The Role of Free Zones Law in Bosnia and Herzegovina in Creation of Curent Economic Policy

Abstract

Basic problem of modem economy is effective legislation. Therefore this essay gives a critical analysis of history of legislation that followed the area of free zones in Bosnia and Herzegovina. However, it is necessary to find weak, points that slow down a free development of economic system. The essence of this work is that without a high quality positive legislature there will be no economical progress in the development of national economy. That could be seen in the area of free zones, that temporary have pitfalls for which correction it is necessary to do the following:

1. Decide about framework for the functioning of free zones on the territory of Bosnia and Herzegovina by introducing equal legal procedure in the area of free zones for the whole territory of Bosnia and Herzegovina, and with accordance with the new Law on free zones, declared on February 19. 2002., and ratified by the end of February 2002.
2. Issuing of approval certificates for the work of free zones in BiH should be done according to plan and with economical justification. The most logical state agent for this function is the Council of Ministers.
3. Free zones should be mainly production based, therefore to reform present free zones is necessary.

During implementation of the Law on free zones the following activities are recommended:

1. BiH should be center for the education of small and medium production firms, and production free zones are suitable for that, because there are interesting for the foreign investors that show interest for this kind of investments, which is very important for BiH economy.
2. Free zones in BiH should be attractive for foreign capital, and they also should have a high level of effectiveness.
3. To motivate production, credit lines for the production in free zones are necessary, which should distract attention of EU countries according to this question.
4. Starting production in free zones should increase level of employment in BiH, as well as the increase of BDP and GDP per capita, improvement of life standard,...
5. For all said so far, education of work force in new free zones, through seminars or work experience in some of the free zones in western countries, is necessary.
6. Realizing above tasks would eliminate present pitfalls in the work of free zones, so that they will not be considered »gray zones» in the countries of Southeastern Europe anymore.
7. For BiH economy, as well as for the economy of R Croatia, it would be of huge importance realization of »Agreement of free transit throgh the territory of R Croatia in and from harbor Place and through the territory of Bosnia and Herzegovina in Neum», so that the Free zone Place could be used.

In this article economy was looked ar as universal economical cathegory and law was also subjected to this aim, so that legal procedures should be in a narrow context of science, in the interest of economical and social progress.