Privatization as the Basis of Reform Process in Serbia

The basic goal of every legal entity in market oriented economy is creation and increase of the profit, while for the non privatized companies are characterized by bureaucratic management that encompasses great irrationality. Market economy, focused on entrepreneurial initiative presumes private property, and the role of the owner over the company is multi task oriented. Above all, the owner decides on the engagement of his own resources, directly manages the company or selects managerial or surveillance bodies, divides profit and covers losses, employs employees, and is responsible for company’s operations. In market economies state intervention into economic life is minimal, unlike the countries where the market was almost suspended from economy, which resulted in enormous waste of social resources. The practice has shown that in economies with dominant private ownership, the rule of law is also dominant, while the countries with preferences over collective ownership where the source of legal instability and totalitarian regimes. Countries in transition, among them is Serbia, have confronted with necessity of establishing market economy that demanded change of the ownership, that is transfer of social and community ownership into private. Bringing in adequate laws and creation of the necessary institutions are one of the key elements for successful privatization process. In front of our country there is established goal – involvement into international economic flows and cooperation with the market economy countries. The prerequisite of such goal is that the privatization process must come to an end in the nearest future, as well as the growth of private ownership and denationalization should be conducted. This means to take over the private ownership through nationalization and returning it to its former owners. After several years of reforms, Serbia is even now almost at the beginning of the transition process into democratic society and market economy. With the bringing privatization legislative and creation of institutional framework for conducting this process the conditions for fulfilling the basic goals of our country – creation of democratic society, based on the market economy principals and joining European Union. With the adoption of new Constitution of the Republic of Serbia in November 2006, private, public and cooperative ownership are proclaimed as constitutionally guaranteed forms of ownership. The law on denationalization is not yet adopted, and the effects of privatization are diminished due to the lack of consistent reforms. Although privatization process lasts for over decade, it is still acute economic problem and lacmus that clearly shows the strength of government in changing the social status and cultural template and way of thinking. The experience shows that the privatization is prerequisite of faster economic development. Highly developed world countries, besides, have provided for the reached level of development through timely privatization. Privatization is not the act that occurs only once, but extremely complex social process, it is essential to achieve consensus on this question from all the important social strengths.