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The Political Economy of Serbia

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Even though the country is a parliamentary republic, there are a few things in the political economy that keep Serbia from really growing or developing for the benefit of the people of the country.  The first is the prevalence of corruptions, especially at the local government level.[i]   The corruption keeps the country from being able to get a lot of foreign investment.  Countries like the UK and the United States have laws against bribery in other countries, so they cannot be sources of investment in Serbia as long as there is so much corruption.

The second main issue is the relationship with Kosova.[ii]  Both of these political economic issues are holding Serbia back by taking them out of consideration from being invited into the European Union.  Until these issues get resolved, Serbia will be tied to other corrupt countries and will not have interest from the more developed world in making investments in the country.

[i] BUSINESS, CORRUPTION AND CRIME IN SERBIA: The impact of bribery and other crime on private enterprise, United Nations Office of Drugs and Crime, https://www.unodc.org/documents/data-and-analysis/statistics/corruption/Serbia_Business_corruption_report_ENG.pdf

[ii] The current relationship with Kosova and how it holds back Serbia is covered in “Relaunching the Kosovo-Serbia Dialogue,” International Crisis Group, Europe Report N°262, 25 January 2021 (https://www.crisisgroup.org/europe-central-asia/balkans/kosovo/262-relaunching-kosovo-serbia-dialogue) and download full report.

The Constitution of Serbia

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There have been many versions of the Constitution in Serbia with the most recent one being made on September 30, 2006. The Constitution can be amended by at least two-thirds of the National Assembly (the name of the parliament in Serbia) after being proposed by at least one-third of the National Assembly, the President of the Republic, or by a petition of at least 150,000 voters.  Some issues also must have a referendum which means that a majority (over 50%) of the people of the country have to vote for it.

The Cabinet of the Republic of Serbia

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The Cabinet of the Republic of Serbia

The cabinet of the Republic of Serbia is made up of 21 ministers presiding over various administrative aspects of segments of the government.  Ministers are from the major political parties including the Serbian Progressive Party (SNS), Socialist Party of Serbia (SPS), Serbian Patriotic Alliance (SPAS), Movement of Socialists (PS), Social Democratic Party of Serbia (SDPS) and the Party of United Pensioners of Serbia (PUPS).  A small number of cabinet ministers are not identified by any political party affiliation.

Minister of Foreign Affairs

Minister of Internal Affairs

Minister of Defense

Minister of Finance

Minister of Economy

Minister of Rural Welfare

Minister of Education, Science and Technological Development

Minister of Construction, Transport and Infrastructure

Minister of Environmental Protection

Minister of European Integration

Minister of Family Welfare and Demography

Minister of Health

Minister of Human and Minority Rights

Minister of Justice

Minister of Labour, Employment, Veteran and Social Policy

Minister of Public Administration and Local Self-Government

Minister of Trade, Tourism and Telecommunications

Minister of Youth and Sports

Minister without portfolio

Minister of Mining and Energy

Minister of Culture and Information

Minister of Agriculture, Forestry and Water Economy

Ministry of the Village Care

Ministry of Family and Demography

Ministry of Human and Minority Rights and Social Dialogue

The Executive Branch of the Republic of Serbia

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The leader of the country is President Aleksander Vuvic who was elected by the National Assembly (Serbia’s parliament, the legislative branch in Serbia) back in 2017. The President is the “chief of state” under Serbia’s constitution. The head of government is the Prime Minister, which is currently Ana Brnabic, who also was elected by the General Assembly in 2017.
The executive branch also includes a cabinet. The cabinet is made up of _____________. The cabinet is also elected by the General Assembly in the Serbian government.
Legislative Branch
There is one legislative body in Serbia called the National Assembly. The National Assembly has 250 Members, each which is elected in a nationwide election. Unlike the United States, there is no regional representation. This means that the National Assembly is controlled by the political party or group of political parties that is (are) the most popular throughout the country. Elections take place by party list. This means that the areas that might have populations that favor a political party or ethnic group are not guaranteed representation on the General Assembly. In Serbia, that means that the National Assembly is dominated primarily by ethnic Serbs. Because the National Assembly elects the President and Prime Minister, there is not much possibility that the leaders of the country will ever be anything but members of the Serb ethnic group.
Judicial Branch
The highest court in Serbia’s judicial branch is the Supreme Court of Cassation. The Supreme Court of Cassation has several panels of judges that are divided into panels. There are a total of over 60 judges on the court that take cases on criminal cases, civil cases like disputes between parties and administrative cases. There is a separate part of the highest courts that just hears issues about the Constitution of the country. There are 15 judges on this Constitutional Court.
Supreme Court judges get elected by the National Assembly after they are proposed by the Judicial High Council. The high council has 11 people on and 7 have to be judges. The Constitutional Court is a little bit different. Members of that court are appointed five each by the National Assembly, the President of the Country and the Supreme Court of Cassation.
This is a lot different than the United States where the President nominates judges to the Supreme Court that have to be approved by the legislature.
There are also courts below the two highest level of courts. There are courts of appeals, a separate administrative court and commercial court, and courts that deal with lower-level crimes like misdemeanors in the United States.
Another special court got created after the Serbian war to deal with war crimes and crimes against humanity.

The Political Economy of Serbia

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Even though the country is a parliamentary republic, there are a few things in the political economy that keep Serbia from really growing or developing for the benefit of the people of the country.  The first is the prevalence of corruptions, especially at the local government level.[i]   The corruption keeps the country from being able to get a lot of foreign investment.  Countries like the UK and the United States have laws against bribery in other countries, so they cannot be sources of investment in Serbia as long as there is so much corruption.

The second main issue is the relationship with Kosova.[ii]  Both of these political economic issues are holding Serbia back by taking them out of consideration from being invited into the European Union.  Until these issues get resolved, Serbia will be tied to other corrupt countries and will not have interest from the more developed world in making investments in the country.

Footnotes

[i] BUSINESS, CORRUPTION AND CRIME IN SERBIA: The impact of bribery and other crime on private enterprise, United Nations Office of Drugs and Crime, https://www.unodc.org/documents/data-and-analysis/statistics/corruption/Serbia_Business_corruption_report_ENG.pdf

[ii] The current relationship with Kosova and how it holds back Serbia is covered in “Relaunching the Kosovo-Serbia Dialogue,” International Crisis Group, Europe Report N°262, 25 January 2021 (https://www.crisisgroup.org/europe-central-asia/balkans/kosovo/262-relaunching-kosovo-serbia-dialogue) and download full report.

The Constitution of the Republic of Serbia

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There have been many versions of the Constitution in Serbia with the most recent one being made on September 30, 2006. The Constitution can be amended by at least two-thirds of the National Assembly (the name of the parliament in Serbia) after being proposed by at least one-third of the National Assembly, the President of the Republic, or by a petition of at least 150,000 voters.  Some issues also must have a referendum which means that a majority (over 50%) of the people of the country have to vote for it.

Branches of Government in Serbia

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Serbia has three branches of government including the executive branch, the judicial branch and legislative branch.

Executive Branch

The leader of the country is President Aleksander Vuvic who was elected by the National Assembly (Serbia’s parliament, the legislative branch in Serbia) back in 2017.  The President is the “chief of state” under Serbia’s constitution.  The head of government is the Prime Minister, which is currently Ana Brnabic, who also was elected by the General Assembly in 2017.

The executive branch also includes a cabinet.  The cabinet is made up of _____________.  The cabinet is also elected by the General Assembly in the Serbian government.

Legislative Branch

There is one legislative body in Serbia called the National Assembly.  The National Assembly has 250 Members, each which is elected in a nationwide election.  Unlike the United States, there is no regional representation.  This means that the National Assembly is controlled by the political party or group of political parties that is (are) the most popular throughout the country.  Elections take place by party list.  This means that the areas that might have populations that favor a political party or ethnic group are not guaranteed representation on the General Assembly.  In Serbia, that means that the National Assembly is dominated primarily by ethnic Serbs.   Because the National Assembly elects the President and Prime Minister, there is not much possibility that the leaders of the country will ever be anything but members of the Serb ethnic group.

Judicial Branch

The highest court in Serbia’s judicial branch is the Supreme Court of Cassation.  The Supreme Court of Cassation has several panels of judges that are divided into panels.  There are a total of over 60 judges on the court that take cases on criminal cases, civil cases like disputes between parties and administrative cases.  There is a separate part of the highest courts that just hears issues about the Constitution of the country.  There are 15 judges on this Constitutional Court.

Supreme Court judges get elected by the National Assembly after they are proposed by the Judicial High Council.  The high council has 11 people on and 7 have to be judges.  The Constitutional Court is a little bit different.  Members of that court are appointed five each by the National Assembly, the President of the Country and the Supreme Court of Cassation.

This is a lot different than the United States where the President nominates judges to the Supreme Court that have to be approved by the legislature.

There are also courts below the two highest level of courts.  There are courts of appeals, a separate administrative court and commercial court, and courts that deal with lower-level crimes like misdemeanors in the United States.

Another special court got created after the Serbian war to deal with war crimes and crimes against humanity.

Serbian Government Basics

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Basics About Serbia’s Government
The general form of government of Serbia is a parliamentary republic. In a parliamentary republic, the leader of the country is elected by the parliament. In Serbia, the President is currently Aleksander Vuvic. He has been the President of Serbia since he was elected by the parliament in 2017. Unlike a democracy, where the people vote for president, in a parliamentary republic the parliament elects the president. As a practical matter, the political party or a coalition of political parties that control the parliament end up selecting the President.
A lot of countries are parliamentary republics, including some of the main countries in Europe like Germany, Poland, Italy, Ireland, and Austria. None of them have exactly the same structure or way that the parliament votes. But they are all similar in the common aspect that the parliament selects the leader of the country, whether the leader is called the president, prime minister, or other name.

Corruption in Serbia

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One cannot talk about the Serbian government, at least how it affects doing business in Serbia, without talking about corruption.  Even though Serbia has laws against corruption, corruption cuts through the government and especially in the lower administrative parts of the government.  This corruption makes it very hard for the country to make economic progress because it limits the desirability of countries that have a lot of capital to make investments.  Countries that are more economically developed like the United Kingdom and the United States have laws that make it a crime for their people to pay bribes to foreign government officials.  They go to jail for it.  What happens is that the government officials can make money because the take bribes to make approvals and things go faster but because the wealthier nations have laws against bribery, the economic development of Serbia can’t really come onto the international stage.  This slows development that could help the people of the country.  It also makes it really risky for people from outside of the country to invest in the country unless, such as countries like Russia and China, they do not have strong laws against corruption.

Compliance Commitment from the Top

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Establishing Commitment From the Top of the Organization

An important and often overlooked aspect of developing a compliance program is the need to obtain commitment from the top of the organization.  Many times in a physician practice this will mean the physician owners of the practice.  It is important that the physician have a clear understanding of the need and benefit of establishing a focused compliance program.

There will inevitably be initial expenditures involved with establishing a compliance system.  In some cases it may even necessitate retaining additional staff.  There will almost certainly be fees to outside attorneys and consultants if the organization is not large enough to hire the needed expertise internally.  It is important that sufficient resources be allocated to compliance and that the physicians and administration understand that in the long term, these expenditures will pay off by reducing the risk of institutional compliance problems.  The difficulty is that if the compliance program works to reduce risks, there will never be a serious event that proves the benefit of the expenditures.  However, if an event occurs in the future and there is no compliance program in place, the regrets will be very deep because compliance issues are much more difficult to solve if there is no compliance plan in place.

As a practical matter, the institutional “buy-in” is often the most difficult hurdle to overcome.  It is somewhat easier now that compliance plans are becoming mandatory.  Yet there is still risks associated with under-funding compliance activities or providing enough resources to do the “bare minimum” when it comes to compliance due to a reluctant attitude on the part of physician leaders who are now being forced to develop compliance programs that they have not fully embraced.

Certain groups may be in a position that they have not been dependent upon institutions who have implemented compliance programs.  Some practices completely reject policies and procedures of any kind that could bind the physicians in their practices.  These organizations present the greatest challenges and unfortunately the greatest potential risk of violations of federal and state laws occurring due to the low level of leadership embracing appropriate compliance activities.  Even as these groups are forced to adopt compliance programs, they present the greatest residual risk because of a low level of physician commitment.

We suggest that physician practices begin the process of implementing formal compliance programs immediately to provide more time to gain physician commitment and appropriately assess the risks associated with the specific practice.  It takes a great deal of time to develop a system for establishing compliance programs, perform a “gap analysis” or other baseline analysis, perform employee interviews and take other steps to identify specific risk areas.  Developing a compliance program is much more than simply adopting a form compliance program.  Even though the precise effective date that compliance programs will become mandatory for physician practices has not yet been set, providers should consider this time a gift to permit them to develop appropriate policies rather than a reprieve.