Enterpreunership and the Local Development
How to revive the economy of one of the biggest industrial centers of Serbia and Yugoslavia, which is in the deepening crisis for the last ten years
K
ragujevac’s Initiative is a project or, rather, still only an attempt, to revive the economy of one of the biggest industrial centers of Serbia and Yugoslavia which is in the deepening crisis for the last ten years. This initiative is a result of the meeting » Enterpreunership
and the Local Development« that has been organised by the end of last year in Kragujevac by the Economic Forum of the European Movement in Serbia and the Municipality of Kragujevac. On that occasion, the Vice President of Kragujevac’s government Miroslav Marinkovic addressed the letter to Dragan Tomic, the Vice President of Serbian Government, informing him about the reasons for launching the Initiative and about the support needed from the state for its realization.
In the letter to the Vice President, Marinkovic highlights that in Kragujevac many people are not working – they are on paid leaves – but at the same time they have qualifications and skills that could be valorized on the market. At the other hand, both big systems where they are formally employed and the local communities have interest that these people find jobs and stop being at the state subsidies. While asking for the help, Marinkovic adds that it would be the best confirmation of the Government’s decision to mark this and the next year as devoted to small and middle enterprises. The essence of Kragujevac’s Initiative is to support private enterpreunership in the form of small firms and thus to solve the problem of (self)emloyment, i.e. overngrown number of employed in the state sector.
Marinkovic suggests three things. First, that big systems pay taxes and public expenditures for the workers who plan to start their own business instead of the salaries. Second, the Republic Government would take the responsibility to faciliate them legalization and the starting of business. In this respect, the assistance in the import of materials, the help to the Fund for the Development of Small and Middle Enterprises and, as particulary important, facilliating of foreign funds' income in that Fund. Third, the local communitiy on its part would assist with the registration of new firms, the deduction of taxes for the firms and faciliated crediting from the Fund for the Small and Middle Enterprises. Marinkovic stresses that international institutions – like USAID, European Bank for the Renwal and Development, World Bank – offered guarantions that they will also help if the support is provided from all relevant factors.
If and what Vice President Tomic replied to his coleague Marinkovic is not known yet, but it is sure that the European Movement in Serbia with the Kragujevac’s Initiative made big and important step towards the operationalization and the revival of what have been written in the constitutional act of Yugoslav private SMEs, well known ‘Zrenjanin’s Initiative’. One of the main goals of that institution that connects small and middle enterprises is permanent pressure on the state or, said in a milder way, constant animation of various state organs with new ideas and projects. For, as Aleksandar Denda, the president of the Economic Forum says, if small and middle enterprises make 43 percent of the national GNP, then it is natural that the same ratio exists in the state creditory funding of economic development. However, completely opposite process is at stake here. For, as Denda points out, while in the period 1988-1992 Yugoslavia had the highest growth rate of small enterprises, that process was soon interrupted. That is why only one third of SMEs (about 65,000), out of 200,000 registered, is active now. For the sake of comparison, in Hungary there are 1,2 million registered small enterprises and more than a half (750,000) is active.
