Sitemap

We Need To Be Industrious And Prudent

Given the current state of the pandemic, it is likely that the Serbian economy will need consecutive infusions of money in order to stay afloat. However, new measures should take into account the fact that saving everybody is neither attainable nor wise

New measures aimed at supporting the Serbian economy, which has been stricken by the pandemic, are already in front of us, despite the new government having yet to be formed. There is nothing strange about this, given that the whole world is now aware that the rebounding of the economy in a sharp “V” curve is impossible. Indeed, it is widely believed that the return to normality will rather take the shape of a “U” or “W”. Some economists actually speak about consecutive “Vs” as the most likely outcome, given that some of the biggest economies are still operating under the conditions of the pandemic, while others are grappling with ups and downs.

Under such circumstances, state support is following the pandemic curve. Governments are spending more in order to save their economies and jobs. Direct support to national carriers, or larger budget deficits which were “big no-no-s” during the global financial crisis, are today a welcome practise.

However, not all economies are in a position to dispense money to their economies generously. The Serbian government already positively surprised both experts and businesspeople by pouring €5.1 billion at the onset of the Coronavirus pandemic. The new instalment, estimated at €1.36 billion, is to be disbursed as of August. Although this amount is definitely much smaller than the first instalment, it surprised both the public and experts, as it was claimed just a month before that there would be no additional financial infusion to the economy, as the state coffers simply could not sustain that.

At the end of the day, it could happen that public money is spent but neither companies nor jobs are saved. The new government will have to address this challenge.

Of course, companies see the new package as welcome and necessary, but expect it to be followed by another more generous one, in the autumn, when a new wave of the pandemic is expected to strangle the economy. Will there be space for that? Experts argue that neither the first nor the second package were well conceived and distributed to those industries that needed help the most. Furthermore, the measures, they argue, lack economic logic – companies will use them, but there is no mechanism that will force them to use resources efficiently. Instead, some firms may go into bankruptcy once it becomes evident that state money cannot keep them alive artificially. It would be helpful if the financial aid were followed by institutional changes aimed at improving the business environment and reforming the labour market, which will render the economy more resilient.

Concerns that one-off measures are not an adequate answer are even more grounded if one takes into consideration that the global economy won’t be the same once the pandemic finally ends. On the contrary, it is believed that countries like Serbia, with less versatile and advanced structures, will fare better during the crisis, but will then fail to grow once the green economy, digital transformation and sophisticated services based on advanced technologies regain their importance. Indeed, any new package will have to balance between channelling support to the economic sectors that are most needed and those that may be “growth accelerators” in the times to come. To be sure, there is no need for them to be hand picked by the government. It will be enough for there to be a transparent, well-established mechanism for financing those companies that have already demonstrated their ability to transform themselves during the crisis.

Related Articles

Marija Cvetković, President of the Municipality of Gadžin Han

We Await Investors

The Municipality of Gadžin Han hasn't attracted any new investors in the last 10 years, because it had nothing to offer them. Things started...

Marko Čadež, President, CCIS

We Have Reason For Both Optimism And Caution

It is encouraging that half of the domestic companies are planning to continue investing in equipment and basic resources and that large foreign companies...

Director: Marko Čadež

Serbian Chamber of Commerce And Industry

Address: Resavska 13-15, Belgrade Tel: +381 11 3300 900 E-mail: bis@pks.rs Website: www.pks.rs With a tradition of more than 160 years, Serbian Chamber of Commerce And Industry (CCIS or...

Serbia launching production of coronavirus tests

Serbian company NeoMedica from Niš will soon be the first in the region and one of the few in the world to begin the...

Focus

The Liquidity of the Economy and Citizens is Key to a Rapid Post-crisis Recovery

Many economic experts are already predicting that the pandemic caused by the Corona virus will be a bigger challenge for the world economy than...

Serbia announces economic stimulus package worth €5.1 billion

Minister of Finance Siniša Mali and President of the Serbian Chamber of Commerce Marko Čadež presented a package of economic measures to mitigate effects...

Marko Čadež, President of the Chamber of Commerce & Industry of Serbia

We Rely on the Best Austrian Practises

Austria has a strong interest in the progress of the economies of the Western Balkans, including Serbia's, and supports the transformation of domestic industries...

Serbia-Turkey Business Forum

Opening the Serbia-Turkey Business Forum, attended by Turkish President Recep Tayyip Erdoğan, President Aleksandar Vučić invited Turkish investors to invest in Serbia and Serbian...

More...

Always Truly Together

It is often said that the strongest friendships are forged during tough times. And sometimes, as in the case of Italy and Serbia, they...

Comment

History Condensed

While we are celebrating many events and factors that make German-Serbian bilateral relations stronger, history might also be in the making. This largely depends...

New Era

It was at some point in November 2005, when Chris Patten was already the former European Commissioner for Foreign Affairs, that “recognition” came from...

Aleksandar Popov, Director Of The Centre For Regionalism

The Glass Is Half Empty

It would appear that in Montenegro, in the most desirable way possible, peacefully and democratically, an historical change of government occurred. It is still...

News

EIB And Erste Bank Serbia Sign €30 Million Loan To Help Fast Recovery Of Serbian SMEs And Mid-Caps

- The EIB will invest €30 million to accelerate the recovery of Serbian companies operating in sectors most affected by...

RAS And HEPA Sign MoU On Cooperation On Foreign Market Growth Program

The Development Agency of Serbia (RAS) and the Hungarian Export Promotion Agency (HEPA) signed a Memorandum of Understanding today,...

Clean Air Challenge

UNDP Serbia, in cooperation with UNICEF and WHO, has announced the Clean air challenge to call proposals for innovative...

Rule Of Law Crucial For The Western Balkans’ Post-pandemic Economy

Belgrade Security Forum continued with Dr. David Landsman, Chairman of British Serbian Chamber of Commerce and former British diplomat...

Brose To Invest €180m In Serbia

Prime Minister Ana Brnabic talked today with Urlich Schrickel, Chief Executive Officer of the Brose Group, which started the...

EIB And Erste Bank Serbia Sign €30 Million Loan To Help Fast Recovery Of Serbian SMEs And Mid-Caps

- The EIB will invest €30 million to accelerate the recovery of Serbian companies operating in sectors most affected by...

Clean Air Challenge

UNDP Serbia, in cooperation with UNICEF and WHO, has announced the Clean air challenge to call proposals for innovative...

Rule Of Law Crucial For The Western Balkans’ Post-pandemic Economy

Belgrade Security Forum continued with Dr. David Landsman, Chairman of British Serbian Chamber of Commerce and former British diplomat...

Brose To Invest €180m In Serbia

Prime Minister Ana Brnabic talked today with Urlich Schrickel, Chief Executive Officer of the Brose Group, which started the...

Deyana Kostadinova Is The New UNICEF Representative In Serbia

Ms. Deyana Kostadinova is the new UNICEF Serbia Representative. Prior to this assignment, she was the Permanent Representative of the...

EIB And Erste Bank Serbia Sign €30 Million Loan To Help Fast Recovery Of Serbian SMEs And Mid-Caps

- The EIB will invest €30 million to accelerate the recovery of Serbian companies operating in sectors most affected by...

Clean Air Challenge

UNDP Serbia, in cooperation with UNICEF and WHO, has announced the Clean air challenge to call proposals for innovative...

Rule Of Law Crucial For The Western Balkans’ Post-pandemic Economy

Belgrade Security Forum continued with Dr. David Landsman, Chairman of British Serbian Chamber of Commerce and former British diplomat...

Brose To Invest €180m In Serbia

Prime Minister Ana Brnabic talked today with Urlich Schrickel, Chief Executive Officer of the Brose Group, which started the...

Deyana Kostadinova Is The New UNICEF Representative In Serbia

Ms. Deyana Kostadinova is the new UNICEF Serbia Representative. Prior to this assignment, she was the Permanent Representative of the...