‘The decision as to when the IMF mission shall come to Serbia might be made this week’, Bogdan Lisovolik, the IMF permanent representative in our country says.
Q: It was mentioned that the IMF was thinking to grant to Serbia a credit to be used as a support to the republican budget. Will that be discussed during the IMF visit?
‘Until so far the IMF has never given money to Serbia in support to the country’s budget and we have not thought about it. At the moment Serbia has access to financial market so our support for the budget is unnecessary’.
Q: The Mission has suggested Serbia to give up giving guarantees for credits to public enterprises. A month ago the Srbijagas, Galenika and JAT got that kind of guarantees nevertheless?
‘There is no magic solution for those companies and the guarantees cannot be suspended over night. Those enterprises have to be stabilized by a thorough reform package. That package understands cut of expenses but also limitation of the number of employees and their salaries. It is yet to be seen if those reforms shall be carried out and how efficiently’.
Q: The Fund’s recommendation is that we should not spend money on subsidies, but still we are doing that?
‘We believe that some of the envisaged subsidies are too expensive. They are expensive for all tax payers and cannot be justified by claiming that they have been directed to spheres in which market does not function well. Actually such subsidies probably obstruct the positive role of market in increasing of competition and productivity.
Q: Very little has been done regarding saving. How do you comment this?
‘One has to be fair and say that the budget envisages some serious savings regarding expenditures, such as limited indexation of salaries in public sector and pensions. However there is still room for additional quality measures’.
Q: Is there a possibility that the IMF leaves Serbia if new arrangement is not agreed?
‘Serbia shall remain the IMF member regardless of the status of negotiations. So there shall always be some form of dialog and cooperation’.
Q: Do you see possible problems for Serbia should it fail to agree a new arrangement with the IMF?
‘The fact that matters is not the Fund’s presence but the efficiency in leading responsible policy. Our chief goal is to promote macroeconomic stability and sustainable economic growth. If that is realized successfully with the IMF program or otherwise, that shall be a good outcome. The real question is whether Serbia shall be capable of making and implementing a package of special policies in order to solve macroeconomic problems’.
Q: Serbia’s public debt is 61.5 percent of the GDP and the actual power is announcing taking of new credits. Some economists believe that we are heading towards bankruptcy?
‘A public debt over 60 percent of the GDP is high for countries at the level of development at which Serbia is. That means it is necessary that Serbia urgently implements a program leading towards cutting of the budget deficit and economic growth in order to cut the risk of being able to service the public debt’.
Q: What are advantages and what are disadvantages of the Law on Budget for 2013?
‘The advantages are that it includes measures that would significantly cut the deficit in this year. It is also encouraging that after many years this law has been passed on time. It is pity that some of more efficient measures that would have a positive influence on economic growth have not been adopted such as rationalization of finances of local autonomies and suspicious subsidies. Measures envisaged for this year perhaps are not going to be sufficient for staying within projected deficit, so the one planned in 2013 seems to be too ambitious’.
Source Blic
