Arsic: Public enterprises biggest risk to reforms

BELGRADE - Serbia has met all its commitments from an agreement with the International Monetary Fund (IMF), but public enterprises - above all, the power company EPS - pose the highest risk to reforms, says Milojko Arsic, editor of the economic publication Kvartalni monitor.

The first topic of discussions with an IMF delegation will be a reform of public enterprises, adds Arsic, a professor at the University of Belgrade Faculty of Economics.

"The biggest risks are in the public enterprise sector, where there are interest groups whom reforms do not suit. They include businesspeople with ties to the government who are syphoning out funds, there are many people who are employed based on their party affiliation, and unions at public enterprises are powerful and can thwart various changes," Arsic explained.

Carrying out reforms at public enterprises will not be easy to do, especially at EPS, where the situation is the most complicated due to resistance from interest groups, he said.

"I think the reforms will be carried out if the entire state backs the effort - not just the Ministry of Economy and the Ministry of Finance, but security services and all those who are prepared to crush any resistance from interest groups prone to threats and violence," Arsic said.