By Milos Mitrovic – Belgrade
In September Serbia would amend its budget, Finance Minister Lazar Krstic announced on Tuesday. At the Forum Economic Summit of Serbia Krstic has also announced that the country would sign another loan agreement with International Monetary Fund (IMF).
The assessment of the damage caused by the severe floods that had hit Serbia in May is needed for the start of amending process, Krstic has said. On Monday government official Marko Blagojevic stated that the damage assessment would be finished on July 7.
Krstic has said that the damage was “enormous” including the affect of floods and landslides on electric power system in Serbia. He underlined that Serbia now imports the electricity.
The European Bank for Reconstruction and Development (EBRD) estimated that the damage from floods in Serbia could cost around 1.5-2 billion Euros.
Minister Krstic stressed that the government’s objective is to reach three-year stand-by arrangement with the IMF until the end of the year. He announced that the drafts of the laws on pension system and labor law would be presented in the parliament in next ten days; these acts would improve business climate in Serbia, Krstic said.
“The rationalization of the employees in public sector” has to start in 2015, vice prime minister Kori Udovicki said at Summit. Udovicki, who is also minister for public administration, did not want to specify the redundancy in the public sector.
She said, however, that “there are certainly” 28,000 employees in the public administration and 760,000 jobs in public sector, including public enterprises.
“This is too much and the number of employees has to be reduced”, Udovicki admitted. Minister underlined that Serbian economy is at “true crossroads”.
According to Udovicki, Serbian economy is its own enemy.
In 2013, Serbia’s economy had a total of 991,030 workers, Ruzica Stamenkovic, registrar at the Serbian Business Registers Agency, said earlier this month; public enterprises have increased the number of employees by 1,248 new staff members in 2013 relative to 2012.
Economy minister Dusan Vujovic said at Summit that the parliament would adopt new privatization law in July. The law would enable the final privatization of 600 enterprises that “are in limbo”, he added. Vujovic announced that the public debate on the law would start tomorrow in Belgrade, Novi Sad, Kragujevac and Nis.
National television (RTS) reported that ambassadors of USA, Italy, Germany and Greece – which have also took part at the Summit – had confirmed the importance of the foreign direct investments; however, they have said that domestic companies should also participate in “building” their own country.
US ambassador Michael Kirby stated that the reforms are painful “but must be stick out” mentioning the examples of Greece and Spain “which slowly but sustainably are overcoming the troubles”.
German ambassador Heinz Wilhelm emphasized that Germany is among the greatest trade partners of Serbia. “We have partnership of “Ikarbus” (Serbian company) and “Mercedes”. This is not investment, we are producing auto body, and everything else is on local suppliers”, Wilhelm said adding that windshields are provided from Turkey.
“Why Serbia has to import this? The objective of the reforms is to propel local companies”, Wilhelm concluded.