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Progress On The Doing Business List Requires More Than Reforms On Paper

Effective, efficient and transparent local government benefits business, which in turn precipitates stronger overall development across a country as a whole

The British Embassy has recognised NALED’s extraordinary capacity to create an efficient platform for improving the business climate in Serbian municipalities and in Serbia in general, which is reflected in the better ranking of our country on the World Bank’s Doing Business list.

“They are one of the greatest champions in this area, and in my opinion their success so far is remarkable,” says Jeremy Lang, Head of UK Trade and Investment at the British Embassy in Belgrade. He also points out that British expertise in public-private partnerships can be useful to Serbia. “We have many consultants, project managers and contractors with experience in small and big PPP initiatives who could be of use when it comes to PPP in Serbia.”

Mr. Lang, you come from a country that has a long tradition of local government. More than three centuries ago, Montesquieu wrote that this characteristic of the UK prevents despotism in your country. Those local governments are asymmetrically organised for historical reasons. How do they affect the economic life of the UK today?

Apart from preventing despotism, the local government has a huge impact on the economic wellbeing of any country. It is enormously beneficial for a country to have an effective and empowered local government, such as that of the UK.

Ultimately, businesses deal mostly with local governments; that’s where most of the decisions about permitting and planning are made. This is exactly why it’s so important for the prosperity of Serbia’s citizens to have strong, transparent and accountable local government.

How would you assess the efforts of NALED aimed at strengthening local government and the business conditions for the private sector?

Since its founding 10 years ago I think NALED has provided a good platform for local governments to improve their attractiveness and show that they’re open for business. A lot of effort is being invested in making it more attractive for companies to do business in Serbia.

There is still much work to be done. That is why we began cooperating with NALED on their work to improve the business environment. They have been one of the main champions in that field, and I think they have achieved some notable success so far.

London and the UK represent one of the world’s main financial and stock exchange centres. It can often be heard that British companies seek better corporate governance and reporting to justify larger investments in Serbia. How can our economy and our state make progress in this area, so as to attract British capital?

Sound corporate governance and good management really make a difference to a company’s success or failure. Good managerial structure, practice, and transparency are fundamental to ensuring that a company runs effectively and with proper accountability.

Good corporate governance ultimately helps companies to self-regulate and prevent collapse or mitigate risks. Serbia can make progress in this area through a real commitment to sound corporate governance in state-owned companies – something that the British Embassy Belgrade through the EBRD is supporting in EPS – and through developing better regulatory structures.

Local governments have a huge influence on the economic welfare of a country. Countries like the UK with efficient and strong local governance benefit greatly from it

When an investor from the United Kingdom appears at a local government in Serbia, what should be explained to them first and what should they be offered first?

UK companies should be aware that in general local governments in Serbia are undergoing reform of their public administrations, including capacity building and development of infrastructure, local by-laws, and the quality of citizen-oriented services, to name a few. Since the capacities of local governments vary quite a lot, the level of progress in reforms may vary considerably too.

We at the British Embassy understand this, and in most instances so too do UK companies. But the British Embassy and my team in the Department for International Trade can provide assistance should they encounter any issues with local governments in Serbia.

NALED, together with the Government of Serbia, has formed a working group to improve the position of our country on the World Bank’s Doing Business list. The British government supports this process and the initiative to implement tangible reforms in four of the 10 areas assessed by the World Bank. Why is it important for our country to make progress on this prestigious international ranking list?

I think you have the answer in your question: because the rankings are prestigious, and it matters to foreign businesses and investors where Serbia ranks. That said, it is not only about the ranking itself.

Once a potential investor is interested, what matters is whether the reforms exist only on paper for the WBDB list, or whether those reforms actually allow companies to do business without administrative burdens.

That’s why we’re supporting NALED which, due to its structure and unique position, is very well placed both to coordinate the different stakeholders and to implement the reforms in a way that is beneficial to both the state and the private sector.

Serbia should commit to creating sound corporate governance in public enterprises. This is something that the British Embassy in Belgrade supports in EPS in cooperation with EBRD

What is the UK’s experience when it comes to PPP?

The UK Government is firmly committed to modernising the delivery of its public services. In the UK, the public expects to receive the best value for money coupled with the highest quality of service and PPP is a process which has been extensively adopted by the UK Government to satisfy this need.

Through the development of well-designed and well-maintained facilities, it has provided consistency in delivering value for money. Some 11% of public expenditure in the UK is now delivered under PPP-based contracts. These contracts are based on long-term partnerships between the public and the private sectors.

Serbia can learn from the British example, and we’d be happy to continue to help municipalities to access British expertise on PPP projects.

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