World Bank supports Government's savings measures

The World Bank supports the decision of the Serbian government to implement savings measures, pension system reforms and state-owned companies restructuring, said the country manager of the World Bank in Serbia, Loup Brefort.

- The World Bank supports this decision of the Government to prepare budget rebalance in line with the changed business environment in Serbia. Income is significantly lower than previously planned and the Government therefore must find the way to save – it has been said in the statement for the Beta agency.

Brefort pointed out that savings is generated not only through cost reduction but also through important reforms, such as state-owned companies restructuring.

- In order to speed up the development of Serbia and to open new opportunities for the unemployed and those ready to invest, the most important thing is to speed up the restructuring process in state-owned companies. Therefore, we strongly support the Serbian government its important efforts – Brefort said.

According to Brefort, new governmental measures within structural reforms should have been initiated years ago and this government showed “courage and responsibility” by taking these steps.

These measures, as he said, will take off the burden from the economy and enable using assets in productive purposes.

Brefor estimated that moderate approach in increase of salaries and pensions is inevitable having in mind chronic deficit in pension fund.

According to his opinion, focus should move to the pension system reform, for example, redefining age for pension and penalties for early retirement.

The World Bank also encourages the Government to improve business environment and creates conditions to increase investments and economic growth rate, it was said in the statements, with praise to the Government for the reform on employment legislation and simplification of construction license obtaining process.

Brefor thinks that huge opportunities to “do more with less” exist when it comes to education and health system costs.

- With respect to that, it is important to notice that the government has already started reforms of public procurement in health – a measure should enable a considerable savings without influencing service quality. The World Bank strongly supports these efforts – Brefor said.

He pointed out that measures and reforms aiming at public finance savings are important not only for maintaining overall economic stability but also for using the country’s potential to enable better living standard for its citizens and to become internationally competitive.