Serb firm revamp key to jobs
BELGRADE – Serbia can only battle its 30 percent unemployment rate by completing the sale and restructuring of state firms as soon as possible and helping the private sector create jobs, the World Bank said yesterday. «If the conditions are not set for private sector growth, the unemployment rate will remain unchanged,» senior World Bank economist Gordon Betcherman told reporters at a news conference presenting a report on the job market. «Completing the restructuring is the key to allow private sector growth,» he added. The bank’s report criticizes Serbia’s «Social Program,» created in 2002 to support workers who would lose their jobs in state firms through restructuring or privatization. Both the program and the restructuring drive were among policies implemented after 2000, when pro-Western reformers ousted late autocrat Slobodan Milosevic, who led Serbia to poverty and war in the 1990s. Redundancy payments through the program averaged 130,000 dinars (-1,655) per worker, totaling 20 billion dinars between 2002-05, roughly 0.5 percent of GDP annually, the bank said. «The Social Program is consuming significant resources to support a relatively small proportion of all workers… who need assistance,» the World Bank said in the report. «It should be scaled back and closed as soon as possible, together with the completion of the privatization plan. A protracted restructuring process would have substantial costs.» The restructuring of socialist-era firms has led to «large-scale redundancies that have shocked the labor market,» the bank notes. With over 200,000 employees in enterprises currently under restructuring, more job losses are yet to come. The key for future job growth lies in creating an environment for the private sector to flourish, the bank said. «Job creation in the private sector has been slow, despite fairly strong economic growth,» the report said, adding the business climate needed to improve to encourage domestic and foreign investment and stronger job creation. «Unemployment can only be reduced by the creation of sustainable, high-quality jobs in the private sector,» Betcherman told reporters. The report said more needed to be done to tackle stubbornly high unemployment among women and young people. Serbia’s youth unemployment rate of close to 50 percent compared to around 25 percent in neighboring Bulgaria and 23 percent in Romania. The World Bank report also called for further tax reform to stimulate job creation, as well as education and training reforms to upgrade the quality of the labor force and tackle shortages of high-skilled workers.
