Serbian officials say they need to implement a radical overhaul of the public sector, including state administration, education, health and pension systems, to deal with the country's economic crisis.
"We have chosen one much more difficult, but much more useful strategy, for the state and for the citizens. Instead of increasing taxes, we will scale down the non productive public sector," said Serbia's Economy Minister Mladjan Dinkic at a news conference on Tuesday (September 1).
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Serbian officials say they need to implement a radical overhaul of the public sector, including state administration, education, health and pension systems, to deal with the country's economic crisis.
"We have chosen one much more difficult, but much more useful strategy, for the state and for the citizens. Instead of increasing taxes, we will scale down the non productive public sector," said Serbia's Economy Minister Mladjan Dinkic at a news conference on Tuesday (September 1).
The head of the International Monetary Fund (IMF), Albert Jaeger was in Serbia on Tuesday, to assess the country's compliance with conditions agreed in a three billion euro stand-by deal in May.
After the visit, the IMF allowed Serbia to expand its fiscal gap to 4.5 percent of gross domestic product from a previous target of 3 percent, but will decide only in October if the country can use the second and third tranches of the loan.
Jaeger said the IMF is open to Serbia's plan, but would like to see concrete details on how the government will cut public spending when the talks resume in October.
"We are more then open to this idea, but we will need to see specific plans and actions in this direction, to be assured that the fiscal programme can be brought on track taking exclusively a spending based approach," he said.
But editor and chief of Serbian magazine "Ekonomist Weekly" Milan Culibrk said the changes to the public sector could mean more then 50,000 people will be left unemployed.
"We must bear in mind that 550,000 people are employed in the public sector in Serbia, 10 percent less means 55,000, that's the whole army of unemployed, when the percentage of unemployed is already high," he told Reuters Television.
Since the end of the regime of former Serb leader Slobodan Milosevic in 2000, the average income in the country has increased almost four times, now standing at around 400 euro a month. The number of people living below the poverty line has halved to 490,000.
But the global economic crisis has hit Serbia hard. Its unemployment rate will rise to 21 percent this year from 18 percent in 2008.
It is almost certain that the growth line this year will be stopped and compared with other countries in the region, Serbian exports are still among the lowest per citizen.
A wave of strikes that spread throughout Serbia in Spring threatens to grow into a storm of workers' discontent this Autumn. About 32,000 workers are on strike in Serbia complaining of unpaid salaries and contributions for social security and pension insurance, as well as a breach of privatization contracts.
The state is trying to find a solution to provide health insurance for all workers in cases where employers have not paid contributions. Debts of employers for unpaid wages exceed 143 billion dinars, or about 1.5 billion euros, and almost two thirds of companies are insolvent. The most difficult situation is in the companies dealing with metallurgy, construction and textile industry.
Media professionals are among those who have been hit by the crisis. In Belgrade alone more than 200 journalists, cameramen, and editors have lost their jobs in the last three months. Some local newspapers in Serbia have had to close down their offices.
Journalists Milica Mancic-Stojkovic and Veljko Jovanovic were journalists at Serbia's Fox Television, and are among 50 people to have been made unemployed when the company scaled down its operations due to the crisis.
"Looking for a job is not easy at all. The first thing that you hear is that situation is bad, that new people are not employed, that all those who work, work for small salaries. So I don't see any optimism for the time being," said Mancic-Stojkovic.
Jovanovic said he was turning to old contacts for help.
"My generation has that advantage, not to expect something big from the state, so we have to use our previous contacts and to find a job, that's the recipe," he said. Close