Eurasia Press & News
“There is great interest in the weapons of our defense industry, which is why an additional investment of about 700 million euros will be secured in that sector before the end of the year,” said Aleksandar Vučić, the president of Serbia from the arms fair in Abu Dhabi.
“We will have an allocation of at least 500 million euros beyond the budget, and since we will market drones before the end of the year, it will be 700 million euros,” said Vučić, with the message that we are not worried about the financial situation and that the public debt will not exceed 56 percent of GDP. -a.
In the budget for this year, 83.5 billion dinars (about 710 million euros) have already been planned for capital expenditures in the security sector, 16 billion more than last year.
73.9 billion or about 630 million euros are planned for capital investments in the defense, that is, the army, and 9.6 billion dinars (about 80 million euros) for the police.
An additional 700 million euros, as Vučić was told by the media from Abu Dhabi, would mean a practical doubling of the capital budget intended for the army.
Mihailo Gajić, an economist in Libek, points out that apparently there is no money in the budget for this and that the deficit and public debt will have to increase.
In the assessment of the budget for 2023, the Fiscal Council concluded that capital investments in security will amount to one percent of GDP, “which is almost 70 percent above the average level of these investments in the countries of Central and Eastern Europe.”
“The predicted increase in 2023 is actually just a continuation of favoring the security sector over some other sectors, among which, it seems, communal infrastructure and environmental protection suffer the most.
We remind you that from 2018 to today, including the plan for 2023, over three billion euros have been allocated to investments in the security sector, which is an amount that is more than enough to completely solve the issue of waste treatment of all types in Serbia (municipal, hazardous , electrical, packaging) and build all necessary waste water purifiers”, the Fiscal Council wrote at the time.
Economists agree that investing in the military is a purely political decision without much economic justification.
“There is no rule as to how much should be invested in the army. We have not invested for a long time, since the nineties, and in the 2000s, we had other priorities in society, so we were hit by the world financial crisis in 2008, when public investments were at a very low level.
Only since 2016-17. public investments reach a serious level. For the last three years, about seven percent of GDP has been invested,” notes Gajić, adding that one to two percent of that has been set aside for the army.
That is why real investments that attract private investments such as roads, railways, gas pipelines or those that raise the standard of citizens such as communal infrastructure are much less than total investments.
“Whether it is justified depends on the political moment. If someone is going to occupy us, then it is justified, we have to defend ourselves. But that won’t happen, it’s being done to buy political support in the country and abroad,” Gajić assesses.
On the domestic field, he believes, it is about buying votes, because the dedicated industry is mostly state-owned and a large number of people work there.
“In addition, we have various private companies, traders, we saw the Krušik affair, so it is also about interest groups connected to SNS. Finally, we have news that we will buy planes from France for three billion euros, which buys political support in this country,” explains Gajić.
Economics professor Ljubomir Madžar also believes that it is not necessary to economically analyze the justification of these investments – common sense is enough.
“We are surrounded by NATO members from almost all sides, and according to Article 5 of the statute of this pact, a conflict with one member is a conflict with all members. It is obvious that no money for weapons and equipment has any purpose, because there is no theoretical chance that these weapons will be used. And thank God for that, but that’s why you shouldn’t waste money on hardware.
In addition, and according to the words of the president, we strive for the West and a democratic society”, says Magjar, adding that such a large purchase of weapons is one of the biggest follies of our politics.
Investing in dedicated industry can still jump-start the economy. Gajić points out that this argument is rarely or never used when explaining to the government why it is investing.
The Hungarian believes that our economy needs growth drivers, but also that we have much smarter things to invest in.
“We have other more important things. Investing in environmental protection, waste water processing, garbage disposal sites, which are unorganized and scattered all over Serbia. According to the calculations of the Fiscal Council, more than 10 billion euros are needed for ten years only for the most necessary projects in ecology.
In addition, is it necessary to throw so much money at the iron and steel industry, with so many poor people in Serbia”, asks Madžar, pointing out that we should turn to the domestic economy as a pillar of development, because no matter how much foreign investments are needed, they cannot be the driver of a country’s growth.
