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Belgrade, Serbia, 15/05/2017

BSN Research: Wages in Serbia and African Countries

Business Support Network Team, as a part of one of their research, came up with worrisome data on the comparison of average net wages in Serbia and large part of African countries. Unless the conditions in the economy improve, and the government removes numerous barriers to doing business, any significant increase in wages will be impossible, which automatically prevents the increase of purchasing power and income of companies on the domestic market.

Comparison of average net wage in Serbia and African countries

Average net wage (without taxes and contributions) in Serbia in 2016 amounted to 46,097 RSD, or 397.49 USD (Source: National Statistical Office). if Serbia, by chance, was not in Europe, but on African continent, it would be ranked on 22nd place, behind Zimbabwe, Mozambique, Tanzania, Chad, Djibouti..

Note: The information is official information of international agencies, organizations and portals monitoring average wages on different continents (Numbeo, Salary Explorer, World Bank, different segments of UN organization, etc.).

Presented data show that in 2016, average wage in Serbia was lower than in almost 2/3 of listed African countries.

Considering that most of the listed countries have a significant lack of basic foodstuffs they are forced to import, unlike Serbia which is not dependent on import of raw materials and produces more than enough food for its needs, a question is raised – why are the wages and living standard of citizens of Serbia lower than in many African countries?

Until 2008 net wages in Serbia had a noticeable growth, however, that was also a period of privatization, and the government had increased budgetary income for public sector wages (which largely influence the average wage in the country, since more than 42% of employees are employed in public sector with government-owned companies and national and municipal governments) and with it managed to influence the general level of wages in Serbia. After that, with the global economic crisis, as well as sluggish end of transition process and unfavorable conditions for the development of private business (which last to this day), our economy and citizens were unable to reach the 2008 levels. It is in this 2009-2016 period that a significant number of African countries had constant growth, investments and liberalization of business legislation and has seen increased growth compared to Serbia.

These results show that the concept of growth of national economy, economic growth and governing of national resources should be urgently reevaluated, since Serbia is currently, according to the level of wages and economic condition at the level of mid-developed African states that are often faced with instability, corruption and lack of efficient government system, as well as a stable system for doing business and protection of private capital.

For years the Serbian businessmen, gathered in BSN and other business associations, asked for changes in economic system in the country and different approach to growth, that would give increased freedom to entrepreneurial ideas and educated and creative individuals who have potential to push economy and society forward. Government must listen to the business sector when they request better business environment, „killing of bureaucracy and unnecessary fees“, as well as efficient administration.

Unfortunately, ignoring these demands by the politicians in Serbia lasts for almost a decade and a half, and we can see the results – a solid European country such as Serbia has been brought to a difficult economic situation, and the living standard of the employees in it today is equal to the poorest African states.