WB expert: Public company directors need to be dismissed

BELGRADE - The directors of public companies need to be dismissed and the management should be entrusted to professionals who will make the companies profitable, said the World Bank chief economist for Serbia Lazar Sestovic.

Serbia's public companies continue to generate losses and request aid from the budget, Sestovic told the Radio and Television of Serbia.

The losses amassed by public enterprises in Serbia reached about EUR 600 million, as 510 out of 730 of these companies operate with a loss, said Sestovic, noting that the upcoming dismissal of public company directors announced by the government will be a start to bringing order to the public sector.

The losses of public companies are measured in hundreds of millions of Euros and the debts in billions of Euros, he stressed.

Commenting on the criteria for the appointment of new directors, Sestovic pointed to the 2012 Law on Public Companies which aimed to bring about a more competitive selection of top management.

The debts incurred by public companies account for 15-20 percent of the total public debt, said Sestovic.

"The credit guarantees issued to public companies are part of the public debt and currently stand at approximately EUR 2.5 billion. The public debt is growing rapidly reaching a level of about 65 percent of GDP. Its structure is unfavorable and the repayment terms are not long, which leaves us little room to refinance," he said.

However, there is still room for cost cuts, said the World Bank chief economist for Serbia, adding that this does not refer to salary and pension cuts alone.

Sestovic also noted that World Bank representatives cooperate with the government of Serbia in many areas, working on a number of...