Tadic: No Quick Fix for Serbian Economy

On the second day of Serbia’s Economic Forum held in the Kopaonik ski resort, the country’s President and government ministers gave some impressive speeches but failed to shed any new light on government policy.

Tadic told the gathering that that he expects his government to reach an agreement with the International Monetary Fund, IMF, on stand-by funding arrangements which would significantly strengthen the foreign currency position of the National Bank of Serbia, although he said that Serbia should be prepared for the tough terms that the IMF representatives would set as a condition of the arrangement.

“Serbia has not taken funds from international financial institutions, which demonstrates that our country has the capacity to defend the existing position, but, as in any other economy in crisis, Serbia’s economy may not make it further without assistance – and this is not gratis, it costs,” Tadic said.

He added that Serbia – within the agreement with the IMF – would accept only “politically and socially sustainable” solutions.

Tadic said he will meet with the government’s economic team, led by the Prime Minister Mirko Cvetkovic, to agree a negotiating position in advance of the IMF talks which are scheduled to start on 15 March.

He also called for investment in infrastructure, agriculture and the energy sector which he said would provide significant employment.

He concluded by repeating earlier appeals to Serbian business, politicians and society to strengthen the fight against corruption and sever the links between crime, business and the judiciary.

Echoing this theme, the first deputy prime minister and interior minister, Ivica Dacic, said that Serbia needed to decisively confront crime and corruption. “It does not matter who a person is or how big his power base is… it does not matter who belongs to which party, whether they are in authority or from the opposition, and it certainly does not matter if a person has economic influence or any other public position, if he or she violates the law”, Dacic said.

Bozidar Djelic, also deputy prime minister, said that wages and pensions should not be reduced as this would reduce domestic demand – noting that most citizens buy goods that are produced domestically. He said a solution to the budget deficit should be sought at the upcoming talks with the IMF.

“We must alter our approach to spending money, and those changes must be obvious in the 2010 budget. We especially must change the way we spend the funds we receive from international financial institutions”, Djelic said.

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