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Economic Structure and Elites in
Serbia’s Transition
Economic Elites in Transformation Countries
International Workshop, Friedrich Ebert Stiftung
September 13, 2013 Belgrade
Kori Udovički
Director of Center for Advanced Economic
Studies
My thesis:
 Socio-economic displacement and decay of 90’s too
deep for self-healing
 Looking forward: more self-organization (better
government), but also foreign capital
A lag in transition recovery for Former Yugoslavs
Graph1. Transition Countries:GDP/cap 2011. vs 1989.
10
Log of GDP per Capita (2011)
SLO
SLK
POLEST
LAT
LTH
9
KAZ
CZE
HUN CRO
RUS
BLR
8
AZE
TKM
ARM
BUL
MCD
ALB
GEO
ROM
BIH
MTN
SER
UKR
7
MOL
KYR
UZB
TJK
6
6
7
8
Log of Initial GDP per Capita (1989)
(1) Slovenia is the exception
9
10
Length and depth of decline matter
Table 1. GDP Per Capita, Indices
Country
1989
2000
2007
2011
Central Europe
Poland
100
127
168
193
Czech
100
104
143
144
Slovakia
100
105
160
171
Hungary
100
102
136
133
Albania
100
110
158
185
BiH
100
66
89
95
Bulgaria
100
85
132
138
Croatia
100
76
106
102
Macedonia
100
82
97
105
Montenegro
100
63
88
92
Romania
100
87
135
136
Serbia
100
56
80
83
Slovenia
100
102
136
133
Georgia
100
47
89
100
Russia
100
74
121
127
SEE
CIS
Serbia’s economy in 2000
In shambles:
 2000 GDP cca 50% of 1989 GDP (only Moldova and Tajikistan
less)
 Massive overemployment
 Obsolete technology (average 18 years old)
A turnaround required:
 Managerial knowhow
 Technical knowhow (upgrade ahead of East Asia!)
 Capital
The elite at hand…
 Socialist managers (less than 500 insider-privatized )
 Enlightened (10 years of bad practice)
 Self-interested
 New capitalists--domestic








Creative entrepreneurs
Opportunity riders
Criminal
Mostly crony make it big (import lobby)
New capitalists –Russia (Cyprus?) (diaspora?)
Government bureaucrats
Academia and consultants
Insiders v. opposition
…deployed to effect the transformation
Table 3a. Privatization process in Serbia
199120021
200220052004
2003
2007
Status
20082011 2012 Total
2010
Number of Companies
Privatized
950
848
236
885
385
18
9
...
Terminated Contracts
...
225
75
232
121
0
0
...
Restructuring
70
...
60
...
...
...
182
In bankruptcy
...
...
300
...
...
...
1081
1 - according to Privatization Law from ’91 and ’97
Table 3b. Private Sector 2012
Size
Total
Micro
Small
Medium
Large
Undefined Size
Number of
companies
101.797
78.815
7.061
2.327
655
12.939
…together with foreign capital
• AmCham membership producers of exportables 15%
- Carlsberg Srbija
- Apatinska pivara
- Fresenius medical care Srbija
- Hemofarm
- Philip Morris
- Eaton Electric
- British American Tobacco Vranje - Ball PakovanjaEvropa
- Algotech
- Coca-Cola Hellenic Bottling
- Bozic I sinovi
Company Serbia
- Rio Sava exploration
- Knjaz Milos
- Best seed producer
- Delta Holding
- MK group
- Masinoprojekt Kopring
- Victoria group
- Urbis Design
- Nestle Adriatic Foods
- Asseco See
- ComTrade
You export what you make
Table 2. Export, Growth rate and Competitiveness of Serbia
Export (millions of USD)
% of total export
2003
(USS
entered)
2008
(Fiat
entered)
2009
Iron and steel
175
1448
648
370
Non-ferrous metals
117
710
442
Cereals and cereal preparations
76
361
Electrical machinery, apparatus and appliances
60
Food (Cereals and Dairy Products excluded)
Name
2012
Avg
(USS
2001&2002
exited)
Average growth
rate
Competitive
ness
2012
20012008
20092012
6%
3%
48%
-17%
0
673
5%
6%
31%
15%
0
477
838
4%
7%
42%
21%
1
417
410
831
3%
7%
35%
27%
1
350
941
994
1.195
11%
11%
26%
6%
1
Road vehicles (including air-cushion vehicles)
42
250
173
605
2%
5%
33%
52%
1
Fast growing stable1
106
720
531
1.055
4%
9%
44%
26%
1
Fast growing slowed after 20092
59
496
491
553
2%
5%
50%
4%
1
10,974
8,344
11,353
100%
100%
30%
11%
1
2,477
Total exports
1 - Metalliferous ores and metal scrap (0), Animal and
vegetable oils (1), fats and waxes (1), Plastics in nonprimary forms (1), Feeding stuff for animals (1), Dairy
products and birds’ eggs (1), Fertilizers (1), Oil-seeds and
oleaginous fruits (1)
2 - Beverages and tobacco (1), Essential oils and resinoids
and perfume materials (1), Office machines (1), Dyeing (1),
tanning and colouring materials (1)
What next?
 Strategic attraction of foreign investors.
 Ensuring domestic leverage of their presence
 Support to growth of domestic companies – by
enlightened government? Use Belgrade (services) as
locomotive?
 Much better targeted education!
Thank you for your attention
[email protected]