“Measures from the second package of state support cannot be the same for everyone as in the first wave, but phased and selective, aimed primarily at the most vulnerable, who survived the biggest crisis and who need more time to consolidate due to the nature of work,” said the President of the Chamber of Commerce, Marko Cadez, in an interview for Blic Business.
“They should help companies to overcome the reduced demand on the domestic and foreign markets more easily, as the main limitation they will face in the coming period, and thus to maintain liquidity more easily,” Cadez believes.
The second package simply has to be structured differently and in financial terms will certainly be less extensive than the first, the ambulance package. Not only because the possibilities of the state are not unlimited, but because there are no such measures, there is no state money whose pumping would help the economy if the market is not functioning, if there is no demand for products, if we do not help businessmen to produce and sell so they can meet their obligations.
How to alleviate the problem of reduced demand? What measures have you proposed to the government?
First of all, greater involvement of domestic construction companies and processing industry in the realization of infrastructure and other state projects for which funds have already been provided, by including local companies in supply chains of large domestic and foreign exporters, as well as in production that would substitute imports wherever possible.
Additional relief would bring a reduction in customs duties on equipment, parts, components that must be imported. Exporters would benefit greatly from additional support through export insurance, new free trade agreements and assistance in entering non-European, fast-growing markets.
It is also important that we continue to actively attract foreign investments, namely investments in the production of more value-added goods for export, which would also employ domestic companies. In the coming period, special attention should be paid to communication with European companies that bring their production from distant markets closer to their home countries.
There is also a lot of space to facilitate business in the country through the simplification of administrative, tender and licensing procedures, for employment. In addition, the labor market has created great potential by returning our people from abroad, both those with university degrees and workers with experience gained in Western European companies and the qualifications needed by the domestic processing industry.
And what measures of financial support can businessmen count on. It seems almost certain that there will be no more help in the form of a minimum?
It is also clear to the economy that such a financially generous package as in the first wave cannot be repeated, that not everyone can expect direct help, but the possibility of such state intervention for the most vulnerable, either in the form of minimum wages or perhaps write-offs of deferred liabilities indicate that it is economically justified, it is not excluded.
It is especially important for businessmen to make the most of the remaining funds from the first package through favorable loans from the Development Fund and bank loans with a state guarantee. We suggest and believe that there will be room to expand these funds at least for the most vulnerable and that it is possible to further relax administrative procedures so that businessmen can get credit support faster and easier and with less financial burden, overcome the liquidity problem to a stronger recovery economy. The findings of the survey on previous experiences in the use of state aid and the real needs of entrepreneurs in the coming period will significantly help in defining this segment of support.
Also, one of the possibilities we point out and will discuss with the Ministries of Finance and Economy, the National Bank, AOFI and commercial banks is stronger support to exporters by increasing funds for export insurance, which would significantly improve the reduced export performance due to the pandemic.
How much more are you afraid of the economy now than in April, and what kind of autumn awaits us?
Thanks to timely government assistance, the support of the Chamber of Commerce and great efforts and mutual solidarity of businessmen, the Serbian economy came out of the first wave of preserved companies and jobs and slowly began to recover during May and June. Due to the complicating epidemiological situation, annual vacations and overhauls, according to preliminary indicators, in July we record a slight slowdown in industrial production and trade, although unlike the spring months, forced vacations are not massive and only about 50 companies have temporary downtime. It is encouraging that, observed on an annual level, the forecasts of international analysts for Serbia have not worsened. However, it is obvious that the unexpected July attack of the coronavirus deepened the crisis everywhere in the world, that there was no expected summer break and that we are looking forward to autumn with a lot of uncertainty when it comes to the health aspect of the crisis. This is also the reason why the support to the economy, which is also resorted to by other countries, should be timely and targeted in order to be as ready as possible and to overcome autumn more easily.
When do you expect the economy to recover?
Although in these circumstances the forecasts are extremely ungrateful and although the recovery of our economy will depend, first of all, on the further development of the epidemiological situation, and then on the speed with which the global and especially European economy recovers, I believe that a stronger recovery will occur next year and most businessmen, in a recent survey, estimated that it will take about a year to recover, those from the most vulnerable sectors and a little longer, while a third of respondents expect to recover in three to six months.
One can hear more and more often how the economy now has to fight and adapt on its own?
In the conditions of a world pandemic, when we have coronavirus as a force majeure, when the global economy has been paralyzed for several months by closing borders, when economies are slowly opening and doing business with so much uncertainty, blindly adhering to the basic postulates of economic liberalism, leaving the market, which does not really work, to arbitrate would be economically unreasonable. This battle for survival and preservation of the base for faster recovery, not only in Serbia, but everywhere in the world, must be fought together – governments, which in such circumstances have a strong stabilizing role, business organizations through support to companies to overcome problems in everyday business, use all existing and open new opportunities, and businessmen, who are fighting like lions to preserve not only their companies and people, but also business connections with companies in the supply chain. The key words in these difficult times for the economy are solidarity and cooperation. And in the national context, where governments, if they let the economy through the water, will have no one to pay taxes and finance health, education and other public functions, but also at the regional and global level, because our economies are interconnected and more than we could to assume, Blic reports.
