Belgrade, July 7, 2008

Esteemed Members of the Parliament,

I have the honour to present to you the Programme of the Government consisting of the Coalition for a European Serbia, SPS-PUPS-JS Coalition and a group of parties of national minorities, for the upcoming four-year period, and to seek your support for the implementation of the proposed programme. 

These are the key Programme elements on which all coalition partners fully agree: 

• Commitment to a European future for Serbia,
• Non-acceptance of the independence of the Autonomous Province of Kosovo and Metohija,
• Need to strengthen the economy,
• Increasing the social responsibility of the Government,
• Stepping up efforts to combat crime and corruption,
• Respecting international law.

Full fledged EU membership is the core interest of the Republic of Serbia and its citizens. Joining the EU would enable Serbia to become a full fledged member of the European family of nations from which Serbia has been excluded for a long time due to certain unfortunate historical circumstances. During the past seven years Serbia has implemented numerous reforms thus approximating its political and economic system to the EU member states standards. However, in the course of Serbia’s path to becoming an EU member, it is necessary to introduce numerous additional reforms which would further approximate Serbia’s legal and economic systems to EU standards to the greatest possible extent during the next couple of years. Therefore, one of the first moves of the new Government will be to submit the Stabilization and Association Agreement to the National Parliament for ratification. 

The Government’s main objective is for Serbia to gain EU candidate country status by the end of this year or by the beginning of next year, through the acceleration of economic and other reforms envisaged by the Stabilization and Association Agreement. The new Government of the Republic of Serbia will adopt the Action Plan whose implementation would fully prepare Serbia to accede to the European Union by the end of this Government’s term of office. 

The commitment to have Serbia join the European Union is not contrary to our intention to further develop good political, economic and other relations with other countries in the world. The practice of some EU member states which have very close relations with EU non-member states is the best example that such a policy is possible. One of the priorities of the new Government is to further strengthen and expand economic and political relations with the Russian Federation. In that respect, the ratification of the gas supply arrangement with “Gazprom” by the Serbian Parliament will be the first legislative initiative of the new Government. In addition, we intend to propose to our Russian partners to expand the free trade and to include Russian investors in the implementation of infrastructure and other projects in Serbia. 

The Government of Serbia will strive to promote relations with the USA with an aim to have this greatest global power take the interests of Serbia and its people into increased consideration when resolving disagreements in the Balkans. The Government of Serbia will also focus on developing economic and political relations with other countries throughout the world, in particular with China, India, countries of the Mediterranean Basin and with non-aligned countries with which Serbia has had successful cooperation in the past. 

There is full consent among the coalition members that the new Government of the Republic of Serbia will never recognise the independence of Kosovo and Metohija and that the Government, in cooperation with other government bodies, will undertake all legal and diplomatic measures so as to preserve Kosovo and Metohija as an integral part of the Republic of Serbia. To that effect, the new Government will continue with its diplomatic activities geared at having as few countries as possible recognise the independence of Kosovo and Metohija. In addition, the Government will take the initiative to re-launch negotiations with representatives of the Kosovo ethnic Albanians in order to find a mutually acceptable solution. When undertaking diplomatic initiatives aimed at safeguarding Kosovo and Metohija as an integral part of Serbia, the Government will continue to cooperate closely with the Russian Federation and all other countries which are opposed to or which have not recognised the independence of Kosovo and Metohija. 

Along with its struggle to safeguard Kosovo and Metohija as an integral part of Serbia, the new Government will launch activities aimed at helping the Serbian people living in Kosovo and Metohija survive and improve their economic and social status. When rebalancing the 2008 budget, the necessary funds for the territory of Kosovo and Metohija will be provided for. At the same time, the Government will re-examine the existing funds distribution mechanisms in Kosovo and Metohija so as to ensure a more fair distribution of funds and prevent abuse and embezzlement occurring under the pretence of patriotism. 

The need to strengthen the economy, increase the employment rate, step up investments, including infrastructure related investments, while at the same time preserving the macroeconomic stability are the key points of the economic programme of the Government. The main economic objectives of the Government for the next four year period are as follows: 

• Dynamic growth of economy related activities,
• Employment rate increase,
• Improvement of the standard of living of Serbia’s citizens and
• A more even regional development.

The necessary preconditions for attaining these goals are to strengthen the macroeconomic stability, accelerate economic reforms, continue with the EU integration process and considerably increase investments. 

The first objective of the Government of the Republic of Serbia is to achieve the 7% growth rate of the Gross Domestic Product annually for the next four years. The planned GDP growth rate is slightly above the average rate for the past three-year period. The increase in the real level of GDP by 30% in the next four years, would decrease economic and social problems in Serbia and reduce Serbia’s economic lagging when compared to the countries in the region and in Europe. 

The second objective of the Government is to considerably increase the employment rate in the next four years. The employment rate increase will be achieved by improving the economic climate, increasing private and public investments and by introducing a string of direct incentives for employment. The implementation of the planned activities will strengthen and reinforce positive labour market tendencies that began last year. Creating at least 200,000 new jobs during the next four years and reducing the unemployment rate from 18.1% to 11.9% are the expected outcomes. 

The third objective of the Government of Serbia is to achieve an increase in the standard of living of its citizens and to decrease regional and social discrepancy which is present in the level of standard of living. The increase in the standard of living will heavily depend on whether the two previous objectives of the economic policy have been successfully achieved. 

The fourth objective of the Government in the area of economy is to decrease regional differences in the level of development. For the purpose of encouraging economic growth in the undeveloped regions, the Government of the Republic of Serbia intends to apply a broad spectrum of incentive measures such as: upgrading and construction of traffic, energy and public utilities infrastructure, construction and updating of education, culture and sports facilities, allowing for tax exemptions for investments made into undeveloped regions, etc. The new Law on Regional Development envisages the establishment of a Fund for Even Regional Development that will be funded from EU pre-accession funds and from the budget of the Republic of Serbia. In addition, a possibility to relocate certain state institutions to undeveloped areas will be considered. 

The main precondition for achieving the above mentioned economic objectives is to further strengthen macroeconomic stability. This primarily implies an inflation rate drop from the current 12% to about 4% annually in 2012, as well as the deficit decrease in current payments from the present 13% to 8% in 2012. Achieving these objectives requires slowing down of domestic demand by harmonising it with the economic capacities of the country. This implies a gradual transition from a fiscal deficit to fiscal surplus in the next two years.

The second precondition conducive to attaining economic goals is to accelerate the reforms which have been slowed down considerably during the past two years due to long breaks in the work of the Parliament and lack of adoption of reform laws. In that sense, the Government will relatively soon submit to the Parliament numerous reform laws the implementation of which should eliminate obstacles and strengthen incentives for entrepreneurial activities. The basic directions of economic reforms for the next couple of years are as follows:

• Complete the privatisation of socially owned companies, state owned banks and insurance companies,
• Introduce competition to the infrastructure and utilities service providers market and launch the privatisation (partial or full) of public enterprises operating in this area,
• Abolish unnecessary regulations which complicate economic activities and simplify the existing regulations,
• Increase the efficiency of judicial bodies when dealing with industrial disputes and make bankruptcy procedures more efficient,
• Privatise state owned agricultural and development land, partially within the restitution process.

Particular attention will be devoted to creating conditions for free market competition in which all participants are equal, transaction costs are minimal, and monopolies have been adequately regulated. 

Reforms in the area of economy will be followed by reforms in all other segments of the country.

Establishing a prosperous and competitive economy that will be an equal player in the global market, and even a leader in some areas, requires a skilled labour force, expert engineers, managers, scientists and researchers capable of adopting and enhancing cutting edge scientific and technological achievements. Increasing the education level and the quality and applicability of scientific and research results will be the Government’s priorities for the upcoming period. The promotion of education as well as scientific and research activities, requires improvement of the existing and passing of new regulations, growth in funds allocated by the state, fiscal incentives for private activities in this area and a more intensive linking of education and research institutions in Serbia with such institutions worldwide, in particular with those in the EU.

Intensifying employee training, gradually introducing an electronic management model and applying the single-window principle wherever possible is planned for the next couple of years in the area of state administration and local self-government reform. Finally, a functional analysis of job positions in the state and local self-government administration will be done for the purpose of their optimisation. With reference to this, the appropriate acts will be adopted in order to end the practice of continuous growth of the number of employees. By eliminating unnecessary job positions in the state and local self-government administration, the unproductive class of civil servants growth process will be terminated. Considerable discrepancy in salary range between civil servants and salaried employees which is currently 1: 9 will be tackled. It appears that we have gone from one extreme to another – namely, from wage levelling to economically and socially unjustified differences between salaries of employees working in the state and local self-government administration. 

Defence system reform and strengthening, as an equally important task in the democratic transition process of the Republic of Serbia, will have the building of an efficient and economically viable defence system and establishing a modern, professional and efficient army as its strategic goals. In addition, full participation of the Republic of Serbia in Partnership for Peace programmes and democratic control of the army and other defence forces will also be priorities. 

The new Government will speed up the adoption process of the National Security Strategy, Defence Strategy, Defence System Long Term Development Plan, Strategic Defence Review, and Republic of Serbia Defence Plan as well as the adoption of those laws which would complete the institutional framework needed to intensify the pace of defence system reforms. It is particularly important to intensify the process of legislative harmonisation with EU standards. 

Stable defence system financing is fundamental to an accelerated process of modernisation and equipping of the Army of Serbia and to the strengthening of its capacities needed to support international peace and stability. 

For the purpose of strengthening overall stability and security, it is important to continue cooperation with international forces and institutions of the United Nations in Kosovo and Metohija within the framework of UN SC Resolution 1244. 

The security of the Republic of Serbia is inseparable from the security of Europe itself. Therefore, developing good relations with key players in global, European and regional security, in particular with our neighbours, is a priority of the Republic of Serbia’s defence policy. 

Accelerated European integration process will have a multiple positive effect on Serbia’s economy. Companies and enterprises will have an opportunity of a tax-free export of goods to a market with over 450 million people. The possibility to use EU pre-accession funds will contribute to finding a solution for social, regional and sector-related problems (agriculture, environment) which would in turn stimulate Serbia’s economy. Serbia’s accession to the EU will lead to the increase of direct foreign investments not only from EU member states, but also from other countries. Serbia’s firm commitment to join the EU will decrease the country’s risk level thus improving Serbia’s loan rating which will lead to the fall of interest rates for Serbian companies and Serbia itself in a global financial market. 

Achieving a high GDP growth rate in the upcoming years will predominantly be based on building new and substantially streamlining the existing industrial capacities. Because of this, it is necessary to increase the share investments in the GDP from the current 22% to 26-28% in 2012. In cooperation with local self-government administrations, the Republic of Serbia will develop a special incentives programme for large investments in propulsive industrial sectors such as automotive industry, electronics, IT and telecommunications. Attracting several substantial investments in the mentioned areas would result in growth of economic activities (sub-contractors network development), employment rate increase, and increase of exports but also in attracting new foreign direct investments.

Apart from industry, agriculture too is an important branch of the economy for Serbia. This is the reason why it is important to define an adequate agricultural policy which should offer solutions for the improvement of current status in this area. In order to adequately address challenges and eliminate obstacles brought on by international integrations, primarily Serbia’s obligations to the World Trade Organizations and the European Union, it is of paramount importance to use all the capacities towards strengthening the competitiveness of agricultural production while at the same time preserving natural resources. Taking care of an overall sustainable development of rural areas is of crucial importance both now and in the future. 

Apart from this, plans have been made to speed up the existing and begin with new large infrastructure projects, most important being: completion of the motorway and modernisation of the railway on Corridor 10, beginning construction on the motorway southbound to the Adriatic Sea, expansion and upgrading a network of regional roads, upgrading Corridor 7, beginning construction on the “South Stream” gas pipeline in cooperation with “Gazprom” etc. The reconstruction of the existing and construction of new irrigation systems has been planned for the upcoming period. Public investments in infrastructure will directly result in increased economic activities during the next several years, while a completed modern infrastructure will encourage long term private investments thus resulting in economic growth. Large infrastructure projects will be financed by regular budget revenues, favourable loans from international financial institutions, EU funds, foreign direct investments, etc. 

One of the priorities of the Government of the Republic of Serbia will be to increase its social accountability towards its citizens so as to improve the living and working conditions of all of its citizens, in particular those in the most vulnerable categories. The Government’s goal is to have all the social groups enjoy the benefits of economic growth. We wish to create a society in which all citizens will have equal opportunities to make headway on the social ladder. In such a society higher education free of charge will be accessible to all hard working pupils and students, all inclusive health care will be guaranteed to all poor citizens, while all citizens of Serbia will be protected from extreme poverty. 

Serbia’s fast economic progress will increase the possibility of finding employment and help address home-owners issues of young people, thus deterring them from leaving the country and going abroad. Consistent care for the youth is a precondition for an economic, cultural and overall social development of Serbia. In its campaign to promote a healthy lifestyle, the Government will work on promoting sports, as well as on providing equipment for, adaptation, reconstruction and construction of sports facilities on the whole territory of Serbia. 

Establishing gender equality is an important step towards achieving civilised progress in our society. The Government will ensure institutional equality of women in the economic and political life of the country and it will sanction every form of discrimination against women. 

In order to achieve the above mentioned social objectives, the Government has prepared a set of measures which should contribute to the improvement of the social status of all vulnerable strata of population: the unemployed, pensioners, families with children, elderly people living in rural households, etc. taking into consideration the interests of all social groups evenly while at the same time not jeopardising the macroeconomic stability and accelerated economic growth. The Government of the Republic of Serbia plans to increase pensions by 10% no later than the end of September 2008 and to adopt the amendments to the Law on Pension and Disability Insurance which would introduce indexed pensions in keeping with the earnings growth during 2009 and define the growth dynamics of the relation between average pensions and average earnings up to a maximum level of 70% in accordance with the country’s economic and fiscal capacities. For the purpose of halting negative demographic tendencies, the Government will allocate additional funds for families with young children; it will pass regulations for the protection of working expectant mothers, new mothers and provide housing subsidies to couples with children. In addition, measures for providing social insurance to the rural households of elderly people will also be adopted. 

Continuing, expanding and intensifying the fight against all forms of crime and corruption are necessary conditions for strengthening the rule of law and functioning of a market economy. Providing appropriate mechanisms of cooperation between the state and civil society will have its rightful place in the area of establishing the rule of law. 

Efficiently combating corruption and crime requires passing new laws such as the Law on Freezing and Seizing of Assets Acquired through Corruption and Criminal Activities, which will be submitted to the Parliament as soon as possible. It is also necessary to include numerous other Laws and by-laws in provisions which would eliminate the sources of corruption. This primarily implies the reduction and regulation of discretionary authority of state bodies when issuing different permits, consents, official opinions, etc. In that respect it is necessary to strictly define procedures and set tight deadlines for the completion of all the stated activities. As for combating corruption, a legal obligation will be introduced stipulating that all state officials, managers of state institutions and public enterprises both at the level of the Republic and at the local self-government level, must disclose information about their property and assets. New provisions will be put up for adoption stipulating that should corruption charges arise, not only would the state officials be prosecuted, but they would also be permanently banned from engaging in any political activities, while the employees working for the government who engage in corruption, would be permanently banned from working in the state administration. 

State bodies which are pivotal in combating these illegal activities should be enabled to efficiently combat corruption and crime. To that effect, it is necessary to adequately equip and train the police, prosecutor’s office and the judiciary, enabling them to combat corruption and crime. 

The aim of police reform is to increase the level of personal and property security of citizens, to preserve the stability of public peace and order and to maintain a favourable security situation in the country. Priority tasks for the police in the following period are fighting organised crime, including industrial crime, resolving criminal cases efficiently, preventing any attempts to destabilise the society and suppressing hooliganism. Internal control mechanisms, suppression of corruption and severing ties with organised crime are particularly important factors conducive to the improvement of police operation. Civil control over all security services will be established. 

Greater efficiency in its administrative activities, such as issuing personal identification documents, vehicle registration, etc. are also included in the process of police reform. New personal identification documents will be developed in accordance with the state-of-the-art technological solutions, thus complying with one of the most important requirements necessary for joining the White Schengen List. 

Judiciary reform will be accelerated with an eye to establishing an efficient and independent judiciary and prosecution, strengthening the rule of law and improving legal security. Attaining this goal implies the adoption of a string of laws regulating the judiciary system in keeping with European standards and in the best interest of the citizens of Serbia. Just to mention a few of them: Law on Judges, Law on the System of Courts, Law on the High Judiciary Council, Law on Public Prosecutor’s Office, Law on Legal Profession, Notary Public Law, Law on Dispossession of Property Gains, as well as a string of other laws regulating the judiciary system and sanctioning criminal acts in the area of high-tech crime, terrorism, money laundering, human trafficking, sexual abuse, etc. 

The judiciary reform will establish a new network of courts and prosecutor’s offices which would include petty offence courts and courts of appeals as well as the Administrative Court for the whole territory of Serbia.

Firm political commitment to combat corruption and crime uncompromisingly and comprehensively is of crucial importance. Only in such circumstances will the employees, tasked with uncovering and sanctioning these criminal deeds, be willing to exert maximum efforts in fighting corruption and crime. 

The new Government of the Republic of Serbia will continue to pursue the policy of strict observance of international law and prompt compliance with all international obligations. This is the only way our country can become a fully fledged and respected member of the international community.

In much the same way as Serbia respects international law, the Government of the Republic of Serbia will expect other parties to do the same. Insisting on respect of international law by other countries is our crucial argument in our fight to safeguard Kosovo and Metohija as an integral part of Serbia. As for the International Criminal Tribunal for the former Yugoslavia at The Hague, the Government of the Republic of Serbia will consistently insist on treating all crimes equally i.e. not to have less important victims and privileged criminals. 

Exceptional achievements in the field of culture, even in the most difficult times, are one of the hallmarks of Serbia worldwide. The Government of the Republic of Serbia will attempt to support, financially and otherwise, creativity and innovation in the area of culture. Particular attention will be given to modernisation of cultural institutions, preservation of cultural heritage, inclusion into global cultural tendencies, increasing the quality of media production and harmonising the relevant regulations with European standards.

Finally, I would like to stress that this project of the new Government is in fact a project for a better life while preserving the singularity and dignity of all citizens of Serbia. Its implementation will ensure higher earnings, higher pensions, increased social responsibility, better employment opportunities, less corruption, development of basic infrastructure and strengthening the country’s position to defend its sovereignty. 

I would like to call on all citizens, state administration bodies and organisations to fully participate in the implementation of these significant goals. At the end of its term of office, everyone will have an opportunity to judge the accomplishments of this Government. This judgment should be passed based on facts not prejudice. 

Esteemed members of the Parliament, in closing I want to propose to you the following composition of the Government:

1. First Deputy Prime Minister and Minister of Interior – Ivica Dacic (SPS)
2. Deputy Prime Minister and Minister of Science and Technological Development – Bozidar Djelic (DS)
3. Deputy Prime Minister and Minister of Economy and Regional Development – Mladjan Dinkic (G17 Plus)
4. Deputy Prime Minister – Jovan Krkobabic (PUPS)
5. Minister of Foreign Affairs – Vuk Jeremic (DS)
6. Minister of Defence – Dragan Sutanovac (DS)
7. Minister of Finance – Diana Dragutinovic (DS)
8. Minister of Justice – Snezana Malovic (DS)
9. Minister of Agriculture, Forestry and Water Management – Sasa Dragin (DS)
10. Minister of Energy and Mining – Petar Skundric (SPS)
11. Minister of Infrastructure – Milutin Mrkonjic (SPS)
12. Minister of Public Administration and Local Self-Government – Milan Markovic (DS)
13. Minister of Trade and Services – Slobodan Milosavljevic (DS)
14. Minister of Education – Zarko Obradovic (SPS)
15. Minister of Youth and Sports – Snezana Samardzic-Markovic (G17 Plus)
16. Minister of Health – Tomica Milosavljevic (G17 Plus)
17. Minister of Telecommunications and Information Society – Jasna Matic (G17 Plus)
18. Minister of Labour and Social Policy – Rasim Ljajic (SDP)
19. Minister of Environment and Spatial Planning – Oliver Dulic (DS)
20. Minister of Culture – Nebojsa Bradic (G17 Plus)
21. Minister for National Investment Plan – Verica Kalanovic (G17 Plus)
22. Minister for Kosovo-Metohija – Goran Bogdanovic (DS)
23. Minister of Religion – Bogoljub Sijakovic (DS)
24. Minister for Diaspora – Srdjan Sreckovic (SPO)
25. Minister of Human and Minority Rights – Svetozar Ciplic (DS)
26. Minister without Portfolio – Sulejman Ugljanin (SDA of Sandzak)