Serbia's New Growth Agenda : State Aid

Serbia spends relatively large amounts on state aid programs, many of which will have to be phased out or restructured to comply with EU laws. There is room to restructure the existing programs to target activities that have more growth and job dividends; for example, by targeting startups and innovating firms and phasing out support for ailing industries, state-owned enterprises, and large or old private domestic firms. Although Serbia's program to attract foreign direct investment has helped create new jobs, the focus should now shift to instruments that facilitate technology spillovers and domestic linkages. Finally, improving the scope and quality of data collection will contribute to better monitoring and more efficient targeting. The sooner Serbia starts to adjust its state aid programs, the larger the economic and fiscal benefits will be