2014年-世界发展银行全球_Rebalancing_Serbias_Economy___Improving_Competitiveness_Strengthening_the_Private_Sector_and_Creating_Jobs_47页_2mb

Summary of Serbia Competitiveness Policy Note

Core Content

This policy note outlines the need for Serbia to rebalance its economy by improving competitiveness, strengthening the private sector, and creating jobs. It identifies key challenges and proposes three priority areas for reform, supported by specific measures and estimated timeframes for implementation.

Main Challenges

• Economic Imbalance: Serbia's economy has been heavily reliant on non-tradable sectors and domestic demand, leading to low productivity and limited export performance.
• High Unemployment: Over 20% unemployment persists, with only 47% of the working-age population employed in 2013, significantly lower than EU new member states.
• Weak Private Sector: The private sector contributes only 60% to GDP, below the regional average of 75%, and employs just 23% of the working-age population.
• High Labor Costs and Tax Burden: The tax wedge on low-wage earners is among the highest in the region, and labor market rigidities make it difficult to hire and retain low-skilled workers.
• Slow Structural Reforms: Reforms have largely stagnated since the early 2000s, with Serbia lagging behind regional peers in terms of economic performance and competitiveness.

Key Areas for Reform

1. Improving the Business Environment

• Objective: Reduce administrative burdens and create a predictable regulatory environment.
• Current Status: Serbia ranks 93rd out of 189 economies in the 2014 Doing Business report, below most ECA countries.
• Proposed Measures:
  • Accelerate and complete the Comprehensive Regulatory Reform.
  • Introduce E-Government to simplify administrative procedures.
  • Ensure full functionality of the Central Registry of Compulsory Social Insurance.
  • Clarify and standardize para-fiscal charges and fees.
  • Strengthen the Better Regulation Unit.
  • Reform the inspections system.

2. Simplifying Planning and Construction Permits

• Objective: Facilitate investment and business expansion by streamlining procedures.
• Current Status: Serbia ranks 182nd out of 189 in Dealing with Construction Permits.
• Proposed Measures:
  • Streamline construction permitting with benchmarks and accountability.
  • Complete missing municipal plans and improve their quality.
  • Introduce flexible safeguard measures.
  • Implement one-stop shops for construction permits in municipalities.
  • Streamline procedures for converting use rights to property rights.
  • Prepare rule books and planning manuals.

3. Reducing Labor Market Costs and Rigidities

• Objective: Create formal sector jobs and improve employability.
• Challenges:
  • Low employment rate and high public sector employment.
  • Low use of unskilled labor in production (14.2% vs. 23.8% in ECA).
  • High minimum social security contribution (40% of average wage) deters hiring low-skilled workers.
• Proposed Measures:
  • Reform severance pay regulation to reduce firing costs.
  • Allow more flexible work arrangements.
  • Abolish the minimum social security contribution.
  • Improve incentives for unemployed/inactive to seek employment.
  • Facilitate own-account work and micro-entrepreneurship for older workers.
  • Support school-to-work transition for youth to align skills with future job markets.

Key Insights

• Export Strategy: Serbia needs to shift from a consumption-led model to an export-driven one, particularly to the EU.
• Competitiveness Gaps: Serbia's productivity in manufacturing is only about half of that in EU new member states.
• FDI Inflows: FDI is heavily skewed towards non-tradable sectors, indicating a lack of focus on export-oriented industries.
• Taxation Issues: High tax wedge on low-wage earners hinders employment of low-skilled workers and reduces the viability of part-time jobs.
• Private Sector Potential: Strengthening the private sector is essential for job creation and economic growth, as it is the main source of employment and productivity.

Expected Impacts

• Short Term (6 months - 1 year):
  • Reduced administrative burden.
  • More clarity in para-fiscal charges.
  • Improved functionality of social insurance registry.
• Medium Term (1 - 2 years):
  • Streamlined construction permitting and improved planning.
  • Flexible safeguard measures and one-stop shops.
  • Reforms in labor market to reduce costs and increase flexibility.
• Long Term (2+ years):
  • Enhanced employability of mid-aged and older workers.
  • Better alignment of youth skills with export-oriented jobs.
  • Increased competitiveness and export performance.

Conclusion

To achieve sustainable growth and job creation, Serbia must focus on structural reforms that improve the business environment, streamline construction and investment processes, and reduce labor market rigidities. These reforms will help Serbia transition from a consumption-driven to an export-oriented economy, leveraging its comparative advantages in agriculture, machinery, and ICT.