Over the last two years, Serbia has made significant progress in structural reforms, fiscal consolidation and improvement of its business regulatory environment. However, there is a clear need to enhance consistency, predictability and transparency if Serbia wants to attract new investors and companies to do business in Serbia
Bilateral relations between Switzerland and Serbia are good and show a dynamic, growing trend of exchanges in different fields, ranging from economy, tourism and trade, to culture and education, says Dragica Tomčić, Economic Attaché at the Embassy of Switzerland in Belgrade.
How would you assess the reform process announced by the government and in particular measures in the area of improving the business climate?
Over the last two years, Serbia has made significant progress in steering structural reforms and implementing its fiscal consolidation strategy in a rigorous manner. It has also improved its business regulatory environment, which is benefitting not only foreign investors, but also domestic ones.
The introduction of new procedures to obtain building permits at one-stop-shops, the simplification of the tax system through the introduction of e-governance tools, amendments to the labour legislation and an eased bankruptcy procedure were all positive steps. These efforts translated directly into Serbia considerably improving its ranking on the World Bank’s Doing Business List in 2016. The opening of EU
Accession Negotiation Chapters 23 and 24 in July this year is another signal of Serbia making progress, and which will also give a positive signal to investors.
At the same time, there is a clear need to enhance consistency, predictability and transparency if Serbia wants to attract new investors and companies to do business in Serbia. Consolidating and accelerating reforms in the area of justice and the fight against corruption will be essential to improve legal security.
Improvement of the tax legislation, considering the excessive level of taxation and the para-fiscal burdens, and amendments to the regulations on electronic commerce, taxation and social security contributions on wages will also prove important.
How do Swiss companies already active on this market evaluate the overall conditions for doing business in Serbia and where do they see room to improve the business climate? Which measures do you see as urgent from standpoint of Swiss investors, both those already doing business in Serbia and those only considering Serbia as a business destination?
Swiss companies operating here in Serbia acknowledge that Serbia has improved its regulatory framework and the overall business climate significantly. Most of the companies who were surveyed by the Swiss-Serbian Chamber of Commerce at the beginning of this year indicated that they did not regret having invested in Serbia and many are actually considering expanding their operations.
At the same time, and as mentioned earlier, consistency, predictability and transparency are the key factors for investors and companies that want to invest and do business in Serbia. This also applies fully to Swiss investors. In this respect, it is essential that in 2017, and the following years ahead, we see substantial progress in the reform of the judiciary, the fight against corruption, the rule of law and the protection of ownership.
Last but not least, ensuring the availability of a skilled labour force will be necessary. Many Swiss companies have indeed stressed that they had difficulties recruiting and retaining workers.
Given that the government has announced much more active work on the development of IT capacities, where do you see an opportunity for the transfer of Swiss expertise and expanding business links between enterprises from the two countries?
The ICT sector is undoubtedly one of the most rapidly growing markets. Some estimates show that in the future 90 per cent of jobs will require familiarity with IT. In this light, it is expected that the European Union will have a shortage of 900,000 ICT experts in the next five years. It is, thus, no surprise that Serbia has endeavoured to further develop this sector.
With double-digit annual growth, ICT is already among the most vibrant and fastest-growing sectors in Serbia, and another 15,000 to 30,000 ICT experts will be needed to meet market demand.
Considering that addressing this demand in the long-run will require an in-depth transformation of the education system and the introduction of informatics to the curricula starting from the primary school level, Swiss expertise – or rather experience – could certainly prove useful.
It is essential that in 2017, and the following years ahead, we see substantial progress in the reform of the judiciary, the fight against corruption, the rule of law and the protection of ownership
Cooperation between universities and so-called polytechnic schools, such as the well-renowned ETHZ and EPFL, which are producing top-class computer specialists, could contribute significantly to the development of a dynamic start-up and spin-off scene in Serbia.
Switzerland will, in any event, strive to further support the development of entrepreneurial skills, including helping Serbian IT experts boost their business skills and competitiveness.
Regarding the expansion of business links between our two countries in the ICT sector, allow me to note that in the last couple of years we have noticed that there is ever more interest among Swiss IT companies for outsourcing their services in Serbia, with a clear increase subsequent to the appreciation of the Swiss franc.
Here they have found talented, motivated, creative, dynamic, language-proficient and highly educated young people willing to learn and upgrade their knowledge. Combing the enormous energy and creativity of Serbian human capital power with Swiss knowhow, expertise, experience and high-tech industry, is where I see the perfect match in expanding and fostering business activities.
How would you assess the trends in overall bilateral exchanges?
Bilateral relations between Switzerland and Serbia are good and show a dynamic, growing trend of exchanges in different fields, ranging from the economy, tourism and trade, to culture and education. Whilst the trade volume in the first half of 2016 amounted to around €130 million, there is, of course, room for improvement.
We expect that the positive trend observed in 2015, which saw Serbian exports to Switzerland increase by 28 per cent, will continue. The most promising sectors include agricultural products, textiles, automotive, food products and wood and furniture.
The Swiss business community in Serbia currently numbers over 200 companies from various sectors, employing around 10,000 workers. Switzerland is also among the top ten biggest investor countries in Serbia. We see new investment potential in the strong Serbian diaspora in Switzerland, which shows an increasing interest in launching businesses in Serbia.
With regard to culture and education, relations and exchanges are vibrant and dynamic, in both directions. Swiss artists, students, visiting professors and experts in dual education are coming to Serbia with great pleasure and are willing to show and share their skills, new tendencies, expertise and experience with the Serbian people.
On the other side, Switzerland remains a top destination for Serbian artists, musicians, students and tourists. In July this year, the “Zurich-Belgrade” route actually became the number one aviation line!