The Vojvodina Development Agency, RAV, is doing everything it can to make Vojvodina a recognisable area in this region, especially when it comes to investments – conditions for doing business. It is already recognisable for some sectors, but time and effort are required to secure a leadership position
It is an important fact for companies seeking new locations that Vojvodina already has a unique and diverse economy, and that it plays host to a large number of companies from various sectors, according to the principle: “If it is good for others, it will also be good for us”.
The mission of the Vojvodina Development Agency is “To make Vojvodina the primary investment location and leader in the economic development of Southeast Europe”. How far are we from achieving that goal?
Realistically, and I’m sorry that I have to start like this, I think that at this juncture we’re ever further away from the goals that were bright and clear in our focus just a few months ago. Today they’re directed primarily towards the fight against the virus, towards maintaining the health of employees, work and contacts, as well as towards creating plans to overcome the economic consequences that the virus will leave behind. Although I must mention that, even at this moment, there are interested foreign companies, for which reports are currently being prepared.
And if the Coronavirus hadn’t happened, then I would still be telling you that Vojvodina isn’t yet the leader of the economic development of Southeast Europe, because that’s a goal that we set high for ourselves. And only if you set your sights high will you leap high enough.
RAV deals, among other things, with the finding of available funding from international funds and the distribution of budget subsidies. How are these funds used at the local and regional levels?
One of the goals of the Vojvodina Development Agency is to bring all available financing opportunities closer to businesspeople in Vojvodina, i.e. to inform them about current subsidy contests, favourable loans and other programmes, as well as finding adequate ways of co-financing their business projects through state assistance programmes or international programmes of donor institutions.
We have strong educational centres, the highest percentage of qualified and highly qualified workers in Serbia … and we are separated from the EU by only one border and an hour’s drive
Companies operating in Vojvodina have at their disposal both funds from national sources and funds from the provincial budget fund, through which subsidies are awarded for new employments, the procurement of new equipment, as well as for investments in the field of cooperatives in agriculture. These funding contests are announced once or twice a year, and we can say that they’ve already become recognisable and popular among business leaders, because firms can apply for subsidies, through a really clear and simple procedure, if they plan to hire new workers or purchase new production equipment. Subsidies are awarded by the Provincial Secretariat for Regional Development, Interregional Cooperation and Local Self-Government, in cooperation with our agency.
Between November 2017 and today, 116 applications have been approved, and thanks to these programmes a total of 1,774 new workers will be employed, while 4.4 billion dinars will be invested in tangible assets. The approved funds for equipment and new jobs amount to around a billion dinars, with around 46 million dinars approved for equipment for cooperatives.
When it comes to promoting Vojvodina as an ideal investment location, what are its greatest potentials?
Vojvodina has strong educational centres, the highest percentage of qualified and highly qualified workers in Serbia, a multilingual educational system, a good business climate and developed agriculture, metal-machinery industries and a strong IT sector.
And along with all of that it also has foreign companies, especially European ones, while also representing a significant factor certainly the fact that it is so close to the European Union, separated by only one border and an hour’s drive.
An important segment of our work is cooperating with companies that are already here, communicating with them, maintaining contacts, visits, taking care. When you present potentials to foreign businesspeople, everything you’ve said or written to them only gains real gravitas and value through “examples of good practice”. And in Vojvodina such examples are traditionally prevalent in the agribusiness, IT and metal-machinery sectors, including the auto parts industry.
Many world economists estimate that the pandemic will change the car industry permanently, so it remains to be seen how this crisis will be overcome by the auto parts industry, which has so far been one of the strongest sectors in Vojvodina, attracting a lot of foreign capital.
Viewed from the perspective of current events, what is the most profitable area for investment in Vojvodina today? In the auto industry, agribusiness, IT sector, or in renewable energy?
Vojvodina is an agricultural region and agribusiness is traditionally one of the leading sectors here. To date a total of 101 foreign companies have come to us, and with them investments worth more than three billion euros. There are currently 76 foreign agribusiness companies active, employing 12,500 people. It is only in these kinds of crises that we become aware of how important it is that our agriculture sector and food industry are well developed, there are no cases of withdrawals or collapses among food production companies. Here are a few examples: French yeast producer Lesaffre (formerly Altech of Senta) sold as much yeast in the first month and a half of the state of emergency as it normally sells in an average year.
It is only in these kinds of crises that we become aware of how important it is that our agriculture sector and food industry are well developed
Likewise, our small producers of jams, juices, pastas, spreads, fresh fruits and vegetables etc., have started using new sales channels – online sales have come to the fore, which everyone was previously less engaged in or only planned to develop. It is also important to note that foreign companies continue to invest and reinvest in the food sector.
Foreign investors were for years hesitant to come to Serbia due to its administrative procedures, but that time is fortunately in the past. How quickly are required permits obtained today?
It is very important to know how others see us, because when considering the possibility of relocating capital and production to another country, companies don’t only read what their development agencies write about investment conditions, but also how they are ranked by institutions like the World Bank. Their reports can sometimes be a kind of instruction manual: what needs to change.
In the World Bank’s Doing Business 2020 report, Serbia was ranked in 44th place, while in the one from 2019 it was 48th. The reasons for this positive shift are cited as the fact that Serbia has eased the obtaining of building permits by implementing a new online portal and reducing administrative fees, improved the reliability of electricity by reengineering substations, installing remote control systems and improving network maintenance, eased the payment of taxes by introducing internal deadlines for VAT refunds etc. So, it is recognised that work is being done to make conditions better and better for launching a business and for doing business.
What about when the Coronavirus pandemic passes? Where will you start; what will be your main activities?
We’ll have to find new dates for the postponed promotional activities, to continue with all the activities that were interrupted or postponed. Also ahead of us is the development of the “AP Vojvodina Development Plan for the 2021-2027 period”.
However, first and foremost we’ll have to do a lot of analysis, to measure losses, talk with domestic and foreign investors, and help where we can, especially small and medium-sized producers in Vojvodina.