Saturday, March 2, 2024

SERBIA WOULDN’T SURVIVE ANOTHER LOCKDOWN

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The second wave of corona virus epidemic with a repetition of all things we’ve already seen (closure of factories and shops, quarantines and a broad lockdown) would have much more serious repercussions on Serbian economy than the first one. Asked to give their judgment on that issue the experts are almost unanimous: a come-back of the corona virus would bring us mass dismissals and a considerable reduction of wages. The mostly affected would be the small and medium enterprises which already ran out of reserves, used up all possible government assistance and risk to see their supply chains fatally disrupted – all this meaning a further slow-down of production, a reduction of profits and less need for workforce.
Although international financial institutions predict that Serbia could suffer from the current crisis less than the other countries, another lock-down would be a huge risk. Professor at the Belgrade Faculty of Economics, Ljubodrag Savic, emphasizes that “many companies are at the brink of bankruptcy and the government has no more means for assisting them”. “Although some segments of the economy have partly won back their partners and clients, their recovery is rather problematic as they depend much on supply chains and other sectors”.
“In the case of the second wave of the epidemic, many companies would not ask for government assistance, even if the credits were favourable – first, because they would be obliged to repay them and second, because their supply chains are broken and their products cannot be sold. Much, of course, would depend on the length of the second wave, however, many companies and even states could hardly recover from it even if it were not too long”, concludes Savic.
His colleague, Miroslav Zdravkovic, says that everything depends on the range of the government measures. He doubts that we could be completely isolated again and pushed into another lockdown, as a month after the epidemic broke out the world generally understood that the price of such lockouts was exaggerated and the disease not as dangerous as it seemed at the beginning. “At present, the industrial production of Serbia has sunk to the level of 2000, which means that we live in a situation we had 20 years ago”, adds Zdravkovic and concludes that our only hope are the still remaining fragments of the European welfare state and the resilience of German economy “capable of neutralising negative consequences of America’s horrific decline”.

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