The coronavirus pandemic hit micro-enterprises in Serbia the hardest and led to a reduction in working hours during the second quarter of 2020, which is equivalent to the loss of 510,000 full-time jobs, according to a report by the EBRD and the International Labor Organization.
However, by offering “the most generous and comprehensive economic package among the economies of the Western Balkans”, the Serbian government has successfully curbed “the spread of poverty”, according to a new report by the European Bank for Reconstruction and Development (EBRD) and the International Labor Organization (ILO).
After the introduction of strict public health measures and the consequent decline in economic activity, working hours in Serbia fell by about 14.8 percent during the second quarter of 2020. Shorter working hours and compensations significantly contributed to this reduction.
If the health crisis continues and employment retention programs end, people could be pushed into unemployment, the study warns.
The report identifies sectors where more than 700,000 workers are at immediate risk while the health crisis continues: wholesale, retail, accommodation, transport, services, forestry and logging, crop and livestock production.
Of this workforce, nearly 314,000 are self-employed, and there are more than 267,000 informal workers. To date, the crisis has hit micro-enterprises hardest, employing more than 735,000 people, with at least one in four workers losing their jobs.
The government provided its “most generous and powerful measure of financial assistance” in the form of retention subsidies, which for micro, small and medium-sized enterprises amounted to about 65 percent of total labor costs.
While the report welcomes “almost universal support for businesses and citizens,” it also offers five preliminary policy recommendations:
• a more selective and targeted approach to supporting the most vulnerable citizens,
• solutions to support a large number of circular and seasonal workers,
• mitigating the less visible social costs of a pandemic,
• optimization of the new youth employment program in Serbia and
• more consistent and efficient use of social dialogue.
“This is an important report that highlights not only the impact of the coronavirus pandemic on the Serbian labor market and workforce, but also provides concrete and valuable advice on how to deal with the challenges it faces. We welcome the commitment of the Serbian authorities to get involved in this process. It is also encouraging for us to see how our advisory support greatly changes things where it has been implemented,” said Barbara Rambousek, EBRD’s Director for Gender and Economic Inclusion.
“At the regional level, we receive a lot of positive feedback on these assessments of the impact of Covid-19 on the labor market and on how alternative policies are implemented under different scenarios,” said Marcus Pilgrim, director of the ILO Office for Central and Eastern Europe. He added that “it is essential to provide policy makers and other stakeholders with solid data and quantitative analysis on the basis of which they can reason and ultimately devise an exit strategy from their specific circumstances.”
In response to the coronavirus pandemic, the ILO Office for Central and Eastern Europe and the EBRD Gender and Economic Inclusion Team have established a joint working group to assess the impact of the crisis on the region’s economies by examining likely short- and medium-term effects on employment and the labor market.
The report on Serbia follows already published studies and recommendations for Montenegro and Northern Macedonia, N1 reports.
