The European Bank for Reconstruction and Development (EBRD) will keep supporting the process of state-owned enterprise restructuring in Serbia. The first priority in the bank’s new five-year strategy for the country is “foster competitiveness and governance by boosting private companies and reforming state-owned enterprises and public utilities,” reads the EBRD’s statement issued on March 5.

Restructuring of state-owned companies in Serbia is crucial for further recovery and stability of the country’s economy even though it may cause political instability. These companies still employ the largest number of people and are also the most desirable employers because a belief from the communist era that only working in a state-owned firm means having a secure job. This causes also resistance to private capital as private companies are seen by may Serbians as “exploiters” who don’t care for labour and social rights but only for their profit.

“The EBRD will keep its focus on the restructuring of state-owned enterprises and encouraging greater participation of private sector companies in sectors largely dominated by the state. We will also continue working with the authorities to promote improvements in the business environment and improving access to finance to support entrepreneurs and small and medium-sized enterprises,” Dan Berg, EBRD director for Serbia, said on March 5.

The new strategy for Serbia, approved by the EBRD’s board on March 5, follows a year of strong EBRD investment in the country. In 2017 the bank provided over €380mn for more than 20 projects across various sectors of the Serbian economy. Investments included loans for the construction of two large wind farms, the upgrade of a railway maintenance depot, the modernisation of air traffic control, the expansion of a retail centre in Belgrade and new funds to a local lender to boost SME and mortgage lending, the EBRD said.

The 2018-23 EBRD strategy for Serbia also sets out as its priority enhancing integration by improving the transport network, supporting regional economic connectivity and advancing energy interconnections.

The bank also plans to support the green economy through investments in energy efficiency and renewable energy as well as promoting sustainable practices across industries in Serbia in the coming five years.