Professor Ognjen Radonjić from the University of Belgrade’s Faculty of Philosophy says that the recent move to cap retail margins in Serbia is a short-term measure, likely aimed at buying time before potential early elections, and one that rarely works in practice.
He explains that price caps are often introduced to protect consumers from sudden price hikes, but in the medium term, traders usually find ways to restore their profits — by removing regulated products from shelves, creating shortages, or diverting them to the black market at higher prices. This, he notes, has been the experience in countries like Venezuela and Argentina, making the policy ultimately counterproductive.
Radonjić believes Serbia’s high prices are more likely the result of unfair competition and monopolistic practices, which should be tackled by breaking up monopolies rather than imposing price controls.
He also challenges the “economic tiger” narrative popularized by President Vučić since 2016, arguing that unlike the Asian “tigers” whose growth was driven by technological advancement, Serbia’s growth is heavily reliant on public infrastructure projects. These, he warns, are losing their effect and are a major source of corruption, crime, and money laundering.
Radonjić says any future honest government would first need to take stock of the situation, acknowledge the extent of the damage, and prepare citizens for a period of sacrifice to rebuild. He stresses that long-term progress is impossible without investment in education and science, noting that current policies are undermining both.
As an example, he points to Ireland, which suffered economic collapse despite being in the European Community, but recovered through consensus on a clear development direction and sustainable compromises.
