USING COMPARATIVE ADVANTAGE OF THE REPUBLIC OF SERBIA IN THE FUNCTION OF INCREASING THE EXPORT EFFECTS

Abstract

For many years, the Republic of Serbia has had a huge problem with balance of payment, which can be seen in chronic deficit in the current balance. Small and inadequate supply and large export demand caused by structural and economic system`s problems are the main reason for such a situation. Regardless the fact that the balance on services of the Republic of Serbia has recorded permanent surplus for years (with an exception of few years when it was in deficit due to errors of economic policy) it is not able to fill in the gaps between export and import of balance on goods, which has been chronically in deficit for decades. Because of that, the future economic policy of the Republic of Serbia should be directed to long-term solutions of problems of the balance of payment, in the sense of its sustainable deficit. This means that the increase in export should be an imperative in the long run, and restructuring of the economy in the sense of increasing the share of export-propulsive sectors is a condition sine qua non.

In order for effects of export to be higher and to have positive effects on the balance of payment and the competitiveness of the Republic of Serbia, all comparative advantages of the economy should be used and their shift to competitive advantages should be speeded up. In this regard, this paper will particularly analyze the “revealed comparative advantages”. We will make an attempt to identify crucial sectors and groups, which show revealed comparative advantages, with a special focus on identifying service sectors, which traditionally record surplus in the foreign trade.