PUBLIC‐PRIVATE PARTNERSHIPS AS FUNCTION TO OVERCOME CURRENT FINANCIAL‐ECONOMIC CRISIS

Abstract

Contemporary globalization trends and processes of regional connecting national trades, and particularly more successful implementation of integration into the European union, impliy the need for huge investments into infrastructure, especially in the fields of transport, energetics, telecommunications, water‐industry, as well as providing services in the domain of general societal activities (education, health system, culture, sports, etc.). However, most countries don’t have the means necessary for an efficient realization of the above mentioned, particularly those less developed countries and countries in the process of transition, which is the case of Bosnia and Herzegovina. Namely, since Bosnia and Herzegovina with its entities has a very limited investment component in its budgets, it can not be expected that public investment expenditure will be strengthened significantly by budgetary investments. This is particularly true if we bear in mind the fact that the global financial and economic recession (in combination with complex structural problems and low competitiveness of domestic trade) has caused downturn of almost all key economic indicators of the country and its entities. It is therefore necessary to make all efforts and create assumptions for the most successful attraction, i.e. engagement of foreign capital possible for the purpose of realization of the mentioned goals, and public‐private partnership represents one of the particularly apt forms of investing, both foreign and domestic private capital for the purpose of financing investments in the field of exploitation of natural resources, building infrastructure and other public goods or providing services, which is the subject matter of this work. The work cites the main modalities of partnership, as well as the basic kinds of risk which are a key element in evaluating justification of entering into arrangements of this sort, and in the end there is an outline of the relations between financial institutions and public‐private partnership.