The first mission of the International Monetary Fund was in Belgrade at the end of March, while the second one arrives in a few days and stays for two weeks, and the goal is to measure the “transient time” when it comes to the implementation of a stand-by arrangement worth around 2.4 billion euros.
In the middle of the year, the IMF stated that the three agreed “benchmarks” were met – electricity and gas went up in May by eight and 10 percent respectively, and it was also stated that “the central electronic public register of salaries and employees in education sector”.
However, there were still nine unfulfilled or partially fulfilled items on the list of goals agreed upon by the Government and the IMF. The key points of the current arrangement relate to changes in domestic energy, but that is not the only topic of the agreement concluded in December 2022.
From the transformation of Elektroprivreda Srbije (EPS) into a joint-stock company, through the additional increase in electricity and gas prices in November, until the adoption of the regulation known to the public as the Law on Public Enterprises – all of these are “structural benchmarks” or criteria on the basis of which the whether the implementation of the arrangement is as it should be or not.
From spring to today, when it comes to “fiscal benchmarks” of which there are four in total, the one related to the register of wages and employees in the health sector has been fulfilled. By the end of January next year, it is expected that a similar registry for healthcare will come into existence, but this does not mean that one of the longest-running reform projects – completing the registry of employees and wages in the public sector – will soon be completed.
This is evidenced by the fact that the extension of the ban on employment in the public sector was recently put on the agenda of the Assembly, as well as the prolongation of the introduction of salary grades until 2025.
The list of “fiscal benchmarks” also included the goal of adopting an action plan by the end of July this year that would contribute to making medium-term budgeting “more effective and more binding” , but it is not yet known whether this obligation has been met.
Energy in the arrangement – out of seven points, only one is not fulfilled
The largest part of the list of tasks is related to energy, and the first of the seven “benchmarks” for the successful implementation of the arrangement has already been delayed.
The transformation of EPS was supposed to be completed by February of this year, according to the agreement with the IMF, but the entire process lasted until April 18, when EPS registered a total of 36.5 million shares in the Central Register of Securities , nominal value 10,000 dinars per share.
The two “points” related to electricity and gas price increases in May were fulfilled on time , but in the meantime, two more “benchmarks” were included in the agreement – that electricity and gas prices rise by eight and 10 percent by November 1, respectively.
Although there was talk of negotiating with the IMF to soften or extend this obligation, decisions on additional price increases were adopted at the end of September.
The implementation of the agreement for the Government to adopt an investment plan according to priorities and costs for the energy sector for projects that should be implemented in the next two to five years has also been delayed a little, but it seems that this is “covered” by a document called “Starting Bases ” of the energy infrastructure development plan for the period until 2028 with projections until 2030″, which was adopted in June of this year.
The only point that has not yet been fulfilled relates to the Government’s obligation to adopt the EPS restructuring plan by the end of December this year.
However, there is still time to remove that item from the agenda by the deadline, as the election for EPS director has entered the final stage, as the application of candidates was completed on September 15.
Apart from the fiscal and energy “measures of success”, there was another important agreement, the fulfillment of which was agreed with the IMF – the adoption of the Law on the Management of Business Companies Owned by the Republic of Serbia.
That law, known as the “law on public enterprises”, was adopted in September, after it was withdrawn from the Assembly in June to undergo another round of public discussion.
What awaits us when the mission arrives?
Energy expert Miloš Zdravković, when asked whether we are ready for winter and the IMF mission, answered for Biznis.rs that the increase in electricity prices during the year has certainly “satisfied the appetite” of that international organization, but that it should be remembered that in the balance should be kept between the demands of the IMF as a creditor on the one hand, the financial possibilities and needs of the state on the other, but also the ability of the citizens to withstand all this.
His assessment is that the “pressure” of the IMF on the domestic energy sector will continue.
“It is an area in which the IMF has levers of influence and in which the effects can best be seen, and that is what experiences from all over the world say – it is a sure item that the IMF ‘targets’ in countries that are domiciled producers of electricity”, says Zdravković.
“This is about the part of the question about the readiness for the arrival of the IMF mission, since the answer to the question whether we are ready for the arrival of winter”, Zdravković emphasizes for Biznis.rs.
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