Strategic framework for sustainable development in the period of transition towards market economy: Critical overview of the strategy of long-term development of Serbia

Abstract

This paper offers a critical analysis of the strategic framework for long-term economic development of Serbia, of the role of strategic development in the success of the transition process, and the consequences of the lack of a development strategy. The strategy of long-term economic development of Serbia, as a programme intended to designate the economic and development policy of the state, is analyzed with the aim of finding an acceptable formulation of development strategy. The authors consider various approaches and propose a strategy for Serbia in the period of transition towards market economy. They also point out that, in the period of transition from a government-planned towards a market economy, strategy should be given greater importance than in periods that do not represent turning points, because of the greater possibility of incorrect policy making, potential conflicts of interest groups, reaching sustainable development, and maximizing prosperity. The authors take into account the advantages and disadvantages of the radical and of the gradualist approach to transition and propose formulating a development strategy that would contain combined elements of plan and market mechanisms. They believe that the process of transition lacks a clear development strategy, and that the quality of the existing development strategy of Serbia until 2010 is such that it cannot be understood as a serious approach to the transition issue. The authors stress the consequences of undergoing transition without a development strategy, that include inappropriate dynamic and sequence of reforms; a lack of coordination between development policy, macroeconomic policy, market reforms, and spatial planning policy; higher costs of transition, insufficient rate of economic growth, etc. They offer proposals for a comprehensive development framework (CDF) and for strategic planning of territorial industrial development.