Radoš Gazdić, Director Of The Development Agency Of Serbia (RAS)

Serbia attracted record inflows of FDI during the three years of crisis that are behind us, averaging more than 3.7 billion euros annually. However, given the challenges that are set to continue confronting the world economy this year, including the countries from which Serbia receives the most FDI, it will prove extremely difficult to maintain the same level of investment over the course of 2023. RAS will certainly continue providing essential support to all interested investors

The year ahead is a challenging one on many fronts. The crisis brought about by the COVID-19 pandemic, which broke global supply chains, was followed by an unprecedented energy crisis and inflation that have further negatively impacted many elements of life, especially related to the economy. Despite this, notes Development Agency of Serbia (RAS) Director Radoš Gazdić, “Serbia coped very well with the numerous challenges that came in previous years as a consequence of events influencing the world economy. Numerous government measures provided support to the economy, and that trend has continued.”

Following the declaring of the pandemic and fearful announcements at the global level regarding reduced investment activities, Serbia was fortunate to be bypassed by those reductions. Indeed, major companies like Barry Callebaut, NIDEC, BMTS, Continental, ZF, Brose and Toyo Tires actually launched some of the implementation phases of their investment projects precisely during these last three years, i.e., in the midst of the pandemic and the current energy crisis, explains our interlocutor.

“Practical experience to date has taught us that serious companies approach possible investment moves very cautiously and studiously, even during carefree times. The trust Serbia has so far amassed as a reliable investment destination, thanks to its business conditions and high-quality and highly educated workforce, as well as the increasingly current practice of nearshoring, are just some of the factors that are favourable to us when it comes to attracting FDI,” concludes Gazdić.

Serbia has already had the good fortune, and shown the required quality, to become the home of several extremely important Japanese companies… The list is impressive, and we hope that it will expand

With what kind of balance sheet totals did we end 2022 and what do you expect of 2023?

The trend of growing FDI inflows that began back in 2012 has continued to this day. According to unofficial data from the National Bank of Serbia (NBS), 2022 broke a new record in attracting FDI – with more than 4.3 billion euros arriving. This stat becomes even more significant when we consider that last year was another in the series of pandemic-hit years, and that it was also marked by the energy crisis and war just beyond the neighbourhood. It is interesting that these crisis years actually brought record FDI inflows to Serbia, with an average of more than 3.7 billion euros annually over the last three years.

Similarly, 45 agreements on the allocating of incentive funding were approved in 2022, the implementation of which will result in investment exceeding 1.1 billion euros and the creation of 5,531 new jobs. However, given the challenges that are set to continue confronting the world economy this year, including the countries from which Serbia receives the most FDI, it will prove extremely difficult to maintain the same level of investment over the course of this year as well. RAS will certainly continue providing essential support to all interested investors.

During the previous few extremely economically challenging years, we actually received several very important Japanese investments. How significant are they for the Serbian economy over the long term?

What’s important for all serious companies, and particularly companies arriving from Japan, is that they spend a long time considering potential investment destinations. However, once they decide to invest somewhere, they do so as a longterm investment, or – to be more precise – they come intending to stay. Serbia has already had the good fortune, and shown the required quality, to become the home of several extremely important Japanese companies. Starting with JTI, as a kind of pioneer of Japanese investing in Serbia, via the Yazaki company, Kansai Group, Hi-Lex, Mayekawa, NTT Data, Itochu and Mitsubishi Corporation, to the more recent arrivals of NIDEC Corporation and Toyo Tires. The list is impressive, and we hope that it will expand. Their presence here is a privilege and confirmation for Serbia, but it also obliges us to continue working at the same rhythm and to continue improving.

It is evident that Japanese companies are slowly becoming present in an increasing number of fields in Serbia, and that existing Japanese companies in Serbia are already busily expanding their capacities

Can we finally say that Japanese investors are today more accustomed to the idea of considering Serbia, and the wider Western Balkan region, as an investment destination?

Certainly. It is evident that Japanese companies are slowly becoming present in an increasing number of fields in Serbia, and that existing Japanese companies in Serbia are already busily expanding their capacities. Their initial investments are also high, while their plans promise further growth. On our part, we try to be an adequate partner in pursuing joint successes.

To what extent does your cooperation with Japanese agencies that are present in Serbia, like JICA and JETRO, serve to help deepen Japanese- Serbian economic cooperation?

Our cooperation with JICA and JETRO can already be measured in decades, to our great satisfaction. Their activities and assistance in promoting Serbia is truly exceptional. Even during the times of the pandemic, we succeeded in organising so-called virtual events that were attended by dozens and even hundreds of participants and interested Japanese companies. Likewise, RAS and JICA last year launched their fifth consecutive cooperation project on the promotion of mentoring for MSMEEs (micro, small and medium-sized enterprises and entrepreneurs) in the countries of the region. This kind of cooperation, which has now already developed into a friendship, is really something we’re particularly proud of.

In your opinion, what is crucial in the work of RAS and the Government of Serbia when it comes to gaining credibility among Japanese investors?

Japanese companies are very conservative in their decision-making when it comes to selecting a country for investment. They thus don’t invest in countries where business is unpredictable and where they don’t see long-term prospects. We believe that Serbia is able to offer precisely that. It is certainly very helpful to our cause that a number of Japanese companies are already present in Serbia and that they are, I believe, satisfied with the support they’ve received in their investment journey from the Government and RAS, and that mutual trust has thereby been created. We should also add to this the fact that diplomatic relations have existed between Serbia and Japan for 140 years, which is also significant.