquially known as ‘Corona 2’ (1 October), which was to be presented in the form of a bylaw to provide financial support of BAM 100 million to the sectors which were hardest hit by the crisis, in first place tourism, transport and agriculture. It was made effective from 23 October.

The Assembly of the Canton Sarajevo also adopted 1.1 billion BAM  2020 re-budgeting (7 May). Most notably, salaries and benefits of those employed by the Canton were decreased by 4%, financing of the political parties and parliamentary groups by 50%. Around 20 million BAM was redirected into the Fund for economic support to mitigate COVID-19 impacts, while 7.9 million BAM was directed for co-financing of the credit-guarantee fund to support cantonal SMEs.

Positive measures in the RS were similar to those in the FBIH, including the postponement of the payment of income tax, the moratorium on the payment of loans to the Investment and Development Bank of the RS and many more. Business entities that have difficulties in doing business due to measures to prevent the spread of coronavirus may submit a written statement to the Tax Administration of RS for deferred tax payments, in accordance with a decision of the Government of RS. The Tax Administration of RS would temporarily postpone the payment of tax liabilities based on income tax and fees for the improvement of public utility functions of forests and fire fees according to the annual tax return for the last year from 31 March on 30 June this year. Taxpayers would settle obligations that would be deferred on the basis of this decision by the end of 2020. The Government of RS has postponed payment of employees’ contributions until 30 June, and has also allowed a three-month delay in loan payments towards the RS Investment-Development Bank. The Solidarity Fund of RS, which, according to officials has some BAM 500 million, would be made available to all affected by the crisis. The funds would be used to pay salaries for each employee, with around BAM 520 per employee, and employers were to pay contributions and provide a higher salary to employees if they could manage to do so. It was stressed that employers who lay off employees at this time could not expect to get support from the Government of RS. After declaring a state of emergency by the Parliament of RS (on 28 March, effective as of 3 April), the President of RS would then be able to adopt decrees with the force of law, which would support the measures aimed at mitigating all consequences of the coronavirus pandemic. Labour and employment law relations would be changed first, in order to be able to pay the taxes and contributions for some of the workers in the private sector. Higher budgets, incentives and other measures in the field of agriculture would also be regulated by decrees. Also, in order to postpone tax payment deadlines, it was necessary to amend the law. The law on penalties would have to be amended as well.

The Government of RS was also placing its focus on economic recovery: some BAM 100 million would be allocated to the Fund for recovery of the health sector, and some BAM 50 million would be directed to the fund for local communities and companies (19 April). The Coordination Body of RS confirmed the establishment of 3 Funds: the Fund for guarantee – credits; the Compensation Fund; and the Fund for assisting local governing units (aimed at helping utility companies) (22 April). On 10 May, the Minister of Finance of RS announced that the Republika Srpska would also initiate re-budgeting for the next month, adding that around 90,000 workers were currently covered (in salaries and contributions) directly from the entity budget. The Minister of Finance of RS confirmed that BAM 120 million were planned to cover 3 months worth of taxes, contributions, minimal salaries and to contribute to those companies which worked during the crisis but saw a decrease in income. He noted that the IMF portion of funding for the RS would go into the health and economic sectors but constitute a small part of overall Government allocation to the COVID-19 response (3 June). On 2 June, the Prime Minister of RS noted that there would be no decrease in salaries or layoffs in the public sector despite expectations that budget revenues would decrease by BAM 240 million by the end of the year. The Government of RS paid minimum April wages to 22,000 workers (BAM 520) (1 June). The Government of RS and its Ministry of Trade and Tourism prepared 50,000 touristic vouchers, worth BAM 100 per person. The list of locations where these could be used would be published by 15 June; the Minister of Tourism of FBIH confirmed that a similar approach is being considered in this entity of BIH as well. In the meeting with the Unions Association, the Prime Minister of RS confirmed that more than BAM 120 million would be transferred to the business sector in RS, in order to cover for the salaries and contributions of some 6,000 businesses with up to 34,000 workers in the period March-May (17 June). From the Solidarity Fund of RS, BAM 30 million were distributed to the local communities in RS (22 June). The Government’s Guarantee Programme for support to small and medium size enterprises was made operational on 2 July. On 14 September, the Governing Board of the Compensation Fund in RS decided to financially support the procurement of two ELISA analyzers and accessory equipment (worth BAM 200,000) to be given to the medical faculties in Banja Luka and Foca for conducting a representative SARS CoV-2 seroprevalence survey in RS. In addition, the Fund supported procurement of 20,000 doses of influenza vaccines for 2020-21 season with co-financing in the amount of approx. BAM 154,000. On 5 October, the Steering Board of the Compensation Fund in RS reported that the fund released BAM 55.7 million for mitigating the economic consequences of the crisis in the period May-September 2020. At the same time, it was reported that the Solidarity Fund in RS had released BAM 118.1 million for the same purpose prior to the establishment of the Compensation Fund, and for the same 5-month period.

The Government of BD BIH adopted urgent measures in early April 2020 to support the economy. BAM 6 million were allocated from the budget for the payment of minimum salaries, as well as contributions and taxes of workers in areas of the economy that were not allowed to work. All companies, except state-owned companies and financial businesses, would be eligible for subsidies provided by the government. The government would refund the payment of the minimum salary to all companies that have been affected by the restrictive measures enforced to fight the coronavirus. The Trade Chamber of BD BIH welcomed the first measures adopted by the government. The initial assessment of the authorities stated that one third of jobs in Brcko District are endangered, which is a total of 5,700. Businesses that laid off at least one worker in March would not be able to qualify for government help.

The status of commodity reserves in the country remains unclear.

• Civil protection
A state of emergency was declared at the entity level by the Governments of FBIH and RS on 16 March. A day later, on 17 March, the State of Natural or Other Disaster (equivalent to ‘State of Emergency’ in BIH) was also declared at the state level by the Council of Ministers of BIH. The RS Parliament voted to declare a State of Emergency in this entity of BIH (28 March), thus transferring its legislative competences to the RS President, who would be authorized to endorse crisis-related legally-binding decisions in cooperation with the RS Government and with the signature of the Speaker of the Parliament (in effect as of 3 April). The RS President noted that this would allow for a swifter change of laws to respond to the impact of the outbreak on all spheres of society, such as the economy (changing laws to allow delayed payments, rents, subventions), as well as education (new formats and timelines for tests and faculty admissions). The state of emergency was discontinued in RS and replaced with an ‘emergency situation’ as of 21 May, and in FBIH as of 31 May. The Ministry of Health of FBIH subsequently declared a ‘state of epidemic’ in FBIH (17 July), and the Department of Health and Other Services of the Government of BD BIH declared a ‘state of epidemic’ in BD BIH (27 July). As of 10 August, the State of Natural or Other Disaster in BIH remains in effect. On 27 August, the government of West Herzegovina Canton in FBIH declared ‘state of disaster’ in the canton.

Military resources have been deployed to set up quarantine facilities at border points of entry for incoming travellers. The travellers would be required to stay in isolation for 14 days after entering BIH. On 6 April, the BIH Presidency instructed the Council of Ministers of BIH to act upon the already endorsed decision of placing quarantine tents on all open border crossings. If the tents were not set in the following 24 hours, then all these crossings were to be completely closed for passenger transit. On the same day, both the crisis management authorities of RS and the Ministry of Security of BIH warned all BIH citizens living abroad and planning to return to BIH for the Easter holidays that they would end up “spending both Easters (first Catholic, then Orthodox) in quarantine tents”. On 8 June, the Armed Forces of BIH dismantled all the remaining tents and units from 10 border crossings which served for quarantine and inspection.

• Cross-border collaboration

The Western Balkans countries are working together to establish transport corridors to ensure the continuation of import and export of goods to the countries in the region and beyond. Representatives of the Foreign Trade Chamber of BIH have stressed that the greatest attention needs to be paid to transport of goods through Croatia towards Slovenia, Germany and other countries, as well as towards Serbia with whom BIH has the largest volume of foreign trade exchange. The Minister of Foreign Trade and Economic Relations of BIH described arrangements within CEFTA’s “green priority lane”, stating that essential products from the joint list - such as basic groceries, medicines and medical equipment, animal feed, veterinary medicines, fertilizers, seed and planting material would be prioritized and be transported much easier across predefined border crossings between the Central European Free Trade Agreement (CEFTA) member countries. He also stated that this list would be expanded with some specific items needed in BIH, and noted that this arrangement might bring groceries into the country even faster than under usual conditions (6 April). On 14 April, the Minister of Foreign Trade and Economic Relations of BIH issued an open letter to the public, reminding them that this is a time for solidarity, including solidarity towards local producers. Companies from BIH are helping to keep the economy running, and by choosing to buy local, he said that citizens would be directly contributing to the stability of health, education and pension systems. On 29 May, the Council of Ministers of BIH discussed the request coming from the business community in BIH, to grant preferential treatment of domestic goods into 2021, as a similar temporary decision expired on 1 June. It was agreed that such treatment was granted at the rate of 30% vis-à-vis agreement with the EU on goods regulations. 

The EU is looking for a way to include the Western Balkans region in initiatives aimed at minimizing the social and economic consequences of the coronavirus pandemic. This would include redirecting instruments of pre-accession assistance and increasing flexibility of the rules for state assistance.

With reports of a deteriorating and critical situation in the Sandzak region of Serbia, the Ministry of Foreign Affairs of BIH officially notified the Ministry of Foreign Affairs of Serbia of the willingness to send two medical teams from BIH to Novi Pazar for medical assistance (30 June). Following this official note from BIH, Serbia thanked but noted they have sufficient in-country capacities to deal with the situation (1 July, http://ba.n1info.com/English/NEWS/a444591/Foreign-Ministry-Serbia-rejects-medical-aid-offer-from-Bosnia.html). Beyond the civil response, the President of Serbia had a slightly less civil outburst in a live interview basically called the offering offensive (2 July, https://www.klix.ba/vijesti/regija/vucic-komentarisao-pomoc-bih-ajde-bre-moram-da-slusam-svakojake-uvrede-na-racun-nase-zemlje/200702183). Finally, on 10 July, two medical teams comprising 15 medical workers from Sarajevo and Tuzla travelled to Novi Pazar as a part of BIH’s assistance and support to alleviate the difficult situation in this region. The teams returned to BIH two weeks later.