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Economic-social program of the Serbian government
June 20, 1999

Serbian Deputy Premier Dragan Tomic
Serbian Deputy Premier Dragan Tomic
Belgrade, 20th June (Tanjug) - Immediately following the NATO aggression on Yugoslavia, the Serbian government made up an economic-social program for employment and reconstruction of war-ravaged companies.

Serbian Deputy Premier and coordinator for drafting and realizing this program Dragan Tomic said in an interview to Tanjug Director and Editor-in-Chief Dusan Djordjevic that since the very onset of the aggression on Yugoslavia and destruction of economic objects by NATO, the Serbian government, with the participation of department ministries and a team of experts, began and very soon finished this program.

The economic-social program is a priority, extremely important and complex government project. I am certain we will succeed in our intention to achieve several major goals in the social and economic spheres of the country with its realization, Tomic said.

The first and most important task is to secure permanent employment for workers who have been left jobless through the destruction of our economy, he said.

The second task of the program is to resolve or ease short-term social problems of families and workers who have been left without work, naturally, until the moment of their permanent employment.

The third, extremely important task, is that the program must be in the function of the speedy implementation of the begin reforms, in particular in the area of restructuring the economy according to production program and company size, in keeping with the established priorities of economic development, he said.

Fourth, the program must be in the function of the implementation of the privatization process in our economy, in which the state itself is becoming directly involved through this program, for the first time.

The fifth major task of the program is to stress development processes in our economy on the grounds of the most modern technology and scientific achievements, with the participation of domestic, but also foreign capital, which should step up the establishment of an economic structure required by the 21st century, Tomic said.

Speaking about the principles on which the government based its work on the economic-social program, Tomic said:

First, concrete production and service programs are made exclusively on the basis of pure market principles, with full freedom of choice of program by the interested subjects.

Second, funds for the realization of the program are secured strictly from real sources.

Third, the program covers the entire economic space - in other words, the program can support projects from all areas of the economy provided they are in keeping with the program objectives and meet the required criteria for success.

Fourth, the program's openness to participation in realization to all potential investors, even foreign capital, certainly, on the grounds of personal interest.

Fifth, the operatively of the program, which urges concrete - operative tasks in employment, with a pre-defined procedure.

Sixth, the great flexibility of the program regarding possible alternatives for combining the participation of interested subjects in securing work, or new jobs.

Seventh, an approach in stages in the realization of operative tasks of employment - first within destroyed or damaged companies and in the territory where they are located, and then also in other economic capacities in the entire country.

Speaking about possibilities for employing workers which have been made jobless, Tomic said the economic-social program envisaged their employment as follows:

- mostly in reconstructed and renewed capacities,

- the full engagement of capacities in successful companies which have no problems with sales on the home or foreign markets,

- by the activation of capacities which are currently not engaged and have a real market opportunity,

- in capacities of small and medium-sized companies, or through the realization of a previously determined concept of development of small and medium-sized companies in our country,

- by returning to their own farms, or agricultural or village capacities which are being set up within the program of development of agriculture and modernization of villages,

- also in newly-constructed capacities, i.e. through development programs.

Tomic said most of the workers who have been left without jobs should be re-employed in renovated and reconstructed capacities.

Professional teams and groups of experts of destroyed companies have been entrusted with making projects of their companies in keeping with the conditions of the Yugoslav market and possibilities for exports in the coming period, working on the grounds of optimum factors, planned implementation of the most modern technology and available personnel structure.

These teams decided on the optimum number of employees in a company, irrespective of the number of workers who have been left jobless. They also had full freedom of choice of production programs, wherein an effort was made to retain good and profitable existing production programs. At the same time, their task was to work also on making other programs which are believed to be acceptable to the company and have a future on the market.

Therefore, a concrete program is first decided, on the basis of market, technological, and staff factors, as well as the size and possibilities for engagement of financial funds for its realization.

After opting for a concrete program, the complete project documentation should be made, which, among other things, implies a precise calculation of economic categories, such as feasibility and profitability.

Projects which require greater funds than the ones available under the criteria of the economic-social program must define additional sources. It is here possible that a large number of workers join funds obtained through the program for setting up a small or medium-sized company. The united workers could also enter into realization of complete new production programs with one of the existing firms, on the grounds of the approved funds.

Tomic said this part of the work, employment, must proceed on market principles and must not in any way be fictional employment of workers, where they are engaged and receive salaries, but do not in fact work.

Tomic underscored that employment is possible only on a real basis, without compulsion, on market principles. This means that any employment must imply increased production and productivity. Experts arrived at the conclusion that a significant number of workers who have been left jobless can be employed in companies which function relatively successfully and have no problems with sales on the home or foreign markets, but have not fully engaged their capacities for some reason.

Tomic said the program gave such companies a chance to overcome the obstacles to use of full capacities with the help of the state, or to realize new production programs which had not been possible earlier due to a lack of funds. Conditions are thus created also to set up new successful companies which could employ workers from destroyed factories.

Such a chance has been given not only to companies which are located in regions where economic facilities have been destroyed, but also to companies from all over the country, provided they have good programs which they had not been able to realize without the help of the state, and that they locate them in an area near to where the jobless workers are.

Tomic said the opening of a large number of small or medium-sized companies presents a significant source for employment of workers of destroyed factories.

The strategy of speedy development of small and medium-sized companies, whose realization the Serbian government has urged since 1994, presents a big chance for opening hundreds of thousands of new jobs, and also a chance for development which could increase the competitiveness of our overall economy.

This is also a chance for our large successful companies, in addition to the many small ones, to become more equal and competitive on the world market. It is necessary to create preconditions for this, naturally, to determine and implement a stimulative economic policy for the development of small and medium-sized companies, primarily a tax and credit policy, the active participation of a commercial banking system in this process, scientific and other institutions, and also many other preconditions in this area.

Since newly-formed small and medium-sized companies will be primarily or exclusively privately owned through the economic-social program, it is evident that, for the first time, privatization will be carried out with the direct help and support of the state. In this way, the process of begun reforms in our country is directly implemented and stepped up through the economic-social program, said Tomic.

Serbia must rely on several key activities which will have priority, he said. Contemporary food production must doubtless be a priority, he said.

The economic-social program provides a big chance to new employment within the program of developing agriculture and villages.

However, in addition to primary agricultural production, the program opens possibilities for setting up small and medim-sized capacities in which primary agricultural products will be processed into final ones. The objective is therefore to stimulate, through the program, the establishment of a more favorable structure of agri-industrial complexes, and much greater feasibility of production, in particular that part which is sold on the world market, said Tomic.

Moreover, the program opens room for the modernization of our villages by setting up production or service objects which should increase efficiency of agricultural production and raise the level of the living standard in villages.

Tomic said the program also envisages the construction of completely new capacities based on scientific and economically verified programs.

In making these capacities, we are, for the time being, relying exclusively on our own means. At the same time, within the realization of development projects, we expect also a major inflow of foreign capital.

We already have reports that there is interest in investments of foreign capital in the realization of our program, in particular in certain areas, such as the agora-industrial complex, Tomic said.

The program will enable a general developmental policy and the activation of all potentials. Its realization rests on real sources. Although there is no doubt it will be difficult, the program will be realized in full, Serbian Deputy Premier Tomic said.


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