Structural Changes and Sustainable Economic Development of the Republic of Serbia in a Pandemic

Introduction

From a historical perspective, many diseases caused periodic pandemics. Depending on the severity of the disease, its duration, the degree of development of civilizations and states, as well as the applied strategies in the fight against the disease and its direct effects, pandemics were dealt with in various ways and they shaped future directions of human civilization (Cvetković & Miljković, 2020, p. 29). In March 2020, the WHO (World Health Organization) declared a pandemic of SARS-CoV-2, better known as COVID-19. It is believed that this pandemic is of animal origin caused by the corona virus. Although medical science is quite advanced, the unknowns and questions that need to be answered about this disease are numerous. The lack of necessary information on the character, mode of transmission, and treatment of this virus contributes to the uncertainty due to mortality and threats to human lives, but also due to the inevitable social and economic consequences. Despite the problems regarding the accuracy of the records of the number of victims, it is considered that mortality due to the COVID-19 pandemic is low – according to research, it is no more deadly than the Spanish flu pandemic (Barro, Ursua, & Weng, 2020, p. 2). However, experts warn about the long-term consequences for the health of those who contracted the disease. The discovery of the vaccine and the race of scientific teams to find new vaccines against the COVID-19 virus mutations offer hope. It is certain that the struggle will be a complex and long-lasting process, within which the healthcare system is of paramount importance.

COVID-19 can be seen as an extreme event that is essentially a non-economic exogenous factor. With the appearance of COVID-19, the healthcare system has been under immense pressure, which is dragging other activities and areas into a socio-economic crisis. The effect of the spillover of the crisis from the healthcare system to other sectors has been accelerated by globally accepted measures of social distancing and self-isolation, initiated and recommended by China and the WHO. They represent necessary and obligatory measures of the social response to COVID-19. These non-economic measures involving refrainment from interaction resulted in a rapid decline in economic activity. “These measures have shattered key pillars of world economies as global trade and cooperation have succumbed to nationalist focus and competition for scarce supplies” (Ibn-Mohammed et al., 2020, p. 2), especially drugs and medical equipment products from the pharmaceutical industry.

The health problem that hit China at the end of 2019 became global. COVID-19 cannot be viewed only as a health or an economic issue, but as an interaction of both. COVID-19 poses a number of challenges in the fields of healthcare, politics, economics, demographics, climate, education, and technology. In addition to the negative impacts, certain positive effects on the environment, energy sector, and ecosystem restoration have emerged as the most positive effects of the slowdown and decline of economic activities. In this interaction of challenges, the issue of sustainable economic development has again come into focus in relation to more efficient implementation and revision of Sustainable Development Goals (SDG).

This chapter focuses on the challenges of sustainable economic development in the Republic of Serbia. The aim of the chapter is to consider the actual model of economic development and structural changes of the Republic of Serbia, which the COVID-19 pandemic has called into the question. These challenges are related to the effective implementation of structural reforms in those areas of the economy and manufacturing whose segments are key to macroeconomic stability, sustainable GDP (Gross Domestic Product) growth, employment growth, social inclusion, productivity increase, and the rise of competitiveness and export. The challenges are particularly related to the financing and organization of the healthcare system in the context of the fight against the COVID-19 pandemic, but behind its future development and flexible adaptation to some new challenges.