The role of Serbia, as a country that creates for the Far East, is very important. Serbia wasted no time – it built infrastructure, which is the best pass for future development.
Before after the pandemic, the economy was the main topic of the second panel of the conference The Economist: World in 2023. Representatives of bilateral chambers of commerce spoke about the effects and consequences from the pandemic on the economy and companies, but additionally spoke of the biggest challenges that we might face next year.
Zoran Petrovi'c, President of the American Chamber of Commerce, assesses the state of the economy as significantly better and incomparable with the situation in 2023. He said that “this year, we're already visiting a shift in all projections for economic growth, which is already certain to be from 6 or 7 percent. In terms of production, construction has helped a lot, while the service sector also produced great results. Additionally, personal consumption has additionally boosted economic growth, in addition to, more to the point, investments.”
Mr Petrovi'c also talked about the differences between Serbia and EU countries, in which export were built with a significant share. Like a good illustration of the economy's state, he explained that the share of corporate non-performing loans within the total number of loans in the banking sector is incredibly low and stands at 2.9 %. Hence, he rated this season as very good. As for the people in the American Chamber of Commerce in Serbia, 80 % of these weren't significantly impacted by the pandemic, as shown by AmCham's latest research. “The same number of our members said that they recorded a rise in revenues, profits and investments,” Mr Petrovi'c said. He also calls optimism concerning the arrival of the vaccine and the good lessons learned in the last year, the most crucial for the success from the American Chamber of Commerce's members.
He pointed out that agriculture continues to be the worst hit in the past 2 yrs, due to droughts, and that he hopes that this economic branch will generate better results next year. Mr Petrovi'c also explained that which was extremely important because agriculture's share in Serbia’s GDP is between 6 and seven percent.
“We have a good situation with the public debt. Last year, we saw the benefits of the fiscal consolidation that the Serbian government carried out between 2023 and 2023. This created space for interventions fiscal and even monetary policy. We'll end this season having a public debt that's lower than in many of the EU Member States. It is also a good thing that the fiscal deficit is much less than planned, and also the projections for next year are even lower. Of course, there are many challenges, among which I have to single out inflation, despite the forex exchange rate being stable. Unfortunately, the Central Bank does not influence at least two-thirds of the factors affecting inflation,” he added.
President from the Italian-Serbian Chamber of Commerce, Giorgio Marchegiani, said that Italian companies in Serbia remained strong and incredibly sturdy. Also, he stated that Italian tourism has suffered a lot, but that as an export country, Italy has were able to recover. Based on him, “Italian companies are tied to Italian producers and also have managed seriously top, whatever the issues with logistics and transportation. All of us have adjusted. So far as the Italian companies in Serbia go, they are large banks and insurance providers, which have were able to survive on the Serbian and Italian markets. 
The role of Serbia, as a country that creates for the Far East, is essential. Serbia wasted virtually no time – it built infrastructure, the best idea pass for future development. Serbia is really a truly European country as well as an important partner to added-value industries,” Mr Marchegiani stated.
When inquired about the efficiency of the Serbian government's assistance to companies during the pandemic, he explained the government was very fast and effective and added:” I think the federal government reacted in the proper time which resulted in high GDP development in Serbia and helped our members, Italian companies. When we desire a safe harbour, this is actually the spot to be. This is one of the main aspects of the great cooperation between our two countries which can be observed in relevant data.”
Dragan Stoki'c, President of the French-Serbian Chamber of Commerce, began his speech by saying the following: “French companies also needed to alter the dynamics of the business, as well as to adapt, reduce their activities and monitor the situation. Fortunately, this season, we've increased demand, that we are also adapting well. So, my general impression is positive. No significant reduction in companies' capacity and layoffs which is important. We feel ready for that year 2023.”
Mr Stoki'c singled out the transport sector, that was the worst affected after tourism, as the most important sectors for that French-Serbian Chamber. According to him, all projects that entail modernization and boosting the capacity from the Belgrade airport, which is under a concession through the French company, are going smoothly. Also, the Belgrade airport is undergoing the entire process of decarbonization.
The labour market disruption has affected all companies. There is an increase in the number of skilled and highly qualified workers, due to higher domestic demand, but primarily due to demand from Western European countries, which turned the countries in South-Eastern Europe. This is also true within the IT sector, that has had a significant impact on growing labour costs.
He pointed out that facilitating youth employment will be among the priorities from the French-Serbian Chamber of Commerce in 2023, to slow the mind drain and prevent highly qualified young adults from leaving to work abroad.
“This is a long-lasting process which is why we need to start it immediately. That is why we support the formation of science and technology parks. Three happen to be established – in Belgrade, Nis and Novi Sad – with the fourth one to be opened soon in Kragujevac. These science parks ought to be like incubators for start-ups and make opportunities for self-employment. We also offer the activities of the Government's IT and eAdministration Office, which has created a set of innovative electronic services that further contribute to allowing the impression of Serbia using a more favourable climate for business and economic expansion. Further digitalization of public and private companies ought to be encouraged too because digitalization essentially helps make the management of company resources more effective and fosters the implementation of more efficient business processes. The emphasis should certainly be around the Green Agenda,” Mr Stoki'c added.
Oliver Lepori, President of the Japan Business Alliance, asserted there are about 60 Japanese companies operating in Serbia, in line with a specific model which entails the combination in to the neighborhood. He cites the cultural and social mobility of the workforce as the biggest challenges for Japanese companies.
“Japanese investments were quite noticeable this past year. Japanese companies require an extremely highly trained workforce and that's the problem many of us are facing. However, such Japanese companies often go unnoticed within the communities in which they operate, precisely due to this characteristic way of doing business as well as their integration in to the community. The aim of Japanese business culture is to provide just as much support as possible to the local community. We are referring to long-term relations and stable investments. Companies contribute not only with their direct investments, creating new jobs, increasing export and affecting the nation's GDP, but also by bringing together a so-called quiet and qualitative change,” Mr Lepori explained.
Comparing the fall in GDP in 2023 and the development in 2023, he figured Japanese companies were able to find their way around quickly, that is mostly because they are usually huge systems that have dozens of factories around the globe, on all continents.
“The problem has been mitigated by a large number of vaccinated individuals Japan, there are now less than 100 infected people per day in the united states. Within the first phase, it has also affected domestic companies, both importers and exporters,” said Mr Lepori.
The president of the Japanese Business Alliance also explained that Japanese factories in Serbia purify air and water, thanks to the support of the Japanese government. They are also active in the digitalization process in Serbia. Next he said that the challenge for example supply chain disruptions, which found the fore throughout the pandemic, happens to be an opportunity for the Western Balkan companies, and that higher foreign investments are required within the future years. The coming year marks the 140th anniversary from the establishment of diplomatic relations between Serbia and Japan, which is expected that 2023 is a historic year due to the growing needs and opportunities for conducting business in Serbia.
Simon Savsek, an economist at the European Investment Bank, noticed that more time will be needed for the economy to recover in the pandemic. He cited wrong estimates from the beginning of the pandemic that the virus will bypass Europe.
“There was lots of help not just from the local authorities but also in the International Monetary Fund and other organizations. Also, the vaccination went much faster than we thought initially. The study we conducted implies that 90 % of companies in the Western Balkans received some type of salary subsidy, between 10 and 20 of these say they received loans, but close to 40 % of companies closed temporarily, and 61 percent reported lower liquidity,” Mr Savsek adds.
“When it comes to obstacles, the informal sector was affected by problems. I would also like to mention political instability, high taxes and a poorly educated workforce which ends from the high rate of structural employment. You can see read about that within the European Commission’s set of Serbia and other countries,” Mr Savsek explained.
When it comes to banks, he said out they have digitalized and effectively implemented state measures, but additionally that small and medium-sized enterprises have encountered financial problems, that the European Investment Bank will continue to work on resolving.
In terms of the lack of skilled workforce within the Western Balkans, Mr Savsek said that only a third of companies offered training to employees. However, he sees outdated infrastructure as one of the trouble for Serbia’s business.
“I agree the fiscal consolidation helped before the crisis, but Serbia now has lower GDP per capita. Recovery takes place but certain tax buffers ought to be set up. Those companies that went digital prior to the pandemic, that invested more in employees, had higher productivity and managerial functions fared the best. From a macroeconomic perspective, the space between 'the losers' and 'the winners' will be much wider and the question will arise who to aid. All this must be considered,” he adds.
Dr David Landsman, President of the British-Serbian Chamber of Commerce, above all highlights optimism. He says that many is different recently both in countries which one of the consequences is that the business communities of both countries have fresh views on opportunities.
“Serbia is the largest country in the emerging region, which certainly attracts lots of attention. Just look at the map of Europe and continuing infrastructure investments. Someone mentioned the problem of education but look at human capital and the progress of Serbian companies in the uk. It is exactly what I continue to say to British companies. From a business perspective, we have to consider the bigger picture,” Dr Landsman said.
Although now there is an epidemic of the new strain, Dr Landsman says he's optimistic about the coming year. Commenting on Brexit, he states the proven fact that The uk left the EU will not change and that a plan for his or her further relations is still being developed. Great Britain will have different regulations compared to EU in certain segments, for example retail and production, but will also maintain the European standards in lots of areas.
“Some of the Serbian members of our Chamber of Commerce are establishing companies for innovative technologies in the united kingdom. That's something which we, as a chamber, are attempting to advertise here in the UK. Both countries are changing and seeing one another inside a different light. The United Kingdom will conclude more trade agreements with third-country countries in the future years. We'll focus on services, where the UK has already been quite successful. So, we're turning away from the EU and trading more with non-EU countries,” he added.
There are multiple options for British and Serbian companies, Dr Landsman concluded, adding the rules regarding workforce mobility have changed for that better which means better opportunities for Serbian companies in Britain. Britain has set aside 4 billion pounds for projects in Serbia, which, as he says, is a good incentive web hosting capital to invest.
