The President of the Republic and I - for the fourth time

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A good four years have already passed since I published the first article in "Vremen" under this somewhat extravagant title. The inspiration for that article came from a figure from the top of the government, an official whose rank appears in the title of this text. That inspiration came from numerous activities that are ours President of the Republic (PR) performed enthusiastically and tirelessly, and I, in my naivety, thought that it would be better for him and for Serbia if he took the gas off the gas and significantly reduced his activities and returned to by the Constitution prescribed limits. There were many things that bothered me: the drastic step out of the framework prescribed by the Constitution, the interference in political matters that seemed to be so numerous that no one in such a large mass could properly perform them, the tremendous increase in political power that was a natural product such broad and - even for the most valuable - insurmountable activities, the systematic decimation of the opposition against which he mercilessly fought under astonishingly unequal conditions, the very fact that he commands battles or passionately enters them under drastically unequal conditions, noticeable differences in communication with foreign countries in relation to the way he treats interlocutors and opponents at home... So much bitterness accumulated in me that some kind of outlet simply had to be found.

It looked like this story would end with the release of that one text. However, Homo proponatus, but God disposes, Man dreams and God decides. With the passage of time, our PR not only did not settle down, but month after month it took off more and more. We also experienced a series of his "historic" performances on various televisions, there were many violent ones (the word has the same root as the word violence) attacks on opposition politicians without the opportunity for them to respond to him equally, followed by arbitrarily long tirades on a large number of televisions, such that it was known when they started, but not when they ended... It was particularly tiring to listen to his long televised (and )(u)fly into a very broad register of the most diverse social issues. It seemed like an easy Indian death - it was perceived as something painful and terribly drawn out in time. These are the reasons why they are after the first text with the title The President of the Republic and me followed by further texts under more or less the same title.

WHAT'S IN THE NEWS?-a FORCED ANGER AND PROTEST

It is difficult to count what all in so many of his performances not only could, but had to bother. Let only some groups of his actions be indicated here, because any attempt to present and systematically classify what bothered me would be futile. What will be enumerated is only a sample from his many statements and actions. Perhaps it is appropriate to start with his frequent emphasis on institutions, with reference to laws and respect for rights, all combined with daily jumping out of presidential constitutional powers. Those powers cannot be interpreted in any other way than as a flagrant violation of the applicable regulations, from the Constitution onwards. It was not worth it that many informed analysts emphasized the most drastic thing from that category: in addition to performing the function of the President of the Republic, he remained at the head of the leading party, actually the only one with political power in Serbia. What can we say about the supreme leader who, due to the aforementioned duplication of functions, in full view of the whole world, has been violating an extremely important article for years. 115 of the Constitution that he swore to during his inaugural acceptance of the presidential office?

Another group of reasons that drive a person to fierce, even if in terms of effects completely futile protest, are gross offenses against the truth. One must start with the most drastic one. He is the inspirer and conductor of the massive and deafening choral incantation about Serbia as a Balkan tiger, an apologetic gospel announcement that is inflated to the point of claiming that Serbia is the most developmentally successful not only in Central and Eastern Europe, but also much wider. The truth is exactly the opposite of that ravishing proposition. In several of its extraordinary reports, the Fiscal Council presented a comparative analysis of the development of countries from the relevant area for comparison, and in the accompanying tables showed that Serbia occupies one of the last places. It is a special curiosity that Croatia occupies a similar infamous position in those unpleasant tables. In the numerous appendices contained in the proceedings of the regular meetings of the Scientific Society of Economists of Serbia (NDES), there is a large number of papers in which the unenviable level of development and the worryingly poor position in the tables of countries classified by growth rates are commented with anxiety, and as a conclusion of that analysis, a serious concern for the economic future of the country.

The aforementioned saga about the rapidly growing Balkan tiger is probably the biggest offense against the truth that affects the soul of our PR, but it is far from being the only one or one of the few. Until a few years ago, Television N1 regularly broadcast the so-called A truth meter where proven falsehoods launched from our political top are documented and registered. The clear first place in those reviews of falsehoods was occupied by our PR. Should we be surprised that his aides also widely and widely broadcast entire swarms of untruths, while they had psychological and sometimes informational support in his eclogues from the political top.

The third large group of ill-advised and even impermissible acts is reckless, sudden and impromptu jumping into huge and expensive projects. The latest example is Expo 27, for which an investment of billions of euros is expected, and there is no place for such a huge undertaking in any published and official state strategy. The news about such a gigantic project was made public immediately after the budget rebalancing was adopted, in which there was no mention of such a huge project. From the reaction contained in a document of the Fiscal Council, it can be seen that the gentlemen from that body came to their senses after learning about this project, and that, again, after some medium-term strategy was adopted in which there was no such or even remotely similar project no speech. To add more salt to the bitter wound, the economists soon reminded that neither a feasibility study nor a large number of inevitable accompanying studies were prepared for such a huge project. PR seems to rush into huge development endeavors guided only by his intuition and confident that the inspiration of the moment will provide him with the right guidelines for that giant leap into the future. This man of inspiration does not care much for systematic, careful and sometimes painstaking analyses. It is somewhat reminiscent of the prophet Muhammad who, in bouts of ecstasy, directly received messages from the Supreme and then passed them on to ordinary mortals as sinless.

RESULTS OF THE COMPARISON OF THE CURRENT POLICY WITH THAT FROM THE TIME OF DOS-A:

The biggest deviation from the truth, and probably the most disastrous for economic policy, promoted from the political top itself, is the claim about the allegedly unsuccessful economy and development from the time that immediately preceded the reign of the current government. That proposition has two equally false implications. The first is that everything that goes wrong in current politics is attributed not to failures in that policy, but to the heavy legacy behind the allegedly unsuccessful "Dosovo" government. This is easily refuted on two grounds. First, the period of "Dosov" government ended more than a decade ago; Isn't it true that the previous government can be blamed for its own failures even after such a long period and a great amount of time passed?! Will this government be ready to blame Prince Miloš or even Emperor Dušan for its failures? Shifting the responsibility to the former authorities after such a long period becomes not only inappropriate but also ridiculous. The second implication is equally important: if the previous government was so unsuccessful, then it is not a handicap but, on the contrary, a good chance for this government to demonstrate its own superiority. I guess it's easier to be successful when you inherit such an unsuccessful predecessor than in the opposite case.

Another set of questions that cast a heavy shadow on misconceptions and, especially, deceptions of the current political top is contained in, for the government, extremely unpleasant comparisons of its performance with the performance of its Dosovo predecessors. That topic is extremely important and interested me a lot, so I published a number of articles on it in Belgrade weekly newspapers. In those texts, it was repeatedly shown in different variants and wordings that in the interval of the "Dosovo" government in 2000-2008. GDP growth rate was 6,2 percent, while during the reign
SNS 2012–2019. reached only 2 percent. Intervals of large exogenously caused breaks are excluded – the great financial crisis of 2008–2012. and the period of the corona virus, from 2020 onwards. The data speak for themselves and do not require further comment. We only need to point out the drastic fact that the picture they portray is diametrically opposed to what we hear every day in the performance of the current government, and it seems most often from the PR itself. It is hard to imagine that anything could be further from the truth compared to that absolutely unfounded self-praise of the government, with the conductor's guidance from its very top.

HOW TO PICK YOURSELF OUT OF A MADMAN'S PARADISE

Extremely wrong, directly opposed to real facts, the belief that we are Balkan tiger, with the complete decorum that this idea implies, a belief produced by political engineering and not spontaneously formed, created a social climate in which it is impossible to implement rational policies or successfully search for optimal solutions at the level of companies and other micro-units of all kinds of decision-making. Observed in isolation, this deformation of economic, political and social consciousness is a huge trouble for the community as a whole and an obstacle for purposeful actions that would open up hope for social betterment. On top of that, however, a comparably severe distortion of the local information system has been added, due to which the possibilities of a realistic assessment and comparison of numerous options in decision-making processes are extremely limited. This obviously and inevitably produces informational chaos and management chaos with wrong decisions and wrong approaches to directing development as the end result. In our country, namely, the monitoring of economic and accompanying financial flows in euros is widely represented, and it is a practice that obscures the overall social reality with a thick, opaque curtain with the equally disastrous result of misperceiving development flows and astonishingly inaccurate determination of the corresponding results.

Massive, almost predominant expression of economic flows, especially those at the macro level, in euros in our country overestimates and size, i.e. the extent of these flows and their growth rate. The reason for this is the chronic overvaluation of the dinar and the great overestimation of all the variables that are expressed in the currency, which is too forced in our country, through the conversion of dinars into euros. The overvaluation of the dinar, the fall in the price of the euro in the dinar sign, is a consequence of a permanent structural specificity of our economy, and also of some additional segments of the social being. Namely, we are a country that continuously receives large and continuously abundant flows of foreign currency, especially euros, flows that are unilateral, i.e. unidirectional, and are not the result of the functioning of our economy itself. Remittances from employees abroad, foreign direct investments, intensive foreign borrowing and various other unilateral transfers create on a permanent basis an excess supply in the foreign exchange market compared to the amount of foreign exchange that our economy could secure independently through exports. The result is, of course, a drop in the price of foreign currency, i.e. a cheap euro and a permanently overvalued dinar compared to that key foreign currency for us. When in currency comparison and exchange, one euro corresponds to the described method reduced amount of dinars or when one dinar corresponds to a relatively large amount of euro units, the conversion of domestic flows into euros greatly overestimates those flows. If the exchange rate were 200 and not 120 dinars for one euro, a salary of 80.000 dinars would amount to 400 euros and not, as is the case here, the entire 666,7 euros, as reported in our official reviews.

The difference is huge, but it is not just down to this described, overestimated, distorted recalculation procedure. Numerical determinants that lead to overestimation of economic quantities, especially macroeconomic aggregates, through an analog mechanism lead to overestimation of their growth rates as well. Since the growth rate is defined as the quotient of the growth of the aggregate in the current year and its size in the previous year, the calculation of growth rates by successive years implies that the numerators in those rates are artificially increased from year to year and thus give a series of overestimated rates, providing a falsely embellished picture of performance. current economic policies.

Here I will use the results of the still unfinished and thus unpublished research of Lidija Madžar, who for the sake of comparative analysis calculated the series of GDP of Serbia in correctly deflated dinars - which are for each year the quotients of current values ​​of GDP in dinars and officially published growth indices of the general level the price. That calculation was made for the period 2012-2023. and the results are astounding. The series calculated in euros gives an impressive growth rate of 4,18 percent for the mentioned period, while correctly - as described - the calculated growth rate reaches only 1,58 percent. The GDP growth rate, a key development indicator, was unjustifiably increased by no less than 2,6 times. What would be left of Balkan tiger if the series of officially presented growth rates, the series of which our virtuous officials are so proud, would be reduced by some 2,5 times?!

Our economic policy, our economy, and the wider public, even the greater part of our academic community, live in the wrong - this word is weak, perhaps it would be more appropriate perverted - the conviction that our economy is taking giant steps with almost amazing growth rates, and they are more than doubled compared to the quite modest ones true and accurate growth rates! A good part of our difficult and not very successfully controlled inflation flows into those inflated growth rates. It must be noted, and this should always be kept in mind, that the development dynamics of the countries in Central and Eastern Europe, with which we are compared in terms of development, with the possible exception of North Macedonia, is not at all distorted on that pernicious basis. The growth rates that we so generously attribute to the Balkan Tiger are in principle not comparable to the rates of other countries.

It is a sad fact that the institutions and officials of the European Union, for which we decided so thunderously, participate in this deception and self-deception. A quite dramatic example in this sense was provided by the President of the EU, Ursula von der Leyen, during her recent dedication. Guided by some European, certainly non-Serbian interests, she, with an emphasis on pleasing the local political elite, fulfilled a large number of those flattering falsehoods with which that elite showers our public. The weather, oh mores! She probably does not understand the specific mechanics of Serbia's economic growth, and even less can she be informed about the subtleties of serious errors in calculating that growth. It is not smart and moral to speak so specifically and explicitly about that complex of things if - which is almost certain - she did not understand them. And if by some miraculous chance she understood them, her thunderous eulogy would be "only" immoral, but it would be a particularly high degree of moral transgression. It seems that the time is coming when even those Serbs with below-average IQ will understand that EU policy is not based on some noble desire to help Serbia get out of this autocratic grind, but is inspired by its own interests, no matter how they are formed and look like. . We can hope for good from the EU only in those special situations in which our interests coincide with the goals of the EU, otherwise "trust everything and your own brains".

It seems not inappropriate to end this text with a question. If Serbia really is Balkan tiger, if she is the best among the best, which would mean that it has reached an optimum in its development policy, what will joining the EU do for us anyway? Because, in the official narrative, that joining is primarily motivated by economic reasons. If we have reached the optimum, we do not need such or any structural systemic changes, since such changes undertaken from an optimal position they can only move the system out of that precious optimum. And that would mean that somewhat more successful efforts in the line of joining the EU would only move us from this bliss in which we prosper to some guaranteed inferior position.

The author is a retired economist and professor