September 15 (SeeNews) - Serbia's government offered the most generous economic package in the Western Balkan and successfully contained the expansion of poverty caused by the coronavirus pandemic, but labour challenges remain, the European Bank for Reconstruction and Development (EBRD) said on Tuesday.
The coronavirus pandemic hit micro enterprises in Serbia hardest and led to a decline in working hours during the second quarter of 2020 equivalent to the loss of 510,000 full-time jobs, but the government's economic package successfully contained the expansion of poverty, the EBRD said in an e-mailed statement, citing the findings of a joint report with the International Labour Organisation (ILO).
To date, micro enterprises, employing more than 735,000 workers, were hit hardest by the crisis with more than one in four having completely ceased operating, while working hours in Serbia declined by an estimated 14.8% during the second quarter of 2020, due to shorter working hours and furlough schemes.
The Serbian government provided its most generous and powerful financial assistance measure in the form of employment retention subsidies, which for micro, small and medium-sized enterprises amounted to about 65% of total labour costs. "If the health crisis persists and employment retention programmes discontinue, however, people may be pushed into unemployment," the study warns.
"We welcome the Serbian authorities’ commitment to engage in this process and make the best use of the study's findings. For us it is also encouraging to see how our rapid advisory support is already making a difference where it is being deployed," Barbara Rambousek, EBRD Director, Gender and Economic Inclusion, said.
The report identifies sectors in which over 700,000 workers are at immediate risk as the health crisis persists: wholesale trade, retail trade, accommodation, transport, services, forestry and logging, and crop and animal production. Of this workforce, almost 314,000 are self-employed and over 267,000 are informal workers.
"At the regional level, we are receiving a lot of positive feedback about these assessments of the labour market impacts of Covid-19 and how alternative policy options are faring under different scenarios," Markus Pilgrim, Director of the ILO Office for Central and Eastern Europe, noted. "It is essential to provide policy makers and other stakeholders with solid data and quantitative analysis on which they can reason and ultimately devise an exit strategy from their specific circumstances."
In response to the coronavirus pandemic, the ILO Office for Central and Eastern Europe and the EBRD Gender and Economic Inclusion team have established a joint task force to assess the impact of the crisis on the region’s economies by examining the likely short- and medium-term effects on employment and the labour market. The report on Serbia follows already published studies and recommendations for Montenegro and North Macedonia.