The deepening political crisis and the PM’s resignation are likely to lead to negative economic indicators. However, viewed over the long run, they open the door to strengthening institutional processes for the first time
According to the economists interviewed for this CorD Focus, the resignation of Prime Minister Miloš Vučević and the formation of a new government with the same political composition wouldn’t change the underlying causes of the current crisis, which has come as a result of the structural weakness of Serbian institutions and the unsustainability of the previous economic model. It is expected that, in the short term, investors will respond negatively to growing instability, leading to an economic slowdown. However, should the current political protests result in the strengthening of institutions and a change in the direction of development, that could set the country on a path to longterm development.
In short, the country might be at the same crossroads it has stood at before or it might be at a turning point: the current crisis may result in the formation of yet another government that will exemplify institutional impotence and mark a continuation of the governance model established in 2012. However, it could also be the prelude to a transparent electoral process that opens the door to change in the direction of strengthening the rule of law and ushers in a sustainable model of economic growth.