Citizens of Serbia allegedly have something to look forward to these days – the second budget revision has been adopted! The happiest about it are the members of the Government who can use this good news to mark a year of their term of office, conveniently turning a blind eye to the extremely bad epidemiological situation and the rising death rate.
Two days ago, the Minister of Finance, Siniša Mali, announced that state revenues for the first nine months exceeded official expectations, surpassing them by 1.5 billion Euros. The Government plans to use this money to reduce public debt, invest in infrastructure projects and health care which is definitely good news.
“We want to use that money for priority investments, and that is raising the living standard, strengthening the economy and investing in capital projects”, Mali said in the Serbian Parliament.
What the state officials are avoiding to mention is the price of this success. How did the unexpectedly high revenue come about in the middle of a pandemic?
The secret of the success is in the mantra repeated many times over, that “even during the epidemic, the economy mustn’t stop”. Thus, even in the middle of the most severe pandemic wave so far, no measures were declared to shorten working hours, stop any production plants or suspend activities in the service industry – everyone worked and spent regularly and paid taxes for that. The largest part of the abovementioned 1.5 billion Euros came from VAT, which we all pay every day, and another large part from taxes on personal income and corporate profits.
It’s clear that the economy cannot function without people, and the dangers we are facing while servicing it in the midst of an epidemic that claims dozens of lives every day are more than real. It is, therefore, questionable whether the growth of state revenues can be a sufficient satisfaction for anybody.
Some are no longer with us to share this joy with the Government
During the previous months, while we were filling the state budget so efficiently, a number of our fellow citizens lost the battle with COVID-19. In October, Serbia topped the lists that compare states by confirmed cases of COVID-19 per million. Increasing pressure on the health care system has led to a new wave of turning hospitals into “COVID centres” and the around the clock engagement of already overworked medical workers. The media report that people are queuing to be admitted in hospitals, and in many towns there aren’t enough beds and respirators to admit and treat all the sick.
More than 9,700 people have officially died of COVID-19 in Serbia, and the big question is how many people departed prematurely, due to the inability to continue their regular medical treatments for other diseases because the entire health system is mobilized for the fight against COVID-19.
At the end of September experts belonging to the association “United against COVID-19” warned that it was urgent to take certain measures, which they had proposed earlier, in order to curb the epidemic. Experts from the medical part of the official crisis headquarters also proposed stricter measures in order to suppress the epidemic. However, the authorities, who have the power to implement these measures, failed to show understanding. Instead of taking measures to protect public health, politicians in power decided to turn a blind eye to the seriousness of the latest wave of coronavirus and focus on positive messages about the growth of GDP and general economic success of the state.
At the beginning of October, Prime Minister Ana Brnabić stated: “I do not believe in protective measures, I told that to the medical part of the crisis headquarters and we don’t see eye to eye. The responsibility is mine”. Just a few days later, a member of “United Against COVID-19”, professor Dragan Delić correctly noted in the Politika newspaper that “we are not just victims of the pandemic, but also a part of its cause and its accomplices”. We can only add that this statement still refers more to politicians in power, who are obliged to take and implement certain decisions, than to the rest of citizens.
The ones who are still alive struggle to survive
While we were so busy filling the state budget, the latest data on the average salary arrived, according to which it amounted to 550€ in August. The government is proud of this accomplishment. However, a far more realistic indicator of how the majority of Serbian citizens live is the median salary, which in general gets ignored by the state leadership. The median salary for August was 430€, which means that half of the employees earned less. The median salary doesn’t amount to the average consumer basket of goods, and, in addition, about 300,000 people receive minimum wages that don’t even reach the so-called minimal consumer baskets, whose contents supply for far less than a dignified life.
The joy of those whose salaries have nominally increased did not last for long, as they were stumbled by inflation on the way from the bank to the store. Citizens won’t actually feel the nominal rise of wages, given the increase in prices of almost all products. Instead, their purchasing power will remain weak.
Experts point out that the sharp rise in prices in Serbia should be regarded as a problem and that inflation is currently twice as high as predicted by the National Bank. They add that “the state and the National Bank of Serbia are not doing enough to preserve the stability of the general price levels”.
There are two months left until the end of the year. Judging by the news about the crisis and the rise in energy prices everywhere in the world, we can hardly expect that Serbia will remain immune to all these events and that prices will stabilize. The government can celebrate its economic victories for a while, but at some point it will also have to answer the questions about the real price of “progress”.
Translation: Iskra Krstić
This article was ORIGINALLY PUBLISHED in Serbian on Oct 29, 2021.
