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Economic policy in 1999 and goals in the year 2000
December 14, 1999

Mirko Marjanovic
Mirko Marjanovic
Serbian Prime Minister Mirko Marjanovic's statement on the press conference on December 13th 1999

Regarding the evaluation of the economic results in 1999, the following should be stressed:

First, the immense destruction and damage inflicted, apart from human casualties, during the NATO aggression (railway and road infrastructure, electric power system, destruction of the largest and economically most significant companies, large number of civilian facilities, huge environmental damage) and, on the other hand, major decrease of production and total economic activity as the direct and indirect consequence of war and the newest sanctions.

Second, huge and completely obvious turn in the country's economic life in the second part of the year with two major characteristics: fast and efficient reconstruction of the country and, in relation to this, major increase in production and entire economic activity compared to the first six months (over 100 percent increase in production after the NATO aggression).

First phase of the reconstruction of the country, started during the aggression, was finished in record time. The results of the reconstruction are unprecedented. No country has restored its infrastructure, production capacities and rebuilt civilian facilities so fast and with such success. It is a joint work of the whole nation, huge effort and enthusiasm of the constructors and their highly professional level, excellent organization of the Serbian Department for the Reconstruction, Serbian Government major efforts to provide funding from the real sources and the patriotism and solidarity of all citizens, who, as well as during the war, stood behind their government and took part in the process of the reconstruction.

Since the beginning of the reconstruction, 136 building sites (42 road infrastructure facilities, 7 railway infrastructure facilities and 87 high-rise buildings and other facilities) were opened. Thus far, works at 68 building sites, i.e. 373 facilities (24 road infrastructure bridges, 1 road, 4 road infrastructure deviations, 4 railway bridges, 1 railroad, 325 housing units at 23 building sites, 4 heating plants/power stations, 3 educational facilities, 4 medical facilities and 5 other facilities).

Currently, there are 68 operative building sites (13 road infrastructure facilities, 2 railway infrastructure facilities, 53 high-rise facilities).

The end of the first phase represents a material and all other bases for the second phase of the reconstruction that has already started and will be continued in an equally fast and successful manner in the following year.

Serbian Government is putting maximum effort to keep the prices and entire economic and social stability in this, judged by all, most difficult year. Serbia has successfully avoided both recession and inflation in this year of war. It is an enormous success. Thus, the results achieved in the industrial and agricultural production and in other activities, as well as preserved prices' stability, are of major importance.

The stability of prices is most difficult to achieve due to large pressure, particularly by the monopolists and various speculators, to burden the consumers and their already poor purchasing power through constant raising of prices. Serbian Government is using maximum effort to prevent such behaviour and rather successfully. In November, the prices were raised by only 1.3 percent compared to the previous month. The prices were completely stabilized in the last week in November when they, practically, decreased due to Serbian Government enterprising measures. Thus, one should expect that established discipline in the product ional and commercial organizations would continue in December, which will completely stabilize the prices.

It is well known that the government takes special care of the prices of products and services included in the citizens' standard. Bread, milk, sugar and oil prices have to be low in order to be acceptable for workers, pensioners and all whose monthly wages are small. That is why the Serbian Government provides such large funding from the budget and intervenes with supply goods and, through premium, subventions and bonuses, protects the economic interests of the producers of these products and simultaneously provides the well-supplied market.

We are convinced that such policy in current economic and social conditions is the best way to preserve the stability of prices and protect the citizens' standard. We will continue our fight for the stability of prices in the following period with economic measures, interventions involving the supply goods and importation, anti-monopolizing measures and increased struggle against all forms of speculation and economic crimes.

Economic policy goals in the year 2000 are very ambitious, but attainable:

First, carrying out of the second phase of the reconstruction with modern development characteristics, market economy restructuring and a reform approach.

Second, providing economic and social stability as primary goals, but also crucial precondition for achieving other economic policy tasks. Thus, the preservation of the full stability of prices is of major significance.

Third, intensifying of production and export at high, two-digit number, increase rates. Planned public production increase is by 14 percent, industrial by 15 percent and import by 28 percent. Such results would provide significant increase in wages and other personal income.

Forth, decisive resumption of market reforms. A speedy property transformation process, further reforms of the financial sector and, in relation to this, reforms in the public consumption, opening of the country to the world and connecting with all who accept cooperation on equal basis.

On the upcoming sessions of the Republic and Federal Parliament will be adopted necessary fiscal, monetary and other economic policy measures, as well as the reform laws package. These measures should have stabilizing effect on the economic courses and simultaneously stimulate the producers.

Serbian Government has benefited to the stabilization decisions with the restrictive budget and covering of all public costs exclusively from the real sources. The Serbian Government is resolute to decrease the public consumption part in the public production below 50 percent. There has to be enough space in this restrictive framework for financing of basis functions of the country, social goals and economic stimulus.

Federal Government and Yugoslav National Bank gave their full consent regarding all the economic policy measures.

Reforms must be carried out because they are the condition for faster and more efficient development and increase in standard on a real basis. Thus, the reform approach will be present in all areas of economic policy, as well as in all activities of the Serbian Government:

- Second phase of the reconstruction is of a full reformist orientation, because it is deeply related to strategic development decisions, market economy restructuring and emphasizing of better use of comparative advantages of the country.

- Speeding up of the property transformation, where additional opportunities will be sought within the present legal solutions.

- Connecting with the strategic foreign partners regarding the concession for construction of the road and other infrastructures and foreign investments in the companies included in the government special program list.

- Passing of reform laws package in the Republic and Federal Parliament, providing financial discipline in all fields, better operating of the financial market and faster connections with the world.

- Beginning of the implementation of the pension and health system through the combination of compulsory and voluntary insurance.

- Rationalizing of the state administration in order to perform basic state functions more efficiently.

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