June 2, 2020 / 4:07 PM / a month ago

Bosnia to distribute IMF emergency aid after six week halt

SARAJEVO, June 2 (Reuters) - Bosnia’s central government agreed on Tuesday to distribute emergency aid it has received to combat the coronavirus crisis from the International Monetary Fund after six weeks of political wrangling, Finance Minister Vjekoslav Bevanda said.

The IMF in April gave Bosnia a loan of 333 million euros ($373 million) under its Rapid Financing Instrument, double the originally agreed amount, but Croat and Bosniak ministers in the national government could not agree on the legal procedure for disbursing the funds.

Bosnia comprises two autonomous regions, the Bosniak-Croat Federation and the Serb Republic, tied via a weak central government. The Federation also comprises 10 cantons.

The government had agreed to distribute 62% of the funds to the Bosniak-Croat Federation and 38% to the Serb Republic, while each region would allocate 0.5% of its share to Bosnia’s neutral Brcko District.

But Bosniaks and Croats had been unable to agree on what terms the loan should be accepted.

They compromised after the European Union delegation and U.S. Embassy in Bosnia, both of which had mediated in the dispute, called on the national government to “immediately unblock the IMF funds so they can be used for the good of the citizens”.

Andrew Jewell, the IMF resident representative in Bosnia, said the withholding of aid was “unprecedented” and may have an impact on future IMF loans. (Reporting by Daria Sito-Sucic; Editing by Giles Elgood)

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