“After Croatia and Greece, Serbia has had the slowest economic growth in the Balkans, and most probably in Europe as well, in the past ten years,” says Vladimir Gligorov, an associate of the Vienna Institute for International Economic Studies.
In his interview for the Beta news agency, he said that that was partly a consequence of the corrections of the exchange rate and the real income after 2008, as well as the fiscal consolidation since 2015.
“Both could have been better, so it is safe to say that the Serbian economic authorities have mostly done a very bad job at managing the economy in the past ten years,” Gligorov added.
He also said that “Croatia has managed its economy even worse, whereas Greece has probably not done a better job if it too”.
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Gligorov said that, when it comes to the level of economic activity per capita, Serbia was worse than most of its neighbours.
The biggest mistake of the fiscal consolidation, according to him, was the reduction of civil servant salaries and pensions, which incited the emigration, as well as the subsidizing of state companies and investors.
“Instead, there should have been reforms of the public sector and economic institutions and the proper implementation of the rule of law,” he underlined.
He also pointed out that the rule of law was more important than subsidies for “more ambitious investors”.
When asked for his opinion on the 2019 budget, whether it is a developmental or a military budget, Gligorov said that “there have already been public complaints about the increase in military expenditures, as opposed to public investments”.
Commenting on the increase in military equipment expenditures, he said that that was something that the state was quite effective in and added: “For that money the state could also buy education equipment for science or for some other public purpose, but it seems that the Serbian authorities believe that purchasing military equipment will be better accepted by the general public.”
He also wonders why it is so important to strengthen the Serbian army. “The army is a means, a better equipped army is even better means, but who do we need to defend the country from? If there is no answer to the question about the goals, as there is obviously none, it’s just wasted money, “Gligorov said.
When asked whether the planned capital investments in the budget were sufficient and directed to the right and necessary projects, he said that “they are not enough, given the development needs”.
According to Gligorov, infrastructure and energy are most important for development, but investing in education and knowledge is even more important since the Serbian economy cannot compete with its uneducated and cheap workforce because there is plenty of it all over the world.
“It is not certain that the state is even capable of spending more on, for example, developing infrastructure, as the implementation of nearly all infrastructure projects has been late, and won’t even mention the quality,” Gligorov said.
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