Living Standards Measurements Study - Serbia 2002 - 2007

municipality level. Again, municipalities can
allocate resources within their budget for these
purposes.
Social and economic reform is running parallel
in Serbia. The efficiency of the social welfare
system is ensured through strategic planning,
anticipating the needs at state and local level and
planning financial resources accordingly. The GoS
adopted a Social Welfare Development Strategy at
the state level at the end of 2005. A similar strategy
is currently being developed at the municipal level.
The aim is to decentralise the system in order to
improve needs assessment and planning. It has been
seen that efficient decentralisation is best achieved
through:
• Partnerships between the state, private
sector and NGOs.
• Beneficiaries being involved in identification
of their needs
• Funding available at the local level
As the majority of funds are provided by the
state budget, efficient coordination of planning and
implementation is essential.
The following analysis focuses on social
benefits that can have an impact on poverty
reduction. The same benefits were examined in
LSMS 2002 allowing an examination of trends.
This is turn can help to evaluate the success of the
social welfare component of the Poverty Reduction
Strategy (PRS).
6.1.3. Take up of social benefits
The PRS adopted by Serbia in 2003 promotes
a multidisciplinary approach to the solution of
poverty. Since the main causes of poverty originate
from the economic sector, the emphasis in dealing
with this problem was placed on intensifying
economic reforms that would encourage increased
activity and employment in the formal sector. The
basis is to increase living standards and decrease of
the number of poor people incapable of work.
Because of this the social assistance program was
strengthened and directed towards:
• the incapacitated
• families with low incomes and children of school
age
• the unskilled.
The unemployed have also been targeted with
a range of active labour market programs in the last
few years, funded through programs and projects by
Social welfare in Serbia
the government via the National Employment
Service and numerous other donors.
Successful implementation of economic
reforms in Serbia enabled dynamic growth of GDP
at an annual rate that was higher (from 2003 to 2007
annual GDP growth was 6.0 percent on average)
than the one projected in the PRS (an average of 4-5
percent annually). A large increase in salaries of
employed people was achieved, especially for those
employees who had had extremely low salaries in
the period before 2000. There was a significant
restructuring of the labour market and salary growth
encouraged the unemployed to seek employment
and leave the social assistance program.
The proportion of households receiving some
sort of benefit was considerably lower in 2007 than
in 2002 (18 percent in 2002 and 14.7 percent in
2007). This reduction is mainly the result of the
reduction in the number of households receiving
child allowance, one-time municipal cash subsidies
and humanitarian aid. There was an increase some
programs in 2007 compared to 2002.
When examining only poor households, the
proportion that has received some sort of benefit
has risen by 12.4 percent in the last five years.
veterans and disabled veterans allowance (250
percent), MOP (83.0 percent); child allowance (29.9
percent); parents allowance (66.7 percent) and
alimony (by 400 percent). While there has been a
reduction in the number of poor households
receiving humanitarian aid (by 94.3 percent in 2007
compared to 2002) and those receiving one-time
municipal cash subsidies (61.5 percent reduction).
The decline in the proportion of poor
households receiving humanitarian aid and the
increase in those receiving benefits financed from
the state budget indicates the strengthening of the
Serbian economy in the last five years and its
capacity to sustain institutionalized programs within
its social welfare system.
The majority of benefits are aimed at
improving the lives of children. As the majority of
beneficiaries are households with children this
implies that, gradually, an important strategic goal
in the National Plan 1 and local plans of action for
children, within the PRS process in Serbia 2 is being
met.
In relation to household size, the majority of
beneficiary households consist of many people, i.e.
with more children. The proportion of 5 member
households was 43.9 percent of all beneficiary
households. More than a quarter are four-member
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