Privatization in Serbia has been a long and challenging process, with over 25% of privatization contracts terminated due to non-fulfillment of obligations. The government now aims to resolve the status of remaining socially owned companies within two years.
The first Privatization Law was adopted in 2001, but its solutions became outdated, making privatization of over 500 companies difficult. The new Privatization Law, which came into effect in 2014, aimed to address this issue by setting a deadline of December 31, 2015, for privatizing social enterprises. However, the process continued slowly, and by 2023, 556 companies were still in the process.
In March 2023, the National Assembly extended the privatization deadline for public companies with majority social capital until December 31, 2027. Currently, 43 companies remain in privatization, with seven expected to publish public invitations this year.
Veljko Mijušković from the Faculty of Economics highlights that the new law could lead to compulsory liquidation for companies that fail to privatize by 2027. Despite some privatization successes, statistics show that more than 25% of privatized companies failed, with reasons including insufficient investment and non-payment of obligations. Mijušković cites examples like HK “Viscoza” Loznica and the “Goša” Rail Vehicle Factory as major privatization failures.
Economist Aleksandar Stevanović views the extended deadline as a technical change, noting that the companies involved are relatively small in scale and debt.
Additionally, there has been a debate on the privatization of public institutions, with some, like SNS member Vladimir Đukanović, suggesting privatizing schools and theaters. However, Mijušković and Stevanović argue that such privatizations could harm public access to essential services and need careful consideration.
Overall, while some public institutions may benefit from alternative management models, privatizing key sectors like education and culture raises significant concerns about public interest and service quality.
