Keynote address of the Prime Minister on the occasion of election of new government members

Dear Members of Parliament, Parliament Speaker, dear citizens of Serbia, 

Thirteen months ago, this government of the Republic of Serbia was elected. On that occasion we said that we wanted to work for the future of Serbia and the Serbian people, to build together with citizens and their communities and institutions and professional public an integral vision of Serbia’s future, and to make a step towards that future. I said then that this government of the Republic of Serbia would be the government for the future, and not one turned towards the past. Progress is not about mere correction of mistakes from the past, it is about continuous moving towards the future. Therefore, without pressure from opposition, we ourselves made the decision to undergo the most encompassing and most thorough reshuffle of the government ever in the parliamentary history of Serbia. 

We did that because we had no right to be satisfied, and because we did not have the right to forget that only constant changing, making things right, constant improvement – is the only way towards the goal that this country and its people deserve. That goal is more modern, just, efficient, organized, respected, safer and richer Serbia. Basic goal of the government reshuffle are precisely the new tasks we put before the government, in order to accelerate Serbia, to change it, and not to make it a constant hostage of inter-party conflicts and division of power. Therefore, among the eleven new government members, more than half of them are nonpartisan.

I know that today Serbia needs everything, and it needs it now. Serbia had gone through a historical crisis, in which many of our national and state interests were brought into question, faced with the dissolution of the former common state, wars, violent secession of the part of our territory, double standards of the international community, economic impoverishment and loss of any perspective. GDP today equals only 65% of the GDP from 1989. Serbia has no more time to wait. Serbia can no longer allow itself to be a country of failed expectations and missed opportunities, a country that is still fighting battles of lost wars. Ladies and gentlemen, we are a small country for so much injustice and defeats that we celebrate. And we do not need more sacrifice than we have already made. Therefore, Serbia must play now to win. 

Within the past year, under the difficult international circumstances, almost without a single ally in the West, this government managed to make probably the biggest steps forward. We have started to negotiate with Pristina, opening a completely new chapter for members of our people in Kosovo-Metohija. A chapter that shall provide them to be internationally recognized as a political entity, whose voice is heard and respected, but that shall at the same time be protected and given normal life, without fear of anyone’s domination and violent separation from Serbia. 

On the last St. Vitus day, the European Council decided to start talks on accession and membership of the Republic of Serbia to the European Union, without additional conditioning, whereby multi-decade dream had come true. Getting the date to start accession talks is nothing else than only an introduction, first minute and first step of that long journey we set off on. Therefore the way we did it matters. Basic distinction between this government that succeeded, and others that might had or had not wanted it, is precisely in that way. From the very beginning of this government’s appointing, we have been aware that results would not be reached neither by great words nor desires, but exclusively by hard work. This government has been working much harder than any other, in order to make this day happen. More importantly, this government has not lied to anyone, either in Serbia or worldwide, at any moment. We had a goal, and nothing to hide. Eventually, apart from the date, we got something else-we were recognized as reliable partners. We had allies, respect for honesty and efforts, and ultimately for what we had delivered. Serbia is, dear citizens, ladies and gentlemen, recognized today as a country of its word, for which it is trusted. 

For this government, for every citizen of Serbia, the harder and more important part is to come. Europe is at the door, but not in Serbia yet. Negotiations that are ahead are the way to let it in Serbia. We ourselves, our work, commitment and progress are the way to keep it here. Europe’s presence here shall be reflected by how much we are capable of being Europe. In every Serbian village, in every mind in the form of system of values, set of rules, laws and built up institutions. This is government’s next priority. This is a goal we must achieve.

Difficult economic and social situation is one of our hardest and biggest problems. Economic recovery is a national priority, because all other key objectives of this government shall depend on whether we are capable of providing economic survival of the country. Serbia needs to have clear implementation plan for financial and economic policy for the next three years, as well as clear economic development strategy. Economic deterioration of the country must be stopped. Since 2008, until the end of 2012, GDP had been declining at 0.5% average rate annually. Almost entire economy is in condition of pre bankruptcy or bankruptcy, followed by lack of liquidity, unbearably high interest rates, and more than 30% uncollectible loans from the economy. 

During the same period, unemployment rate had gone up from 14% to approximately 24%, and level of salaries and pensions stagnated. It is estimated that the gray economy level reaches up to 30%, comparing to 15% to 20% in the EU countries, which leads to tax evasions at all levels. Budget deficit of the consolidated budget, though lower than before, is still high. Public debt has reached limits of stability and sustainability, approximately €9 billion, what Serbia has indebted since 2008, mostly were not used for the requirements of growth, but for “filling holes” in public finances. Economic activity is mostly founded on public enterprises and public administration, almost 60%, or trade, financial and other services. There is an absence of manufacture, absence of the real sector, so today we are faced again with challenges of reindustrialisation that must provide for optimal restructuring of our economy. 

Of course, some positive movements were made regarding economy. Exports reached the biggest share in GDP so far, of approximately 29%. Inflation was put under control; national currency exchange rate is stabilized. For example, exchange rate today is RSD 114 for €1, and when I gave my keynote address on the occasion of electing the government 13 months ago, exchange rate was between RSD 117 and 118, which is almost unrecorded example in several decades’ history. Increased interest of foreign investors and good business projects have occurred in past months, such as arrangement between Jat Airways and Etihad. 

However, despite all the improvements, general conclusion is that Serbian public finances and economy system are in very difficult and alarming condition. Therefore, it is necessary for changes to occur in this area regarding the manner of managing economic policy, which meant changes in governmental structure during the reshuffle.

The objective is to take Serbian economy and public finances on the path of long-term sustainability by brave but measured moves. What must occur is stabilization of public finances and economic system, creation of sustainable and cost friendly business environment and encouragement of sustainable growth through active development policy, all the time having in mind preservation of social justice. The state must be a guarantee for operation of market system and social justice, and not an instrument of social policy and main market stakeholder. The emphasis must be put on manufacture, innovation, competitiveness, and exports as the basis for sustainable progress, growth of employment and standard of living of all citizens. There must be zero tolerance and high fines for law disobedience and white collar crime, as well as for not paying taxes. The state needs to be a partner and associate for those who observe the law, and to punish rigorously and systematically those who are not doing that.

The new vision of Serbia in this moment must be based on four key presumptions. Firstly, universal minimum of social protection as a sign of society featured by solidarity, i.e., as a safety that no one will be neglected. Secondly, consolidated public finances, based on new taxation policy, i.e., accountable state and accountable citizens. That means that fiscal policy is required, redirecting the emphasis from labor fees to property fees, profit, and to extent necessary, expenditure, with gradual, but accountable decrease of public share in economy and zero tolerance for law disobedience, white-collar crime and corruption through reformed institutions of the system. Thirdly, corporisation of the economy, i.e., treat stated owned property as you would treat your own. Social policy needs to be evicted from public enterprises, because the only goal of the company is profit. Privatisation process of 179 companies under restructure needs to be finished. Accountable and corporate management needs to be introduced into public administration and state controlled enterprises, including particularly those undergoing bankruptcy or restructuring process. Direct foreign investments and professional management need to be encouraged and actively attracted. State interventions in economy should be channeled and focused on capital projects that contribute to GDP growth. Fourthly, there should be reasonable regulatory rules, i.e., that and only that what make sense. All those imply amending the Law on Planning and Construction, amendments of the Law on Bankruptcy and Law on Privatisation, the aggressive guillotine of regulations and e-administration wherever possible. 

In all this, it is very important to establish and open dialog with economy, associations, unions, professional public, scientific circles and representatives of international institutions. Measures that shall be put forwards must be short-term ones, for the next sixth months, mid-term by the end of next year and long-term ones for the period of coming five to ten years. 

It is very important that reform of strengthening capacities of key bodies of Ministry of Finance takes place – the Tax Administration and inspection services, the Treasury, the system of public procurements, the Customs Administration. It is necessary that amendments of set of laws regulating financial system take place, for instance, the Law on Foreign Exchange Operations. There must be transparency at all direct and indirect budget users. It is necessary to start public debate and reform of the system of pension and disability insurance, followed by continuity of accomplished rights. Additionally, it is necessary to carry out reform of public administration and public sector.

This government shall be committed to creating special environment that shall provide for our enterprises similar, if not better, working conditions comparing to those in neighboring countries. First of all, I refer to stable national currency, cost friendly asset price, more efficient administrative procedure, incentives for importers and subventions for agriculture. Likewise, this government shall create conditions for friendly investment climate for foreign investors, guaranteeing them legal security and better conditions for investments than in other similar countries. The role of the state in this period must be how to help people survive the economic crisis in the least painful way. I understand the role of the state as a requirement to help citizens and economy and all others that need help.

Strategy of economic development of Serbia should be based on what Serbia has and what presents our comparative advantage. First of all, those are agriculture and food industry, energy and infrastructure as well as car industry and information technologies. These are fields that should start new investment cycle. 

Dilemma between growth and savings is a false question, because we need both. The only solution is in decrease irrational expenditure, decrease of bureaucracy and elimination of unnecessary costs of the state, and on the other side in increase of investment expenditure in order to encourage growth and increase employment, followed by social accountability regarding protection of the most vulnerable layers of population. 

Ladies and gentlemen, Serbia shall continue its eager fight against crime and corruption. In the period between 1 August 2012, when the new government was formed, and 31 July 2013, 27 KT cases were created for 236 persons, as perpetrators of criminal offences within the scope of jurisdiction of the Prosecutor’s Office for Organised Crime. After completed investigations, indictments were raised against 117 persons, and other investigations are ongoing. Out of these 117 indictments that had been raised in criminal procedures after 1 August 2012, i.e. after this government had been elected, 113 were confirmed. Additional 63 indictments were raised after investigations that had previously been carried out, which makes totally 180 indicted in 18 criminal cases. During this period, first instance verdicts were made against 254 persons, out of which 204 were sentencing verdicts. The firm commitment of the government of the Republic of Serbia is that there is no revival of Serbia without success in fighting crime and corruption. 

Ladies and Gentlemen Members of Parliament, bearing in mind that on our agenda today we have election of the new government members, I would like to underline that we expect big steps forward in other areas as well. In order to have Serbia progressing faster, it is required that all its parts get equal opportunities, and therefore it is important to pay particular attention to decrease of regional differences, aiming more equal regional development. Education, science and culture are the foundation stone of every society, and therefore it is important to keep working on reforms and increase of their share in budget, because they are not the cost, but investment into the future of Serbia. Transport corridors through Serbia are prerequisite for economic development. Sport is the best and most efficient Serbia’s diplomacy. Therefore, new serious challenges are before the government of Serbia. The road ahead of us and routes on it are to be determined by one factor alone-the result we make. That result is the reason why this government exists. Therefore, the results we achieved and the ones we will achieve shall not be an alibi for this government’s work. Quite the opposite, opening of EU accession talks and better international position of Serbia, are the reason to see what we can do even better. This is simply something inevitable, consequence, and a good one, of our changed awareness and preparedness to replace the good result, the moment we achieve it, by new goal. That new goal is a different Serbia- changed engineering that drives the entire system, politics without masks. That new goal are new jobs and starting economy that stopped long time ago, increase of standard and organisation of absolutely all social areas, from economy to culture. Basic goal of government reshuffle are precisely those new goals and tasks that are crucial for the future of Serbia. 

Many politicians and historians used the phrase of historical time and moment, adding often themselves to historical events. But Serbia is really at the turning point today. We need not small, but big steps in order not to become and remain removed inflamed “appendix” of the modern world. Therefore we need to make results, long-term effective policy that might foresee and take the risk and responsibility. This government will be good only if it is successful, and therefore its priorities are not parties’ interests. Therefore starting point of the government reshuffle was the criterion of expertise and not party affiliation. 

Dear Members of Parliament, dear Parliament Speaker, citizens of Serbia, I propose the following candidates to be the new members of the government of the Republic of Serbia:

- Minister of Finance Lazar Krstic,
- Minister of Defence Professor Nebojsa Rodic,
- Minister of Regional Development and Local Self-Government Igor Mirovic,
- Minister of Economy Sasa Radulovic,
- Minister of Transport Aleksandar Antic,
- Minister of Agriculture, Forestry and Water Management Professor Dragan Glamocic,
- Minister of Education, Science and Technological Development Professor Tomislav Jovanovic,
- Minister of Culture and Media Ivan Tasovac,
- Minister of Youth and Sport Vanja Udovicic, and
- Ministers without Portfolio Aleksandar Vulin and Branko Ruzic.

Aleksandar Vulin shall be in charge of Kosovo-Metohija, and Branko Ruzic for European integration.

Ladies and gentlemen, allow me to thank the previous government members for their cooperation and performance of responsible state duties. 

Dear Members of Parliament, difficult period shall still await us. Complicated international situation, fight for just solution of Kosovo issue, stopping economic decline and fight for each new job. No one can promise to resolve all the problems that piled in and over Serbia for decades. But as the Prime Minister, like thirteen moths ago, I and the entire government promise that citizens of Serbia will have more justice, a country that helps them and decisive, accountable, efficient and professional government that shall help them and that shall share the faith of its citizens. They will have the government that shall bring the faith back to Serbia. It is because I and all of us believe in Serbia. Therefore, I call on you, ladies and gentlemen, Members of Parliament, to support the election of new members of the government of Serbia.

Long live Serbia!