Second Programmatic State Owned Enterprises Reform DPL

closed

Closed

The development objectives of the Second Programmatic State Owned Enterprises Reform Operation Project for Serbia are to reduce state participation and level of direct and indirect support to the real sector, enhance state owned enterprises (SOEs) performance, governance and accountability, and mitigate the short term social and labor impacts of the SOEs restructuring and disposition plans. These objectives will be achieved through supporting reforms carried out by the Government of Serbia revolving around three pillars areas: (A) accelerating the restructuring and divestiture program for the Privatization Agency portfolio and selected state owned enterprises operating in the commercial sector; (B) strengthening governance, regulatory and institutional framework, and monitoring and transparency arrangements for SOEs; and (C) mitigating the social and labor market impact of the SOEs reform program. This program document presents a proposed Second State Owned Enterprises Reform Development Policy Loan (DPL) to the Republic of Serbia for an amount of EUR 89.8 million (US100 million dollars equivalent). This is the second loan in a programmatic series of two operations supporting Government of Serbia’s structural reform program for the state owned enterprises (SOEs) sector, which aims at reducing state participation and level of direct and indirect support to the real sector, enhancing SOEs performance, governance and accountability, and mitigating the short term social and labor impacts of the SOEs restructuring and disposition plans. The measures supported under the proposed series are an integral part of the Government of Serbia’s (GoS) Fiscal Strategy for 2016–18, as well as the Program of the new Government of Republic of Serbia, presented by the Prime Minister to the Parliament in August 2016. The proposed series is fully congruent with the FY16-20 Country Partnership Framework and contributes to both of its focus areas (Area 1: the “Economic governance and the role of the state” and Area 2: “Private sector growth and economic inclusion”) supporting economic growth by tackling the bottlenecks to improved productivity and competitiveness, and supporting reforms to some of the key aspects of the social safety net system. The global financial crisis has exposed structural weaknesses in Serbia’s economic growth model, and prompted the need for fiscal consolidation and the acceleration of the unfinished transition to market economy.

FY17 - Public Administration

World Bank Group

Project

Commercial, Government