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Serbia to Trim Public Administration Staff |
Serbian officials said Monday (September 14th) that about one-fifth of the 70,000 employed in the country's public administration sector will have to be laid off to cut spending and meet the conditions for further financial support from the IMF.
Prime Minister Mirko Cvetkovic and Finance Minister Diana Dragutinovic said an estimated 14,000 employees are set to lose their jobs under a multi-year reform programme.
Economy and Regional Development Minister Mladjan Dinkic added that ministers who fail to present plans for lay-offs of workers in their sectors will be fined.
"In the first year of implementing regulations on administration rationalisation and modernisation, the number should be downsized by 10,000 employees," Belgrade-based Beta news agency quoted him as telling reporters Monday.
An estimated 31,000 people have lost their jobs since the global downturn hit the Serbian economy, with unemployment currently standing at 18%.
In January, the IMF approved a 394m-euro stand-by arrangement with Serbia to help the country implement a programme aimed at maintaining macroeconomic and financial stability. But, as the impact of the global crisis on the country's economy proved worse than initially expected, in March, the Washington-based institution agreed to increase its financial support to about 2.9 billion euros.
Serbia immediately received 788m euros of the loan money and was expecting to get a second tranche of 700m euros after an IMF assessment of its compliance with conditions of the stand-by arrangement. After nearly ten days of talks, the IMF said on September 1st that the review will not be completed until late next month. Thus, the release of the second installment was postponed.
Once the review is completed and is approved by the IMF board, "the combined second and third tranche will be made available to Serbia," Albert Jaeger, the Fund's mission chief for Serbia, said. "The total amount is on the order of 1.4 billion euros."
During the assessment, the IMF agreed to allow Serbia to raise its 2009 budget deficit to 4.5% of GDP, up from the initially set target of 3%, but insisted that the government take more stringent measures to address problems facing the economy. It has also reportedly told Serbia it must make sure that its 2010 budget deficit does not exceed 3.5% of GDP.
Serbian authorities rejected the Fund's suggestion for tax increases as unacceptable, proposing instead to draft a comprehensive multi-year spending reform strategy, Jaeger said at the end of the assessment.
"So far we had adjustments that were not of an excellent quality," the IMF official told Reuters on September 1st. "What are we looking for is large public sector reform. We are looking to reduce spending and make the public sector more efficient."
Dragutinovic said on Monday that Serbia is planning to curb spending before the IMF review resumes on October 20th, when the government is expected to present its plan for 2010.
Dinkic said the necessary legislation, including amendments to the law on state employees, has already been drafted. The government should adopt the bills within the next few weeks, so that they can be approved by parliament before the resumption of the talks with the IMF, Beta quoted him as noting.
Given the already high rate of unemployment, trade unions are threatening mass strikes if the government carries out its plan to lay off 14,000 public sector staff without consulting them.
AP, BBC, Beta, B92, Serbian Government - 14/09/09; Reuters, Beta, IMF - 01/09/09 |
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16 Eylül 2009, Çarşamba |
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Setimes
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