Suchergebnisse

The economy of the Republic of Srpska is burdened by inherited (structural) issues and a sluggish adjustment of the current economic policy to the contemporary global trends. According to the standards of the WB, IMF and Kuznets, the Republic of Srpska is classified as a small economy. Just like Bosnia and Herzegovina or any other countries of Western Balkans, it too is finalising the transition to a market economy. The Republic of Srpska features insufficient GDP growth rates. Under such circumstances, there is a need for enticement of GDP growth. Consumption (both final and public) as well as all forms of investment affect economic growth, with FDIs having a particularly important role. In most countries, there is a positive correlation between investment and GDP growth. Likewise, there is a positive correlation between GDP growth and final consumption. Therefore, the Republic of Srpska, as well as any other small economy, resorts to attracting investments and increasing final consumption. However, the issue is that public debt maintains its growing trend in most of such transitional economies. This paper contains the quantification of the impact of investments and consumption onto the GDP of the Republic of Srpska. It has been proven that the final consumption and investments affect GDP growth in the Republic of Srpska. Correlation-regression analysis confirmed a positive correlation between the mentioned variables. This development policy affects the continuous growth of public debt and brings the increase in the share of government (public) consumption in total consumption. In addition, it also affects the insufficient efficiency of investments. As a consequence, low productivity and insufficient competitiveness emerge, followed by the occurrence of other economic and social problems. Therefore, the Republic of Srpska and Bosnia and Herzegovina need to complete the initiated reforms and expedite their EU integration, modernize and restructure their industry as per the requirements of the global market, reduce the costs of public institutions and increase their overall competitiveness.

The European Union is the most complex and by any aspect the most unique example of a regionaleconomic integration. Its origin, evolution and survival are based on a common legislative andinstitutional framework. The so-called common policies implemented in a number of economicand non-economic areas are particularly distinctive. Most of them are implemented on two levels:national and communal. The only common policy that is fully implemented at the European Unionlevel is the Community Agrarian Policy (CAP), whereas the agriculture has the highest expenditurein the communal budget. The function of CAP is primarily economic as its goals are strictly relatedto economic issues: price stability of agricultural products, productivity growth, higher wages forthe farmers, etc. The CAP strengthens the Union's social cohesion, which is of utmost importancein times of constant crises, BREXIT and other extreme instabilities. For this reason, the CAP hasbeen in the processes of continuous reforms (MacShary, Mansholt and those of recent times) fordecades, in order to increase its efficiency and justify enormous financial investments. The CAPresults depend on the achievement of preset objectives and the exchange of agricultural productsand food that the European Union generates globally. It has been demonstrated that the CAP is asignificant common policy, both in achieving economic goals and in the sphere of strengtheningcommunal cohesion.