More than a month ago, the President of Serbia announced that in the next three and a half years, 2027 billion euros will be invested for the specialized exhibition EXPO 17,8, all the projects and everything he wants to achieve (whatever that may be). The president further says that 2,4 billion euros have been earmarked for this in this year's budget, which would mean that another 15,4 billion euros will be allocated to it from the budget of the following years. Where did this money come from and what could be done with it?
photo: ap...and E. Macron present manifestations;...
For the sake of comparison, the total costs of this year's Summer Olympic Games in Paris, according to data from December last year, amounted to around 8,8 billion euros. And since the construction of stadiums is increasingly popular in our country, it is interesting that, for example, the renovation of the Santiago Bernabeu stadium in Madrid - which the president said is the most beautiful in the world - will cost more than one billion euros.
If we look at the budget of the Republic of Serbia and take, for example, the allocations for the operations and functioning of the Ministry of Defense and the Serbian Army, we would see that the Army, taking into account the current allocations (about 1.355.402.000 euros), could provide itself with 17,8 billion budget for more than 13 years.
A modern aircraft carrier costs somewhere around 13 billion dollars, while NATO's civil and military budget for 2024 is significantly lower than the expenditure for EXPO. The civil budget is around 438,1 million, and the military budget is 2,03 billion euros. Well, if this were multiplied by three and a half years - the period for which the investment for EXPO is planned - it would still not be close to that 17,8 billion euros. In this fun enumeration, we can also get to the cost of building the Burj Khalifa in Dubai, the tallest building ever built by man, which was about 1,5 billion dollars. But let's not call for skyscrapers yet.
photo: Tanjug…models…
IT DOES AND IT DOESN'T
Bearing in mind all these examples, the question is - where does that much money really go? During the president's guest appearance on RTS, part of the answer could be heard. However, this is where the whole thing gets confusing. Namely, in addition to the construction of the "most modern fair" and the residential block where those exhibiting at the EXPO will be housed, this investment will also include a number of other things. These, said Vučić, are the construction of the "northern smile" or "smiley" - which, according to him, "is understood by EXPO, and it has nothing to do with EXPO" - and will cost more than two billion. Further, the Belgrade-Nis high-speed railway is almost three billion. The airport in Nis, magnetic resonance imaging, maternity hospitals and mammograms - the list seems to be long. Direct costs for EXPO, according to Aleksandar Vučić, will be around 2,5 billion euros.
What does that actually mean? What is the problem in that what is meant by EXPO will be built and bought, but it has nothing to do with it?
Last year, the lex specialis was adopted, i.e. the Law on special procedures for the realization of the international specialized exhibition EXPO BELGRADE 2027. Article 14 of this law provides that a special business company, as well as a special purpose company will not apply the provisions of the law governing public procurement.
photo: ap...and stadiums
WHERE DOES THIS LEAD
Economist Milan R. Kovačević tells "Vreme" that all this means that it is possible that "everything will be done without public procurement", and that the situation is catastrophic. "The president talked (on RTS) about the repairs of the maternity hospital, schools, repairs and the construction of new roads, but he didn't include anything in those 17 billion," Kovačević said.
He is of the opinion that everything was done this way so that public procurement would no longer have to be taken care of, which opens more room for corruption. "Unfortunately, we see that in our country corruption takes a huge part of the gross domestic product. And the more broadly you apply that lex specialis, then you can reward whoever you want, punish whoever you want, you've opened up even more space for arbitrary decision-making," he says.
Director of the FEFA Institute and professor at the FEFA faculty, Goran Radosavljević, told Vreme that the whole story about EKSPA is that it will be a "washing machine for money", and that there is no other reason why Serbia is entering into the EKSPA financing project, and that as one of the poorest countries in Europe. Secondly, Radosavljević wonders why this project is entered under a "veil of mystery", where it is hidden from the public eye, brought by "some lex specialists who will basically create an environment for some funds to go into illegal flows". This, he says, has been the case so far with projects such as Belgrade on the water, the complete construction of infrastructure and others.
"From time to time, an insider comes out and says: 'We paid twice as much for the highway to Šabac than we should have,' and that's the end of it," states Radosavljević. He adds that this government likes nice and pompous announcements, and the latest announcements are in line with that - we are the biggest, the best, everything starts with us, and we will spend 18 billion.
"The state will probably invest 18 billion in the next few years, but not for EXPA needs. This is the size of capital investments from public funds in general in Serbia in the previous period", explains Radosavljević.
HUGE MONEY FOR WRONG PROJECTS
What can be done with this money? Radosavljević says that annual investments at the level of the whole of Serbia from public funds are somewhere around seven billion.
"Everything that Serbia finances from the budget during the year at this moment - well, that can be done. These are incredibly large funds. It is unnecessary to talk about what we could build with that, because everything that Serbia produces in one year amounts to 60 billion. In short, Serbia could be built with 17 billion, so that it looks much better than today", says Radosavljević. This number, he explains, is quite "inflated", because it is not known how much everything will cost in the end.
Bearing in mind that healthcare and education are in a very bad state, Radosavljević believes that money should be spent on those areas. "It will be spent on all kinds of things. We have already spent huge amounts of money on the wrong projects", he concludes.
FALLING INTO RUIN
A debt that costs more than economic growth is, according to Kovačević, a rush to ruin: "We now have to take six or seven percent of the interest on the debt, and economic growth will only be two to three percent."
However, the problem is not only debt, as he explains, "if I were to take on debt in my household, and at the same time sell everything from the house, it would be even worse." On this track, he points out that Serbia sold everything it could, including very successful banks.
"Our economy and our public goods, assets in a large percentage, become foreign property. What do we have? On the one hand, sales and debt, and on the other hand, consumption that is neither selectively prioritized nor controlled. An example of public procurement (related to EXPO), which will become less and less, is rushing to ruin", says Kovačević.
Why and why EXPO
"We know what the essence of EXPA itself is - to promote something, to show it, to attract tourists", says Goran Radosavljević, but he points out that the essence of EXPA here is to make someone extra rich. He then adds: "Nevertheless, there will be a one-time effect from which Serbia will have some benefits. Apart from that, the question arises as to who will work, maintain those halls, what will they live on. Then, how much will the citizens of Serbia still have to pay for the maintenance of those halls in the future? Otherwise, it will be ruins again".
When it comes to the positive effect of EXPA, Kovačević says that this kind of exhibition can improve the reputation of a country, that it is easier to trade with the world... "The reputation of a country can be beneficial in many ways, however, we here do not even know what the exhibition will be. It can happen that it is simply a waste of money, in principle - some worked and took a larger part for themselves", Kovačević explains. Radosavljević says that there are some positive effects, but that they are only short-term.
