It is crucial that Serbia continues to “work hard” and bring in investors, as many will seek cost reductions in the future as they will not be able to withstand such a fall, the Serbian president said.
In the next period, all factories in Serbia will be opened, and more than 80 percent of workers have already returned to most of the plants. In the next period, as announced by the President of Serbia, Aleksandar Vucic, the state will have the “biggest task” – raising the economy, which, in his opinion, will not be easy. Vucic added that that is why it is important to open the European and especially the German economy, because factories in the Serbian automotive industry make components for their manufacturers. It will be of crucial importance for Serbia to continue “working hard”, to bring in investors, “because many will ask for a reduction in costs in the future, since they will not be able to withstand such a fall,” Vucic said.
Experts are united in the view that foreign investors in Serbia have so far been seen as a generator of employment growth. However, according to prof. Ljubodrag Savic from the Faculty of Economics in Belgrade, foreign investors can pick up and leave for a while, or simply shut down their production until the flows on the world market calm down, as well as the situation in their home country. Mario Reljanovic, a research associate from the Institute for Comparative Law, agrees with that, emphasizing that the state will not have too much money to raise the economy through public spending and be the investor that will create new jobs.
– So far, it has done that by giving support to foreign investors, but that is no longer sustainable to such an extent. Namely, foreign companies will first look to stabilize themselves, and only later will they continue to realize the cycles of their investments – Reljanovic believes and adds that this is why the private sector will not be so comfortable, because all forecasts of economists and analysts who monitor labor market trends show that Serbia will return to 2008 with unemployment.
– If we are hit by another wave of layoffs, it will certainly be worse for us, and we will not have a good time even if employers decide that it pays more to lay off workers than to use economic support measures – Reljanovic points out.
The question is whether the overall situation will change the state policy when the new labor law is written. Its production was planned for this year, but, chances are, it will be postponed until 2021.
– Only then can we expect new solutions regarding labor legislation. It will be interesting to see whether the state will continue to hold the position that labor rights should be reduced and workers cheaper in order to attract foreign investments. Or maybe it will start appearing as someone who invests in a domestic employer and public works, someone who takes back some functions that it does not perform now, and it should – Mario Reljanovic explains, Politika reports.
