EFT News

Sunday, February 24, 2008
Vuk Hamović interview for Nezavisne Novine “Straight to Europe”

European Stability Intitative (ESI), one of the most influential European non-profit organisations which brings together politics and economy analysts, claims in its latest report  that Bosnia and Herzegovina has a unique chance of becoming a leading energy factor in south-east Europe. As a case in point, ESI singles out the economic recovery of the Stanari mine and the construction of the TPP by EFT.   

This prominent NGO, with its seat in Berlin, will present its report this evening in the State Parliament building, in the presence of the political leaders of Republika Srpska and the Federation of Bosnia and Herzegovina. 

“ESI’s report is yet another confirmation of the direction the entire region should be going in. It is the direction of economic integrations and of speedy membership in the EU” EFT Group Chairman, Mr Vuk Hamović, says in the interview for  Nezavisne Novine. 

Being one of the biggest investors in Bosnia and Herzegovina, what is your take on the current situation in the country? 

Bosnia and Herzegovina has made considerable progress in the past ten years. Unfortunately, its image in the outside world does not reflect this. Naturally, the situation is not ideal, but I would say that the people in Bosnia and Herzegovina have managed to put the past behind and to focus on the basic, every-day issues of improving their lives. 

From the perspective of an investor in the local energy sector, I would also say that the authorities have also made a considerable progress. They have encouraged private initiative, the necessary reforms are well under way, the deregulation procedure is also happening, and as a result we are seeing the development of a competitive, thriving market. In this respect, as far as the energy sector is concerned, Bosnia and Herzegovina has made better progress than the neighbouring countries. In the next decade, several billion Euros of investments will be realised in Bosnia’s energy sector alone as direct result of these reforms. That is quite a success for a country which was so devastated. 

How important are foreign investments to Bosnia and Herzegovina? 

I would say that  new investments might be of utmost importance at this point, not only for Bosnia and Herzegovina, but all the countries in the region. As the latest ESI report has shown, the biggest problem of this society is high unemployment rate, while almost all the positive developments in relation to this problem are the result of direct foreign investments. 

It is vital for Bosnia and Herzegovina to send clear signals to foreign investors. Firstly, that there is a political consensus on the European future of the country, but also that Bosnia has some competitive advantages which should encourage investors to come here.     

It is thus very important to continue with the reform job we started and to achieve the necessary EU standards. Modern, competitive companies, operating according to these values will prosper within such a framework. Companies in Bosnia and the region will link and cooperate on the basisi of their undersatning of the world we live in, and not ethnic or national belonging. 

My partners and I are very optimistic about the future of the region. Without faith in the European future of Bosnia and Herzegovina, and the other countries of the region, we wouldn’t be making these investments, which are defining the future of our company.   

How much influence did the expectations of further regional integrations have on the success achieved in Stanari? 

The primary goal of our investment of some EUR 800 million in Stanari is not to make a power plant which will provide electricity only for Republika Srpska or Bosnia and Herzegovina, but also for Greece, Albania, Slovenia, Hungary and other countries of the region. It is precisely this kind of reasoning that has so far led us to invest tens of millions of Euros in the mine. As ESI has described in their report, the population of Stanari and the surrounding region has experienced many positive effects as a result. 

Four years ago the production in Stanari almost ceased and the overall situation was very difficult for the locals. Today, coal exploitation at Stanari is  done according to the same high standards that you would find in any similar mine in, say, Germany or any other European country.  The salaries in the Stanari mine are far above the state average, the employees have a clear perspective and enjoy safety they never had before. I am convinced that these are the questions that concern the vast majority of people in Bosnia and Herzegovina.  

So we can say that owing to, among other things, expectations of European integration of Bosnia and Herzegovina we are seeing the biggest investment in this region ever and all the benefits that come with it. The Stanari mine has gone a long way, from the brink of total collapse to one of the best examples of a successful privatisation in Bosnia and Herzegovina.   

ESi has also claimed that coal and electricity could have the kind of impact on Bosnia and the region coal had on European integration processes in the 1950’s. What is your view of this?   

The development we have been witnessing in the past years in the energy sector of the countries in the region has already brought a number of positive, tangible results for the general population. In the decade ahead, if private initiatives are given the incentive in the local energy sector, this impact could really be a turning point in the economic recovery of the region. 

This region is specific in that it has a clear potential for further economic development, but also unused natural energy resources.  If we act rationally, our approach to the development of the energy sector will bear in mind primarily our own best interest.  This means, above all, a regional approach to this issue. It is in the best interest of Republika Srpska that investments are realised in the Federation of Bosnia and Herzegovina, and vice versa. 

The Stanari mine is a case in point. Our mine sells 70% of the coal we excavate in the Federation: Tuzla, Maglaj, Lukavac. The reason they buy coal from Stanari is that it is cheaper and the supplies are reliable in the winter months. There is obviously a mutual interest there, the economic logic is inescapable.