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Prof. Dr. Ioanna Batsialou, Director and Owner of Ioanna Regen Polyclinic

Sun YES, Ageing NO

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Peter Novak, Managing Director at Kolektor Etra

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Danijela Bojović, Project and Real Estate Manager, Napred

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Djordje Djokic, Senior Partner, Djokic + Partners

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Wolt

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Branimir Jovanović, Economist, The Vienna Institute For International Economic Studies

Balancing Between East And West Comes At A Cost

Whether Serbia will emerge as a winner of the nearshoring trend over the coming years will depend primarily on political developments. If Serbia stays with the EU, that may well happen

The war in Ukraine is likely to accelerate the nearshoring trend. One of the reasons nearshoring has been gaining momentum in recent years has been geopolitical tension (mainly related to China), and the war in Ukraine only adds to that. Our research has shown that the Western Balkan economies are among the first nearshoring options for German companies, due to their geographical proximity, availability of labour and low wages, but also for cultural reasons and due to the good reputation of Balkan workers. And Serbia has managed to establish itself as the region’s economic leader, attracting more than half of all FDI in the region over the last 10 years, with average FDI inflows of around 7% of its GDP in recent years, even during the pandemic. So, taking all this into consideration, one could conclude that Serbia is indeed likely to benefit from the reshuffling of the global economy that is set to come in the years ahead.

However, Serbia is facing one major challenge that brings all of this into question. That challenge relates to its policy of balancing between East and West, which will be very difficult to maintain in the coming period. Serbia is among the very few European countries that haven’t imposed sanctions on Russia (together with Bosnia-Herzegovina, Turkey and Belarus).

Our research has shown that the western Balkan economies are among the first nearshoring options for German companies, due to their geographical proximity, availability of labour and low wages, but also for cultural reasons and due to the good reputation of Balkan workers

This is not viewed very favourably by the EU, because it undermines EU efforts to ensure Russia is made accountable for its actions. It seems that the EU is letting this go unpunished for now, but strong diplomatic pressure has been applied and it is highly likely that Serbia will soon be given an ‘us or them’ choice. If that happens and Serbia decides to turn its back on the EU and side with Russia, that will lead to significant economic losses for Serbia.

Yes, Russia is an important economic partner for Serbia – with four per cent of Serbian exports heading to Russia and seven per cent of Serbian FDI coming from Russia – and Serbia did indeed receive a favourable price for Russian gas several months ago, which saves the country around 300 million euros, according to President Vučić. However, this is dwarfed by what Serbia gains from the EU – with around two-thirds of Serbian exports heading to the EU and just as much FDI coming to Serbia from EU member states. And Serbia also received around €1.5 billion from the EU budget during the 2014-2020 period, via IPA II funds.

So, whether Serbia will emerge as a winner of the nearshoring trend over the coming years will depend primarily on political developments. If Serbia stays with the EU, that may well happen.

Comment by Zoran Panović

From Lavrov to Macron

Despite the Serbian Progressive Party (SNS) having signed a Cooperation Agreement with Putin’s United Russia, and despite SNS President and Serbian PM Miloš Vučević...

Goran Radosavljević, Ph.D. Vice Dean and Director of the FEFA Institute

We Need to Quadruple Our Growth Rate

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Luka Baturan, University of Novi Sad Faculty of Law

Arbitrary Tax Breaks Degrade the System

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Nebojša Bjelotomić, Director of the Digital Serbia Initiative

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Ariston Breaks Ground on €75 Million Factory in Niš, Serbia

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Serbian Women’s Volleyball Team Awarded Diplomatic Passports

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EU Council Lifts Visa Restrictions for Serbian Passport Holders from Kosovo*

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EU and Serbia Sign Memorandum on Strategic Partnership for Sustainable Raw Materials

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EU and Serbia Sign Memorandum on Strategic Partnership for Sustainable Raw Materials

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EU and Serbia Sign Memorandum on Strategic Partnership for Sustainable Raw Materials

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Biden Ends Re-Election Bid, Backs Harris as Democratic Nominee

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Andrej Plenković Re-Elected as HDZ Leader with Overwhelming Majority

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Serbia and Egypt Sign Landmark Free Trade Agreement

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United States Adds $18 Million In New Funds To Development Partnership With Serbia

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