All avenues exhausted, unions to strike

Trade Minister Rasim Ljajić says the state had exhausted almost all of the measures at its disposal related to shortages and price hikes of basic food stuffs.

Source: Tanjug

However, the Association of Autonomous Unions of Serbia (SSSS) has warned they will not give up on the planned protest.

After a meeting with SSSS President Ljubisav Orbović, Ljajić said that the time when the government controlled prices was in the past and that going back to this system would mean that Serbia did not intend to advance toward the EU and the World Trade Organization.

"We cannot force anyone to lower the price of their products through some kind of administrative decision, because this goes against the principles of the free market," said the minister.

He noted that in addition to urgently importing 20,000 tons of cooking oil, the government was also considering importing some other foods.

The increase in prices can result in lower demand, and the state can drive down prices of some products by importing them duty-free, he said.

Ljajić said that starting on Friday, officials would meet with producers of basic foods stuffs and representatives of major supermarket chains.

Orbović said the unions would not give up on the planned protests but were still choosi

"Curb producers"

Saša Đogović, expert at the Belgrade-based Marketing Research Institute (IZIT), said Thursday that trade unions and consumers' associations should exert pressure on the producers to cut the rising prices, while the government should liberalize imports of basic foodstuffs for some time.

Đogović told at a news conference called by IZIT that the petition by the unions for the government to bring prices back to their former level was unfounded since the government was not a body in charge of regulating prices.

Trade unions and consumers' associations should, through the media, “label” the trade companies and producers that they believe had unduly raised prices and start a negative campaign against them and also call for a consumer boycott during a given period.

On the other hand, the thing that the government could do in the short term is to liberalize imports of certain foods, creating competitive market conditions that would lead to prices being held down at market level, said Đogović.

In the medium and longer term, the Commission for Protection of Competition should sanction cartel and monopoly association, he said.

The “scissors system” - government measures and pressure with the help of trade unions and consumers' associations - should be used to make producers and traders, not the government, create reasonable market prices, said Đogović.

He noted that economic policymakers were also partly responsible for the increase in food prices, since major privatization proceeds had gone into consumption instead of into investment in strategic industries such as agriculture, which would alleviate the effects of the current drought.

According to projections, the inflation rate might be around 11 percent, or at least double digits and twice higher than the projected target rate of 5.5 percent by the end of the year, which shows what kind of unrealistic expectations we had for this year, Đogović noted.

He said that the already threatened standard of living would continue on an “erosion trend,” which would negatively affect retailers, restaurants, tourist traffic, and even the housing industry, so the question was how much cash the VAT rise would really bring to state coffers.

Đogović pointed out that about 58 percent of the available average household income goes to meet the most basic needs, an indicator of general poverty, with 44 percent of household income going on food, while in the developed countries of the EU, the amount of cash spent on food accounted for only about 16 percent of disposable income.

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