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Lack of reforms drags Serbia down in Heritage Foundation economic freedom chart - Serbia Business

Lack of reforms drags Serbia down in Heritage Foundation economic freedom chart

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U.S.-based think-tank The Heritage Foundation said the lack of political will to undertake important reforms dragged Serbia 22 positions down in its global economic freedom chart to the 99th place.

Serbia’s overall score puts the country within the group of mostly unfree economies, as it declined to 58.9 points in 2017 from 62.1 in the 2016 edition of the chart, covering ten freedoms, from property rights to entrepreneurship, graded on a scale from 0 to 100.

Serbia’s score is below the world’s average of 60.9 as only Moldova ranks lower among the countries in Southeastern Europe (SEE).

“Overall economic freedom in Serbia continues to be constrained by the lack of political will to undertake the bold reforms that are required,” The Heritage Foundation said. “Inefficient government spending remains high and poorly managed. Deeper institutional reforms are needed to tackle bureaucracy, reduce corruption, and strengthen a judicial system that is vulnerable to political interference.”

However, privatisation has revived the once-defunct banking sector in Serbia which continues to evolve, while the economy’s competitiveness is supported by low flat tax rates, relative openness to global trade, and ongoing regulatory reforms, the think-tank explained.

The judiciary in Serbia operates independently, but endemic problems continue to plague it, as corruption remains a problem in many sectors, including the security, education, housing, and labour sectors, as well as in privatisation processes, The Heritage Foundation said.

Despite some progress in streamlining the process of launching a business, other time-consuming requirements reduce the regulatory system’s efficiency. At the same time, financial intermediation is relatively low, and the percentage of nonperforming loans in banks is one of the highest in the region, the think-tank added.

Detailed data about Serbia’s economic freedom score in 2017 and 2016 follows: