Vucic set for landslide in Serbia amid hopes and concerns

By bne IntelliNews March 14, 2014

Andrew MacDowall in Belgrade -

Serbia's popular and energetic deputy prime minister, Aleksandar Vucic, is set to win a landslide in the March 16 election with a mandate for sweeping reform. But actually implementing the tough measures including privatisations, labour-market liberalisation and public sector cuts is likely to prove much harder than rhetoric suggests. What is more, critics warn that Vucic, a former ultra-nationalist who is almost certain to become prime minister, may be tempted to overreach himself if too much power becomes concentrated in his hands.

The latest poll by Belgrade's Centre for Free Elections and Democracy (CESiD), regarded as the most-reliable pollster, put Vucic's Serbian Progressive Party (SNS) on 44%, more than three-times that of the second party, the Socialist SPS of Prime Minister Ivica Dacic, with 13%.

But Bosko Jaksic, an editor at Politika, Serbia's oldest daily newspaper, tells bne that the SNS will struggle to get over 40%, pointing out that polls are unreliable - they greatly overestimated the party's support at the last election. He adds that the SNS is already past its peak support. In the last election in 2012, it took just 24% of the vote, after surveys suggested it would take between 27 and 35%.

The SNS is already the biggest party in parliament, with Vucic as the outgoing government's main power broker, but this was not enough for the deputy PM, who successfully pushed for a snap election.

Vucic and the SNS - and even Dacic, whose position is at stake - claim the election was called to build a stronger mandate for the reforms they say are necessary. These include the sell-off of around 100 state companies; changes to the laws on labour, privatisation and bankruptcy; and public sector cutbacks that could affect 300,000 to 500,000 workers, as Vucic told local media in October.

With such painful measures in store, SNS figures say that the party will seek coalition partners after the election to build a broad-based government, even if the Progressives win an absolute majority in parliament. But the makeup of the government is unlikely to be clear until several weeks after the votes are counted.

"There is no discussion at the moment about coalitions," a spokesman for Vucic tells bne. "The country will face tough reforms and a continued push against corruption and crime. The coalition will include all those who can stand behind that."

The other parties expected to clear the vote threshold to enter parliament were the NDS of Western-leaning former President Boris Tadic (8%); his former party, the DS (7%); the liberal LDP led by youthful and controversial Cedomir Jovanovic (6%); and the conservative and anti-EU DSS of former president and anti-Milosevic campaigner Vojislav Kostunica (5%). Two or three minor ethnic minority parties are also likely to be represented, and turnout is estimated at up to 60%.

Bratislav Grubacic, a political commentator and a member of the Progressive Party's board, tells bne that there are three main candidates for coalition partners, any or all of whom could be brought into the government: the SPS, the NDS and the LDP. All three have been making overtures to Vucic, and all could bring benefits to an SNS-led government, but all also have potential pitfalls.

Partner problems

Many assumed that the election was originally called so the SNS could rid itself of the SPS, which given its ties with state-owned companies and conservative voter base is not a natural ally for reform. But the famously tenacious Dacic, a kingmaker in the two previous governments and head of the powerful interior ministry, will certainly look to dig his heels in and bringing the party in would certainly boost the parliamentary majority.

Tadic has international credentials and enjoys the favour of many in the SNS hierarchy - Jaksic says that party leaders are anxious that his NDS enters parliament in the hope that it will prove a pliable partner. But the former president is tainted by the economic problems of his spell in power and splits in his party.

The LDP brings with it liberal cache to offset the SNS's far-right roots, but its core membership may oppose backing Vucic. Grubacic rules out the DS (presumably because headed by a foe of Vucic's) and the DSS (too anti-European), though in Balkan coalition-making, one should expect the unexpected.

Beyond the nitty-gritty of parliamentary horse trading, other serious questions remain: most importantly whether Vucic really has the stomach for painful economic reform, and whether Serbia risks concentrating too much power in the hands of a man with an authoritarian past.

The outgoing government has the historic pluses of a landmark deal with Kosovo and the start of EU accession negotiations to its name. It has also signed important deals with the United Arab Emirates (UAE), including a $1bn loan (part of a package of up to $3bn, the government hopes) inked in early March, an agreement on arms industry cooperation, and the sale of 49% of the national airline to Abu Dhabi-based Etihad, which has taken management control of the re-branded Air Serbia and already appreciably improved services and connectivity.

But otherwise its economic record is less than stellar, with the deficit set to grow to the largest in Europe this year, and debt above 70% of GDP (the theoretical legal limit is 40%). The government could rightly say this was partly the legacy of its Tadic-led predecessor.

But its commitment to the sort of root-and-branch reform and fiscal consolidation the SNS is promising was seriously called into question by the January resignation of technocratic economy minister, Sasa Radulovic, an economist and Silicone Valley entrepreneur appointed in September.

Radulovic resigned over lack of progress in labour liberalisation and privatisation, and said in a statement that: "the chief obstacle to all reforms was and remains the office of the first deputy prime minister [Vucic]".

A Belgrade civil society figure tells bne that even if Vucic does want reform, powerful vested interests in Serbia, including within his own party, will be difficult to face down. Party activists and backers may seek sinecures and favours. "That's the way it's always been done - and if Vucic wants to use his mandate to change that, he will face serious opposition from within the SNS and all but one or two other parties", the figure says.

Critics say that the government, like its predecessors, seems too willing to attack and marginalise its opponents through the press. Vucic has an uncomfortable history in this area - he was minister of information under strongman Slobodan Milosevic, including during the Kosovo War, when he imposed stringent controls on the media - though few expect a return to this era, particularly now the Serbia is on EU tracks.

But in a statement to bne, Vucic's spokesman strongly rejects the idea that the SNS leader's commitment to reform is only skin-deep. "Regarding reform, the SNS and Vucic have proved in the past year that they are tough enough to have initiated the fight against corruption and to make the necessary decisions in order to open accession talks with the EU," he says. "They also took the necessary decisions last November to raise VAT on high public salary earners and begin a balancing of the state budget. So any opposite claim on that issue is simply ridiculous."

Jaksic feels that Vucic is indeed committed to taking the country by the scruff of the neck, but echoes concerns by some figures that imperial overstretch could be a risk. "He does have something messianic, wants to get job done and is very keen that the job is done, but at the same time I think he faces the problem that he doesn't have enough real professionals around him that he can rely upon, and that's the reason that he is slowly taking care of everything - there's a danger of concentration of power and the cult of the personality. He must be careful."

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