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    Economists: We are doing everything wrong

    Serbia’s economic growth can be encouraged by increasing public investment in infrastructure, rather than by increasing public spending, through salary and pension increase, according to the members of the Scientific Society of Economists of Serbia (NDES).

    President of the Fiscal Council Pavle Petrovic, at the conference „Economic Policy of Serbia in 2019“ held at the Faculty of Economics in Belgrade, pointed out that about 300 million euros of available investment funds could have been allocated from the state budget, without compromising the deficit of 0.5 percent.

    „Public investments, not public spending, have a strong impact on the growth of gross domestic product (GDP), increase in employment and overall economic activity,“ Petrovic says.

    He added that there were insufficient investments, not only in road, railway and utility infrastructure, but also in health care, and that public companies were not investing enough, and that the most drastic example was Elektroprivreda Srbije (EPS), which invested a third less than the amount necessary for depreciation.

    Professor of the Faculty of Economics in Belgrade Milojko Arsic said that investments were crucial and a direct factor of economic growth.

    „Growth is also encouraged by innovation and technological progress resulting from investments, so it is unclear why the prime minister announced the abandonment of an economic policy based on investments and switching to an innovation-driven economy,“ Arsic said.

    Economist Ljubomir Madzar said that to him „Serbia looks like a paradise of lunatics because the situation is presented as better than it is.

    We hear every day that Serbia is a leader in many segments, but in terms of the rate of economic growth it is actually at the bottom compared to the surrounding countries and the last on the list,“ said Madzar.

    „Foreign investments have good and bad sides, and the bad side is that they are contracted by inexperienced people from the government with investors’ experts, which is why contracts often have secret clauses that are insisted on not only by foreigners, but also by local authorities. That is why such contracts are most subject to corruption,“ said Madzar.

    Economist Ivan Nikolic pointed out that the level of investments could not be raised to preferred 25 percent of GDP without investing in residential building construction, and that the rate of investment was not a guarantee for economic growth. „In Serbia, the investment efficiency is low, 17.1 percent lower than in the EU,“ Nikolic said.

    Professor of the Faculty of Philosophy in Belgrade, Ognjen Radonjic said that „Serbian science produces a lot more compared to investments“, but that if the law on science and research was adopted, it would lead to harmful consequences to the development of scientific thought.

    Izvor: N1, Beta

    Foto: Pixabay

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