news 05 Dec 12

Serbian State to Quit Managing Public Firms

Ruling coalition has proposed changes to the law on public companies, obliging the state to withdraw from day-to-day management of public enterprises.

Bojana Barlovac
BIRN
Belgrade

Mladjan Dinkic, Finance Minister, told parliament on Tuesday that amendments to the Public Companies Law envisage the state withdrawing from company management roles.

"The professionalization of management in public companies and tenders to select directors are being introduced and management boards are being abolished," Dinkic noted.

Media organisations criticised the law which said that the state own media. According to the media strategy adopted in September 2011, the state must withdraw from ownership in the media.

Sasa Mirkovic, president of the Association of Independent Electronic Media, ANEM, said that if adopted, the law will jeopardize the independence of media.

"As President of the largest association of broadcasters, I can say that we will withdraw from further talks about this issue," said Mirkovic Beta.

The OSCE Mission to Serbia also reacted asking the government and the parliament to revise the controversial bill, as the provision according to which the state may be founder of a media company "violates the commitments that Serbia accepted."

So far, the state has appointed directors and managing boards of public enterprises. State-owned companies that turn a profit, or which obtain large funds from the budget, have long been considered "prizes" for the ruling parties following elections.

Governments have routinely filled boards with party loyalists or funders as part of a well organised patronage or rewards system.

Serbia's biggest public enterprizes include Telekom Srbija, the power utility EPS, the gas company Srbijagas and the construction company, Putevi Srbije.

Under the changes, the directors of public companies will no longer be party officials. Instead, Dinkic said that tenders to select directors will be conducted by a special body, and the relevant minister, provincial secretary or municipal president will only be able to select managers from at least three candidates.

"Another novelty is transparency in the work of public companies," the minister said, adding that companies will have to publish financial reports and plans on the web on a quarterly basis. All tenders will have to have be published on the companies' websites.

So far, public companies were obliged to publish their financial reports only annually.

Vacancies for the positions of directors in public enterprises are due to begin in March.

Serbia has 1,340 state-owned companies, which employ about 100,000 staffers. In 2010 they had losses of a billion euro, or 3.5 per cent of GDP.

Total subsidies and transfers to these enterprises in 2011 amounted to about 2.3 per cent of GDP.

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