Montenegrin Journal of Economics

Does Serbia Need A New Transition?

Danica Drakulic

2012, vol. 8, no. 3, p. 37-46

Starting from the well-recognizable factuality of the social and economic reality of postsocialistic countries and their historical involution and entropy, the work evaluates development results of the Serbian economy. This development, in its contemporary times, passed through the double discontinuity of intensive process of organizational devastation of the human life from 1991 to 2000 and from 2000 on, with the challenge of the need for the complete country reconstruction. The unused advantages at the end of the 1980-th, economic openness, reformist government, balanced economic structure; human resources with expressed entrepreneurial sensibility were turned to the "lost decade", resulting in the slow and late transition. At that time, the realized GDP was $163 billion less in relation to the potential product, and it was the price of interrupted transition processes started at the end of the 1980-th. Production capacities were settled to less than 40% of operative capabilities relating to 1989. To stop this long-range trend of declining investment activities, even with good management and much luck, a very scientific-technological and development policy and abundant "seed money" were necessary for a complete turnabout in the economy. What are the results of the second decade that was met with great expectations of the true transformation of the society to its developmental transformation, as catharsis of the previous economic collapse? Is it about the "cosmetic changes" or another "lost decade"? Under effects of many endogenous and exogenous influences, we can say that the Serbian economy functioned in the first decade under conditions of absolute isolation, and in the second decade in the circumstances of relative isolation. It caused that the permanent production of economic weaknesses became constant chaining the development trajectory on the periphery of modern trends in a very dynamic environment. As an indicator of unsuccessfulness of reform processes, we can take the fact that GDP fell on 50% in relation to its level in 1989. This fact shows the synthesis of all consequences of accumulated difficulties in the previous decade. It is the same in the indicator of the global international competitiveness of our country, as a synthetic indicator of quality of the overall socio-economic ambient. Paying tribute to some well-done structural changes in the first years of transition, some questions were put if progress could go faster and why some steps were not made to strengthen the institutional frameworks for more powerful support to the impulses of the started transition. At that moment, almost ten years after the huge beginning enthusiasm for creating good society and economy that will provide the people a dignified life, there are more reasons to ask such questions. In the years to come, after politically and economically critical 2003, the absence of needed political to continue economic reforms are often quoted. The work will give the recapitulation of the main weaknesses and negative repercussions of the former transition way. The author's opinion that prospects for good future and exit from the existing development can be based on the complete opposite matrix of the economic, political organizational and cultural transformation through the new way of behavior and differently seen reality. It is not in the function of evidence or critical previous evaluation, as it is sometimes done, but just as the key argumentation about it. In addition, the view of desirable elements for development in this direction will be given.

suggested citation:

Danica Drakulic. "Does Serbia Need A New Transition?." Montenegrin Journal of Economics. vol. 8, no. 3, 2012, p. 37-46

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