Reindustrialization strategy of Serbia: How to get it and how to use it

Abstract

Serbia's economic crisis is not cyclical, but structural. Our starting point is that reindustrialization is the cornerstone of the anti-crisis program and the road map for coordinated response to the crisis. The article incorporates four sections, along with Introduction and Conclusion. The first part reviews the macroeconomic situation in the mid-2013. The analysis indicates that anti-crisis program is imperative due to large output gap resulting from deindustrialization. The second part of the article analyzes the concept and the main components of anti-crisis program. The third part provides economic policy proposals for reindustrialization. Finally, we identify priority sectors for reindustrialization. For the most part, economics is not an exact science. This particularity allows that everybody thinks they know it, especially politicians. That is why economics often has no further scope than a gizmo science in the hands of politicians. Given that, this article represents an attempt to provide contribution from microeconomic (or business) perspective, while not ignoring macroeconomic one, to exit from profound and overwhelming crisis into which Serbia persistently sinks. As business economics professionals, we share certain shame that a nation which can be proud of Nikola Tesla and Mihajlo Pupin, as well as of many great people from the field of theoretical and applied engineering, has not been able to create level playing field for development of industrial economy. Adequate institutional framework encourages technological development as well as commercial use of innovations in tradable sectors and, consequently, fosters an economic and social development which could make Serbia comparable with other European countries. The future of our future must be brighter than the time we are facing today. It will not be easy because we must simultaneously eliminate the burden from the past and adapt the economy to transformative global discontinuity challenges.