TRANSITION IN SERBIA: FOUNDATIONS, RESULTS AND PERSPECTIVES

Abstract

Paper considers the foundations, results and perspectives of transition process in Serbia. The foundations were the postulates of neoclassical economics, the mainstream in recent economic thought. They determined the goal, the methodology, and the ideological basis of this process, and resulted especially in Washington Consensus. The results of the reforms, based on Consensus, showed, with some exceptions, that Serbia, as the other former socialist countries, realized deep and long-term economic fall, followed by similar processes in other spheras. Contrary to ordinary opinions that transition crisis show as result of inconsistency in reforms taking, the paper argues that this is normally its result. As an analogue is the Morgenthau’s plan for West Germany observed, that has promoted Germany to industrial disarmament, and that would lead to its poverty and its transformation into raw material basis for the developed economies, and to impossibility of survival of the existing number of population. Fortunately for the Germany, Morgenthau’s plan was abandoned and Marshall’s plan was introduced. It leads to industrial renewal of Germany. For the transition countries it is also necessary, considering the practice and basic principles of the Other Canon, which have they, origins as far as from the economic policy of Henry VII, to access re-industrialization in the same way, which is the necessity for renewal of economies, and for overcoming the long-term crisis.