The President of Serbia said that some ministers are not working enough for GDP growth, adding that he would ask Prime Minister Ana Brnabic to point out his dissatisfaction.
The President of Serbia, Aleksandar Vucic, is dissatisfied with the work of certain ministers when it comes to engagement in the growth of gross domestic product (GDP). He said he would ask Prime Minister Ana Brnabic to point out their dissatisfaction.
– They did not know how to spend their money in January, and they were looking for it in the budget only a month and a half ago – Vucic said for RTS.
He did not want to say who the ministers were, adding that it was the job of the Prime Minister.
– I’ll tell her what I think. You cannot hold meetings for GDP growth with only two or three ministers coming, which means that the others do not understand how important growth is to us – Vucic pointed out.
He emphasized that we must achieve growth, because “we cannot invest two billion if we do not have four or five percent of GDP growth this year”, and that we cannot allow our public debt to grow.
– I am a little angry about that and I believe that they will understand this message. I am not doing this because I want to criticize someone, but because I know how important it is for our country. In order to be able to procure all medicines and vaccines, to build hospitals, increase salaries and pensions – concluded Vucic.
“Politika” from the cabinet of Prime Minister Ana Brnabic and the Ministry of Finance did not receive answers to the questions about how the money was withdrawn from the budget in January and which ministries spent less money than planned.
If it is known that the fiscal strategy envisages that reaching a growth of six percent in 2021 is based primarily on high investment growth, one can sense when all eyes are on. Tomislav Momirovic, Minister of Construction, Transport and Infrastructure, and Andjelka Atanaskovic, Minister of Economy, are responsible for public, private and foreign investments, which should be increased by a total of about 13% this year.
After the meeting of the Capital Investment Commission, Sinisa Mali, the Minister of Finance, clearly said that the priority is the economic growth of Serbia, which is why the focus is on public investments, which contribute the most to the growth of the gross domestic product. He reminded that 2.7 billion euros from the budget for 2021, ie 5.5 percent of GDP, is planned for capital investments, and concluded that the inviolable goal is the growth of living standards and the growth of the Serbian economy of six percent by the end of the year.
The Minister said that the most important thing is to respect the dynamics of works and the agreed deadlines, and warned that it is necessary to take more care of project management.
The current budget allocates 612 million euros more for capital projects compared to the 2020 budget, which is an increase of 36 percent. Most of the projects are related to traffic infrastructure. Capital expenditures of the Ministry of Construction, Transport and Infrastructure, which finances most of the construction of road, railway and other transport infrastructure, recorded a strong growth, by about 80 percent compared to 2020 (from 601 million to 1.08 billion euros). These allocations are supported by three times higher expenditures for land expropriation (148 million euros versus about 50 million euros in 2020).
Expropriation is a bottleneck in public investment because in previous years, only half of the money earmarked for this purpose was usually withdrawn from the budget.
Last month, after a meeting with ministers and directors of public companies, Serbian President Aleksandar Vucic said that there was a serious problem with the expropriation of land on the Stara Pazova-Novi Sad line, land near Cacak, and that he was not satisfied with the plan.
Most of the money is allocated for the construction of the Belgrade-Budapest railway, and there is also the continuation of the construction of the Moravian Corridor, Preljina-Pozega highway, Iverak-Lajkovac highway, Ruma-Sabac-Loznica highway, Sremska Raca-Kumin highway. The Council of the Government of Serbia for coordination of activities and measures for the growth of gross domestic product assessed that it is necessary to start the construction of the Frushkogorski corridor, sections of the road Nis-Merdare, New Belgrade-Surcin, as well as gas interconnection Serbia-Bulgaria in the first quarter of this year.
The priority is also the construction of railway infrastructure, and there are also projects in the field of environmental protection, primarily the construction of factories for wastewater treatment.
The Ministry of Construction, Transport and Infrastructure told “Politika” that, despite the working conditions during the Covid 19 pandemic, all infrastructure projects for which they are responsible are being implemented according to the established dynamics and, accordingly, that dynamics follows the financial realization.
At the beginning of November, when the mandate of Minister Momirovic began, less than 70 percent of construction works were realized, and by the end of December, 99 percent, they say in this ministry. They did not answer us how much money they withdrew from the budget in January, but they told us that the minister did not attend the meeting related to GDP growth, but delegated and sent a state secretary.
The reason was the urgent meetings regarding the project of the wastewater treatment plant and the meeting on the construction of the highway from Pozega to Boljar.
Due to capital investments, the budget of the Ministry of Environmental Protection has been increased. About 70 million euros were approved, which is an increase of about 21 million euros in relation to the November rebalance. Investments in the construction of wastewater treatment plants and sewerage networks increased by about 8.4 million euros.
The Fiscal Council states that public investments are under the direct control of the government, that their high growth is economically justified, and there are enough started and planned projects for that, so that nothing is disputable.
According to the assessment of this independent body, high growth of investments in public and state-owned companies is currently not possible, because these companies are burdened with numerous business problems. Strong growth of foreign direct investments in 2021 is unlikely, since little is invested in times of crisis. Domestic private sector investment has never been large, so it is also unlikely that anything will turn around in the coming years without a change in government policies.
The Ministry of Economy is in charge of increasing these investments, but we did not receive an answer from them on how much money they withdrew in January, what they are doing to increase the share in GDP and whether the Minister attended the meeting of the Government Council.
Agriculture had a high share of about 7.5 percent of GDP last year. This year, direct incentives to farmers are lower by almost 50 million euros, after extremely high payments in 2020 due to the unexpectedly good agricultural season.
Capital investments of the Ministry of Agriculture, such as the construction of the “Arilje” on Rzava and the wastewater treatment system in Brus and Blace, increased by 5.9 million euros, so hypothetically, criticism could be directed at them as well.
The Ministry of Mining and Energy has launched a procedure to amend the Law on Mining and Geological Research to attract more investors, increase ore rent, provide greater protection of human health and the environment, but also increase the share of mining in the country’s GDP in the next few years. 1.9 to 3.5 percent.
Mihajlovic: The remarks do not apply to me
Zorana Mihajlovic, Deputy Prime Minister and Minister of Mining and Energy, does not think that the remark of the President of Serbia referred to the ministry he leads.
– I believe and I am sure that all ministers give their maximum, because Serbia is certainly among the best in Europe in terms of results. The budget of the Ministry of Mining is spent in accordance with the planned dynamics. In December, the realization of the ministry’s budget was 96 percent, and we will know the exact percentage for January when the month is over. In addition to the projects for which he is an investor, the Ministry will insist that public companies in the department more efficiently implement the projects they are responsible for, because those projects produce the greatest financial effect. I believe that many people are bothered by the changes that the ministry is implementing, and that is why the attacks in certain media do not surprise me, and I believe that there will be more. But, there was that before, so regardless of that, we finished Corridor 10 and the highway “Milos Veliki” and reconstructed more than 550 kilometers of railways in Serbia – she says.
According to the Minister, they will work in the same way in the mining and energy sectors, which have been “sleeping” for a long time, and can contribute much more to the Gross Domestic Product, the budget and the development of Serbia as a whole. Through the new laws they are preparing, they want to increase the share of mining and energy in the GDP, which currently amounts to about six percent, including the processing of petroleum products. He believes he can increase the share of mining in GDP, which is now around 1.9 percent to 3.5 to four percent in the next three years, Politika reports.
