ECONOMY-SERBIA: A New Discovery, That It Pays to Work

By Vesna Peric Zimonjic Reprint | | Print |

Vesna Peric Zimonjic

BELGRADE, Jul 15 2003 (IPS) - Many Serbs say that little has improved for them since Slobodan Milosevic fell from power almost three years ago. But some are discovering opportunities not there before.

“For me, it’s the same, or maybe even worse,” says Radovan Pajic (42), a tram driver with the Belgrade City Transportation. His monthly salary of 20,000 dinars (360 dollars) barely covers the food expenses for his family of four. The additional income of his wife, a nurse, covers other needs.

“We thought it would get better after Milosevic, but these new guys haven’t done much to improve things,” he says. He seems to voice the view of many.

Serbia was an impoverished nation when Milosevic fell from power in October 2000. It had suffered a decade of economic isolation due to wars in Croatia and Bosnia. Its industrial and infrastructure systems were destroyed in 11 weeks of North Atlantic Treaty Organisation (NATO) bombing in 1999 aimed at ending Serb repression of Albanians in Kosovo province.

In pre-war times, it was the most developed country in the region.

When the new regime took over in October 2000, it faced a devastated economy and a herd of “white elephants” by way of state-owned banks, factories and industrial facilities that had been idle for years.

And something else. People who had forgotten how to work.

“It has become a syndrome,” says Nebojsa Atanackovic, head of the newly formed Union of Employers. “Many think it’s enough to show up at work and get the salary, however meagre, by the end of the month.”

Like many private entrepreneurs, Atanackovic welcomed the newly adopted Law on Employment that revoked the right to life employment that Serbs had become accustomed to under communist and Milosevic rule. Once employed, people could not lose their jobs.

“Now that people can get sacked if they don’t work, things will look different,” Atanackovic says.

The law says the unemployed cannot be picky about jobs. This clause was added after a Ministry of Labour study showed that a third of the unemployed regularly turned down job offers. They preferred to remain unemployed for health and social care benefits.

But hundreds of thousands have lost their jobs after privatisation process began. In a population of 7.5 million, only 1.2 million are employed, while 1.4 million are pensioners.

The term “transition”, meaning transformation of a state-run economy into a private economy has come to be hated by many.

Only people who could keep jobs in privatised firms have no complaints. In the past 12 months, the state sold 713 of 970 state-owned firms. This brought the government 500 million dollars.

Those who found jobs in small or medium sized private firms that started flourishing after Milosevic fell from power also have no complaints.

“By the year 2008, we’ll have almost 40,000 small and medium-sized private firms,” Serbian Minister for Privatisation Aleksandar Vlahovic told IPS. “That will mean an additional million jobs in private firms after 2000.”

Productivity is three times higher in private than in the state-owned firms, says Branislav Canak, head of the Nezavisnost (Independence) Trade Union. “The salaries are 2.5 times higher,” he says. “In the state-owned firms, people tend to work effectively only three hours, and spare themselves for the additional job later in the day.”

The grey economy remains a survival tool among many. Almost 40 percent of economic activity remains in the grey zone in which income is informal and not declared, according to official estimates.

“It’s a perfect security valve for the regime, as it keeps the lid on potential social unrest,” Canak says.

“We are in the third year of transition, which proved to be the worst in the countries (of former Eastern Europe) that went into this process ten years ago,” Vladana Hamovic from the Belgrade Institute for Marketing Research told IPS. “It’s in the fifth year that real improvement begins to show at the general level. By that time, people will realise that it pays to work.”