Reform program is difficult, but will help open new jobs

BELGRADE - The reform program agreed with the International Monetary Fund (IMF) is difficult, but it provides a basis for the creation of new jobs and investment, Serbian Finance Minister Dusan Vujovic has said.

The international financial institution signed on Thursday an agreement with the Serbian government on a new three-year precautionary arrangement of around EUR 1 billion, which will take effect from January 1, 2015.

Serbia has pledged to prepare for a difficult surgery, but this is one of the few examples where the Fund really, and not just in words, lays a foundation for economic growth, job creation and attraction of investment, Vujovic said on a Radio Television of Serbia (RTS) talk show late on Thursday.

Vujovic said it was the first time a program looked at structural measures and macroeconomic stabilization measures as equal.

Vujovic said that the IMF would come to Belgrade to conduct its first review of implementation of the new commitments in mid-May. Until then, the government must hold budget deficit within the limits agreed with the Fund, he added.

Asked whether the arrangement involves a certain number of dismissals of employees in the public sector, Vujovic said he would not like to speak about numbers. "The goal is not a number. The goal is to close the deficit."

"The essence is that we have agreed a program whose essence is to achieve a deficit reduction of EUR 1.3-1.4 billion, or 4.25 percent of GDP in three years," he said.

The IMF is not setting out any number of people as a requirement, Vujovic said. What they want to know is what the share of GDP that goes to the administration is and what kind of services it offers in all spheres.

Asked whether...