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H.E. Demetrios A. Theophylactou, Ambassador Of Cyprus

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Dušan Vujović, President Of NALED Scientific Council

The Grey Book Is An Authentic Reflection Of Our Business Environment

In 2020, only two out of 100 Grey Book recommendations were fully implemented, and only 11 were partially. Although institutions were working in extraordinary circumstances caused by the pandemic, the main challenges are essentially the administrative system’s lack of readiness and ability to implement the recommendations

The Grey Book is a great contribution to shaping public policies to improve the business environment and reduce the cost of administrative procedures. It transforms economic necessities into specific recommendations to the Government of Serbia, starting from the authentic viewpoint of various economic entities working under the existing legal and institutional environment at all levels of executive powers. Recommendations for changes come from a wide variety of economic entities differing both in size and scope of activity. They include small, medium-sized and large enterprises in almost all areas of production and services, in all parts of Serbia. This ensures the recommendations are reliable, objective and empirically obtained.

When suggesting complex solutions, we should pay attention to effects they may have on the economy and the whole of society, and the objective limits within which the country functions. That is the role of NALED’s Scientific Council, which is dedicated to understanding the true nature of the issues and corresponding recommendations, as per its mandate.

The Council analyses the aims of economic initiatives from a suitable theoretical and analytical viewpoint and points to the systemic nature of certain changes, i.e. identifying deep and complex relationships between recommendations and their effects in a wider social context. This approach is vital for reaching agreement between all the interested parties, taking all kinds of economic, political and social interests into account.

NALED Scientific Council supports the expert team of the Executive Office in carrying out research and analysis and devising regulatory reforms to improve the business environment

The economic initiatives and recommendations can be grouped in four categories. The first contains those that are sufficiently precise and empirically and theoretically well-founded. The proposed solutions in this group are supported by all interested parties and can be achieved by amending existing laws, regulations or scientific analyses and enforcing the laws where fiscal (budgetary), administrative and organisational effects confirm the justifiability of the suggested measures.

The second group encompasses initiatives that are well-founded in legal regulations and empirically obtained data but have asymmetrical effects on certain economic entities (or sectors, or regions) and therefore require additional analysis and quantification of the effects, and compromise between interest groups (the so-called political economy of the measures). It should also be estimated whether such initiatives should be carried out in two stages, where the first would encompass identifying the nature of the proposed solutions whose implementation is purposely postponed (for two or three years) while the necessary analysis is carried out and economic, political and social balance achieved.

The third group encompasses initiatives that must be preceded by a detailed analysis of the technical and procedural steps. They require a software solution, training on how to use it and the expansion of institutional capacities of the state and all the participants to enable finalisation and implementation. Here, NALED often works with international partners on providing support for implementation. For instance, this is the case with e-construction permits, the e-system for hiring seasonal workers and the online calculator for flat-rate taxation.

Ultimately, the fourth and most complex group of explicitly or implicitly systemic recommendations requires additional empirical research and theoretical analysis to review all the relevant economic and other effects and propose appropriate modes of implementation.

NALED faces those challenges by conducting analysis and implementing methodological guidelines. Those efforts are aimed at facilitating the quality solutions contained in the economic recommendations. Simultaneously, such efforts should enable a better look at some crucial issues and reduce the great cumulative load of the recommendations that have become obsolete during preparation or implementation.

In 2020, only two out of 100 Grey Book recommendations were fully implemented, and only 11 were partially. Although institutions were working in extraordinary circumstances caused by the pandemic, the main challenges are essentially the administrative system’s lack of readiness and ability to implement the recommendations.

Among the 10 priorities in the 13th edition of the Grey Book, those aimed at modernising the state administration, increasing transparency and reducing costs for taxpayers particularly stand out (for example eAgrar – a register of agricultural holdings and incentives, electronic health records, cashless payment of charges, unified certificates of paid taxes and modernisation of foreign exchange operations). The recommendations include those related to reducing the workload, which would be welcome if properly executed, while this requires further analysis and consultation.

Improving the wastewater management system is a very important recommendation because it reflects both an urgent need of the public and European trends.

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