"Business models no way to sustainable development"

BELGRADE World Bank's Loup Brefort says "the two business models that many claim are the foundation of the Serbian economy did not lead to sustainable development". What is more, Serbian citizens pay for everything twice - once as consumers and the second time as tax payers, the World Bank country manager for Serbia wrote in a Serbian-language blog post on the B92 website. "Business models no way to sustainable development" According to Brefort, one model is to buy for one and sell for two or three (dinars, euros, dollars), and the other to buy for two or three and sell for one. The first model applies to some private companies, and the second to public or state companies. The chance to buy for one and sell for two or three is offered by monopolies or oligopolies - this is the situation where one or two big companies control the market. This is why Serbia needs to encourage more companies to invest in sectors where such trends exist, wrote Brefort. New companies would compete with the existing by lowering prices or offering better quality products for the same price, families in Serbia will obviously benefit from this, and liberalization will not work for those enjoying an easy market position, but this is the right policy to implement, he wrote. An example of the second model is gas - consumers in Serbia pay less for gas than it costs to import it. As a result, the company which sells gas loses money. Since it is a public company - Srbijagas - the loss is covered by tax payers, wrote Brefort. The tax payers include both people who use gas and those who do not, and some gas users are able to pay the full price. If gas was sold at a realistic price, Srbijagas would not record losses, the tax payers would not need to cover these expenses, and there would be more money in the budget to help those in need, and only them, to pay their gas bills, said Brefort. B92 Tanjug

"Business models no way to sustainable development"

According to Brefort, one model is to buy for one and sell for two or three (dinars, euros, dollars), and the other to buy for two or three and sell for one. The first model applies to some private companies, and the second to public or state companies.

The chance to buy for one and sell for two or three is offered by monopolies or oligopolies - this is the situation where one or two big companies control the market. This is why Serbia needs to encourage more companies to invest in sectors where such trends exist, wrote Brefort.

New companies would compete with the existing by lowering prices or offering better quality products for the same price, families in Serbia will obviously benefit from this, and liberalization will not work for those enjoying an easy market position, but this is the right policy to implement, he wrote.

An example of the second model is gas - consumers in Serbia pay less for gas than it costs to import it. As a result, the company which sells gas loses money. Since it is a public company - Srbijagas - the loss is covered by tax payers, wrote Brefort.

The tax payers include both people who use gas and those who do not, and some gas users are able to pay the full price.

If gas was sold at a realistic price, Srbijagas would not record losses, the tax payers would not need to cover these expenses, and there would be more money in the budget to help those in need, and only them, to pay their gas bills, said Brefort.