The American Chamber of Commerce in Serbia, AmCham, has represented an important pillar of American-Serbian partnership for 20 years already. Its goal is to work, through partnership with the Government of Serbia, to advance the business climate, promote the best business practices and values of America and Europe, and help its member companies
AmCham will continue to work over the next decade to promote the values of American business and strive to hold a seat at every table at which advancing the economic environment is discussed,” says AmCham President Stefan Lazarević at the start of our interview, during which we summarized AmCham’s 20 years of activity in Serbia and its members’ expectations for the year ahead.
Given current economic developments globally, and the ways those developments reflect on the Serbian market, what kind of operational results do AmCham members expect?
According to the latest reports of the World Bank, global growth is expected to contract from 5.7% in 2021 to just 2.9% in 2022. This means that the global economic slowdown is continuing, and is now entering the phase of a prolonged period of weak growth and increased inflation. The European Commission, on its side, revised its 2022 economic growth forecast for the eurozone by 1.3 percentage points, down to 2.7%, while increasing its inflation forecast by 3.5 percentage points to 6.1%. The most significant negative factor is the rising price of energy, which has seen inflation soar to record levels at the European level, overburdening European companies and households. All of these factors are important to economic movements in our country.
The research we conducted during 2021 showed optimism among member companies when it comes to their growth plans. Following the start of the war in Ukraine, we carried out a survey among member companies and the answers showed that they are less optimistic compared to last year, primarily due to the continued presence of the pandemic, the war in Ukraine, inflation and energy prices.
In your opinion, and according to AmCham members, where does room exist for Serbia’s new government to improve conditions for doing business in the Serbian economy?
Digital transformation, the agenda for an environmentally clean and energy efficient Serbia, advancing the health care system and business integration through regional initiatives are four priorities that AmCham and its members will work on intensively during the period ahead. We believe these priorities are key to the continued creation of a predictable and stable business environment, which is why we’re sure they’ll also remain among the top priorities of the next Government of Serbia.
Alongside these four key tasks, as we’ve previously pointed out, improving the rule of law, judicial efficiency and the fight against corruption remain fundamental and crucial preconditions for advancing the business climate sustainably, which we are convinced the new government will also continue working on.
What does the Open Balkan initiative mean to you and how do you view it in the context of the nearshoring trend that’s emerging in the wake of Covid-19?
AmCham encourages the Open Balkan initiative actively and strongly, primarily because we’re sure that such initiatives can provide a significant stimulus to activating the economic potential of the region as a whole, which is an excellent thing. Even though it currently only includes Serbia, Albania and North Macedonia, the Open Balkan initiative, represents – as noted recently by Ambassador Hill – great support to the process of the accelerated accession of the region to the European Union, which is a goal that we support strongly.
Enabling the free flow of goods, capital, services and people on the basis of the EU model will enable the growth of many sectors, and contribute to strengthening the economies of the region. AmCham will endeavor to also be a constructive partner in this direction by continuing to work with all participants. I would also add that the American chambers of commerce across the region work closely on a large number of issues, because we have common challenges and shared aspirations for a better business environment, and for us the Open Balkan initiative represents, first and foremost, an economic initiative for the improved integration of business within the scope of the region.
The pandemic, the war in Ukraine, inflation and rising energy prices have led to reduced optimism among member companies, but – given the uncertainty – it’s pointless to predict future trends
When it comes to nearshoring, supply chains disruptions worldwide, caused by the Covid-19 pandemic and the war in Ukraine, have put nearshoring on the agendas of a large number of companies. With a view to the geographical position of the region, competitive tax regimes to attract foreign investments, and cultural similarities, this region could be interesting to European companies.
However, institutional inadequacies – the same ones hampering the countries of the region in the EU accession process – make such decisions somewhat more complicated. The Open Balkan initiative, as a platform that uses European standards as the basis for rules on the free movement of goods, people, capital and services in the region, is something that can ease and fast-track such decisions, but whether we, as a region, can take advantage of this crisis will depend on the effectiveness of implementing this initiative in practice.
From your perspective as a businessman, where do you see the most room to improve the institutional framework in order to really bring the Open Balkan initiative to life when it comes to the flow of people, goods, and capital?
When we speak of the institutional framework, there are many challenges, but it’s encouraging that work is being done in parallel on many tracks. For example, citizens of Serbia, North Macedonia and Albania could soon be hired in these three countries by showing only their Open Balkan Identification Numbers, with no additional administrative barriers, which would really be a huge step. In late 2021, the Agreement on Conditions for Free Access to the Labor Market in the Western Balkans, the Agreement on the Interconnection of Electronic Identification Schemes for Western Balkan Citizens, the Agreement on Cooperation in Veterinary, Phytosanitary, and Food and Feed Safety in the Western Balkans, and the Agreement on Mutual Recognition of Certificates of Authorized Economic Operators for Security and Safety (AEOS) were all signed and are now valid in all three countries. It is now important to speed up work on the implementation of these agreements, which we are supporting strongly.
AmCham has been active in Serbia for two decades already. With that in mind, which of your chamber’s many initiatives would you single out as being important to shaping Serbia’s market economy?
The partnership between the United States and Serbia has lasted more than 140 years, and we are proud that the American Chamber of Commerce has been an important pillar of that partnership for the last 20 years.
This year’s celebration of our important anniversary provides an opportunity to remind ourselves of our own top priority: improving the business environment, which we have been working on continuously, and in partnership with the governments of the Republic of Serbia, since 2001.
Systemic work to improve the business environment cannot be effective in the short run, nor – in that sense – could we single out a couple of initiatives that have provided key contributions to change. We have worked on this important task, and continue to do so, together with our members, with the Government of Serbia and with other important stakeholders in Serbia. Every step that each of us has taken in the right direction, and especially the systemic reform activities that we’ve witnessed since 2000, has meant a step in the right direction for all. The changes in the domain of the economy are significant and plain to see, even though all of us – both citizens and businesspeople – wanted those changes to come faster and be felt more. Still, we should be honest and remind ourselves of where Serbia was immediately after the democratic changes of 2000 and where we are today.
Apart from regular topics like improving transparency and the rule of law, today we are also seeing topics like digitalization, energy diversification, and environmental protection high on the government’s agenda. What can U.S. investors offer in these fields?
It is noticeable that the number of American investments in our country is growing year on year, that American companies feel good in our country and that they’re doing a great job of promoting Serbia further, which – as the largest country in the region – has imposed itself as a key investment destination. We are encouraged by the arrival of American investors in the services and manufacturing sectors despite the impact of the crisis on the volume of investment globally, which is of course also reflected in our region.
Digital transformation, the agenda for an environmentally clean and energy efficient Serbia, advancing the health care system and business integration through regional initiatives are four priorities that AmCham and its members will work on intensively during the period ahead
The list of interests of American companies is traditionally topped by the IT and telecommunications sectors, various production activities, especially in the consumer goods sector, the pharmaceutical industry, the automotive industry, infrastructure and similar areas. We expect even higher interest in Serbia among American companies in the period ahead, and for certain in the areas you mentioned.
Serbia has witnessed the gradual emergence of a large number of business associations that bring together local and foreign investors. How strong is the competition among these associations today and what are AmCham’s strengths when it comes to enticing new members?
At AmCham we don’t see other business associations as competitors, but rather as collaborators working on the same mission. AmCham gathers together more than 210 American, international and domestic Serbian companies that have collectively invested more than 14 billion euros in Serbia and employ over 100,000 Serbian citizens. Our goal is to work, through partnership with the Government of Serbia, to improve the business climate, promote the best business practices and values of America and Europe, and to enable the continuous professional development of members and the improvement of education in accordance with the needs of the business community. We collaborate with all organizations and individuals who share the same values and strive for the same goals, and do so with great enthusiasm.
Skilling, reskilling and upskilling are today, more than ever before, seen as top factors of employee competitiveness. How can the government and business associations work to influence the creation of an education system that’s more flexible and robust?
Skills, or competencies, are the key currency of the future, and the speed at which one can adapt to new conditions, i.e., the ability to learn new skills, is an element that will determine the path of success or failure to a great extent – both when it comes to individual businesses and economies around the world. With this in mind, it comes as no surprise that the European Commission launched the EU Pact for Skills in late 2020, as a common platform for access to the development of skills. It is clear that this topic requires a synergetic approach and joint work among governments, businesses and educational institutions, and that each of these stakeholders has a crucial role to play in this process.
The American Chamber of Commerce’s Am- Champs program, which was launched in 2014, serves as an example of how businesses and educational institutions should work together to educate young people who possess the capacity to become leaders in the business community. Eight generations of final-year students and young managers have so far successfully completed this mentoring program, one of the basic elements of which is to develop a readiness for lifelong learning and the development of ideas and experiences.
The American Chamber of Commerce’s AmChamps program, which was launched in 2014, serves as an example of how businesses and educational institutions should work together to educate young leaders
It is noticeable that the number of American investments in our country is growing year on year, that American companies feel good in our country and that they’re doing a great job of promoting Serbia further
AmCham encourages the Open Balkan initiative actively and strongly, primarily because we’re sure that such initiatives can provide a significant stimulus to activating the economic potential of the region