Serbia is a small and open economy in South Eastern Europe that has been in the process of transition from planned to market economy for more than two decades. The process was gravely impacted by the Yugoslav wars of dissolution of the 1990s and economic sanctions from 1992-1995. After the ousting of the former Yugoslav President Slobodan Milosevic in 2000, the country went through an economic liberalization process and experienced fast economic growth that has stalled since the onset of the global financial crisis.
Similar transitional processes are reflected in the media landscape as well. Serbia’s media scene is in the process of transition from state-owned to more privately-owned. Over the past decades, media owned by the state and local municipalities were seen as propaganda machines in the hands of the authorities. In a bid to make it more independent and professional, media have gone through two waves of privatization, but despite the change in ownership, ruling elites have been able to maintain considerable influence over the media.
There seem to be three financial mechanisms through which ruling political parties influence the media, undermining media freedoms and integrity. These financial mechanisms include: project co-financing of media programs that serve, supposedly, a public interest by central and local government; state advertising in the media; and tax breaks.
Project co-financing as the only means for the state to allocate funds to the media on an annual level was introduced in 2014, following the adoption of new media legislation. This approach to financing public-interest media programs has been marred with different problems. These include the issue of defining the public interest, problematic procedures for allocating funding, problems relating to the competence of the members of commissions deciding on grants and poorly defined mechanisms for evaluating and monitoring project implementation. As a result, while the idea of using project co-financing to support public-interest program production in the media may have seemed like a good idea, the way that it has been implemented has arguably done more harm than good to the public interest.
Over 1,600 media outlets in a small and struggling economy like Serbia’s have long been highly dependent on advertising income. For years, state institutions and state-owned companies have been among the biggest clients in the Serbian media advertising market. This leverage has allowed Serbia’s politicians to influence the editorial policy of numerous media outlets – those critical towards national or local government risked losing the very state advertising on which they were dependent for their financial survival. To make matters worse, thanks to close ties between private business and politics, ruling elites were frequently able to exert control over the allocation of private advertising in Serbia as well.
When it comes to the financial value of the Serbian media market, rough estimates – the only ones available – estimate its worth to be in the range of EUR 120-175 million annually over the past few years (EUR 175 million in 2016 according to Ipsos).
A report on the media sector issued on 20 February 2015 by the Serbian Anti-Corruption Council indicated that the state has various sorts of allowances, write-offs or special treatment for different media regarding the payment of fees and taxes to the state and regulatory bodies, the Regulatory Agency for Electronic Communications and Postal Services (RATEL) and Regulatory Authority for Electronic Media (REM). One of the main conclusions of the report is that the efforts invested in ensuring media integrity, independence and professionalism to date have delivered few positive results.