CAN TOURISM AND THE IT SECTOR SAVE THE ECONOMY?

The continuous decline in orders, which has led to layoffs in factories, is evidenced by the fact that 1,100 people have lost their jobs in Republika Srpska over the past few months. The outlook from business leaders is not encouraging for the coming period.

Statistical data on the state of the manufacturing industry and its trends in the first half of 2024 were on the agenda of the Government of Republika Srpska yesterday. Following this, the Minister of Labor and Veterans' Disability Protection, Danijel Egić, emphasized that the wood processing sector, whose products are primarily exported to Western Europe, has been the most affected due to the crisis in Western Europe. According to him, unfair competition has emerged in the region, particularly from products originating in Ukraine.

"Around 1,100 people in Republika Srpska have lost their jobs due to the cancellation of foreign contracts amid the crisis affecting Western Europe. Therefore, it is necessary to change the structure of our economy and focus on developing highly productive sectors. This is a long-term policy and development strategy of the Government, to which we must pay special attention," said Egić.

The President of the Chamber of Commerce of Republika Srpska, Pero Ćorić, told "Glas Srpske" that it is very difficult to provide short-term solutions and measures to improve the current situation.

"The results for the first six months show a general decline in industry by five percent, with an even greater drop in manufacturing. When we look at some of the most significant sectors in the economy of Republika Srpska, for example, wood processing, production has fallen by as much as 30 percent, while the footwear industry is down by 15 percent. This is reflected in the reduced exports in the first half of the year. On the other hand, imports have increased, resulting in a larger foreign trade deficit compared to last year," said Ćorić.

He added that the economy of Republika Srpska depends on foreign partners, and it has been shown that countries such as Germany and Italy are facing the same problems.

"Therefore, we should rely on sectors that do not depend as much on foreign markets, such as tourism, which has recorded positive trends this year, and the IT sector, given that digitalization of both the economy and public administration is on the rise. It is in these sectors that we should look for positive developments that will, to some extent, compensate for the export potential of the industries affected by the global crisis," said Ćorić.

According to him, it is currently very difficult to react quickly and produce something that will be competitive in the European market.

"Due to such a significant decline in the physical volume of production, there has also been a reduction in the number of employees in the industry, which is not good. However, the economy is fighting back, and the average wage continues to rise despite these trends," Ćorić said, adding that by September, business leaders must know what conditions they can expect in the coming year.