The Impact of Covid19 in Serbia: A new report and call for action from the United Nations

Belgrade, 28 September 2020 – A new assessment from the UN in Serbia shows that the Government of Serbia had a good and timely response to the first impact of COVID-19. Moving forward through this unprecedented crisis, the country will need to continue and strengthen its health systems, to fast-track reforms in social protection and local governance, and shape the support to small and medium enterprises for greater agility and resilience. The country should use the COVID crisis as an opportunity to build forward better, accelerate the transition to a green economy, and continuously build the trust between institutions and citizens based on shared accountability and responsibility.

Globally, the United Nations has spearheaded a concerted effort to support countries, Serbia included, in shaping the short- and long-term response to Covid19.  The Socio-Economic Impact Assessment is the result of a broad, collaborative effort involving UN agencies and programs, the Government of Serbia, and representatives of both businesses and civil society.  The analysis focuses on health, social protection, jobs and SMEs, macro-economy and multilateral cooperation, governance and community resilience, environment and climate chance. It will be used by the UN system and beyond to identify and propose short and long-term recovery solutions, with an objective to reduce inequalities, increase the well-being of people, and secure a healthy future for the environment.

”We are at a moment where our collective and individual futures are in our hands, with a once in a lifetime opportunity to build forward better. As we restore health systems, we should also accelerate our efforts towards a sustainable future, and the realisation of Agenda 2030” says Francoise Jacob, UN Resident Coordinator in Serbia.

“The SEIA report findings indicate that going forward we need to use the digital solutions more in order to strengthen the social capital and to scale-up the examples of good practice that emerged from this crisis, such as community and volunteer support, as well as to build resilience of the health system and the economy, for example through e-health and e-commerce. The comprehensive use of innovative digital tools can also help in building the transparency of decision-making and citizens trust in governing bodies. Providing more support to green businesses is of key importance for health, environment and for ensuring the competitiveness of Serbian companies in the EU and other markets”, says Francine Pickup, Resident Representative of UNDP, that had the technical lead in preparing this report.

The report shows that the Government of Serbia (GoS) had a timely and efficient response to the first peak of Covid-19, while addressing the health emergency, and the immediate economic impact. Backed by a rapid fiscal stimulus package, the economy has shown short-term resilience in being able to rebound from the initial shock. Serbia did not have such a deep decline in GDP, employment and wages as other similar countries in Europe. While it is likely that the GDP will decline between 3% to 5.3%in 2020, it is expected to rebound in 2021. The drop in GDP will generate an increase in the budget deficit and in the debt to GDP ratio. These trends will reduce the Government’s funding available to address structural problems and especially the poverty ratio, levels of inequality, availability of social services. Both economic and social indicators need to be closely monitored over the time of the pandemic and beyond to prevent a new downturn.

The report shows that certain segments of the population were more affected than others, such as workers in the informal sector, women in the small holder agriculture, elderlies. 85% of dismissed workers in the 1st quarter were informal workers, and many did not benefit from any regular or covid19 specific social protection measures. Roma citizens in informal and formal settlements suffered from lack of access to water and power, a severe obstacle to maintaining the recommended hygiene behaviour. Poorer households also had difficulties to ensure the participation of their children to online schooling.  Medium-sized companies proved to be most resilient and adapted fastest to the new situation, while the conditions to access stimulus packages were too strict for many smaller enterprises. Future fiscal support should be both accessible to more companies but also provide incentives to encourage environment friendly business models.

The report highlights the shortfalls of governance at both local and national levels. It recommends strengthening the social dialog, while building up on the strong contributions from the civil society, volunteers from all walks of life, the private sector and members of the Serbian diaspora. municipalities have been able to respond to the crisis with various levels of capacities, resources and creativity. Lessons learned from the past 6 months indicate that emergency preparedness and crisis response mechanisms need to be strengthened and be more inclusive to reach out to all population.

The importance of collecting, analyzing and using reliable data for decision making is clearly a necessity for the future. Communication between institutions and citizens about such data and about the services available is key to build both trust and resilience.

The findings will be used by the UN to inform its upcoming 2021-2025 cooperation framework with the Government of Serbia, and to support its partners in the collective efforts to build the future we want.

Full report is available at the following link.