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What The Pandemic Has Taught Us

If the new reality that we’ve entered had to be summarised in a telegraph, its key words would be solidarity, putting people first, commitment to reform, dialogue and digital transformation. In the future, the bar that’s been set during the pandemic should be raised constantly

Somewhat surprising data for June and July arrived recently, showing that the recovery of the Serbian economy is happening much faster than we’d expected, and that’s happening primarily in the fields of industrial production and foreign trade. However, to a great extent, how long such trends will last depends primarily on world trends, where the biggest contraction in trade since World War II is expected, as well as a drop in the level of foreign investment by a minimum of 30 to 40 per cent.

Experts believe that, under such circumstances, Serbia must work on the diversification of production and supply, which could also be an incentive for attracting new forms of foreign direct investment.

The need for a new growth model isn’t a new topic. It has been discussed in Serbia for several years by both international financial institutions and local experts. This new model envisages the shifting of the backbone of growth to the newly formed structure of larger and smaller Serbian enterprises, primarily exporters, which emerged in the company of large foreign investments that contributed to building a modern economic structure on the ruins of the old system after the 2000s.

In the time that follows, both the new government of Serbia and the economy face a period in which little can be predicted. According to IMF forecasts, we will probably experience an even deeper economic downturn, with unknowns regarding the scale of the pandemic and the promise of a vaccine that will make life easier, but in some new reality. That reality now needs to be embraced creatively

Such a model does not renounce foreign investments, of course, but does imply a different approach in attracting such investments, based primarily on the creation of a business environment that will be based on the rule of law, equal conditions of doing business for all and transparency.

Every crisis, and particularly such a strong one as this, leads to the loss of a large number of jobs, and, according to IMF forecasts, between 140,000 and 160,000 will be lost in Serbia. Of course, this also means that a large number of companies, primarily small ones, will collapse. At the same time, such conditions also lead to the birth of some new business initiatives and new ways of working within existing business structures, or completely new ones.

If we had to draw several conclusions from the course of the crisis to date that would be relevant for the period ahead, they could be these: investing in reforms pays off, because if that weren’t the case then Serbia would not have met such a crisis with a far better fiscal position than the one it had earlier; an honest, thorough and timely dialogue with all stakeholders in the economy is key to success, both in crisis situations like a pandemic and in “peacetime” periods; anyone who entered into the process of digital transformation, either prior to the crisis or under the forced circumstances of the crisis, increased their chances of overcoming existing market challenges and preparing for the new period of pronounced digital communication; Last but certainly not least, the crisis has shown us that people – their health and safety, solidarity, responsibility towards others, colleagues, companies and society – form the basis for building communities that will be able to respond to existing challenges and new ones that emerge. 

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