It is now more important than ever for the FIC to unite its efforts with the Government in working on improvements to regulatory, legal and other aspects of reforms. They may have positive multiple effects on the Serbian economy in the challenging times in which we live
I believe it’s still too early to talk about a time after COVID, as all indications are that the virus isn’t going away any time soon. This is why we believe recovery should happen in phases, with each new phase responding to each change in the situation. In other words, short term solutions as part of a long term strategy. But we have already learnt valuable lessons which will guide us in the future, says Foreign Investors Council President and Telenor Serbia CEO Mike Michel.
“The first priority is people and their health, and we, as a society, must do everything necessary to protect them. As employers, we must ensure all health procedures are applied in our workplace. “Secondly, it is essential to adjust business models rapidly to the new normal, and to understand new trends and new customer behaviour if we want to stay competitive. Business communities must also accelerate workplace digitalisation and remote ways of working, where regulatory changes are needed to improve flexibility. “Thirdly, we should all consider how we can support our people in changing and adapting their career paths by creating “new” specialists and skill sets.
“And, finally, we must first help those who have been hit the hardest, the SMEs and entrepreneurs, on which the Government has already focused. We have also seen a huge effect on entire industries, such as tourism, which decreased 53% in Serbia compared to last year, or the transport sector, with a significant drop,” says our interlocutor.
“The FIC will compile all our recommendations and innovations in a 2020 White Book, to be available in the last quarter of the year. This will be based on the knowledge and experience of FIC members – large foreign companies operating in Serbia. The focus this year will be on digitalisation and how it can help in overcoming the current difficulties,” concludes the FIC president.
Serbia needs to seize the opportunity of digitalisation and improve its competitiveness, not only in e-government, but also throughout the private sector
In these new circumstances, with the slowdown of GDP growth in Serbia and abroad, which of the measures that were advocated by the FIC before the epidemic still remain valid?
– This crisis has not changed our priorities, as previously defined by the joint Task Force with the Government. We structured our efforts around nine areas that we see as priorities: taxes, labour, inspections and food safety, infrastructure and real estate, digitalisation and e-commerce, pharmaceuticals, bankruptcy and Forex. We believe that improvements in these areas can have very positive multiple effects on the Serbian economy and make the country more attractive for foreign investors.Nor have our expectations changed: we firmly believe these are the key prerequisites for any progressive economy. We want Serbia to strengthen EU accession negotiations as a way of improving both business regulations and their implementation. We still think there is a lot of work ahead of us when it comes to sustainable fiscal consolidation. There is also a great need to improve the implementation of the law, especially in taxation.
There has been much global debate about whether COVID-19 will encourage foreign investors to reconsider their strategies. What do your members think about the future of their operations in Serbia?
– We at the FIC believe in the future of investment in Serbia. If we didn’t, we wouldn’t invest. However, at a time of global crisis, an economic model which assumes a huge inflow of investments to ensure growth is questionable. This is why Serbia needs, on one hand, to step up improvements in regulatory, legal and other issues important for investors and, on the other, to enable the development of start-ups and small and medium-sized companies, which have been hit hardest by the crisis. There is undeniable ability among local people. We should motivate them by creating a predictable and business- friendly environment with less bureaucracy, rather than waiting for huge investments to arrive from somewhere.
Have the FIC’s proposals been taken into account in consultations held with the government during the pandemic?
– These were serious consultations and the Serbian Government was receptive to the position of foreign investors.
All major changes in regulations that affected companies and employers were sent to the FIC in advance, for feedback and discussion, and most of our proposals were included in the government’s first set of measures for supporting the economy back in March. The FIC also compiled and submitted proposals for priority products for CEFTA green corridors to the Serbian Chamber of Commerce. A position paper was prepared and submitted to the Ministry of Finance on delaying FATCA Agreement reporting. We were also invited for consultation by the minister for construction and compiled proposals for the joint preparation of a recovery plan. We firmly believe that this practice and this dialogue will continue.
We also want to further develop our organisation by expanding our membership base and including industries that have so far not been adequately represented in the FIC (e.g. the pharma sector, IT, renewable energy). This will result in a more representative membership profile and achieve stronger advocacy results.
How did you manage consultations with FIC members and in which areas have you provided them with the greatest support?
– We reacted promptly and efficiently. Our members were initially focused on ensuring the health and safety of employees, maintaining business continuity and adapting to the new circumstances, which – coupled with the state of emergency – exposed acute problems that the FIC solved urgently. We collected and submitted proposals on the economic measures needed and input on how to implement these. We also established the practice of continuously collecting reports of day-to-day issues hampering business operations and resolving them. This was done in various areas, including HR (working permits in particular), taxation and transport. In fact, we’ve been working together more closely than ever, as this crisis is a shared challenge that requires a shared response.
The FIC is a major advocate for digitalisation. What do you see as the top priorities in the digital tranquarter sformation of public services, and what are the obstacles that should be cleared for this process to achieve maximum success?
– As I’ve already said, digitalisation will be one of this year’s White Book priorities. In the last couple of months it has been clearer than ever that digitalisation is not just a phrase, but a real need of the overall society, as the whole system has been transferred to the remote way of functioning. Businesses must see this as an opportunity rather than a disruption. Serbia needs to seize this opportunity and improve its competitiveness, not only in e-government, but also throughout the private sector.
We want to further expand our membership base by including sectors such as the pharma sector, IT and renewable energy, and thus achieve stronger advocacy results
Our members understand this now more than ever, and we recommend that everyone adopts this attitude, particularly during this crisis, when customers have turned to digital channels in droves. We recently held an online conference with about 100 FIC members and 15 government representatives from seven institutions, launching a dialogue on digitalisation in Serbian legislation. The FIC presented areas of key importance, particularly enabling the broadest possible use of electronic signatures for day-to-day communication and paperless transactions, continuing accelerated work on the digital transformation of customs and tax administration, further relaxing the rigid mode of communication between employer and employee, and so on.
Does Serbia have the infrastructure required to keep pace with these changes? Is it time to consider the 5G network?
– Absolutely. However, there is still a lot of work ahead of us before 5G is fully operational in Serbia. Technological standards need to be fulfilled, including the adaptation of local zoning requirements and the improvement of procedures for the issuing of licenses. Also, we need the device ecosystem to be in place and the market to be ready. 5G is a transformational technology and will impact on all industrial processes, bringing cost optimisations and increased use of automation.
The greatest benefits will be seen in medicine, communal services, agriculture and the automotive industries, so it will affect overall economic development, bringing a much-needed boost in post-crisis times. Because of the pandemic, the planned auction for 5G has been postponed until 2021. We have also seen a lot of public debate about 5G, which means extensive market education on this topic is needed. We strongly support any public debate or research which includes experts from a range of industries. It is important that all stakeholders – state institutions, universities, technical and health experts and mobile operators – are willing to engage in public discussion of all the issues raised.
Will the particular circumstances now prevailing have an impact on publication of the forthcoming White Book?
– Of course they will, and we will summarise all aspects of the crisis and its effects in the White Book, as the unified voice of investors seeking to improve conditions for everyone. We’ll give a transparent presentation of the progress achieved during the year, address major areas for improvement and present an overview of how the crisis has affected us.
The launch will certainly happen, although the form will depend on the circumstances. We would like to hold the traditional live conference, but, like so many others, the FIC has also moved to working remotely. Thus, if necessary, we are prepared to launch the White Book at a digital event.
What advice do you have for the new reformers?
– We must be the engine that guides the economy in the years ahead, now that we see that COVID-19 will be with us for some time to come. It will continue to affect all industries and now, more than ever, it is crucial that the business community comes together with a unified voice and continues an open dialogue with the government.
To close, I must add that the commitment of our FIC members during this crisis has been an inspiration. Throughout the epidemic they have shown solidarity and unity, giving mutual support, instituting best practices and providing generous donations. We hope to continue the practice of good operations with the new Government as well, and we are looking forward to that.
Throughout the epidemic FIC members have shown solidarity and unity, giving mutual support and providing generous donations.
During the pandemic, the Serbian Government was receptive to the position of foreign investors. We firmly believe that this practice and this dialogue will continue.
We at the FIC believe in the future of investment in Serbia. If we didn’t, we wouldn’t invest.