Public enterprises owe EUR 11 billion

Public enterprises owe EUR 11 billion

KOPAONIK -- Some 740 public enterprises in Serbia owe around EUR 11 billion in total, "which underlines the urgent need to reform them," a Kopaonik Forum panel has heard.

Advisor with the Belgrade Institute of Economics Svetlana Kisic said they account for 17 percent of the total debts incurred by the Serbian economy.

Kisic said on Wednesday at a panel on Serbia's reform of public administration and public sector that, for an example, public enterprises made a total loss of RSD 51 billion in 2013.

Public enterprises constitute a major share of the Serbian economy, Kisic said, specifying that 17 big public enterprises engage over 19 percent of the assets of the Serbian economy and hire around 10 percent of the total number of employees.

She said that public enterprises are a generator of illiquidity and noted that, for an example, Serbian Railways cannot cover a third of its expenses with the revenue, and that the public transportation company GSP Beograd cannot pay employees' salaries from its revenue.

Kisic said that almost all public enterprises are burdened with incompetent management, high expenses, and inefficient work of a large number of workers.

She underlined that public enterprises need to be reformed as soon as possible, budgetary constraints made stricter, business transparency greater, "particracy" banished, and efficiency of their work stepped up through corporatization.

Restructuring enterprises owe to public enterprises around EUR 670 million, she said.

To illustrate, one working hour is paid four times more in public enterprises in Serbia - RSD 809, than in the private sector - RSD 226, Kisic said.

She said that the...