Udovicki: “Once again subsidies are given to those who need it least”

Director of the Centre for Advanced Economic Studies (CEVES), Kori Udovicki, has said that in Serbia, for the third time since March 2020, subsidies are distributed indiscriminately to all and to a greater extent to those who need them less or not at all.

“The group of business owners most affected by the crisis will receive only about one-eighth of the planned subsidies, as decided in February 2021,” Udovicki said in a press release. She added that “the political implications of the health care measures, and the increasingly likely implosion of the health care system, are now likely to happen.”

She adds that “the President of Serbia, Aleksandar Vucic is the one who weighs and evaluates such measures, while this work should be done independently, and therefore responsibly and professionally, by a number of public bodies and organizations. However, that has not happened and all of them are waiting for a nod from the President to know what and how to proceed”.

According to her, the political factor plays an important role in deciding about lockdown because governments do not like demonstrations, and they do not help to control the epidemic. The problem is that, in Serbia, “the political factor plays a primary role precisely because decisions are made only by one person”.

“The fact that the economic price of restrictive measures and health is evaluated and weighed these days at the meetings of the Crisis Unit is pure manipulation because one month of the current measures means a minimum loss of 0.8% of the gross domestic product (GDP), or 350 million euro,” Udovicki warns.

She added that for businesses that had been severely affected by the pandemic, such as, for example, restaurateurs or retailers and their suppliers, the loss is great, and for some it is total, i.e. 100%. This loss could be covered with two-thirds of the subsidies determined in February this year.

The problem, as Udovicki says, is “structural in nature, because when decisions are made by one man, then there is much more political pressure on him because he is the one who gives and takes.”

“People in Serbia would be more open to accepting epidemiological measures if the Crisis Unit had real responsibility, worked professionally and collected reliable data regularly, as well as made realistic projections of the likely increase in the number of patients under different circumstances and planned and announced measures several months in advance,” Udovicki said.

Finally, the expert said that now that the measures are overdue and unavoidable, subsidies should be increased significantly, or at least businesses that are most affected should be exempt from paying taxes.

(Danas, 22.03.2021)



This post is also available in: Italiano

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