Serbia is completely unprepared for the economic crisis, News
The economic crisis due to the corona virus pandemic is slowly starting to heat up and its negative effects will start to be felt more and more by the fall, and the expert public in Serbia is not sure that the new government has a strategic plan to counter it effectively.
Both economic analysts and trade unionists share the opinion that the current growth of the epidemic will further complicate the situation and are skeptical that the government has an adequate response to the upcoming crisis.
Privatization advisor Branko Pavlovic points out that not only the government in Serbia but also the whole world will have to face the negative effects that the corona virus will cause to economic activities.
– Considering the completely new situation caused by the effect of the corona virus pandemic, we should not expect favorable conditions for the functioning of the economy until the end of the year. The new government in Serbia will also face that. It remains to be seen whether the government will decide to borrow more from international financial organizations or will look for other ways to counteract the negative effects that the crisis will cause. I believe that the new borrowing is something that should not be practiced, but the new government should do what the developed countries are also focusing on, and that is the use of available financial resources in the country. In other words, it would be more useful to borrow from the National Bank of Serbia in dinars than in foreign currency from international financial institutions – Pavlovic points out.
The president of the United Trade Unions of Serbia “Sloga”, Zeljko Veselinovic, says for Danas that the new government will be completely unprepared for the impact of the economic crisis due to the corona virus in the fall.
– All measures of assistance due to the corona virus were for the purposes of the election campaign. One-time assistance to citizens of 100 euros was distributed, as well as assistance to employers in the payment of salaries to employees for a period of three months. Nothing but that the government has neither designed nor has a vision of what should be done. Objectively speaking, the government no longer has the necessary funds that could be directed to those purposes because it has already spent them for the best possible result in the elections – Veselinovic points out.
Our interlocutor adds that the big question is whether foreign employers will be interested in investments in Serbia, regardless of the assistance provided by the state through subsidies, and he is convinced that there will certainly be layoffs.
– When it comes to industry, most companies in Serbia are engaged in either the production of cables or car covers. It is known that the corona virus epidemic has particularly shaken the auto industry sector, and consequently the existence of subcontracting companies has been called into question. I expect that there will be layoffs, and considering that the current government is incapable of dealing with the economic troubles that are coming, it would not surprise me if salaries and pensions are reduced again – states Veselinovic.
He adds that the fighting unions will oppose layoffs and salary cuts, but that adequate resistance to such measures by the government and employers requires coordinated action by all unions, and the obstacle is the fact that the leaders of the largest union headquarters have a pro-government orientation and do not protect the interests of their membership.
Economist Milan R. Kovacevic says for Danas that the epidemic of the coronavirus, which has not abated but has been growing lately, will lead to a great economic decline in Serbia.
– The new government will have some more resources that it will be able to use in order to counteract the economic crisis. However, there will be no expected economic growth, but on the contrary, there will be a minus in the percentage in which the government expected economic growth to be recorded. I think that the authorities could have accepted the loans offered by international financial organizations. Instead, Serbia borrowed two billion euros at high interest rates. It is necessary to return the money obtained through the sale of bonds, and no matter how much the authorities in Serbia thought that the state had the money for it, objectively speaking, it will be a problem to return the money under unfavorable conditions – Kovacevic concludes, Danas reports.
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