1 / 19

Serbia: National Context and Outstanding Priorities UNDAF Workshop Belgrade, 2-6 June 2008

Serbia: National Context and Outstanding Priorities UNDAF Workshop Belgrade, 2-6 June 2008. Country Context: Political Background. Growing political maturity reflected in peaceful and democratic national and local elections (May 2008).

nairi
Download Presentation

Serbia: National Context and Outstanding Priorities UNDAF Workshop Belgrade, 2-6 June 2008

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Serbia: National Context and Outstanding PrioritiesUNDAF Workshop Belgrade, 2-6 June 2008

  2. Country Context: Political Background • Growing political maturity reflected in peaceful and democratic national and local elections (May 2008). • Yet fluid political situation: uncertainty about formation of governing coalition and evident differences between two blocs, primarily on the issue of EU integration. • Advancing European integration and recent major progress made towards Stabilization and Association Agreement (SAA). • Status of Kosovo still playing prominent and controversial role in Serbia’s political life, possibly impeding the SAA process. • Active role in regional and global initiatives: as of 2007 Serbia is a signatory to Energy Community of SEE Treaty and to CEFTA (Central Europe Free Trade Agreement). Serbia ratified the Kyoto Protocol and is progressing towards joining the WTO.

  3. Country Context: Economic Background • Progress in economic reforms continues, resulting in increased macro-economic stability and better incomes. GDP per capita approached $ 5,400 in 2007. However, two-digit inflation remained in 2007. • Public debt has almost halved as a proportion of GDP and reserves stand at over 30% of GDP. Yet private external liabilities continue to grow quickly. • The economy has grown at average 5.5 % per anum, driven by the private sector. • Current account deficit continues to expand, unsettling the focus of monetary and exchange rate policies. Serbia’s reserve position is yet comfortable due to private sector and FDI inflows (FDI average 6.7 % of GDP in last 5 years) • External debt remains about 60% of GDP in 2007, despite London and Paris Club debt write downs. • Trade deficit remained high in 2007, with exports reaching only 50% of imports.

  4. (Cont.) Country Context: Economic Background • Investment remained at the solid 22-23 percent of GDP in 2007. In fast-growing transition economies such as Slovakia, Croatia, Bulgaria investment share has been ~30% of GDP. • Privatization agenda is still unfinished: large utilities and over 1,000 socially owned enterprises remain to be privatized. • According to LSMSs 2002 and 2007 the percentage of population living in poverty has fallen by 50 percent (from 14.6 in 2002 to 6.6 in 2007). Poverty profile remained the same, with persistently high regional differences. • Fiscal deficit remains, with spending increasing in 2007 as a proportion of GDP. Public expenditures reached 44 % of GDP in 2007. • Governance indicators for Serbia continue to improve, although at the slower pace. Perceptions of ineffective rule of law and weak control of corruption remain. • Unemployment remains a continuing problem, at 21.6 percent of the labor force (Labor Force Survey 2007).

  5. Overview: Serbia’s Outstanding Priorities According to the GoS Memorandum on the 2009 Budget and Economic and Fiscal Policy for the year 2010 –2011, the following themes stand out on the GoS agenda: • EU Integration • Macro-economic stability • Economic growth and future reforms (enterprise, business environment, financial sector reform, transport, energy sectors) • Increasing employment and living standards • Social policy reforms • Balanced regional development • Rule of law and human rights

  6. EU Integration: Priorities • Accelerated integration with EU remains over-arching priority. Future government profile will influence the pace of integration process. • Continuation or halting of the Stabilization and Association Agreement (SAA) will influence all aspects of the Government reform’s program. Key points include: - Harmonization of Serbian legislation and practices with EU standards - Public administration reform - Improving economic framework, trade cooperation and attracting FDI - Reform and advancement of environmental and energy sector

  7. Macro-economic Stability: Priorities • GoS committed itself to accelerate structural reforms in the financial and public sector. Special attention will be paid to increasing external vulnerabilities and growing current account deficit. • GoS fiscal policy will aim to reduce public expenditures as a percentage of GDP and increase revenue base. • Stabilization of inflation will be among key GoS and National bank of Serbia (NBS) priorities. • Financial management and reform of public administration figure prominently at the GoS priority list. Decentralization, professionalization and rationalization of civil service is envisaged to take place in the coming period.

  8. Economic Growth: Priorities • GoS further commits to encouraging private sector led economic growth. Improving business environment and strengthening enterprise and financial sectors should lead towards increased competitiveness. • Strengthening the capacity of judicial system to address business issues remains important. This is a part of the overall GoS judicial reform strategy which should reduce case backlog and delays and should ultimately result in modern judiciary system. • Structural reforms and further privatization of large utility companies (NIS, EPS, JAT, ZS) and more then 1,000 socially owned enterprises is planned to continue.

  9. (Cont.) Economic Growth: Priorities • Completion of restructuring of financial sector is foreseen to take place. Insurance sector reform and strengthening of capital markets would consolidate financial sector reforms. • Transport network (road and rail infrastructure) is in frail state, remaining well bellow EU levels. Significant investment needs are evident. GoS is placing high priority on revitalizing infrastructure, which is also required within the context of the European Commission overall framework for South East Europe. • Progress has been made in upgrading Serbia’s energy sector over the last years. Restructuring of energy sector according to EU guidelines and Energy Community of South East Europe (ECSEE) Treaty will require separation of EPS generation, transmission and distribution assets. Although privatization of EPS is not foreseen by the GoS in the coming period, the structure for new private investment in generation capacity is to be created.

  10. Increasing Employment and Living Standards • Unemployment remains a continuing problem, at 21,6 percent of the labor force (Labor Force Survey 2007). Government employment strategy focuses on the private sector as the major generator of new jobs, and FDIs. • National Employment Strategy for the period 2005-2010 sets out the ambitious target of employment growth of 1.5 percent a year, with the unemployment rate decreasing from the current level to 15.5 % in 2010. Expanding job opportunities is one of the Government’s main economic policy priorities until 2010. • High youth unemployment is related to the challenge to link education and labour demand. Reform of primary, secondary education and alignment with Bologna is half-way through and figures among GoS priorities. • Retraining and increasing knowledge of the labour force (men and especially women) to adjust to structural changes in the economy and industry will remain important.

  11. (Cont.) Increasing Employment and Living Standards • Poverty measures (LSMS) suggest that the proportion of of the population living bellow absolute poverty line (roughly 12.5 USD per day) has fallen from 14.6 in 2002 to 6.6 in 2007. The Government is thus already close to meeting their 2010 target of reducing poverty to 6.5 percent. • Yet, a number of people in Serbia belong to the vulnerable part of society (such as Roma, IDPs, refugees, people with disabilities, elderly). Poverty remains high in rural areas, which are home to two thirds of all poor people in Serbia. Poverty profile and regional differences remained the same as in 2002. • Pension spending makes 75 percent of the total social protection payments. Pensions will for sure be one of the most important priorities of the next government. • Overcoming regional disparities and creating opportunities for people in underdeveloped regions (unemployment in Bor region is for example 40% high) is addressed by the GoS Regional Development Strategy of 2007.

  12. Social policy: Priorities Education • Quality of education in Serbia is below EU standards. Key GoS priorities in the forthcoming period include further Bologna alignment and creation of stronger linkages between education and labor market demands (Strategy for professional education 2006). • GoS also plans to adopt set of legislation for pre-school, primary and secondary education in order to address poor access to education, in particular of Roma, children with disabilities and the poor. • GoS aims to reach 4% of GDP in 2011 for education expenditure and expand the sources of financing by including contributions from self-government, private sector and donations. Health • Continuation of health sector reform is foreseen to take place, based on a number of adopted policies and legislation regulating the sector. Key GoS medium term objectives are further modernization of health system, improved system management and education.

  13. (Cont.) Social policy: Priorities • Client-based approach is the center of health care system reform, according to the Memorandum on Budget 2009. Development of a preventive care system is required. • Out of 7.7 million people in Serbia 1.2 is without health insurance. Access to health is thus among key objectives of the GoS. • Health expenditures in 2007 reached 6 % of GDP, considered to be high to EU standards. Expenditure levels are expected to remain the same in the forthcoming period (2009-2011) Social Welfare • Priority agenda in the social welfare entails further implementation of reforms. MOP covered in 2007 over 50 000 families, while child allowances covered approx. 200.000 families.

  14. (Cont.) Social policy: Priorities • Better targeting of social welfare benefits and/or an increased amounts of MOP could help reduce poverty. • Further GoS priorities include decentralization of services and deinstitutionalization. A relatively significant number of local services has been already created (home care, elderly care, day care centers for children and adults with disabilities, shelters for victims of violence etc) but the gap is evident in smaller and poorer municipalities. Deinstitutionalization with formation of new services, supported by combined national and local financing, will continue. • Social safety nets to reduce the impact on poor households of needed increases in energy tariffs will also be critical. • The reform implementation also includes new role of centers for social work (case management), introduction of social welfare mix, and of licensing and accreditation.

  15. (Cont.) Social policy: Priorities Social dialogue • One of the key EU social acquies include establishment of bipartite and tripartite social dialogue at national and local levels. Government, representative trade unions and association of employers are to be brought together to discuss further restructuring of public utilities and their transition towards competitive market economy. • Wage negotiations, severance packages, vocational training of the staff will be key themes in the forthcoming period. • Serbia just recently signed a Collective agreement and therefore further steps ought to be made in it’s implementation.

  16. Balanced Regional Development • Improving the welfare of rural populations has been recently recognized as important objective. A vast amount of small rural households are prone to poverty due to structural changes and transition (UNDP). Creating new off-farm employment is one of the GoS regional priorities. • Fiscal decentralization and municipal reform is recognized by GoS as crucial to reduce regional disparities and to ensure that EU pre-accession programmes and financing can be utilized fully. • Management of natural resources, including abundant agricultural land, forests and water resources as identified as priority as of 2005 but results are yet to be seen. • Climate change effects will especially impact on rural communities dependant on agriculture. Shifting from disaster response to disaster risk reduction is a serious challenge for GoS

  17. Rule of Law and Human Rights • According to the National Judicial Reform Strategy of 2006 the aim of the reform is establishment of an effective judiciary based on independence, transparency, responsibility and efficiency. This is among key GoS priorities in the period 2009-2011. • Adoption of the 2008 package of laws on the judiciary is of exceptional importance for the judicial reform in particular because of the establishment of new judicial institutions, such as Supreme Court of Cassation, appellate courts, the Constitutional Court, Higher Minor Offences Court. This will provide a significant contribution to increasing efficiency of the High Court Council and the State Prosecutorial Council • In the period 2008-2010 the GoS also plans to establish the Agency for anti-corruption. • Reform of police is yet another GoS priority as it is required in the process of EU integration.

  18. (Cont.) Rule of Law and Human Rights • Serbia is a party to almost all UN human rights treaties, and has signed but not ratified Convention on the Protection of Migrant Workers(CMW), Convention on Rights of Persons with Disabilities (CPD) and Convention for the Protection of All Persons from Enforced Disappearance (CED). • Although recognized as important, national plan or strategy on human rights is still to be addressed by the GoS.

  19. Conclusion: Key Challenges in the Coming Period • Uncertain pace of EU Integration process • Internal political polarization and weak executive and legislative powers • Macro-economic instability • Partial economic and social reforms • Delayed public administration and judiciary reform • Stagnation/deterioration of living standard

More Related