“If another 250,000 leave Serbia – we will face a problem”

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Dragoljub Rajic of the Business Support Network has stated that Serbia’s economic growth will be practically sealed shut if another 250,000 people leave the country in the next five years. “The minimum wage abroad is EUR 1,900. When they cover their living expenses, they are left with around EUR 800 to EUR 900, and from that amount they can save or send money to the family in Serbia. In that case state will not be in a problem, as this money will increase the foreign exchange inflow. However, at a certain point, this will stop the growth of the entire economy and reduce tax revenues, Rajic adds, because if in the next five years another 250,000 people leave the country, and given the current birth rate, the country’s economic growth will be practically sealed shut,” Rajic is of an opinion. The next year might already be record-breaking when it comes to departure of workers outside Serbian borders, as Germany is liberalizing the labour market, and according to European data between 44,000 and 52,000 people leave Serbia every year, while every other person out of that number is already employed. As an example, Germany is missing about 140,000 drivers. Rajic says that low GDP in the country will automatically have a bad impact on wages and pensions. “And the problem will emerge,” Rajic has said. He believes that state should have introduced a progressive system of wage taxation ten years ago. “The problem arises when those with skills and knowledge realize that they cannot receive promotion, thus they want to leave because companies do not have the space to increase their earnings and improve working conditions. All of this would be somewhat equalized by the introduction of a progressive taxation system, and state could thus reduce migration to some extent as well,” Rajic explains. As for the more and more frequent scenario where pensioners work part-time jobs, with payment of full contributions, Rajic says they should be exempted from paying taxes, as Hungarians plan to do.

Source: Politika

Photo: Pixabay