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The Government of the Republic of Serbia

In the service of citizens

Continuation of rapid privatisation a pillar of 2005 economic policy

Belgrade, 17 December 2004

Serbian Minister of Economy Predrag Bubalo said that the pillars of the government's economic policy for 2005 include the continuation of speedy privatisation, restructuring of economy with an emphasis on public companies, restrictive monetary policy, as well as further creation of legal and institutional framework for new investment and economic strengthening.

Predrag Bubalo

Bubalo said in a statement to the latest edition of the E-magazine that these are necessary steps for building an economic structure that should enable sustainable growth in the long run, and that can be achieved by strict implementation of economic reforms. That will be assisted by the Company Law, which introduces many benefits for easier and quicker foundation of companies, the Law on Registration of Economic Entities and the Law on Agency for Economic Registers, which shorten the deadline, simplify the procedure and reduce costs for registration of companies. He said that the Law on Bankruptcy Procedure and the Law on Agency for Licensing Trustees in Bankruptcy will help achieve long-term sustainable growth. These laws will promote rights of domestic and foreign creditors and will establish a clear, stable, secure and time restricted bankruptcy procedure, which will encourage the creditors to invest in domestic economy. According to Bubalo, when capital inflow and other positive effects are taken into account, it is obvious that privatisation in Serbia has been successful. He said that transition from state to private ownership was a strong impetus for economic growth. He specified that by the end of 2004, another 14 firms will be offered for sale through tender procedure and 140 firms through auction, as well as 60 packages from the Share Fund portfolio. In order to complete privatisation, the government expects that the amendments to the Law on Privatisation will be adopted by the end of the year, which will help remove defects of the original law discovered during the practice thus making the procedure even more efficient. However, the existing model of privatisation will not be altered, the Minister of Economy stressed. Bubalo said that the government is preparing a plan for restructuring of public companies and that implementation should start as of January 2005. He explained that each ministry will prepare a project of restructuring public companies from its field of jurisdiction. A division of primary and secondary fields of activity of each public company will be made first. Primary fields of activity will not be offered for sale in the near future, while privatisation of secondary fields of activity can be expected to begin in the middle of 2005. The Minister concluded that public companies, with almost 135,000 employees, are a huge ballast, because they have great debts and the cost of their work is still very large. For that reason, this problem requires a quick solution.