Financial Times; Mar 18, 2003
By Bozidar Djelic
Sir, With war looming in Iraq, the murder in Belgrade on March 12 of the Serbian prime minister Zoran Djindjic may be seen as a tragic but annoying distraction. Yet the stakes are high and many of our friends wonder whether Serbia and the Balkans are about to blow up again. What should Serbian authorities and the international community do to prevent it?
The tragic death of the Serbian reformer could be a blow for our ambitious economic agenda. This year's growth target of 5 per cent and expected €1bn in foreign direct investments will be more difficult to achieve. Therefore we shall need to revise our macro and fiscal framework within the three-year extended arrangement with the International Monetary Fund. Early estimates of the additional gap are about €400m. In particular we shall need additional resources to allow our law and order forces to fight with total determination against terrorist and organised crime groups and to maintain stability in the south of Serbia. Ridding our country of terrorist and criminal groups is of global importance.
If the prospects are somewhat dimmer, they certainly should not spell the end of a strong economic programme that we have implemented over the past two years. It included closing 24 insolvent banks, bringing an entirely new labour code and attracting blue-chip foreign investors. This earned us plaudits from the World Bank, the IMF, the Organisation for Economic Co-operation and Development and international banks and investors. We can overcome short-run difficulties with total determination on our part and a renewed commitment by the international community.
Serbia, as announced by Mr Zoran Zivkovic, the prime minister-designate, will pursue the same political and economic reforms that made us a reliable partner for our neighbours and for the international community. This includes working with The Hague tribunal and contributing to regional security and political stability. The war against terrorist groups and organised crime will now be even more our priority.
The state of emergency, solely aimed at criminal groups, should be lifted in a matter of weeks. We shall harmonise our economic relations with Montenegro and create viable institutions at the level of the state of Serbia and Montenegro so as to continue the stabilisation and association process with the European Union. On the economic front, we shall keep on rationalising public finances, continue privatising and redouble our efforts to pursue structural reforms, which have earned us such high marks over the past two years.
What part should the international community play in keeping Serbia's democratisation and economic reform process on track? First, the EU and the US and other nations should stabilise Serbian public finances this year with an additional €250m in financial support, both grants and soft loans. The IMF and the EU should increase their balance of payments support by €150m. The EU should grant Serbia further quotas for exports of textile and sugar and repeal unjust anti-dumping measures in steel.
A donors' conference, long promised to Serbia and often delayed, should be held in June in Brussels, as the focal point of this effort. There is no need to lose Serbia. Success is within reach. We owe it to our fallen hero.
Bozidar Djelic,
Finance and Economy Minister of Serbia
