Fiscal Council: Public Investments in Serbia Among the Largest in the World, Projects Not Transparent | Beta Briefing

Fiscal Council: Public Investments in Serbia Among the Largest in the World, Projects Not Transparent

Source: Beta
SEE Business / Serbia | 17.06.24 | access_time 16:30

Belgrade, panorama (BETAPHOTO/MILOS MISKOV)

Accounting for more than seven percent of Gross Domestic Product (GDP), Serbia’s public investment rate is the largest compared to the same kind of investment in Central and Eastern Europe (CEE), and quite rare elsewhere in the world as well, the Fiscal Council stated in its Public Investment Report.

Citizens, however, have no insight into the economic and social rationale behind large-scale government projects, the project costs are justified poorly or not at all, and the selection of priorities and contractors is unclear and non-transparent.

"In the previous three years, from 2021 to 2023, unusually large budget allocations were allocated to state investments, and a similar economic policy will be pursued in the coming years, too. At this point, about five billion euros are spent on public investments annually, i.e. more than 15 percent of the total public expenditure, which is the third largest budget allocation, right after pensions and salaries in the public sector", the Fiscal Council said in the special report.

The Fiscal Council cautions that the increase in public investments, although necessary, did not involve systematic, institutional improvements to the process of public investment management, nor an increase in transparency.

"Excessive arbitrariness in the selection of projects leads to the realization of investments the justification of which is disputable – a vaccine factory and different sports facilities to name a few - while neglecting many important sectors, including environmental protection and education", the Council reported. 

Disregard for standard procedures, according to the Fiscal Council, is gradually reducing the positive economic effects of public investments on economic growth and social well-being due to poor project selection and excessive involvement of foreign companies.

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