Will Serbia increase wages and pensions?


As the government copes with the recession, many Serbs are losing patience with tight living conditions.

By Bojana Milovanovic for Southeast European Times in Belgrade -- 13/08/10


Pensioners have not seen an increase in their payments for two years. [Nikola Barbutov/SETimes]

The economic crisis and the budget deficit gripping Serbia have kept pensions and public sector wages at the same level for two years. They are due to be unfrozen in 2011, but some ministers say an increase could happen earlier than that.

Meeting with representatives of the IMF, which last year granted the country a multi-billion euro loan to help it through the current downturn, Economy and Regional Development Minister Mladjan Dinkic has proposed a gradual, approximately 4% increase in wages and pensions.

"I am deeply convinced that could take place, without great cost, in the final quarter of this year, or it would have to happen at the beginning of next year at the latest," Dinkic said.

Labour and Social Affairs Minister Rasim Ljajic is more cautious. He says there are no resources available for a hike in wages, and that he opposes taking out loans and adding to the budget deficit for that purpose.

"If there is economic growth, this will provide for it. Then nobody in government can be against it," said Ljajic.

Bloggers by and large are fiercely critical of the freeze.

Logicar Panonski reflects a commonly held view that resources for increasing wages could be set aside if employers regularly paid all the taxes and social contributions for their employees.

"How can we seriously tackle the problem of unpaid contributions? Even foreign companies are now paying half of the wages into accounts and half cash-in-hand," he writes.

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Miki Murga claims that the purchasing power of households in Serbia has fallen drastically. "Before we used to buy whole watermelons, now I see some people buying them in halves. That means until we start buying slices, there's still room for robbery!"

On the B92 media portal, Uca sends a clear message to the current government: "In the last two years my wage has gone down by 100 euros. I am not interested in why! This government -- never again!"

Fellow B92 user Drako is also disappointed and angry. "My wife holds a master's degree in medical science, I have a degree in information science," he writes. "Total earnings in July 2010 -- 805 euros. Earnings in July 2008 -- 1,110 euros."

Drako says he has had enough of the parties in power and "all the rest". After 20 years of political drama, he writes, "Kosovo doesn't interest me at all. Just like national pride, dignity and the other fairy tales for fools ... I simply want to live."

This content was commissioned for SETimes.com.
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