Serbia advised to embark on Thatcher-style reforms

Serbia's new government will have "a historic opportunity to reform the public sector, most notably public enterprises," says economist Mihajlo Rabrenović.

Source: Tanjug
Mihajlo Rabrenović (Tanjug)
Mihajlo Rabrenović (Tanjug)

Rabrenović, who teaches at the Faculty of Business Studies and specializes in public companies, noted that such policy at this moment "has great support of the Serbian citizens."

For that reason he believes that "the wave of enthusiasm should be used to complete development of an institutional framework to increase the capacity of public enterprises and eliminate systemic risks for their poor performance. "

"Looking back, these companies had been disintvested, are using obsolete technologies and usually have a surplus of employees," noted Rabrenović, and added that

"If a future government is forced to fire people from these companies it would have to at the same time creates the conditions for finding alternative employment."

But subsidies set aside by the state for the loss-making companies it owns "remain the most painful question," he said, and added that "such companies must be reorganized as soon as possible."

This economist advised a special council to be established with the government, and be tasked with analysis and reform of the public sector as a whole and its key segments.

"Reforms are a long process and cannot be carried out during the tenure of a single government. Four years is too little. This requires political support in the long term," said Rabrenović and cited the British example, describing that country as "the leader in the field of modernization of the public sector. "

"The famous reforms of Margaret Thatcher," Rabrenović continued, "laid the foundation of a new policy that promotes the state as a good host that does more with less money."

"The British clearly decided what should remain state-owned, and what should be privatized, and what was privatized was not left up to the chaos - the state established a regulatory body that entrusted private companies to do certain work," he said.

"A company applies for a job, and then obtains a license for a certain period. After that period it comes up for review, and if it did not work well the license will next time be given to someone else," stated the professor, who is a member of the organizing committee of Eurosfera's conferences and public debates.

On April 7, a conference devoted to economic cooperation between the UK and Serbia will be held, and Rabrenović invited all interested parties to attend.

According to him, Serbia can learn from the UK when it comes to other things, and also "deepen the cooperation."

"That country can be our great strategic partner for access to third markets, especially in the Commonwealth which has 53 states and two billion people, which is almost one third of the planet," said Rabrenović.

Business & Economy

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