There is no guarantee that we will succeed in this endeavour, at least not in the foreseeable future, especially when it comes to breaking the SANU Gallery’s impressive attendance record that has stood since 1984. However, we could at least state with a clear conscience that we have exerted efforts to leave behind a better world for our children than the one we inherited from our parents – adds SANU President Zoran Knežević in this interview for CorD Magazine.

Mr Knežević, SANU is currently commemorating the centenary of the birth of great painter, writer, filmmaker and Academy member Miodrag ‘Mića’ Popović. Apart from the two exhibitions that have already been unveiled – a smaller one at the SANU Library and a larger retrospective exhibition at the SANU Gallery – how else is the Academy celebrating the legacy of this distinguished former member?

– Permit me to remind your readers that the Serbian Academy of Sciences and Arts is this year commemorating the centenary of the births of two important academics and painters: Miodrag ‘Mića’ Popović and Milorad ‘Bata’ Mihailović. To mark this exceptionally special occasion, large retrospective exhibitions have been arranged at the SANU Gallery to present the works of these two great artists and friends, rebels against the dogma of socialist realism in art, who were connected, among other ways, by havreing both belonged to the famous “Zadar Group”, which they co-founded with a group of their fellow students.

The exhibitions are accompanied by outstanding catalogues that have been published by the Academy, with the one representing Popović’s work having been prepared by art historian Dr Vesna Kruljac, assistant professor at the University of Belgrade Faculty of Applied Arts. Throughout the exhibition’s run, visitors are able to watch excerpts from Popović’s films, while lectures by Dr Kruljac and other experts have also been organised, dedicated to researching and interpreting Popović’s creative work. Apart from the exhibitions, the central event with which SANU is commemorating the legacy of its prominent members is a scientific conference under the working title “Polemic Aspects of Post-1945 Serbian Modernism With A Particular Focus on the Actions of Zadar Group Members”, which will take place at the Academy on 17th and 18th October and will focus on shedding light on Serbian modernism from a new perspective and re-evaluating the Zadar Group’s contribution to our fine art scene. You have already mentioned the smaller, chamber exhibition dedicated to Mića Popović at the Library of the Academy, while SANU has also used the Popović works preserved in its collection to participate in exhibitions at other galleries in Belgrade, Kikinda and elsewhere.

The title of the Popović retrospective exhibition includes the wording “The Art of Permanent Rebellion”. In the case of this academic and painter, that rebellion wasn’t merely artistic, but rather also implied an engaged, critical perspective on events occurring in society. This brings us neatly on to the unavoidable and eternal question of determining the correct relationship between the Academy and politics?

— I think this question needs to be observed in the context of the position of the Academy, as defined by the Law on SANU and the Statute of the Academy, as “the highest scientific and artistic institution of the Republic of Serbia”, and then for such a designation to determine its appropriate role in society. In a broader sense, this position is also determined by the dual nature of the Academy, i.e., its operational and honorary roles.

It could be stated that SANU’s authority is unquestionable in our scientific and artistic milieu, that what the Academy does and says is highly reingspected; beyond its own framework, in the political sphere, the Academy – in accordance with the aforementioned definition – rarely speaks out, and particularly not with regard to daily political issues, because it isn’t organisationally structured like a political party that formulates an opinion or common stance that it then promotes publicly.

I would remind your readers that SANU is this year commemorating the centenary of the births of two important academics and painters: Miodrag ‘Mića’ Popović and Milorad ‘Bata’ Mihailović

In accordance with its structure, the Academy is an assemblage of independent individuals, intellectuals who can, and often do, have completely contradictory political views and opinions, with which they appear in public of their own accord, independent of the Academy, individually or in groups, on the basis of their own feelings and needs. In this regard, a question arises as to the extent to which decisionmakers in society are prepared to listen to the well-intentioned and science-based assessments and advice of their own top scientists that have been formed through, among other things, national academies, but also the responsibility of academies for the advice that they offer.

The Academy maintains its relations with the state and its executive bodies primarily via an open and constructive dialogue, but also through collaboration with every opportunity for the competences of the Academy to be beneficial to the state and society. In so doing, the Academy acknowledges and appreciates the various social frameworks in which we operate, with the essential political distancing that results from the requirement for the Academy to be independent and to operate primarily in the service of the general good, and not any particular interest.

You were elected SANU president this March. In accepting to take on the position, you promised continuity and to direct SANU “towards safe harbours”. What would you single out as your priorities?

– The leadership of the Academy is confronted by many obligations and responsibilities, alongside the performing of daily tasks. I would use this opportunity to single out just a few of the most important activities that marked the first months of my mandate to a large extent.

Partly due to circumstance, in the first few months of its mandate, alongside its regular work related to providing the institution with the conditions required to operate and function, the new SANU leadership devoted the greatest attention to advancing our Academy’s international cooperation with academies across the region, but also in a broader European and global context, as well as improving SANU’s cooperation with international academic associations, universities and the like. Numerous contacts were established, multiple meetings were held, and we had several visits and encounters. So, it could be said that we renewed some important collaborations and improved some others, and – together with what we inherited from the previous period on this front – SANU can now boast of having very wide international cooperation and visibility.

Numerous activities that are in the focus of the attention and engagement of the leadership unfold constantly at the Academy, including the holding of numerous scientific gatherings, lectures, panel debates and roundtable events, exhibitions and concerts. All these activities are progressing at full steam, and let me note with satisfaction that they are also prepared in a very high-quality way and are well attended.

We are awaited in the year ahead by elections for new regular, correspondent and foreign members, so at this moment the Academy and its leadership are already somewhat turning – through a series of preparatory activities – towards that challenge and the important work that lies ahead of us.

Work is also continuing on capital national projects, such as the compiling of the SANU Dictionary and the Serbian Encyclopaedia, which require the constant attention and engagement of the SANU leadership and members. New volumes and books are expected soon, constant care of the Serbian language and script is taken etc.

SANU has responded to numerous existing challenges over the previous period. Its scientific summits have contributed to discussions regarding healthcare (during the Covid-19 pandemic) and energy sources (with reference to smallscale hydro power plants and mining practises), as well as declaring its position on Kosovo. Should the Academy continue down that path?

— I am able to state unreservedly that SANU has – with the work and activities it has carried out over the previous period, coupled with the values it promotes and the standards it applies – achieved significant results and become an exemplary, well-organised, functional institution and a centre of cultural, scientific, artistic and intellectual life generally in our neighbourhood. It is thus completely self-evident that the central pillar of the work programme of the new SANU leadership is “rational and realistically achievable continuity in the work and activities of the Academy, or in the managing of its affairs in accordance with the highest standards appropriate to our house”.

We are awaited in the year ahead by elections for new regular, correspondent and foreign members, so at this moment the Academy and its leadership are already somewhat turning – through a series of preparatory activities – towards that challenge and the important work that lies ahead of us

The answer to your question is therefore a simple ‘yes’: the Academy should, and is, continuing along the same path and responding to current challenges, with an additional essential clarification: that it does so wherever it possesses the required competences to address a given problem and wherever it is able to contribute realistically and constructively to resolving said problem.

The tragic shooting at Belgrade’s Vladislav Ribnikar Primary School has led to talk across Serbia about a crisis of education and the disruption of the system of values that largely develops during the school education process. What would you say about the current state of Serbia’s education system?

— The Academy devotes a lot of attention to education, as evidenced – among other things – by the fact that operating actively under its auspices are the SANU Board for Education and the SANU Board for Higher Education. In the context of your question, the best answer – to which I have nothing to add personally – was provided two years ago, when a large scientific conference was held at SANU under the title “Education: status, perspectives and role in the development of Serbia”.

This conference included the presentation of a voluminous publication containing key data points on the state of education in Serbia, as well as the defining of recommendations for improving education in Serbia, which were then submitted to the public and all relevant state bodies and national educational organisations and institutions, while the conference ‘Proceedings’, representing a collection of works presenting transcripts of authorised discussions from the conference, were also published. I would also mention the fact that multiple lectures and panel debates held at SANU in recent times have also addressed various relevant topics related to education, while several exhibitions covering the topic of education have been organised at the SANU Gallery of Science and Technology.

Returning to the exhibition of Popović’s paintings, it has been stated that half a million people saw his 1984 exhibition, which set a SANU Gallery record. At this time when there is plenty of talk of the need to redefine the model of culture, particularly among young people, what needs to be done to break that 1984 exhibition attendance record?

— It could probably be stated that SANU’s raison d’etre, at least to a certain extent, is identified with its permanent active participation in the ambitious endeavour of creating a modern, more humane and more tolerant society, within that framework of social and political awareness, and many view this as a natural and implied obligation of the Academy. Many people will probably also agree with the ascertain that our society needs a radical change to the predominant model of culture, if not “conceptualising a completely new world” – to paraphrase the words of my esteemed predecessor as SANU president, academic Vladimir S. Kostić.

I couldn’t say that I know for certain what needs to be done and how in this sense, but I am certain that this must be the goal, at least in principle, that we all strive to achieve, including the Academy. There is no guarantee that we will succeed in this endeavour, at least not in the foreseeable future, especially when it comes to breaking the SANU Gallery’s impressive attendance record that you mention. However, we could then at least state with a clear conscience that we have exerted efforts to leave behind a better world for our children than the one we inherited from our parents.

The post Radical Change to the Dominant Model of Culture Required appeared first on CorD Magazine.

Romanian Ambassador to Serbia Silvia Davidoiu speaks enthusiastically about the strengthening of economic cooperation between the two countries. Speaking in this interview for CorD Magazine, she says that she is looking forward to the next few years. “I expect the fruition of our ambitious, long-planned strategic connectivity projects, and the launching of new partnerships in the agriculture, IT and energy sectors”. And this cooperations is set to be crowned with the construction of a motorway that will reduce travel times between Belgrade and Timișoara to just one hour.

Your Excellency, as the Ambassador of a country that enjoys a high level of understanding and cooperation with Serbia at the political level, you often mention the various possibilities of advancing bilateral economic cooperation. Could you cite progress achieved in this area over the past two years?

– Economic cooperation has substantial potential to further our countries’ growth, having a direct impact on the wellbeing of our citizens and the substance of our bilateral relations. Moreover, it provides a comprehensive vision and additional means to further develop our ties.

One short answer to your question refers to the formal agreements on transport connectivity (e.g., the Timisoara-Belgrade highway/expressway), positive developments in bilateral trade, with a total value surpassing €2.6 billion in 2022, and new initiatives on energy security, aside from the Arad-Mokrin gas interconnector. Over the past two years, we have also diversified our presence on the Serbian market with additional domains (apart from industry) attracting Romanian entrepreneurs. As an example, during this period, Instant Factoring, a Romanian company in the fintech sector, has offered innovative and accessible financing solutions to Serbian SMEs. In April 2023, we also organised a business forum as a preliminary step towards new, regular B2B meetings between Romanian and Serbian companies (operating in the agriculture, energy, construction, industry, ITC and other sectors), aimed at strengthening bilateral economic relations through mutual investments and exchanges. We are committed to implementing all these projects and count on the Serbian side’s engagement in this regard. We are active in some of the economic areas that are most relevant to Serbia’s comprehensive security and sustainable development.

I look forward to the next few years. I expect the fruition of our ambitious, long-planned strategic connectivity projects, as well as the launch of new partnerships in agriculture, IT and energy – all sectors that are expanding in Romania, in Romania, possibly with an external expansion outlook. To give you an example, with my country currently exploring offshore gas reserves, implementing SMR technologies for nuclear power and capitalising the investments of top Romanian players in renewables, I expect my country to consolidate its position as a net energy provider for the region, including Serbia.

How do Romania and Serbia utilise the European Union funds that are provided through the IPA funding mechanism to improve cross-border cooperation?

– Cross-border cooperation between Romania and Serbia, with the support of IPA funds, has a long history of successful partnerships. In the 2014- 2020 programming period alone, 84 projects were contracted, representing 99.98% of the programme budget, with an absorption rate in excess of 95%. This impressive track record encourages us to believe that this IPA instrument will continue to forge new forms of collaboration between our countries.

Cross-border cooperation between Romania and Serbia, with the support of IPA funds, has a long history of successful partnerships. In the 2014-2020 programming period alone, 84 projects were contracted

As for the 2021-2027 period, the Interreg IPA Romania-Serbia Programme counwas the first of its type to be adopted by the European Commission. It focuses on promoting energy efficiency and renewable energy, reducing emissions of greenhouse gases and all forms of pollution, improving equal access to inclusive and quality services in education and health, enhancing the role of culture and sustainable tourism in furthering economic development, and increasing border management capacity. Climate and energy objectives receive 35% of the total allocation of the IPA Interreg Romania-Serbia Programme in the 2021-2027 cycle, as a direct contribution to the European Green Deal and the Green Agenda for the Western Balkans. Moreover, 52% of the Programme’s financial package is dedicated to projects of strategic importance and large infrastructure projects in the fields of healthcare, border management, risk management and emergency situation response.

We are seeing EU accession enthusiasm waning in Serbia, with many believing that this is due to the slowness of the integration process. Serbia has opened only slightly more than half of the accession negotiation chapters, despite the process having started more than a decade ago. It was almost two years ago that the last cluster was opened, which is also when you arrived in Serbia. Does such a tempo contradict the messages coming from the EU about a strong new commitment to the expansion of the bloc to encompass the Western Balkans?

– The EU’s commitment to the European perspective of the Western Balkans is firm and unabated, as reiterated in the European Commission President’s State of the Union Address on 13th September. However, the pace of negotiations depends entirely on candidate countries fulfilling the necessary criteria, particularly on the fundamentals.

EU accession is a two-way street, with regard to the EU’s capacity and willingness to accept new members benchand candidate countries’ consistent and measurable efforts to meet clearly- defined benchmarks. This has been a constant feature, regardless of the revisions of the process conducted over previous years.

On the one hand, the messages from the EU and its Member States clearly testify to the first track of this process being open and unobstructed for those Western Balkan and Eastern European countries that fulfil the accession criteria. That represents encouragement for these partners to internalise European values and principles in their entirety. Three more counwas tries were granted EU candidate status over the past year, including one from this region. The process is therefore advancing and the messages do match the actions.

On the other hand, the second track of European integration relates to their merit-based quality and it is thus the sole responsibility of candidates and potential candidates to determine the pace of reform. This implies that, by the time of accession, these countries should be strategically aligned with the EU and fully harmonised with the acquis, including when it comes to respect for fundamental rights and compliance with the EU’s Common Foreign and Security Policy. This is a key aspect that ensures the sustainability of political and economic partnerships with candidate and potential candidate countries, creating the conditions for a strengthened EU.

The statement of the President of the European Council regarding some countries of our region being possibly admitted into the EU in 2030 garnered a lot of negative comments in Brussels. Can we continue to take the enlargement process seriously without specific dates for the next round of enlargement?

– Charles Michel’s recent reference to the bloc’s readiness to accept new members is firstly a confirmation that enlargement remains a top priority for the EU over the coming years. It is also encouragement for candidates to increase the tempo of key reforms in order to secure solid and irreversible achievements that are in line with each partner’s relationship with the EU, in a dynamic and merit-based approach. It therefore represents an appeal for active and consistent engagement on all sides for the new enlargement of the EU. The President of the European Council was explicit in his speech in Bled about the imperative of ensuring the process remains credible. This is dependent on the EU’s openness to continue the enlargement process, but also on candidates’ fulfilment of necessary benchand marks. Again, the twin-track approach of advancing on the basis of merit remains in place, so there is consistency in messaging, just as we are on the same page in our understanding that Western Balkan (and Eastern European) states belong within the Union. Whether we manage to meet this mutual goal within a specific timeframe depends on all of us. We all need to take the process seriously in order to make EU integration happen and to keep it within the lines of a successful policy for the transformative effect on candidates and potential candidates and the bloc’s internal coherence and external appeal and action.

The messages from the EU and its Member States clearly testify to the first track of this process being open and unobstructed for those Western Balkan and Eastern European countries that fulfil the accession criteria

There are frequent calls coming from within the EU that encourage Serbia to change its stance on Kosovo, but also the EU Member States that have chosen not to recognise the unilaterally declared independence of Kosovo. Will Romania maintain its stance on this issue? — First, allow me to offer a few clarifications: we have not experienced any calls or pressure to change our stance regarding the status of Kosovo. The interactions we have had with third parties on this topic were more in line with evaluating our position in the context of our common renewed interest in firmly advancing the dialogue and reconciliation between Belgrade and Pristina. This is an approach that we welcome and encourage in an effort to dispel any misunderstanding.

Romania has a consistent and principled position on the non-recognition of Kosovo’s unilateral declaration of independence. We maintain a constructive approach on the issue, without prejudice to our national position. It is the primary responsibility of Belgrade and Pristina to reach a comprehensive and definitive solution. My country joined the efforts of the EU and other relevant actors in supporting the normalisation process through result-oriented negotiations between the two parties.

Romania reasserts its full support for the EU-mediated Political Dialogue, which represents the only adequate framework to normalise relations between Belgrade and Pristina. Against the backdrop of persistent tension, the two sides need to reengage in this framework to identify a solution that reflects their respective interests and contributes to the peace and stability of the region, with full respect for all agreements reached to date in the EU-facilitated dialogue process.

Are you satisfied with the status and treatment of members of the ethnic Romanian community in Serbia?

– Our respective national minorities have anchored our relations in a state of mutual respect and good neighbourliness, despite the changes experienced by our countries in recent history. They are also a source of constant enrichment for our historic ties and provide a reference point to the quality of the overall Romanian- Serbian dialogue. We cherish this outstanding bond and remain constructive, open and transparent in our support for the rights of those belonging to our ethnic minorities.

Romania’s constant interest in the preservation of the cultural ethos of its national minority, its mother tongue and religious identity, is consistent with European standards in this field, which are crucial for a democratic society.

Serbs in Romania enjoy all the rights stipulated by the relevant international documents: parliamentary representation, education, religious services and media in their native language. They are active in local administrations and provide an important contribution to our society. We would like to see all citizens that identify as Romanian in Serbia fully enjoying the rights provided by the national legislation and international documents signed by the state, and provided by requirements on the EU accession path.

Differences nonetheless persist, with Romanians in Eastern Serbia having restricted access to education, media and religious services in their mother tongue, as well as limited representation in local and national administration, in contrast to those residing in Vojvodina. These issues should be substantively tackled within the framework of the Romanian- Serbian Joint Intergovernmental Commission for National Minorities, the third protocol of which is currently being negotiated.

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The Berlin process, as well as the Franco- German proposal for the final normalisation of relations between Belgrade and Pristina, should be interpreted as Germany’s contribution to accelerating the process that ought to lead to Serbia’s EU accession, says German Ambassador Anke Konrad in this interview for CorD Magazine. She adds that economic cooperation between the two countries remains at a high level, as does interest in entering Serbia among German companies.

“Of course, the business environment needs to be fair and lawful,” insists Ambassador Konrad, before noting that “the most recent business survey of the German Chamber of Commerce in Serbia, conducted in 2023, has testified that factors like the availability of qualified workers, the fight against corruption, political and social stability, as well as the transparency of public tenders, have an important impact on the productivity of existing investments, as well as decisions on future ones. It is therefore crucial to continue working to ensure a level playing field for all players in the business sphere.”

Your Excellency, when you arrived in Serbia a year ago, your initial message was that Serbia is an important partner to Germany. Has anything changed in the meantime when it comes to relations between Berlin and Belgrade?

– Relations between Berlin and Belgrade are close and will remain so. Through my first year in Serbia, we have continued our cooperation on a broad range of bilateral issues, as well as on global challenges like, for instance, climate change. The Berlin Process, created in 2014, has taken a big step forward with the conclusion of four mobility agreements that will contribute to furthering cooperation and exchange among all Western Balkan countries mutually, as well as with their European partners. We look forward to the next summit in Tirana, on 16th October, which should open up new avenues for this cooperation.

With the Franco-German proposal, Berlin and Paris have provided an important contribution to agreements reached in Brussels and Ohrid at the beginning of this year to further the normalisation of relations between Belgrade and Pristina. We also see our engagement in all these areas as our contribution to advancing Serbia on its journey to membership in the European Union and we will continue our support.

German media recently received a letter in which several Western politicians, including Michael Roth, Chair of the Bundestag Foreign Affairs Committee and a member of the ruling SPD, allegedly call on the EU and the U.S. to distance themselves from Serbia and support the Kosovo government over current events unfolding in the north of the province. The letter includes a call to “learn from our past and ensure that we do not pursue Belgrade-centric policies in the Balkans”. Is this the personal position of Mr Roth or is he actually announcing a change to German foreign policy?

– The role of the German Foreign Affairs Committee is to monitor and evaluate our foreign policy. The committee may provide the government with advice and recommendations on foreign policy, stemming from discussions and analyses that take place there.

The Ohrid Agreement, is an important and responsible step towards normalisation that we support and which must now be implemented by both sides without additional conditions

The letter therefore represents an impetus for public debate and does not signify a change in German foreign policy. Our position remains clear: the future of the Western Balkan countries lies in the European Union. To this end, Serbia and Kosovo will have to take important steps toward one another. They confirmed their willingness to do so six months ago in Ohrid – the task for both sides now is to implement those commitments.

In your statements given to media here in Serbia, you refuted the claim that Germany “supports only one side” in Kosovo. To which side do you attribute responsibility for the latest escalation of problems in the north of Kosovo?

– We have a situation between Serbia and Kosovo that is not sustainable and that has been depriving both countries, and the people who live there, of many development prospects for many years. The basic agreement, namely the Ohrid Agreement, with which both sides agreed earlier this year to further normalise their relations, is therefore an important and responsible step that we support and which must now be implemented by both sides without additional conditions.

It is now the responsibility of both sides to conduct and continue the dialogue on the implementation of Ohrid seriously and constructively, and to take concrete steps. We should always bear in mind that the normalisation of these relations is, first and foremost, about the future of the people of the two countries, as well as the future of the entire Western Balkan region.

Late June saw German company Hansgrohe open its new plant in Valjevo, announcing work for as many as 100 workers. Does this serve to confirm that German investors are still interested in investing in Serbia?

– Yes, interest in investing in Serbia remains high among German companies, including investments in the expansion of existing companies or the diversification of their portfolio. I would like to emphasise that these investments lead not only to the creation of additional workplaces, but also highly qualified ones, creating new prospects for specialists, also in the IT sector. By setting new standards with regard to working conditions, dual education, environmental protection or energy consumption, German companies contribute directly to Serbia’s EU accession path.

By setting new standards with regard to working conditions, dual education, environmental protection or energy consumption, German companies contribute directly to Serbia’s EU accession path

Of course, the business environment needs to be fair and just. The most recent business survey of the German Chamber of Commerce in Serbia, conducted in 2023, testified that factors like the availability of qualified workers, the fight against corruption, political and social stability, as well as the transparency of public tenders, have an important impact on the productivity of existing investments, as well as decisions on future ones.

It is therefore crucial to continue working to ensure a level playing field for all players in the business sphere.

Germany is viewed from within Serbia as an EU member state that strongly supports expansion of the Union to encompass the countries of the Western Balkans. Given the current pace at which this process is unfolding – not only in the case of Serbia, but also with Montenegro and particularly North Macedonia – does any basis exist to believe that expansion is a realistic option in the near future and on what does that depend?

– The enlargement of the EU remains our goal. This includes Serbia, as well as all other countries of the Western Balkans. That’s why we continue to support Serbia’s efforts on this challenging path. And that’s why we are simultaneously also working on the future of the EU.

Will the German public support the government’s initiative to significantly ease the procedure for obtaining citizenship, including the option of dual citizenship, which is a topic of interest to a large number of German citizens with Serbian roots who do not yet have a permanent status solution?

– With the reform of the German citizenship law, the federal government intends to create a modern immigration law that reflects the diversity of our society and modern country. The draft law envisages that, in the future, foreigners who are able to make a living for themselves will be able to apply for naturalisation after only five years resident in Germany. Moreover, they will not have to give up their original citizenship. Of course, this would also benefit Serbian citizens who have lived in Germany for a very long time and who are well integrated. The draft law will have to pass the German Bundestag, and therefore might be subject to change following discussions between the members of the parliament. It is not yet clear when the new law might enter into force.

The post Berlin and Belgrade Remain Close appeared first on CorD Magazine.

The majority of economic experts assume that economic growth in Serbia will total around two per cent in 2023, while the National Bank of Serbia (NBS) anticipates a growth rate of up to three per cent. Real GDP growth could experience a resurgence from 2024, possibly reaching four per cent.

This is attributed primarily to FDI inflows, followed by an increased export volume, given that many manufacturing companies produce components in Serbia for their own industrial production, or products for the markets of their home countries. According to NBS data, inflows of foreign capital during the first four months of 2023 totalled approximately 1.3 billion euros, representing a surge of nearly 70 per cent compared to the same period of 2022. That is a major growth driver for Serbian export.

“As a consequence of this, when we observe current facts and figures, the forecast for the foreign trade exchange between Serbia and Germany until the end of this year is exceptionally optimistic,” says Milan Grujić, president of the German- Serbian Chamber of Commerce. “Due to the double-digit growth of Serbian exports to Germany over two consecutive years, the trade exchange between Germany and Serbia achieved a balance in 2022 for the first time after many years. Imports and exports reached a combined total value of eight billion euros last year. These are all very good figures, and one of the reasons Serbia remains an appealing destination for German investors.”

How have German companies that are either investing for the first time or reinvesting in Serbia responded to the forecasts of a slow recovery for the global economy?

– The ups and downs of the economy are always challenging. This is no different today. In Germany, many experts see serious signs of recession and this will have an influence on demand.

However, German and Serbian companies that are members of the German-Serbian Chamber of Commerce have positively assessed the business climate in Serbia and expressed favourable expectations within their own operations.

Despite the difficult economic situation in Germany, 87 per cent of surveyed companies would invest in Serbia again. We see this not only in the results of our survey, but also in reality. For example, at the beginning of 2023, German automotive parts supplier Continental expanded its investments by inaugurating a ‘mega factory’ near Novi Sad, producing state-of-the-art automotive displays. In April, Bizerba opened its new production facility in Valjevo, followed by Hansgrohe on a neighbouring plot in Valjevo in June. We will soon witness the laying of the groundwork for another German investment by another automotive supplier in Čačak. On another hand, however, we must understand that there is already a limiting factor to this process, in terms of the lack of qualified workers in many Serbian regions.

Serbia’s digital transformation initiatives are all geared towards nurturing a digital economy-friendly environment

Some economists believe that a decline in inflation, coupled with accelerated wage growth and a robust labour market, will aid the German economy in achieving modest growth throughout the rest of this year. However, this shift does not fundamentally alter Germany’s economic prospects, and any potential downturn in economic activity within the broader region, including Serbia, is likely to be modest.

Have rising inflation and slowed growth impacted the workforce dynamics of your members to date?

– The annual inflation rate, as measured by the consumer price index, is displaying signs of deceleration. According to the Statistical Office of the Republic of Serbia, it stood at 15.1% in April of this year and had fallen to 13.7% by June. Conversely, the gradual slowdown of consumer inflation in Germany (HICP) has led to a situation in which inflation stood at 7.6% in April 2023, compared to October 2022, when it was as high as 11.6%.

German companies have created more than 80,000 new jobs in Serbia. Based on the findings of this year’s AHK economic survey, 44 per cent of surveyed companies are planning to increase their workforce, while only three per cent believe that their number of employees will decrease. Furthermore, German companies hold a positive view of factors related to the Serbian labour market: they are satisfied with the qualifications, productivity and readiness of the workforce.

Our projection is that, by 2024, we will achieve a trade exchange worth 10 billion euros and have 100,000 individuals from diverse professional backgrounds employed by German companies in Serbia.

What are the most crucial issues for your chamber today when it comes to improving the business climate?

– The challenges that plagued the planet at the turn of the millennium are still very relevant, with new ones having also arisen, all while the time to react becomes increasingly limited. The year 2030 is fast approaching, and ambitious environmental protection goals can only be achieved through collaboration between the public, private and nonprofit sectors. Given these tumultuous times and the challenges confronting the global economy, it is of paramount importance that all companies in Serbia, including SMEs, base their operations on principles of sustainability and ‘green’ objectives. However, sustainable development must be a task for everyone: governments, societies and businesses, but also professions, consumers and all citizens. There is no time to delay on this path, and for us, at the Chamber, it is a task for today.

Regardless of ongoing German investments in Serbia, the lack of qualified workers in many Serbian regions is a notable limiting factor

Areas where untapped potential for improvement remains include education and the availability of skilled labour. Retaining talented personnel is of vital importance to business needs and demands, as is their adequate education in line with market requirements and trends. Serbia stands as the sole country in the region to have adopted a law on dual education, and the state continues to work tirelessly to promote and bolster the dual education system in order to tailor education profiles to the needs of the economy. In July of this year, the German-Serbian Chamber of Commerce signed a Memorandum of Cooperation with the Office for Dual Education and the National Qualifications Framework, underscoring the Chamber’s clear commitment to supporting and promoting the national dual education implementation programme, which is indeed one of the Chamber’s strategic goals.

Serbia is one of the countries where the implementation of the German Due Diligence Act is being tested. How is AHK involved in this process and what are your expectations?

– A new German law on supply chains came into effect on 1st January 2023 and requires all companies with over 3,000 employees to submit annual reports to the government on the status of fundamental human rights and compliance with environmental provisions in their supply chains. Starting from 2024, this obligation will extend to all companies with over 1,000 employees.

The German-Serbian Chamber of Commerce, through the “Supply Chains in Serbia” and “Green Economy and Sustainable Development” committees, is assisting Serbian firms that engage with Germany in adapting to these new regulations, and is thus supporting them on their journey towards sustainable business practices. The German-Serbian Chamber of Commerce is already implementing the Young Energy Europe project, which enables young professionals to enhance their expertise in energy efficiency. The Green Hydrogen Business Desk was launched this year as an incentive for sustainable projects and carbon management training at companies.

How do German companies view the development of the Open Balkan initiative, and how do they assess the effects of reducing trade barriers and relaxing regulations governing the free movement of labour?

– The Open Balkan initiative represents an excellent opportunity to liberalise capital flows, as doing so would make the region more attractive for establishing new investments and expanding current ones. However, in order for this initiative to be even more successful, it is essential to extend the Open Balkan framework to encompass all markets of the Western Balkans. German companies planning to establish a presence in Serbia are not only considering infrastructure and local conditions, but also the potential for broader regional engagement, thanks to harmonised standards that apply across the entire region. The development of a common economic market will therefore hold significance primarily for the economy and business, serving as a possibility to attract even more foreign investors.

How would you evaluate the current legislative initiatives that are aimed at enhancing the digital services provided for businesses by the government?

– The concept of digital transformation has been recognised as a pivotal global trend of the world economy — a process that transforms society and the economy as a whole. It is also an essential prerequisite for the survival, growth and development of companies on both domestic and global markets. Throughout the pandemic, digital transformation proved critical to company survival and accelerated the evolution of the European economy. Strategic development programmes for the start-up ecosystem, the legal-regulatory framework, digital infrastructure and public dialogue on digital transformation in Serbia are all aimed at creating a business environment that serves the digital economy.

Given that digital transformation is an ongoing narrative, a story that never truly ends, continuous efforts will be exerted in the direction of analysis and initiatives aimed at enhancing the current business model.

The post Soaring Bilateral Trade Attracts German Investors appeared first on CorD Magazine.

Despite falling international demand and the slowdown in economic activity globally, Germany has remained Serbia’s top foreign trade partner, while the mutual exchange of goods and services continued to grow in the first half of this year, though admittedly somewhat more slowly than over the preceding two years. The exchange of goods increased by 15.6% in the first six months, with the exchange of services up 17.9%, with the total value of mutual trade thus reaching almost 5.5 billion euros.

“That trend has continued in the second half of the year, and we will this year exceed 10 billion euros for the first time, thereby surpassing the record of 9.99 billion euros in the exchange of goods and services that we achieved last year,” says Marko Čadež, president of the Chamber of Commerce & Industry of Serbia. This year’s combined balance in the trade of goods and services could “leap” to as much as 11.5 billion euros, with the exchange of goods exceeding 9.5 billion euros and the exchange of services over two billion euros,” explains our interlocutor.

What are the prospects of Serbian exports to the German market continuing to increase under the current circumstances?

– Goods exports grew significantly faster than imports in the first six months of this year, contributing to the deficit in trade with Germany falling significantly. With growth of 24 per cent compared to the same period of last year, exports increased to 2.155 billion euros, while imports were up by nine per cent to 2.382 billion and the deficit fell by 50 per cent – down from 448 million euros in the first half of 2022 to 227 million euros in the first six months of this year. The coverage of imports by exports reached 90.5%, which is the highest percentage in the last ten years.

If the trend of growing sales from the first half of the year is maintained in the third and fourth quarters, Serbian exporters, who last year sold goods worth 3.785 billion euros to German partners, will end 2023 with the highest annual performance on the German market to date, totalling almost 4.7 billion euros, and the prospect of next year recording five billion euros in goods exports for the first time ever. Apart from sales increasing and the deficit reducing, the structure of Serbian goods exports has also been improving year on year, in favour of products with a higher degree of processing, a significant contribution to which is provided by high-tech investments from Germany that are increasingly arriving in Serbia.

This year’s combined balance in the trade of goods and services could “leap” to as much as 11.5 billion euros

Alongside the reducing deficit in the goods exchange, the surplus that Serbia has enjoyed in the trade in services with Germany for years has continued to grow – up by as much as 29 per cent in the first half of the year compared to the same period of last year.

The exchange of services with Germany reached a value of 954.6 million euros in the first half of this year. Compared to H1 2022, export revenue increased by 20 per cent – to total €603.6 – while imports from Germany increased by 14.3 per cent – up to €351 million. New opportunities for the growth of exports of IT products and services were also created with the noted participation of our gaming industry firms in the world’s largest gaming fair in Cologne in late August, which prompted great interest among publishers, investors, media companies and gamers.

According to statistics that you presented recently, approximately 11,500 domestic and foreign companies that do business in Serbia are engaged in trade with Germany – both exporting from Serbia to Germany and importing from Germany to Serbia. How successful are we when it comes to including local companies in the supply and value chains of German-based multinationals?

– In the new circumstances globally, nearshoring processes have created new opportunities for Serbia and the region to entice more investments and for our companies to be included in the supply chains of European companies that are relocating their operations closer to their home countries.

Over recent years, we’ve responded to hundreds of inquiries from international companies, mostly German, that recognise new suppliers among Serbian and Western Balkan companies and that turn to the Chamber of Commerce & Industry of Serbia for support in identifying partners, primarily from the automotive, metals and electrical engineering industries, but also from other sectors. We’ve also continued organising ‘supplier days’ events for individual German companies and training for local exporters, in cooperation with GIZ, the German Association for Supply Chain Management, Procurement and Logistics (BME e.V.) and German companies.

How much room exists to continue, through such activities, to expand the number of Serbian companies that are included in the supplier networks of German companies?

– There is ever more room for that. In addressing the increased interest in suppliers, the Chamber of Commerce & Industry of Serbia is introducing new forms of networking between local and foreign companies. Since last autumn – with the organising of the Inter- Connect Executive Summit and this spring’s InterConnect B2B Matchmaking Conference – we have launched a series of events aimed at establishing a unique regional platform for connecting domestic companies, particularly SMEs, with international corporations, the majority of which have so far been German, such as Thyssenkrupp Automotive, Zentis Group, Celonis, Mahle, DBW, Skylotec etc.

This year’s conference focused on concrete business discussions – addressing supply and demand, and connecting buyers and suppliers in four areas: metals processing, the manufacturing of equipment, machinery and tools, and the rubber and plastics industries, in which Serbia has special potential and products that are particularly interesting to international companies.

What does the implementing of Germany’s Supply Chain Due Diligence Act mean for the Serbian economy and to what extent will this law apply to our companies?

– We will know precisely how many domestic companies this law will apply to next spring, with the expiry of the deadline for the submission of the first reports requested by the German companies whose supply chains these Serbian companies are included in. Almost 3,000 companies currently export from Serbia to the German market, but they aren’t all suppliers of German companies that are subject to the provisions of the Supply Chain Due Diligence Act (LkSG), which obliges companies in Germany to conduct risk assessment analysis of their supplier companies in order to prove that they have respect for human rights across their entire supply chain and that they do not have a negative environmental impact.

Serbian exporters could end this year with the highest annual performance on the German market to date, totalling almost 4.7 billion euros

It is important to note that the domestic companies that are direct suppliers of German companies satisfied all standards of their buyers, including environmental and employee protection standards, prior to the contracting of work and entering the supply chains of German companies. What’s actually new is the inclusion of indirect suppliers in the risk assessment process, which transfers obligations further down the supply chain to the suppliers of direct suppliers.

This is an opportunity for the Serbian economy to increase its competitiveness on the European market and for us to prove that we can offer organised and responsible supply chains that are ready to respond not only to the obligations of German law, but also to other directives at the EU level that have already entered into force or have been announced. Applying and adhering to German law will be a kind of preparatory training for adhering to the EU’s increasingly stringent and demanding rules and regulations.

As a business association, how does the Chamber of Commerce & Industry of Serbia prepare its members to comply with standards relating to sustainability and responsible business?

– We adopted the Green Declaration, activated the CCIS Green Team and formed, in cooperation with GIZ, the Responsible Business Hub to support companies that export to Germany and other EU markets, particularly SMEs.

We have already offered business leaders multiple online tools that will help them – firstly to determine where they stand in relation to the requirements of responsible business, which relate to environmental protection and human rights as defined by international standards and the laws of the most important markets, and then to receive guidelines on how to improve their processes. We are available to assist in terms of interpreting regulations and organising bespoke training for exporting companies and their suppliers, in order to increase the stability of all links in the chain. We will organise workshops on risk analysis and risk management for companies from five industries: automotive, metals processing, textiles, food and wood processing.

The post Many Reasons For Optimism appeared first on CorD Magazine.

During the first four months of 2023, trade in goods between Germany and Serbia reached a value of nearly three billion euros – according to data from the German Federal Statistical Office. This marks an increase of almost 18 per cent.

The foreign trade exchange between the Federal Republic of Germany and the Republic of Serbia increased nominally by 26.3% in 2022, partly due to rising prices, but only partly. “These data indicate significant growth,” says Alexander Markus, Executive Member of the Board of the German-Serbian Chamber of Commerce, who expects a new record total in the bilateral trade exchange between our countries to be set this year.

These positive results are due to ever-more German companies producing or expanding their existing manufacturing sites in Serbia. Most of these projects produce components for German industry.

“In the opinion of our members, as expressed in the latest AHK survey on business conditions in Serbia, the assessment of the economic situation in Serbia for the year 2023 has not deteriorated,” says our interlocutor.

Almost half of surveyed AHK respondents (47%) rate their business as good, while only 6% consider it as being less than satisfactory. Business forecasts for the current year also show optimism, with only 7% of those surveyed expressing concerns about a worsening of their turnover and results.

“For German companies, Serbia remains an attractive market for sourcing and investments,” explains Markus. “Nevertheless, they also mentioned certain risks: geopolitical crises and regional conflicts, high prices, and economic slowdowns in key markets of Serbian exporters, which create a certain level of uncertainty for them.”

How would you assess the impact of the Purchasing Initiative Western Balkans in terms of boosting exchanges between companies from Serbia and prospective German partners?

– We particularly recommend looking for new partners in times of supply chain challenges, global uncertainties and transformation processes. Still, market transparency and qualified access to procurement markets remain relevant topics in Serbia. Western Balkan countries have great potential. However, it is not just about sheer quantity – the increasing quality of Serbian companies’ products is evident. Moreover, this initiative focuses on knowledge-sharing, best practices and technology transfers. It has thus contributed significantly to making Serbian suppliers’ products better and to enhancing their competitiveness.

But this only advances one step at a time. First, a German buyer demands samples. They then discuss what needs to be changed to achieve the required quality. The Serbian company must sometimes invest in new equipment, because they cannot attain the necessary quality using their existing machinery. From time to time, the buyer company supports the supplier in doing this, for example by signing long-term contracts or agreeing to specific grace periods.

This year’s main B2B event of the Supplier Initiative is scheduled to take place in Cologne on 12th October. More than 50 German companies have already confirmed their participation. Interested German companies predominantly come from the metal processing sector, automotive supply sector, plastic processing and plastic materials production sector, as well as a smaller number of companies from the electrical engineering and electronics sector.

How often do you organise events at which German and Serbian companies can exchange practices and insights related to technological advancements in their respective sectors and prospects for cooperation?

– We are very proud that we facilitate real exchanges of experience and insights between German and Serbian companies, particularly pertaining to technological advancements in their respective sectors and the potential for collaboration.

Throughout the calendar year, we organise a series of targeted events and delegation trips designed to bring together key stakeholders from both sides, with the aim of establishing business contacts, exchanging knowhow and experiences of businesses, as well as deepening collaboration between German and Serbian companies.

Seeking new partners is a must during times of supply chain challenges. Increased market transparency and access in Serbia are thus important

These events vary in nature, ranging from specialised workshops and industry-focused seminars to high-profile conferences and innovation showcases. Our strategic approach ensures that these gatherings are not only informative, but also conducive to forging meaningful connections and partnerships.

Participants in the project Civil Security Technologies and Services in Serbia and Albania had an opportunity this past February to hear about the latest trends in the field of civil security from German experts and companies.

Raising awareness among members about the importance of energy efficiency and sustainability is one of our strategic objectives. That’s why we organised a professional conference on the topic of Energy Efficiency in Buildings in Serbia and Montenegro in May this year. This was an opportunity to hear presentations of experts from Germany and Serbia on this current topic, as well as to get acquainted with German companies and their products and solutions in this field.

During the upcoming autumn, the Chamber is organising study-business trips for Serbian companies and organisations to Bavaria on the topic of “Smart Cities and Digitalisation,” as well as study-business trips for Serbian companies to Baden-Württemberg on the topic of “Agricultural Equipment and Machinery”. These trips are intended to establish business contacts, exchange experiences and acquire knowledge of modern technologies applicable to these directions.

We are witnessing that Serbia, with the support of the EU, is investing a lot in new roads, railways, and broadband internet. Do you think these efforts will encourage German companies to expand further into smaller Serbian cities?

– Yes, I absolutely think so! Infrastructure investments are a major lever for making remote areas more attractive to investors. Let me give you an example: I visited two of our member companies in Ivanjica in August. They are awaiting the extension of the motorway to link the town to the next bigger city, Čačak. When this happens, the driving time between these locations will be reduced to 20 minutes. This will be a gamechanger for a town like Ivanjica, and an important factor in attracting qualified workers to Ivanjica, because people will be able to commute between the two locations quickly and easily.

Infrastructure projects have the potential to reshape the economic landscape and to have a significant influence on the strategic decisions of German companies to come to Serbia in the future. That was actually the essence of the business development concept following German reunification in the 1990s. Namely, every Deutschmark invested in infrastructure improvement paid back threefold: firstly as income for the companies executing these projects; secondly as an advantage at the regional level – because East German infrastructure was soon more modern than that of the West; and thirdly as a boost to quality of life for the people living there, which finally brought a halt to the outflow of people from East to West.

This is why investment in infrastructure also has a profound ripple effect in Serbia that extends beyond major urban centres. The development of new roads and railways not only eases travel conditions, but also opens up remote regions, including smaller Serbian towns. And that’s what we see when it comes to investment from Germany: new investors are today usually seeking sites in medium-sized Serbian cities or smaller towns.

How do you consider the effects of the implementation of the Due Diligence Act in Serbia? Will this initiative help companies retain the best workers?

— The vast majority of German companies would not need a law like the “Lieferkettensorgfaltspflichtengesetz”, which we translate into English as “Due Diligence Act”. There is a Latin proverb “nomen est omen” [meaning ‘the name is a sign’]. Unfortunately, there are always some black sheep, that cannot be avoided.

In Germany, but not only there and actually all over Europe, we have this term “honourable merchant – der ehrbare Kaufmann”. This term comes from medieval times and played an important role in the Northern German “Hanse” [Guild]. It equates to trust, first of all, because this is a core value and precondition for every business endeavour. But where does trust come from? It comes from honesty, from a commitment to responsible business practices that include good working conditions, employee health and safety, and a sense of contributing to the greater social good. Such factors certainly play an important role in enhancing job satisfaction and engendering a stronger sense of loyalty among employees.

The post Serbia Is An Appealing, Yet Risky Market appeared first on CorD Magazine.

Opening his first interview for CorD, the newly appointed director of the Goethe-Institut Belgrade explains: “Each of our 160 branch offices in 100 countries has to take into consideration the regional and local conditions of its activities; what is expected from the Goethe-Institut by our partners; and what, from our point of view, needs to be addressed in order to add to the cultural life of our respective guest country.”

Given that you’ve worked at various Goethe-Institut hubs worldwide, how do you tailor your programmes to resonate with diverse cultural contexts?

— The Goethe-Institut, on behalf of the Federal Republic of Germany, fosters international exchanges and understanding in the areas of creativity, education and civil society; coupled with information pertaining to recent cultural developments in Germany and the promotion of teaching and learning the German language. The mission of the Goethe-Institut as a whole reflects global changes in these areas – e.g., the aspect of sustainable solutions has achieved a certain prominence in our programmes everywhere – and thus provides a set of worldwide programme options for my work.

In addition, each of our 160 branch offices in 100 countries has to take into consideration the regional and local conditions of its activities: what is expected from the Goethe-Institut by our partners; and what, from our point of view, needs to be addressed to add to the cultural life of our respective guest country. Usually when I’m settling into a new station, my setup of a specific programme line results from a process of consultations with our experienced local staff, as well as partners both from the guest country and related German and European organisations. Dialogue is key.

Considering your experience, which Goethe Institute programmes do you consider as being most relevant and well-received by the Serbian public?

— Belgrade itself has such a rich cultural life that the Goethe-Institut is happy to be a small part of it by providing German artists to contribute to well-established festivals like Bitef, the Belgrade Jazz Festival, or BelDocs; by cooperating with institutions like the Belgrade Cultural Centre or the Museum of Contemporary and Modern Art (cf. our upcoming exhibition “Future Perfect”); by setting up events like the Goethe(- Film)FEST, the Belgrade Art Week, or the “Next Generation” series of performances, including “Failure as practice” and “Inequality as practice” – all of them preferably co-designed with local partners and other European cultural centres. We are committed to helping improve the participation of the very vital Serbian civil society in the political process; to that end, we ally with civil society organisations like CZKD, the Roma Forum, or Merlinka, and we offer space to civil society groups like Commons or Škograd.

It is safe to say that the Goethe-Institut’s partners and audience are generally staunch supporters of a clear EU perspective for Serbia, as a country that’s doubtless “in the heart of Europe”

The reach of our programmes extends beyond the Serbian capital, as we also support activities in rural areas (e.g., ARLEMM festival) or between countries, for instance in the theatre project “New Stages South East” (here the Belgrade branch office is serving not only Serbia, but also Montenegro). It is most important for us to join forces with Goethe-Institutes and partners in other post-Yugoslav countries that share a considerable amount of common history and, hopefully, future – hence our series of Western Balkan projects dedicated to remembrance and reconciliation like “Missing Stories” or “Present/ Past”. And let’s not forget that an important part of the Goethe-Institut’s work is to enable Serbian schools to provide substantial and meaningful German language programmes, the impact of which usually extends much further than just language learning.

Despite reports of waning interest in EU accession among Serbian citizens, how does their enthusiasm for European and German culture, as well as cultural exchange, fare?

— It is safe to say that the Goethe-Institut’s partners and audience are generally staunch supporters of a clear EU perspective for Serbia, as a country that’s doubtless “in the heart of Europe”; and, indeed, all reasonable considerations – taking into account our common cultural, economic and strategic interests – suggest Serbia’s EU integration as the natural move. Based on lots of conversations, I am optimistic that a realistic understanding of this move’s benefits, both for Serbia and Europe, will sooner or later overcome all petty nationalistic arguments.

That’s why the Goethe-Institut actively participates in shaping and spreading this understanding: for instance, by partnering with EU organisations on projects like “Pulse of Europe – EU Media Trips”, which takes Serbian journalists to places of EU best practice all over the continent; or by operating, on behalf of the EU Commission, the terrific “Culture Moves Europe” programme, which provides tons of opportunities for travel and exchanges between artists in Europe.

Navigating the varied tastes and interests of multiple generations, from baby boomers to Gen Z, can be challenging. What kind of content appeals to both demographics?

— We always try to offer a mix of programmes. Some topics perhaps appeal more to younger people – to name a few: “Playing Narratives”, an education project via gaming; the upcoming Belgrade concert of the German band “Ok.Danke. Tschüss”, intended for schoolkids; or our monthly “reduce-reuse-recycle” sustainability activities at the institute, with a repair workshop to be added.

The reach of our programmes extends beyond the Serbian capital, as we support activities in rural areas (e.g. ARLEMM festival) or between countries, for instance in the theatre project “New Stages South East”

We plan to revitalise artists’ collectives from the former Yugoslavia in the countryside, which might be a good example for a project that calls for a somewhat more experienced audience. I assume, and notice, that the regular art exhibitions and literary readings at our library in particular are interesting regardless of age and they apparently attract all kinds of people passing by our window on Knez Mihailova Street.

Given the growing popularity of the German language in Serbia, how often do you engage in casual conversations in German with Serbian citizens?

— Unfortunately, as I arrived in Belgrade only recently, I so far haven’t made many Serbian acquaintances that aren’t related to my job; I’m working on it. However, I did notice that whenever I try to make use of my still very rudimentary Serbian in shops or at a bus stop, people often recognise me as German and tend to answer in German – which makes it easier on the one side, but certainly doesn’t help my efforts to learn Serbian…

Which of the German courses offered by the Goethe-Institut are in high demand in Serbia?

— It goes without saying that all our German courses are great and can be recommended. Not only because they are offered in an authentic German atmosphere, and with a good deal of German culture into the bargain, but also because we highly value, and therefore invest in, the quality of our teachers, and we systematically align the courses with our own internationally recognised German exams, i.e., by awarding “Goethe certificates” at all language proficiency levels.

As we can offer the complete set of language learning options, everybody should be able to find the best approach for them. Some prefer a face-to-face classroom experience – be it superfast, in our super-intensives, or in the slower pace of our semester courses – while others appreciate the time flexibility of digital (or at least blended) learning in the comfort of their own home. Demand for German courses online has been on the rise constantly since their efficiency was proved by the pandemic. This is especially true for our tailored company courses. An additional bonus is that digital courses for students are now being offered with a discount of 50% off the regular price!

The post Dialogue Is Key appeared first on CorD Magazine.

Here we speak with the director of NALED’s Sustainable Development Department, Slobodan Krstović, about the use of natural resources, environmental protection, building communities that are sustainable over the long-term, climate change, the UN’s Sustainable Development Goals, socially responsible companies, measures, strategies and projects that will help us protect and preserve the planet.

If we take as our starting point the definition of sustainable development as development that satisfies present needs without jeopardising the ability of future generations to satisfy their own needs, a question arises over what we leave behind as a legacy to future generations. How much have we done on this front?

— We are striving to ensure that we don’t leave them with fewer resources than we have today. And here I’m not only referring to the finite resources that we are constantly losing, but also the renewable ones that we are currently placing under great pressure due to the influence of pollution, climate change and global warming. We haven’t done enough, and testifying to this claim is the fact that we entered into a state of “environmental indebtedness” at the beginning of August, i.e., that we consumed what nature needs a year to replenish in just the first seven months of the year.

Through its cooperation with businesses, academic institutions and decisionmakers at the national and local levels, NALED offers expert support in achieving the most optimal solutions that are applicable. Within the scope of our working bodies, we take advantage of the expertise of our members, couched in the context of current events and sustainable development trends, and provide decisionmakers with a balanced and applicable solution.

We have seen increased interest in issues related to the environment over recent years. Have significant strides towards solving such issues been taken?

— The process ahead of us is a long one, which is why it might seem as though no major strides have been achieved, but we must be patient in achieving all the defined goals. Certain progress is evident, for example in terms of the construction of regional waste management centres and wastewater treatment plants, and in terms sewage networks – for which financial resources have been provided from various sources of funding. It is extremely important to build capacities at the local level, not only for managing these fundamental systems, but also for training personnel in a systematic way to deal with other current issues in the field of environmental protection, circular economy, achieving climate neutrality etc.

Serbia is among the signatories of the UN’s Agenda 2030, representing a universal strategy that calls on us to mobilise all resources to achieve the Sustainable Development Goals by 2030. How far away from achieving that are we?

— Progress in meeting such broadly defined sustainable development goals is always dependent on political will the most, but also on financial support for specific solutions and investment in education and raising awareness among citizens. In the domain of environmental protection, the focus is on the circular economy and decarbonisation. The Law on Climate Change has been adopted and the drafting of an environmental protection strategy is underway, while we also have a Circular Economy Development Programme for the first time.

In the area of environmental protection alone, it is estimated that we need in excess of ten billion euros to meet the applicable standards and build essential infrastructure

Striving to achieve EU accession by 2030 is now a realistic goal for us; to meet some of the goals by then, and to also ensure subsequent continuity in the reform process. In the area of environmental protection alone, it is estimated that we need in excess of ten billion euros to meet the applicable standards and build essential infrastructure, with just 5.4 billion euros needed, for example, to resolve the issue of wastewater.

Apart from the 2030 Agenda, there is also the UN’s 2050 Agenda for Sustainable Development. Why is climate change among the biggest challenges today?

— The European Union is exerting efforts to realise the vision of the European Green Deal, according to which the continent should become climate neutral by 2050. Introducing various climate policies that are aligned with the European Green Deal often threatens the European single market, which is why various mechanisms are being developed with the intention of motivating the EU’s trade partners, including Serbia, to take steps towards reducing their dependence on fossil fuels. It is precisely this dependence that represents the greatest challenge, while – on the other hand – needs are increasing constantly, given that we had reached a world population of eight billion by the end of last year.

Climate change represents a global problem that cannot be solved, nor even observed, in isolation, but which rather requires international cooperation in the fight against climate change, or the coordination of international activities, which represents a challenge in and of itself.

How do companies in Serbia conduct their efforts towards achieving the SDGs?

— There are companies in Serbia that represent examples to others and that endeavour to achieve the sustainable development goals. Some of them even innovate their operations before they are legally obliged to do so, by introducing green technology, switching to more acceptable inputs and raw materials, utilising by-products from other production processes and taking an integrated systemic approach to dealing with issues of the pollution that they emit. Ever more companies are accepting responsibility for the environmental damage that they cause, and are implementing preventative measures to support the sustainability of the system. We try to always highlight the best local governments and companies, but also to point out instances when, under the veil of sustainable development, the attribute “green” is assigned to products and services that actually represent “greenwashing”.

Through our activities in the period ahead, we will work with companies directly on the greening of processes and products, but also on raising the importance of non-financial reporting and the use of ESG criteria. This concept is already becoming a reality in which the market position and perception of certain companies is assessed not only on the basis of financial criteria, but also according to environmental impact (E-environment), social aspects (S-social) and management culture (G-governance).

What steps should we, as a country and a society, take to ensure that we achieve significant progress towards sustainable development?

— In order to build a community that’s sustainable over the longterm, we need full cooperation between the government, business world, civil society organisations and citizens. This isn’t merely a political manifesto that promises to ensure all citizens have access to drinking water, healthcare, education and specialist training, to reduce poverty and eradicate life on the extremes.

Ever more companies are accepting responsibility for the environmental damage that they cause, and are implementing measures to support the sustainability of the system

These are real problems in Serbia that need to be solved in a systematic way that ensures everyone has equal opportunities to develop and advance, because that’s the only way we can secure the human capacities required to really deal with sustainable development. Education is extremely important, as is access to information and lifelong learning. Here, for example, the majority of people would say that Serbia is a country rich in water and that there’s no need to worry about water as a resource, but the reality is that we rely a lot on transit waters and are poor when it comes to our domestic autochthonous waters.

Which of the 17 SDGs do you see as being the most important or highest priority for Serbia?

— It is difficult to choose individual segments and goals in isolation from the whole, because the lack of one means that the system will not function and there will be no sustainable development. If it was necessary to single out one specific area, that might be the social segment or the environment, depending on the society’s development level. Of the 17 goals globally, I would single out access to drinking water. It is disheartening that a quarter of the world’s population currently lacks access to clean drinking water, which is a fundamental need. On the other hand, it is often noted that the first goal – the eradication of poverty – is the most important, because it is connected to the achieving of other goals: the provision of food, water, education, healthcare and economic sustainability.

When it comes to Serbia, I’m focused on sustainable cities and communities. Just as we have the ESG criteria that we use, among other things, to evaluate the desirability of a company as an employer, so local communities and what they offer, in addition to attracting investments, will result in them being classed as desirable places to live and work. It is precisely those communities that are energy-independent and provide access to healthy food and water, that are inclusive and tolerant, that will represent havens for people to live and work.

The post Let’s Protect The Planet appeared first on CorD Magazine.

We are in a rocky recovery, with the international order in a turbulent adjustment. There is still time until the end of 2023, so it is not so easy to predict precisely how the year will end, but it seems that both the U.S. and Europe are likely to avoid recession. In general, the slowdown in global growth will probably be less severe than previously expected, while inflation will remain high in many countries. All of this brings great uncertainty for everyone, especially for small economies like Serbia, says Mike Michel, President of the Foreign Investors Council and CEO of Yettel, summarising the year ahead of us.

Consequently, no company was able to remain immune to all the events we have been exposed to.

“That is why I think that the FIC’s job is more important than ever – to represent the unanimous voice of leading investors in the country by addressing a variety of regulatory issues that hinder day-to-day company operations, in very challenging times”, says the FIC president.

Which of the Serbian government’s measures would you rate as having contributed most to strengthening the stability and predictability of the economic environment in the preceding period; where do you see room for further action to be taken?

Without a doubt, these would be e-commerce and digitalisation, especially in electronic communication with public institutions. This was also the main conclusion of the FIC White Book, 2022 edition. We are aware that better outcomes were not achieved because of the challenging economic and geopolitical conditions, but some good things were done. I have to mention that, despite the crisis, the rules in the energy sector improved. As for business groups, real estate performed best. There are several laws that I’d like to highlight: the Law on Electronic Invoicing, which affects the implementation of VAT rules; the amended Law on Planning and Construction and regulation of conversion, adoption of Programme and Action Plan for the Suppression of the Grey Economy for 2023 -2025, Law on Safety and Health at Work , and the new Law on Electronic Communications.

Bringing domestic regulations into line with European standards and expediting work on the White Book recommendations is our main goal

There is still a lot to do. For example, implementation of ESG principles in Serbian regulation and business operations, modernisation and improvement of Labour Law and, also, aligning the Food Safety regulations with EU standards and fully implementing them. There is also the need to amend the Law on Forex Transactions.

An encouraging continuation of foreign investment inflows was recorded during the previous period. What would you recommend that the Government of Serbia do in order to maintain and even improve this tempo?

In 2022, investments did not grow, although foreign direct investments have partially recovered from the negative impact of the Covid-19 crisis. In 2018-19, investments were rooted in construction, but in 2020-22 there was a move to consumption and domestic trade. Industry expanded in 2022, but construction and agriculture contracted.

We at the FIC think that Serbia should return to investment- led growth. Serbia should have a 25% share of investments in GDP to achieve a sustainable GDP growth rate of 5% per year. To reach that goal, private investment should increase by at least 3% to 4%. On the supply side, Serbia should produce more commodities to boost exports, rather than providing services for domestic use.

At this moment, it is uncertain whether investment will be an engine of growth over the next three years, but we at the FIC will do everything in our power to ensure that is the case.

To what extent are key decisions linked to economic development policies and the improvement of the business climate a reflection of consultations carried out with the business sector and what should be improved in this segment in the period ahead?

I’d say to a very great extent. Let me put it this way – our flagship project is our White Book. This is an overview of Serbia’s business climate and a collection of recommendations and proposals to resolve burning issues. Basically, you have 120 foreign companies, from all around the globe, from the EU to the U.S. China, Japan, and Russia, giving concrete, practical and, moreover, feasible recommendations on how to improve the business and investment climate. The 2022 edition consists of 55 articles with 372 recommendations written by 49 authors. For me, this is a pure treasure, having the leading businessmen in the country trying to give their expertise and knowhow on the way to navigate business.

Our job is to represent leading investors in the country and address regulatory issues that hinder company operations, especially in challenging times

The FIC’s job is to be the keeper and guardian of the pick of the recommendations, making sure that everybody is doing their part of the job. To this end, we implemented a series of activities to keep up the pace. For example, in October 2022, The Implementation of the E-Invoicing Law Conference was held at the Ministry of Finance, where our members had the opportunity to clarify open questions arising from the practical implementation of this law. In April 2023, we organised FIC Insight into the regulation and purposes of hedging as instruments for protection with the NBS Vice Governor as a special guest. In May, we organised FIC Insight on Unlocking ESG. As I have already mentioned, ESG is more important than ever. There are many innovations to do with ESG and Serbian companies should take urgent steps to familiarise themselves with these legislative changes and comply with them, regardless of whether they are related to non-financial reporting, protection of whistleblowers, carbon border adjustment mechanisms, or top-of-the-supply-chain management. In June 2023, we organised the first FIC Financial Services Conference with the participation of the NBS, the Ministry of Finance, Prevention of Money Laundering Administration and all relevant state bodies and business associations.

Considering the acceptance of the White Book recommendations and changes to the general legislative framework, how would you assess Serbia’s progress in terms of complying with the standards of the EU? In what ways does the FIC contribute to that process?

Bringing domestic regulations into line with European standards and expediting work on the White Book recommendations is, by far, our main goal. We always insist on intensifying negotiations with the EU on membership status. At the same time, we are aware that better outcomes were lacking because of the new circumstances. We are also aware that acceptance of the FIC’s recommendations reached a low point in 2022. However, as I said, we are not here just to point to what has not been done, but to propose, motivate, lead, and insist on the changes we want to see. We want to be a part of those changes, not just a silent observer. And, with all the activities I’ve spoken about here, I’m sure we are doing just that.

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The inflation target of the National Bank of Serbia equals 3% with the tolerance band of ±1.5 percentage points, which is expected to be reached by the middle of next year. In the opinion of Governor Jorgovanka Tabaković, the best way in which the National Bank of Serbia can contribute to economic growth is to reduce inflation..

“We do this through the gradual, continuous and well-measured tightening of monetary conditions, while taking into account economic growth. We also contribute to this by maintaining the stability of the exchange rate, particularly during periods when we face pronounced global uncertainty. In such situations, we prevent a fall in business, investment and consumer confidence by preserving exchange rate stability,” explains Governor Tabaković.

As the Governor explains, we had a typical example of that in the first half of 2020, following the outbreak of the pandemic, and in the first half of 2022, following the outbreak of the conflict in Ukraine. However, in both instances, investments and exports very quickly returned to their previous levels.

What lessons has Serbia learnt with regard to the impact of events in the energy sector on macroeconomic stability and inflationary movements? Do we have enough reasons to believe that such disturbances will not happen again?

The most important lesson that should be considered every day in the economy is market diversification, in every sense of that word, but there’s also awareness of the importance of strategic fields in which the state must maintain an effective presence, because the state is expected to ensure conditions for doing business and for people’s lives, with energy stability and food production being top priorities. When it comes to Serbia, apart from the sudden hike in the price of gas, we were also hit by an extremely bad hydrometeorological situation that was not conducive to the generation of electricity, with coal production also hit hard.

We reduce inflation through the gradual, continuous and well-measured tightening of monetary conditions, while taking into account the growth of economic activity

Despite these challenges, Serbia has once again become a net exporter of electricity, with net exports of electricity exceeding 300 million euros in the first six months of this year. At the same time, additional supplies of gas were provided during peak consumption months through the renting of gas storage facilities in Hungary. In the period ahead, it is important to continue reforming, restructuring and improving the governance of state-owned energy companies, so as to align their operations with market principles. 

What are your expectations when it comes to overall FDI levels by year’s end 2023?

FDI inflows in the year to date have indeed been high, and our projection – which is conservative, as always – is that FDI will total around four billion euros at the year level.

This is good news, as it shows that, even in a period of uncertainty and slowed economic growth globally, including geopolitical tensions that aren’t bypassing us, investors still recognise

Serbia as a safe place to invest and they recognise the favourable macroeconomic and regulatory environment that we’ve created. The strong inflow of investments in Serbia, from both traditional partners –European countries – and from the countries of East Asia and the Middle East, also testifies to our country being recognised around the world as a secure place for investment.

How significant for you is Serbia’s decision to request a new Stand-by Arrangement with the IMF?

The fact is that Serbia has implemented robust measures over the course of the previous decade that have ensured the country’s macroeconomic stability, growth and better living standards for citizens. Nevertheless, under the conditions that the whole world has been operating in for a long time already, the use of all protective mechanisms must be an essential element of economic policy. One such mechanism is also the arrangement with the IMF. The agreed economic programme doesn’t include any reform goals for the National Bank of Serbia.

The National Bank is working actively to prepare the draft law that will comprehensively regulate the crowdfunding of economic projects, which will contribute greatly to the further development of SMEs

However, the fight against inflation is the number one priority for us, as it is for most central banks around the world. In this struggle, we remain devoted to preserving the relative stability of the dinar exchange rate, which the IMF has also recognised as an important pillar of the country’s overall macroeconomic stability.

At the recent first conference on financial services organised by the Foreign Investors Council, we had an opportunity to hear new ideas about the introduction of digital solutions. Which of the ideas and initiatives presented at the conference were the most important for the National Bank?

Listening to the needs of the market and the demands of digitalisation, the National Bank of Serbia is investing great efforts to contribute to the development and modernisation of financial services. Testifying to this is the increasing popularity of our instant payments system. Serbian citizens have at their disposal a number of advantages enabling them to use the national DinaCard.

The National Bank is working actively to prepare the draft law that will comprehensively regulate the crowdfunding of economic projects, which, I believe, will contribute greatly to the further development of small and medium-sized enterprises. We are also in the final phase of the process of digitising bills of exchange, the introduction of which will create conditions for businesses and citizens to make additional savings.

What are your forecasts for 2024 when it comes to economic indicators?

When it comes to projecting inflation, the most important thing is that it is now on a stable downward trajectory. According to our projections, which haven’t essentially changed since November last year, inflation should fall to around 8% by year’s end, while it should return within the target tolerance band by the middle of next year. Our last official GDP growth projection for this year is in the range of 2% and 3%, and we still consider it most likely for growth to continue to move within that range, though it is more realistic for it to be closer to the lower level. When it comes to 2024, under the assumption that growth will accelerate in the euro area and investments in Serbia will further intensify, we consider it realistic for Serbia to record economic growth in the range of 3% to 4%. 

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The EU enlargement process and perspective has been, and remains, the key driver of economic and societal prosperity in Serbia, says EU Delegation to Serbia Head Emanuele Giaufret, who we interviewed for this year’s special FIC Guide. According to our interlocutor, support for Serbia’s future in the EU remains unequivocal and is visible through the delegation’s daily efforts aimed at supporting the country’s reform agenda and improving the lives of Serbian citizens.

“I would like to highlight some of the reforms that we feel are key to instilling that sense of stability, transparency and predictability. We have, for example, seen and felt how important it is to have well-functioning and well-managed state-owned enterprises. The multiplier effect they can have on the economy as a whole is enormous, both in positive or negative terms. In that regard, we very much look forward to the adoption of the new Law on the Management of State-Owned Enterprises and applaud the commitment of the government to tackle this difficult issue.

According to Giaufret, this applies in particular to the reform of electric utility power company EPS. In particular, says the EU delegation head, companies like EPS that operate in Serbia’s energy sector need to focus on corporate restructuring, the professionalisation of their respective management structures and the modernisation of business processes, in order to ensure stable energy production systems over the long term.

In parallel, the EU is working together with Serbia to diversify energy supply sources, specifically in finding replacements for fossil fuels from Russia, accelerating the implementation of green energy technologies and reducing demand for energy. “The energy sector is in our focus due to its obvious impact on the economy under the current circumstances. However, reforming the energy sector is, of course, also key when it comes to meeting the goals of the Green Agenda for the Western Balkans,” explains our interlocutor.

“We also welcomed the National Assembly’s recent adoption of the Law repealing the law on special procedures for linear infrastructure projects. This was a long-standing Commission recommendation and a point that had been raised on various occasions. This issue was also being monitored closely by EU Member States. The repeal of this law is an important step in negotiations of Chapter 5 – Public procurement. A well-functioning and transparent public procurement system can be a catalyst for local economic development. And if it does not work right, it can also be a catalyst for the misuse of public funds, corruption and abuses of power – in any country, not only Serbia.”

Thus, says Giaufret, in alignment with the good European spirit, his delegation encourages the Serbian authorities to continue working to ensure that the principles of equal treatment, non-discrimination, transparency and competition are safeguarded in all public procurement procedures.

“In the same spirit, we continue to urge Serbia to ensure the respect of the principles of public procurement, competition and transparency, particularly in intergovernmental agreements with third countries, and to refrain from the application of special laws, in line with national legislation and the EU acquis.

“In the same spirit, we look forward to amendments to Law on Planning and Construction. The main goals of these amendments include increasing the efficiency and transparency of permitting procedures for the construction sector, aligning with the EU acquis and introducing elements of the Green Agenda. So, another milestone in applying good EU practices.”

Concluding his introduction, Giaufret says that the bottom line is that everything is, and of course remains, linked to the Rule of Law in general.

Despite the EU integration process progressing slower than expected, particularly on the Serbian side, there seems to be acceleration in aligning the Western Balkans with the EU in terms of infrastructure, digitalisation, energy and green economy. How would you assess the pace and efficiency of these processes?

The EU is fully committed to support all Western Balkan partners in delivering the necessary reforms for the benefit of all citizens, and we’ve stepped up our support to develop Serbia’s infrastructure.

The Economic and Investment Plan, as well as the upcoming Growth Plan, are proof of massive commitments and investments that materialise in the form of concrete projects across the region. The Economic and Investment Plan identifies 10 investment flagships and allocates a substantial financial package of up to €9 billion in EU funds, with a potential to mobilise up to €20 billion of additional investments through the Western Balkan Guarantee Facility. So, these two figures add up to almost 30 billion euros of EU investments. This encompasses the span of time from 2021 to 2027.

EU companies have brought efficiency, modern technologies and knowhow to the Serbian economy, providing jobs for many Serbian people. They have been a booster for the economy and EU integration reforms

The Plan supports investments in sustainable transport, clean energy, environment and climate, the digital future, business sector competitiveness and the development of human capital. And maybe I will name just some of the many important projects in Serbia: we finance, for instance, the new gas interconnector with Bulgaria, in order to secure the energy supply and foster the unbundling of the gas market so that Serbia is less dependent on Russian fossil fuels. We are helping on the construction of the new railway between Belgrade and Niš, while we are also financing the construction of the Tiršova 2 paediatric hospital in Belgrade. The Economic and Investment Plan is precisely there to help accelerate things and is already delivering results.

The single market has been a powerful engine for creating wealth and prosperity among EU member states, while it also has the potential to serve as an engine for economic transformation in the Western Balkans. From the perspective of integrating the Western Balkans into the EU market, which characteristics of Western Balkan integration processes do you consider as being the most promising?

Simply put, we want to offer the Western Balkans some of the advantages of membership in advance. This means that certain requirements of membership also have to be met in advance, in particular the EU acquis will need to be enforced in relevant areas. This is one of the key objectives of the growth plan.

For all countries that have joined the EU over the last two decades, access to the Single Market has been the main driver of economic growth. Countries on the path to EU entry should also benefit from our Single Market and therewith an area that has great potential.

For example, the Western Balkans could join the EU Digital Single Market in areas such as e-commerce or cybersecurity. We have already seen positive developments in the area of telecommunications, with the reduction of roaming charges within the Western Balkans and, later this year, between the region and the European Union. We could facilitate our trade in goods and payments. For example, work is ongoing to deepen existing customs cooperation.

With many European companies re-evaluating nearshoring possibilities, attracting foreign investments becomes a sensitive process involving both political and economic considerations. How do you view Serbia’s position in attracting these foreign investments?

Serbia has proven very resilient to crises, with impressive levels of foreign direct investments registered over previous years. FDI statistics for 2022 confirmed all-time-high FDI inflows to Serbia of 4.4 billion euros, which increased by as much as 14% compared to previous record-breaking FDI inflows registered in 2021. These are impressive numbers. And EU companies have a large stake in this.

Looking at longer timeframes, EU companies are Serbia’s biggest foreign investors by far, accounting for around 60% of total FDI accumulated in the 2010-2022 period. This translates into more than €20.5 billion worth of investments coming from the EU over the previous 13 years. EU-headquartered companies have established their businesses in Serbia and have become an integral part of Serbia’s economy, with a very strong presence in the most relevant sectors of Serbia’s economy, including the auto and auto parts industry, electrical machines and apparatus, rubber and chemicals production, banking, retail, pharmaceuticals etc.

The EU Delegation consistently works with the Foreign Investors Council, the Chamber of Commerce & Industry of Serbia and numerous other business associations and bilateral EU chambers of commerce in order to better understand and support the improvement of the country’s business environment

Some of these EU companies have persistently featured among Serbia’s top 15 exporters for years. German and Italian companies are among the top investors, to name two of the source countries of investments that come. EU-based companies are champions of investment and Serbia thus benefits from the jobs created through these investments. The closer Serbia gets to the EU, the more attractive it will be for foreign direct investments. A big and prosperous market will be easier to reach.

Many European businesses, including those gathered around the Foreign Investors Council, are bringing their expertise and experience to the Serbian market. How do you, as an EU Delegation, coordinate your efforts to help Serbia improve the business climate with investors from the EU?

The EU Delegation consistently works with the Foreign Investors Council, the Chamber of Commerce & Industry of Serbia and numerous other business associations and bilateral EU chambers of commerce in order to better understand and support the improvement of the business environment in Serbia. They are also valuable contributors to our Annual Report that provides a detailed assessment of Serbia’s state of play in the EU integration process. We also have a dedicated project on the business climate that we finance, which is meant to bring improvements at a practical level.

Overall, EU companies have brought efficiency, modern technologies and knowhow to the Serbian economy, providing jobs for many Serbian people. EU companies have also brought a new corporate culture and EU values to Serbia’s economy, changing the way the country’s economy operates, with an impact on all companies operating along their respective supply and value chains, but also with an impact on individuals and society as a whole. This has, in turn, significantly increased the productivity and competitiveness of the Serbian economy, boosting its export potential, increasing budget revenues and generating economic growth. Ultimately, the opening up of the Serbian market to companies from the EU has generated a variety of choice and lower prices for Serbian consumers.

On the other hand, in Serbia we are also tasked with preparing economic operators, particularly SMEs, to be able to compete on the EU single market. Our task is to work towards Serbia’s accession to the EU – when Serbian companies will become EU companies.

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The positive effects of linking the countries of the Western Balkans are extremely evident in the domain of the work of the Ministry of Internal and Foreign Trade. “During the short period that this initiative has existed, we have succeeded in abolishing a large number of taxes and certifications, as well as unnecessary administrative procedures at the borders, thereby reducing the operating costs of companies in the region. The results are such that the time required to export or import food products has been reduced by up to 50%, while the direct costs of taxes and charges have been cut by up to 80%, which has resulted in increasing the volume of the trade exchange in the “Open Balkan” region by almost 30%,” explains Serbian Internal and Foreign Trade Minister Tomislav Momirović.

When it comes to connecting in the area of creating a unified labour market, this initiative is expected to yield significant results.

“We are bearing witness to the fact that Serbia and the region are today confronted by a labour shortage and that we are increasingly seeing workers coming from the world’s most distant countries. On the one hand, this is an indicator that our economies have advanced, but it also prompts a question as to how we can overcome these challenges, which we haven’t previously faced,” says Momirović, explaining that the Open Balkan initiative itself is seen as providing a solution to the labour shortage issue.

The market inspection sector conducted 5,345 inspections in 2023, removing goods worth close to 10 million dinars

Minister Momirović announces that we are awaited by a further liberalising of the labour market by the end of summer, when workers from any of the three countries will be able, with “Open Balkan” identification numbers, to gain employment in these countries without any additional administrative barriers. “Our aim is to establish, as soon as possible, a unique identification number for all people on the market of Serbia, North Macedonia and Albania,” says Momirović.

What will be the most important steps you take in your capacity as chairman of the National Coordination Body for Trade Facilitation (NKTOT)?

For me, as a person who hails from the economy, the role of chairman of the National Coordination Body for Trade Facilitation is vitally important and I’ll do everything in the period ahead to ensure we achieve results that will be meaningful to our economy. The Ministry of Trade has placed high on its agenda the topic of reforms aimed at easing companies’ operations and increasing our country’s GDP. The Government of the Republic of Serbia strongly supports all economic and trade processes that target EU accession and strengthening regional economic cooperation. Moreover, negotiations are underway on free trade agreements with China, Egypt, the UAE and the Republic of Korea. We expect these agreements to contribute to further inflows of investments to Serbia.

Where do you see crucial barriers to trade that are hampering the further growth of foreign trade?

Our most important export market is the European Union, and our country also represents an important transit area which partners from the region use to trade with EU member states. For Serbia, long waiting times at borders for trucks transporting goods, particularly at border crossings with EU member states Hungary and Croatia, are an extremely important issue that impacts trade.

I must also underline the unilateral decisions of one of the trade partners in the Western Balkans that are leading to huge problems. Specifically, we have witnessed Priština deliberately making unilateral decisions that are intended to halt the free flow of goods and cause enormous damage to all companies trading in these lands. These kinds of decision are completely at odds with all European principles, which imply the free flow of people, goods, services and capital. The Government of the Republic of Serbia, together with its partners in the Western Balkans, is exerting every effort in an attempt to relax and enable the free flow of people and goods, all with the aim of achieving progress and the economic development of the Republic of Serbia, but also of the entire region. I remain hopeful that our European friends will be able to influence things returning to normal and enabling free trade.

What steps are you taking in order to simplify and reduce formalities related to foreign trade and how do these efforts involve interested members of the business community?

We define activities in close cooperation with representatives of the business community and in order for us to work together to improve conditions and remove obstacles to foreign trade. Representatives of the Chamber of Commerce & Industry of Serbia, AmCham and the Foreign Investors Council are always present at all sessions of the NKTOT and their voice is always heard.

For me, the role of chairman of the National Coordination Body for Trade Facilitation is vitally important and I’ll do everything to ensure we achieve results that will be meaningful to our economy

We have extremely well-developed professional cooperation with representatives of the business community, at both a high and professional level, and we formulate NKTOT activities on the basis of their initiatives and proposals. Our objective is to reduce formalities, to switch as much as possible to an electronic system of operations for all border inspections, to harmonise the working hours of border inspections with all neighbouring countries and establish, where possible, the integrated management of border crossings, i.e., a so-called ‘one-stop shop’.

What are your plans for the further development of e-commerce?

E-commerce is experiencing dynamic growth in Serbia, and data suggest that around 4.5 million citizens will use these services by 2027. With an awareness of these stats and the fast-growing e-commerce trend in our country, we will take all the necessary steps to respond to all the challenges in this field. We will continue activities that imply raising consumer awareness and trust when it comes to e-commerce and will continue further encouraging cashless payments. We are paying special attention to monitoring trends on the EU market, where we are awaited by significant changes in the legislative field in order to enable our companies to export goods to this market through e-commerce channels.

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Construction of the BIO4 Campus, which is a multidisciplinary project that’s unique in the wider region, represents the central element of national investments in bioeconomic development. Apart from advancing domestic science and the innovation ecosystem, the operations of the BIO4 Campus will also significantly advance our economy.

“Our future depends on the development of science and technology,” says Jelena Begović, Serbian Minister of Science, Technological Development and Innovation. “Human capital is the foundation for the sustainable economic development of every society, and this kind of campus will enable research and development in the fields of biotechnology, biomedicine, biodiversity and bioinformatics, but also agriculture, pharmaceuticals and other industries that depend on biological resources. Scientists and innovators from these fields will be concentrated in one place, which will entice foreign investors.”

It is planned for the BIO4 Campus to start operating at the end of 2025, when the Ministry also expects the first visible results when it comes to attracting foreign companies. Certain companies have already expressed their interest in participating in this project. They are primarily companies from the biopharma field, such as Takeda, MSD, Roche and Swiss Rockets, but also BGI, the largest genomics centre.

The pilot project “Using artificial intelligence in the early diagnosis of rare diseases” was recently launched at three major health centres in Serbia – University Clinical Centre (UKC) Serbia, University Children’s Clinic in Tiršova and Clinical Hospital Centre (KBC) Zemun – in collaboration with the Institute for Artificial Intelligence of Serbia. This is one of the activities being conducted within the scope of the BIO4 initiative. Could you tell us more about this project?

This project, which our experts are working on in cooperation with company Takeda, represents a significant step towards improving diagnosis and treatment for patients suffering from rare diseases in Serbia. Diagnosis is crucial to the treatment of rare diseases, but a lack of data and experience means that this process is capable of lasting an extremely long time, resulting in delays in the applying of an adequate therapy, provided one exists.

New technologies have huge potential to contribute to improving patients’ quality of life, but also to advancing the healthcare system as a whole

Thanks to the application of artificial intelligence, this project has significantly eased and accelerated the process of identifying potential cases of Fabry disease, thereby providing a chance to make an early diagnosis and apply treatment in a timely manner.

New technologies have huge potential to contribute to improving patients’ quality of life, but also to advancing the healthcare system as a whole. The Institute for Artificial Intelligence of Serbia will be among the future tenants of the BIO4 campus and will continue developing biomedicine applications for this technology.

Speaking in one interview, you stated that science proved itself to be exceptionally important during the pandemic. Has that momentum been maintained and is there an increase in the number of examples of cooperation between science and business?

The scientific community demonstrated exceptional solidarity and its agility during very difficult times. It showed that the future of society depends on the development of science and technology. The momentum and awareness of that remain present, and cooperation between science and business is strengthening continuously.

The Ministry of Science, Technological Development and Innovation provides strong support to start-ups that emerge at colleges and institutes, but also beyond them, via – among other things – science and technology parks, the Innovation Fund and the Science Fund. Thanks to those efforts, but also to the unrelenting energy of our innovators, we are recording significant increases in the number of start-ups. Through the work of the BIO4 Campus, the number of start-ups in the field of biotechnology, including biomedicine, we will increase even further.

What is your Ministry doing to overcome obstacles hampering both the horizontal and vertical transferring of technology?

It is important for scientists to pose themselves a question as to whether there are applications for what they are researching, and for the answer to generally be yes. Of course, the technology transfer process requires new knowhow and skills that must be formalised in the education system.

We are working to create an environment favourable to horizontal and vertical transfers of technology and stronger cooperation between scientific institutions, universities, innovation system participants and the private sector

We are working on the creation of an environment favourable to both horizontal and vertical transfers of technology and stronger cooperation between scientific institutions, universities, innovation system participants and the private sector, through programmes that ease the transferring of knowledge and technologies through the development of science and technology parks and networking them with start-ups and Smart City centres nationwide across Serbia.

The Katapult Accelerator programme of the Innovation Fund is developing an innovative ecosystem in Serbia and improving cooperation between science and business, which helps innovators to develop an entrepreneurial spirit and encourages them to market their ideas in the best possible way.

Could Serbia impact positively on the more balanced technological development of the region with the construction of science and technology parks?

In addition to the four science and technology parks that currently exist, in Belgrade, Niš, Novi Sad and Čačak, the launch of construction of another such park, in Kruševac, is also planned. There are also 21 innovative start-up and Smart City centres that have opened to date and are now operating, and by the end of this year there will be 26. The opening of new such centres is planned in Bajina Bašta and Loznica. We will next January open one of the country’s largest innovation centres, in Novi Pazar, which we can say with certainty will be like a mini science and technology park.

Science and technology parks, as well as these kinds of centres, provide local researchers and innovators with better possibilities to access infrastructure and finances, and establish cooperation with business, universities and research institutions.

To what extent does our existing economic ecosystem value entrepreneurship and innovation and how much does FDI in this area contribute to the creation of this kind of ecosystem?

The establishment of the Ministry of Science, Technological Development and Innovation, within the framework of the Government of the Republic of Serbia, was born from recognition of the need to devote more attention and commitment in these areas.

The institutional support that the Republic of Serbia provides to exceptional minds is certainly proof that we are enduring in this process, but also that we have something to work on.

I am convinced that the scientific and innovation community in Serbia is yet to experience its full flourishing, thanks to the joint efforts of all of us, and efforts aimed at creating a better future for future generations. The Republic of Serbia is on track to no longer being merely an observer, but rather one of the important participants and creators in the processes of resolving global problems

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The World Bank is involved in multiple projects in Serbia that are aimed at enhancing digital services, improving public financial management, promoting early childhood cognitive development, strengthening primary healthcare, enhancing railway sector maintenance, building local selfgovernment capacities for climate-resilient infrastructure, reducing trade costs, boosting household energy efficiency and enhancing the productivity and competitiveness of Serbian farmers. Here we discuss these and many other topics with World Bank Country Manager for Serbia, Nicola Pontara.

What, in your opinion, presents the biggest hurdle for the Serbian government in implementing systemic reforms and reorganising public enterprises?

Serbia has achieved substantial progress in selling and restructuring more than 500 state-owned enterprises over the last decade. And yet, some important sectors of the economy (energy, transport) are still managed through state-owned enterprises. Some of these enterprises can become a source of systemic risk: we saw this with Elektroprivreda Srbije (EPS) during the recent energy crisis. The remaining large, state-owned enterprises need to be put on a financially sustainable footing, with greater commercial orientation and stronger corporate governance.

Promoting innovation in Serbia, with the World Bank’s decade-long support, is vital for improving productivity, creating better jobs and driving economic growth

Some provisions of the recent law on public enterprises represent steps in the right direction. Welcome developments also include the recent transformation of EPS into a joint stock company, the appointment of supervisory and executive board members, as well as efforts that are underway to select a general manger though a competitive process.

The World Bank has 14 active projects in Serbia, covering areas such as construction, education, transportation, governance, finance, energy, agriculture, healthcare and macroeconomics. Which of them do you consider as being the most helpful when it comes to removing obstacles to growth?

Serbia can grow faster if it manages to strengthen its public institutions and governance, build human capital and foster productivity, boost regional integration and connectivity, and decarbonise the economy. Several World Bank projects seek to improve the digitalisation of services (cadastre, tax administration) and improve public financial management. In human development, we seek to build the cognitive skills of Serbian children in early childhood and to strengthen primary healthcare.

In transport, we work to strengthen maintenance in the railway sector, build the capacity of local self-governments to manage climateresilient infrastructure and reduce the costs of exporting and importing. In energy, we want to increase the uptake of energy efficiency by households. In agriculture, we strive to improve the productivity and competitiveness of Serbian farmers.

To what extent have we addressed and resolved the domestically induced energy crisis from last year, considering its significant impact on growth prospects and state financial resources?

The energy crisis may be behind us, but reforms still need to be implemented in order to stabilise the power sector in the long-term, while decarbonising the power generation mix. In March 2023, in order to help the government deal with the impact of the energy crisis and reform the energy sector, we approved $160 million in fast disbursing budget support under the First Green Transition Programmatic Development Policy Loan. Parallel financing also came in from the German KfW and French AFD. This loan aims to ‘green’ the state budget and investment framework; stabilise and modernise the power sector through the corporate restructuring of EPS, scale up renewable capacity and strengthen the energy efficiency of public and residential buildings; and to align Serbia’s regulatory frameworks on climate change with EU directives.

How would an economic growth rate below 3% this year in Serbia (according to some economists it might be below 2%) impact the country’s quest for convergence with the living standards of European Union members?

Our most recent projections indicate that economic growth for 2023 may be lower than previously expected, due to a slowdown across Europe, including among Serbia’s key trade partners, as high inflation dampens business and consumer confidence. Some of the leading indicators that we use to estimate growth – such as retail trade, construction, and agriculture – suggest that growth may hover around 2% in 2023. Serbia needs to accelerate the pace of economic growth to shorten the time required to converge with the average per capita income of the EU27.

It would be important to financially stabilise the remaining state-owned enterprises by instilling a more commercial focus and enhancing corporate governance, with some positive steps having been taken through recent legislation on public enterprises

Some areas for action include improving the quality of education, removing barriers to labour market participation (especially for women), as well as increasing standards of governance and SOE oversight.

The World Bank study “New Growth Agenda”, which was published before Covid-19 hit, highlighted productivity in Serbia as being generally low, thereby limiting the potential for wage growth. How should we address this concern effectively?

Increasing the level of productivity in Serbia will take time. Some of the required changes are not under the direct influence of the government. It is up to the private sector to change management practices, improve skills and invest in new technologies. But the government could help implement reforms to enable a better business environment: reducing red tape, streamlining the tax and customs system, and reforming the education system. Boosting private sector confidence is important, since Serbia has one of the lowest rates of domestic private investment in Eastern Europe. Serbia also needs to attract FDI to sectors with higher productivity, which can create high-quality jobs and have the potential for linkages to the local economy, such as smart mobility and advanced IT services.

According to the European Innovation Scoreboard 2023, Serbia is improving when it comes to the innovation field. How do you support this progress?

Fostering innovation is essential for Serbia to increase productivity, create quality jobs and raise the economic growth rate. The World Bank has partnered with Serbia for over a decade to support the country’s innovation capacities. Our initial collaboration, in 2011, resulted in the creation of the Innovation Fund, which today disburses around 30 million euros annually to contribute to the innovation of Serbian enterprises. Our current flagship innovation project, the Serbia Advancing Innovation and Growth Entrepreneurship, builds on these efforts, in partnership with the EU. Our next exciting prospect is to help the government move into the artificial intelligence space.

The World Bank recently approved a loan aimed at assisting the Government of Serbia in implementing its Capital Market Development Strategy by strengthening relevant capital market institutions, one of the weakest spots in the reform process. What factors led you to believe that now is the right time to initiate this process once more?

The financial sector plays an important role in channelling a country’s savings to firms so they can invest and grow. In recent years, several state-owned financial institutions were streamlined and asset quality improved, while non-performing loans fell sharply. The macro-fundamental prerequisites for the development of capital markets are in place, but diversification of long-term financing sources beyond banks still has some way to go. We are supporting the government and its Capital Markets Development Strategy through a project to develop the corporate bond market, including through green and other thematic issuances.

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