By Jelena Virovkic Ivanovic

With legislations dating from the second half of 20th century and even from Federal People`s Republic of Yugoslavia, Serbian economy and state administration are kept from moving on, not to mention from running alongside with developed European countries.

Finally, although among last in region, Serbia`s government has decided to confide drafting of the "regulatory guillotine" plan to Ministry of Economy in August. This government`s operation is neither unknown, nor cruel, or evens something that has to be feared of. It concerns the guillotine that everybody looks forward to.

The process implies the procedure of registering all obsolete regulations that complicate day-to-day administration and businessmen activities, which are then simplified, or eventually - eliminated. Organised countries supervise implementation of legislations very carefully, and if it turns out that these regulations have become ineffective, they "cut them in pieces" or simply modify them.

Mladjan Dinkic, Minister of Economy, has announced the beginning of the "guillotine" project, after which two-thirds of legislations will be considered as non-existing.

"Regulations that complicate administration procedures will be eliminated, and new circumstances will attract more investments in Serbia, particularly in private sector. Realisation of the `regulatory guillotine` should last from 12 to 15 months. We have already sent requirements to all ministries demanding the lists of laws and other regulations that are considered obsolete, so we could finally make common request for their elimination", says Minister Dinkic.

This process usually lasts long and away from publicity, after which that request will be put before parliamentarians demanding regulations annulment in just one day.

The question is - why didn`t Serbia change these legislations bit by bit and simplify day-to-day administration, which spends a lot of time bothering with old documents that mean nothing anymore. Stabilisation and Association Agreement has, in fact, determined the national course. There is an open space for European and national companies, because none from Berlin, Vienna, Salzburg or London wants to tolerate massive and clumsy bureaucracy, endless roaming in front of inquiry desks, etc. Europe has enforced us, owing to our obvious lack of wisdom, to make things easier.

The Foreign Investors Council has also made a pressure on Serbia`s government to start this massive and dreadful, yet useful work. Those who have invested more than six billion dollars and employed about 70.000 workers expect from local authorities the simplification of formalities and reduction of expenses.

Ana Firtel Vlajic, Foreign Investitor Council`s executive director, says that the Council supports the Serbian government`s initiative, adding that rejection of one-third of regulations is expected. According to her expectations, this process should last more than one year.

She also stresses that Serbia has made a progress in setting up a legal frame for business activities in the past eight years, but the main problem occurs when laws are being accompanied by sublegal acts, which make these laws practically ineffective.

To understand what process of simplification is, the best thing to do is to analyse experiences of European countries, which have managed to save 150 billion euros by implementing the "regulatory guillotine" in the past two decades.

Sweden was the first that began eliminating dispensable legislations during 80s. It was soon clear that the project is efficient and the rest of the world was "infected". Some countries were radical, while more organised had less to do. For example, Mexico has eliminated 45 percent of regulations, and 97 percent of what has remained was simplified. The final result was rapid economy development, increase of direct foreign investments and poverty reduction. Hungary has done even more, deciding to eliminate not only obsolete, but ineffective laws as well.

Countries in region have started the same process. After National Competitiveness Council`s decision, Croatia has eliminated 12.000 legislations and regulations inherited from Socialist Federal Republic of Yugoslavia period in the past two years - legislations which are useless for entrepreneurs. Savings were enormous - 1.4 billion kunas, i.e. 200 million euros. Croats have called this action "swift-cut" (in Croatian "hitrorez"), followed by motto "Less regulations, more freedom".

Neighbouring Bosnia and Herzegovina has also started with the "regulatory guillotine" project recently, while one of its entities, Republic of Srpska, has done that with legislations on the level of its entity. Republic of Srpska has thus managed to eliminate 60 percent of inspection regulations. Reduction from 2474 to 1040 inspection acts has come as a result of detailed analysis, which has proved that duplication of legal acts has caused bureaucracy disorder. Besides, Republic of Srpska authorities were responsible for issuing 337 various permissions, licences and certificates, and thanks to the "guillotine" 77 legal formalities are eliminated completely, 75 are modified and 185 are still valid.