Serbia 2016

Serbia held second consecutive snap parliamentary elections in April 2016, together with regular, time wisely, regional and local elections. Serbian Progressive Party (SNS), which called the elections in order to strenghten its position rather than to increase government efficiency, confirmed its current dominance by taking 131 seats in the parliament by their electoral fusion ticket. Although Serbia witnessed improving freedom and fairness of elections since the fall of the Milošević regime, these elections abound with irregularities. Serbia`s score will expectedly deteriorate in the 2017 Freedom Barometer publication. Abuse of authority and state resources for campaign activities, bribes and voter intimidation were an integral part of the electoral process, but the biggest problem

There are no unconstitutional veto players in Serbia, and therefore decision making process is completely in the hands of the authorities. Executive branch dominates over judiciary and legislation in practice, thus undermines democratic procedures and system of checks and balances. Consequently, abuse of power and corruption among high ranking officials is common. Most actors are not held accountable for their actions. A case which brought the largest media attention was unlawful destruction of several private objects in the neighborhood called Savamala, where the Belgrade Waterfront project should continue to spread. While a lot of evidence emerged on the inadequate and suspicious reactions by relevant institutions, nobody was prosecuted or suspended up to date. Several scandals during

Serbia is among countries in which freedom of the press had the biggest decline in 2015, according to the Freedom House’s Freedom of the Press report. This is mainly due to intensification of political pressure on editors and journalists, and crackdown on investigative journalism. Following an article on the corruption in procurement, series of verbal attacks from the government, including by Prime Minister Aleksandar Vučić, and by the state-controlled media, was launched against the three major investigative journalism outlets, accusing them of being funded by the West in order to take down the government and destabilize the country. Many journalists have been fired and many political and investigative broadcast programs were canceled, mainly due to their critical note in reporting

The situation in judiciary is not improving. It remains the most important stumbling block for the rule of law, while the lack of the latter is the most important obstacle to freedom in Serbia. Courts are slow, inefficient, unpredictable and often under pressure or corrupted. Thereby, political pressure on courts (rather not to do than to do something) is merely a tip of an iceberg. Outside influence on police and prosecutors is even stronger. Their willingness to react and their efficiency highly depend on the hints which they get from the executive branch of power. The most drastic among such cases is the Savamala incident as of 25 April 2016. The (still unnamed) perpetrators of the illegal night-time vigilante demolition of the (allegedly illegally built) buildings in this neighborhood

Current popularity of the PM Aleksandar Vučić still owes much to the hopes for a corruption-free country, which he awoke in 2012. But since then, Serbia has de facto stagnated in its fight against corruption. Compared to the-then score in the Corruption Perception Index (39), it roughly stayed where it had been – e.g. in 2015, CPI score was 40 and the ranking 71 of 168. Government goals meanwhile became more realistic, acknowledging that the anti-corruption struggle will be long, expectedly resulting in putting corruption under control and seriously limiting it. Some of the meanwhile adopted laws, such as on the maximum deadlines for issuing construction permits, or on the protection of the whistleblowers, have started producing results – for instance, there was a landmark case of a

In their report Nations in Transit 2016, Freedom House noted that Serbia`s democracy continued along its “modestly negative trajectory observed in 2014”. Meanwhile, the state of human rights varied from one aspect to the other. Domestic violence is still an important challenge to personal safety, in spite of the government and NGO activities to curb it, or of increased societal stigma against beating women or children. Secular principles are often breached, primarily to the advantage of the biggest church SPC, or occasionally of other “traditional” religious communities. Two separated Islamic communities are still on the road to reunion, following their government-sponsored split as of 2007. Bosniak and Hungarian ethnic minorities have obtained a strong leverage for the promotion

Private property is not adequately protected in Serbia. There are strong out-of-the-court influences on the judiciary, including also on the Prosecutor Office, which lie at the core of the problem. A good depiction of this was the recent Savamala affair. Corruptive practices are widespread within public institutions, including the judiciary and Land Register. Due to slow, and expensive legal processes which sometimes have uncertain outcome, legal enforcement of contracts is a painful process. First level courts are lacking sufficient knowledge and expertise to assess more complicated issues, so many cases are automatically transferred to appellation courts. There have been improvements in the process of restructuring of state-owned enterprises (SOE). They are no more legally exempted from

Size of government in Serbia is excessive, with the government consumption reaching 44.7% of GDP in 2015. Accumulated high public deficits have led to a strong increase of public debt, which peaked at 77.4% of GDP in 2015. Bad shape of public finances has increasingly required a fiscal austerity program, which finally was, albeit partially, introduced. It curbed very high public deficit to a more modest level of 3.7% of GDP in 2015, and it is expected to decrease further. However, those measures should not be abolished, because the level of debt remains very high. The unsustainable pension system and bloated public wage bill remain at the core of public finance problems. Furthermore, direct or indirect subsidies to inefficient state-owned enterprises (SOE) are still very high. The process

Although several reform agendas have been fully or partially introduced, Serbia still does not pose a very much business-friendly environment. Starting a business is an efficient process, being fast, inexpensive and without paid in minimum capital requirements. However, there are many other areas where bureaucracy procedures are burdensome. Registering property is a lengthy procedure due to inefficient land registry, which still does not cover all land titles. Obtaining a construction permit is another clear example, although the new Law on Construction has significantly streamlined the process while the land development tax was abolished and incorporated into the property tax. Getting connection to the electricity grid imposes very high costs, due to inefficient public-owned

International trade is generally free in Serbia, but there are weak points that need improvements. The inefficient customs agency burdens trade with its complicated procedures. Foreign currency regulations for companies are restrictive, leading to malfunctioning of Internet payment services such as Pay Pal. However, the introduction of the New Computerized Transit System (NCTS) in February 2016 is envisaged to eliminate hurdles and make transit of goods more expeditious. Serbia is, alongside Bosnia and Herzegovina, rare among European countries for not being a member of the World Trade Organization (WTO). Majority of the trade is conducted under the current Stabilization and Association Agreement (SAA) with the EU and Central Europe Free Trade Agreement (CEFTA), as well as bilateral