New Serb central banker

BELGRADE – Serbia’s new Parliament yesterday voted in Radovan Jelasic as central bank governor, in a first show of strength by the incoming conservative-led government backed by Slobodan Milosevic’s Socialists. The appointment of the 36-year-old Jelasic, formerly the vice governor in charge of bank supervision, was approved by 124 votes to 81 in the 250-seat Parliament. He replaced Kori Udovicki whose appointment last year was tarnished with voting irregularities at the time the Parliament was dominated by reformist rivals. The assembly earlier yesterday removed Udovicki with 126 votes against 108. Udovicki said Parliament had violated the law and the central bank’s independence with the decision to remove her. «I wonder why the Parliament had to fall so low. We all know that this was an act of retribution motivated by petty political interests,» she told a news conference, her voice trembling. Jelasic, a former McKinsey consultant specializing in East European banking reform, has said he would continue policies aimed at economic and monetary stability and that boosting confidence in the dinar currency would be his main task. «I hope the new central bank management will cooperate well with the government and I can only guarantee that the National Bank of Serbia will comply with the law and pursue and maintain price stability,» Jelasic, a member of the liberal G17 Plus party, led by ex-Yugoslav Deputy Premier Miroljub Labus, told reporters after the vote. He said the dinar policy would very much depend on how the government tackled Serbia’s $4.8 billion trade gap in 2003, a key concern for the new central bank management. «The new government must quickly move toward cutting the trade deficit, figure out ways to attract more foreign direct investment and speed up privatization. Only that could keep the dinar stable in the long run,» Jelasic said. In a bid to enhance stability, Jelasic said a formal money market would quickly be set up. He also vowed to speed up privatization of banks and tighten control of their books. His appointment came a week after a central bank official said lower hard currency reserves and less cash in circulation signaled that Serbia was heading for monetary instability.