TWO DAY REGIONAL CONFERENCE ON SOCIAL SECURITY OPENED IN SARAJEVO

SARAJEVO, Bosnia (February 29,2008) – The Bosnian capital Sarajevo is hosting a two day conference on healthcare financing, pensions and unemployment benefits in the southeastern Europe.

At the conference organized by the World Bank in cooperation with the Direction for Economic Planning in Bosnia,the high government officials from Bosnia, Montenegro, Serbia, Albania and Macedonia gathered in Sarajevo along with experts from the World Bank and other international organizations.

The goal of the conference is to reach consensus on necessary reforms of health financing, pensions and unemployment benefits, especially in the context of citizen’s aging. Participants shall exchange experience from their own countries on social security and financing in this area.

Head of the World Bank office in Bosnia Marco Mantovanelli stated that issues of financing healthcare, pensions insurance and unemployment insurance are extremely important for all countries of the southeastern Europe which are facing new challenges related to the sustainability of existing models of social security.

In these countries these rights are realized through incomes from formal employment and considering that the base of formal employment is very narrow, authorities must rely on the narrow tax base for collection of income tax. Consequence of this are high tax rates which is does not motivate employment in formal sector.

"High taxes on work power harden employment of larger number of people and on the other hand, with fewer employees there is less assets for financing all social rights”, added Mantovanelli.

Population in these countries is getting older and the only exception is Albania, so there is fewer work competent people who could pay income tax which leads to situation in which these countries would have to decrease rights and find new ways for their financing.

"I hope we will exchange information during this conference on how individual countries think about solving these problems and that we will reach a consensus on how to move on”, added Mantovanelli.

Bosnia is currently developing a new strategy for mid-term development. Head of Direction for Economic Planning Ljerka Maric stated that this conference is a chance to reconsider situation in the social sector from 2004 to 2007.

"Economically we are progressing but social expenditure is highly endangered”, stated Maric and underlined the priority of implementation of structural reforms in these three sectors.
.