Investing in people and developing digital skills are key to each country’s economic development, participants of the Business Forum at Kopaonik say. Prime Minister Ana Brnabic, who will address the participants, says Serbia could turn the great changes and challenges of digitalization to its advantage and be one of the winners of the fourth industrial revolution. Reforms, business climate, growth forecasts and the impact of coronaviruses on the domestic and world economy for RTS are discussed by the IMF Chief Jan Kes Martaine.
The IMF’s first man in Serbia, Jan Kes Martaine, tells RTS that public finances must still be under control, but that reforms are needed to improve the business climate. Serbia, he believes, should be an even more attractive place to live by strengthening institutions and improving people’s return policy.
What is most important for Serbia to accelerate reforms?
– To begin with, much has already been accomplished in the past five years. The IMF was part of the process, many reforms have already taken effect, public finances have been put under control. What we hope and emphasize is that, first of all, these achievements from the past must be preserved. This includes fiscal discipline. Public finances must still be under control. We are convinced that this will be realized, but we are still helping the authorities to put in place systems to ensure that fiscal discipline is maintained. In addition, we have repeatedly highlighted different areas: one is to solve the problem of the gap in public infrastructure, which means that more investment is needed in the sector, but it is also important to invest and make the right projects and to value money adequately. Secondly, to put in place policies that address the issue of demographic shock, especially because of the problem of leaving Serbia. More can be done to increase labor market participation. Lastly, reforms are needed to improve the business climate and address the problem of the still powerful gray economy.
Where do you see the biggest obstacles, where do you expect them to be?
– All these reforms are difficult, it is understandable that they are not so they would have already been implemented. We are ready to continue to assist the authorities in all these areas and we are confident that progress will be made.
Are there any specific areas where there might be problems?
– If I singled out one that may be less under the direct control of the authorities, it is a matter of demographic shock, to prevent the incentives for people to leave Serbia and settle in the EU. However, a policy for greater participation of women in the labor market can be introduced. Serbia needs to be an even more attractive place to live by strengthening its institutions and improving its return policy.
We could say that you are new to Serbia, given how much you talk to our authorities. What are your impressions, experiences with the Serbian authorities, are they ready to continue the reforms?
– As I said, the program is well implemented, it is on the right track. I am very happy to be able to cooperate with the Serbian authorities. I think it is a very good experience for us and for the country and we look forward to continuing that partnership.
Can we expect a new forecast when it comes to coronavirus, how it will affect the global economy as well as the Serbian one?
– Our latest economic growth forecasts in Serbia for 2020 are at four percent, but this forecast was given before the spread of the virus. At the moment we have no other number, we can see the consequences for Serbia through the supply chains, we can see the consequences for other countries, but how it will affect the world economy and how it will affect the Serbian economy later, we do not know, we do not have a current projection.
Will Serbia need a new arrangement with the IMF after this one?
– First of all, this decision is up to the Serbian authorities to ask us if they want to continue the arrangement and support of the Fund to Serbia. From my perspective, the previous arrangements were successful, the current one is still successful, and we look forward in advance to the continued to the Serbian authorities, in whatever way we can, RTS reports
