INTERNATIONAL BUSINESS PAGES
of textile, leather, footwear of
Republika Srpska).
Incentive, Subsidies and Benefits
The textile, leather and footwear sec-
tor is in a constant growth, both in the
number of companies and in the num-
ber of employees. This is because
these are the activities that employes
people the quickliest, and also the ac-
tivities that have constant growth of
exports. More intensive subsidizing and
incentives for the textile, clothing and
footwear industry is a tendency in BiH.
Since 2013, the Council of Ministers
of BiH has made annual decisions on
the temporary reduction of customs
duties on imports of raw materials and
reproductive material for the manufac-
ture of footwear. With this practical
move the savings to the footwear sec-
tor has been made when importing
soles (which no one in BiH produces)
due to a decrease in customs duty from
the previous 15% to 3%. Benefits of
these decisions more than 250 com-
panies in the textile and shoe industry
of BiH have.
The incentive policy is run at the en-
tity level. In the past period, the au-
thorities in both entities implemented
a series of programs that provided in-
centives for the textile, clothing and
leather industry, either directly or
through grant and credit funds for the
development of entrepreneurship, to
strengthen the competitiveness of
small and medium-sized enterprises,
for the implementation of employment
support programs.
Within the budget funds of the cantons
and municipalities, there are funds for
incentives, depending on the available
financial possibilities (incentives for
development of business branches,
incentives for employment, increase of
exports, incentives for certification) ...
International organizations (UNDP) and
development agencies from the most
economically developed countries of
the world (USAID, SIDA, GIZ, etc.)
through the projects that they imple-
ment (CREDO, LIR and the like), in-Sector In Numbers
Gross value added
ActivityValue in BAM% growth
in 2016.% share
in GDP
Textiles manufacture117 984 0007,051,52
Clothing manufacture144 174 0008,32
Production and
processing of leather193.644 00012,26
Processing industry3 698 953 000
Total GDP in 201629.900.000 0009,2
10,8612.37
100,00
Source: B&H Energy Sector Study - World Bank
Activity
Textiles manufactureNet salary
FBiH RS*Gross salary
FBiH RS*
Clothing manufacture
Production and processing of leather424
397635
550
Processing industry
Activity407
637565
958638968
Source: Federal Statistical Office, Monthly Statistical Review FBiH 2/18;
Data by the activities within the processing industry of RS are not available
cluding the textile, leather and footwear
sector, also provide direct financial
support to this, for BiH, an extremely
important industrial branch.
In the total foreign trade of BiH in 2017,
this industrial sector is represented
with 10.9%. When it comes to partici-
pation in the total export of BiH, de-
spite the dominant “lohn” jobs, this in-
dustrial branch achieved exports in the
total amount of 1,351,326,000 KM in
2017, which makes up 12.2% of total
BiH exports and imports in the total
amount of 1.836. 787,000 KM or 10,1%
of total BiH imports. Import coverage
by exports is 74%. (while the rate of
BH import coverage with total exports
in 2017 was 61%). Most importantly,
both import and export market with
which BiH companies operate in this
industry is the European Union.
Number of Companies & Employees
Enterprises in this sector are represent
by 8.5% of the total number of enter-
prises in processing industry of BH
(4.810).
The number of employees in the tex-
tiles, leather and footwear sector
NCM-MARCH 2020
64makes 22.9% of the total number of
employees recorded at the end of 2017
in the processing industry in BiH and
it is higher by 9.1% in relation to the
number of employees in 2016.
The real greatest chance for the arrival
of foregin investors in the sector, the
opening of new companies and new
employment is the observed trend of
returning textile production from the Far
East to Europe (according to real esti-
mates, a minimum of 40 percent of
production has already been returned).
Direct Foreign Investment In Sector
It is noticeable that the inflow of for-
eign investments into the textile,
leather and footwear sector is currently
nominally lower than the record that
was achieved in 2008. Mostly Italian,
German and Slovenian companies
have invested in the bh textile, leather
and footwear sector.
The current situation, as desirable, re-
quires investments in the moderniza-
tion of equipment and adoption the new
technologies, improvement in work or-
ganization and strategic market link-
ing in the sector.