MEETING OF THE BELGRADE CHAMBER OF COMMERCE MANAGING BOARD
 


                                                                      
"THE CRISIS IS NOT OVER YET"

 

The Managing Board of the Belgrade Chamber of Commerce at its meeting held on October 5, 2009 unanimously concluded that Serbia was not out of crises yet and that the Government should put more effort in finding the solutions to problems in the Serbian economy.

 

PhD Dragan Đuričin, President of the Serbian Association of Economists remarked that after attenuation of crises in the near future, strong irreversible measures could result in additional weakening of economic activity. In conditions of economic crisis, it is of crucial interest for Serbia to have a stable exchange rate, as it it the best encouragement to companies and investors to make investments in Serbia. We are still undergoing a recession that could easily slip into a depression or even lead to progress, but that would certainly require structural reforms. Serbia is a country that has been in the transition process since year 2000; it has an unfavourable economic structure, since the export accounts only for 20% of GDP, while in Hungary, for example, it amounts to 80%.
Our foreign debt is presently 30 billion EUR, while in October 2000 it was 10.1 billion DEM; our economy continually generates deficit, so we will have to take additional loans and such burdain will be passed on future generations. In that respect, stability of exchange rate is the best guarantee to economic operators; so, the concept of taking loans in order to increase the reserves and consequently increase the stability, yields positive results, because the stable exchange rate encourages the companies and investors to make investments and enter business deals. In order to overcome the crisis, it is necessary to attain higher level of investments, since no one made a fortune by saving, but by investing. It is also a must to increase the level of industrial manufacturing, because the competitiveness of Serbian companies presently ranks  93 on the global level.

 
The Goverment cannot force private sector to make investments, but it can enhance investments in public sector (energy, telecommunications, agriculture, etc.)  that accounts for 45% of GDP. The important area for investing are also infractructural facilities, but by giving the foreign investors concessions, not by taking the loans. "When there is a low level of economic activity, you should not run away from risks, but get closer to them", remarked professor Đuričin.

M.Sc. Milan Janković, President of the Belgrade Chamber of Commerce concluded that the Chamber should continue to tackle topics of interest to companies and address all relevant stakeholders in Serbia with proposals and initiatives. Business operators are very interested to learn what economic measures the Government will propose, as well as the National Bank of Serbia.

Toplica Spasojević, Vice President of the Belgrade Chamber of Commerce remarked that the ending of economic crisis had never been a spontaneous process; our institutions are weak and their capacities underdeveloped, while the level of industrial production today amounts to merely 30% of the level in 1989. Economic operators do not have sufficient financial assets or funds for investments, and there are no attractive loans available to them so that they could revitalise the production, because the banks are treating credit risks rather strictly plus they are not very happy with the high-rate of mandatory reserves imposed by the NBS. In that respect, fighting the inflation should not be the priority, but instead – fight against the recession.