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Exciting Year Ahead

Italy has been Serbia’s main trade partner in the last decade, with a high degree of compatibility and proximity, and I have reasons to believe that it will return to that position. Indeed, losses from 2020 are already being compensated for

Italy was Serbia’s second largest partner in 2020 when it comes to exports and the country’s third largest partner when it comes to imports, after Germany and China. Although these are favourable statistics, it seemed for some time that bilateral trade between our two countries had somewhat lost its momentum. Here Marina Scognamiglio, Director of the Italian Trade Agency in Belgrade, crunches the numbers and trends for CorD.

Which factors influenced such trade dynamics in recent years?

– A recent study confirmed our own research, conducted several years ago: there are around 600 Serbian companies with Italian capital (this number grows up to almost three times if we consider all companies with a share of Italian capital) operating in the country and they form part of the economic backbone of the country, ranging from the financial and banking sectors, to manufacturing, industry and agri-food.Italy remains one of the primary investors in Serbia, with investments ranging from small joint-ventures scattered all across the country – from Vranje to the north of Vojvodina – to huge investments like Fiat-Chrysler Automobiles in Kragujevac.

Last year was unfortunately marked by the COVID pandemic, a factor that cannot be ignored. Resilience and persistence have, however, always characterised the entrepreneurs of both countries and the fall in trade in 2020 is already being compensated for in the first quarter of this year (+2.6% in the trade exchange with Italian exports beyond 3% in the same period). Although the automotive sector remains the single most significant contributor to our bilateral trade, the structure of commerce is very heterogeneous and encompasses nearly all key parts of the Serbian economy. Italy has been Serbia’s main trade partner in the last decade, with a high degree of compatibility and proximity, and I have reasons to believe that it will return to that position. According to the latest figures, Italy is still – like in 2020 – Serbia’s second trade partner.

How has COVID19 influenced investment relations? What was the level of investments of Italian companies in 2020, and where did these investments mostly head in terms of sectors?

– I don’t believe that the COVID pandemic caused the cancelling of investments, but it certainly put numerous projects on hold, not just in this country.

Serbia experienced an understandable fall in FDI inflows in 2020, while still performing relatively strongly despite the economic crisis. There are several Italian investments that should unfold this year, bearing in mind the strong government support to the economy and the rapid reaction with the vaccinating of the population and the workforce. Italian investments are announced in the sock manufacturing industry, which represents a workhorse of Italo-Serbian cooperation, as well as in the metal industry, but also in the entertainment, industrial, agri-food and other sectors. This should be an exciting year for our economic relations.

ITA provides information, assistance, consulting, promotion and training to Italian and foreign SMEs. How did your usual line of work change in 2020?

– The pandemic obviously changed the way we work, but not necessarily in a negative way.

While physical travelling has been banned or made difficult, the majority of our partners in Italy adjusted quickly: fairs that traditionally host top Italian companies were able to create online events, companies have been very receptive to the concept of online meetings and in a way the whole adjustment was merely accelerated by the constraints imposed by COVID.

Our Agency is already deeply orientated towards online services and we haven’t skipped a beat. I believe that the good old-fashioned face-to-face meetings and a physical presence at significant business events will still remain unparalleled in terms of experience, but the truth is that the vast majority of work can be done online just as efficiently as “in person”. In some cases, even more efficiently. I must say that Serbian companies are showing a great deal of adaptability and willingness to embrace the new trends, which is something that hasn’t been the case in all European countries.

There are projections that Serbia will see robust GDP growth in 2021. What are your estimates when it comes to bilateral trade? Is this growth going to translate into increased export and import opportunities for Italian companies?

– It is very hard to make predictions or projections at this moment, though we are all hoping that the pandemic is slowly passing. As I mentioned earlier, I have no doubt that bilateral trade will blossom once both countries overcome the major consequences of the pandemic and resume a normal working regime. The trade statistics for the first quarter of 2021 are a good indicator of the things to come. Both countries worked really hard to create the best possible business conditions, while keeping the pandemic situation under control, with incentives and programmes aimed at resuming normal business activities as soon as possible, and I believe that in the coming period we will be able to reap the fruits of those activities.

Italy is one of the first EU countries to devise an Industry 4.0 national framework, while Serbia is already famous for its highly qualified tech staff. But we still have a lot of work ahead of us if this is to become a match made in heaven

The food sector remained strong during the pandemic, but there were no large trade events and fairs, such as the one in Novi Sad that used to be in the focus of Italian companies. Was this lack of face-to-face businesses contacts fully offset by online communication and networking? How does 2021 look to you from that perspective?

– Although the food sector remained strong during the pandemic, the experience of trading using online communications and networking, without face-to-face business contacts, showed the weakness of a lack of personal contacts. Hence it is my great pleasure to inform you that ITA Belgrade has the opportunity to organise the participation of Italian companies in the 9th Italian exhibition as part of the International Agriculture Fair in Novi Sad. This event will take place from 18th to 24th September 2021.

The pandemic caused a strong push to advance digitalisation and innovation. What kinds of opportunities have these trends created when it comes to our mutual cooperation?

– The ICT sector, as well as innovation and hightech sectors in general, are sectors that we view as having perhaps the greatest potential for collaboration between our countries.

During and after the pandemic, it has just become more visible that there are several other sectors which, in one way or another, rely heavily on digital infrastructure and underlying sophisticated technical solutions: healthcare and medicine, agriculture, industry, renewable energy, industry and so on. Italy is maybe best known for its cars, fashion and gastronomy, but it is also a leader in digital industry and ICT, as well as one of the first EU countries to devise an Industry 4.0 national framework, in order to promote and support fast and modern industrial development. Serbia, on the other hand, is already famous for the availability of highly qualified staff. The number of engineers, technicians and other specialists is sufficient to meet the growing demand of international companies. In theory, this is a match made in heaven, but we still have a lot of work ahead of us to bring together these subjects.