Effects of the process of deindustrialization and the concept of reindustrialization strategy of Serbia

Abstract

Countries of Eastern and Central Europe have introduced market reform on the basis of the so - called shock therapy, with inevitable transitory drop in GDP, standard of living and industrial production. Those most advanced economies, after more than a decade of restructuring process, have succeeded in becoming competitive on the global market. Serbia was also facing problems with deindustrialization when it started late with market reforms, although the drop was not so deep because the previous economic crisis during the 1990s had already hampered the national economy. Deindustrialization caused problems such as increasing unemployment, balance of payment deficit and finally nonsustainable development, which became more serious during the global crisis. The collapse of industrial development is the "Achilles heel" of the Serbian economy. So, reindustrialization is seen as a vehicle for overcoming the crisis and, at the same time, for creating sustainable development. It is also the key to the recovery of the national economy, to improving its competitiveness and creating dynamic, sustainable and inclusive economic growth, together with increasing employment and standard of living.