Stefan Lazarević, President Of The American Chamber Of Commerce In Serbia

The visit of more than 40 representatives of major U.S. companies sends a clear signal that the current U.S. administration gives a strong impetus to developing economic cooperation with Serbia. And strengthening strategic partnerships like the one with the U.S. is crucial to the development of our economic potential ~ Stefan Lazarević

We recently had an opportunity to see two important delegations of American companies visit Serbia, bringing more than 40 representatives of major U.S. companies to Serbia in a period of just four months. This is excellent news for us, says AmCham Serbia President Stefan Lazarević.

When it comes to discussing potential, an emphasis is ordinarily placed on investments and the creation of new jobs, but our interlocutor explains that it should also be noted that Serbia generated record revenues exceeding 1.2 billion dollars from the export of services to the United States in 2022, which represents an increase of a whopping 30 percent compared to 2021. “It is thus clear that strengthening strategic partnerships like the one with the U.S. is crucial to the development of our economic potential. I believe that, apart from well-known geopolitical reasons, one more important reason for American business’s fresh interest in our country is the region’s internal connectivity through the Open Balkan initiative, the implementation of which Serbia is working on intensively.”

You mention the Open Balkan initiative. How attractive is this concept operationally, from the point of view of investors, and in the context of creating this unique economic space what more should be done for it to receive its full synergistic effects?

– We should be conscious of the size of our economy and that of the region as a whole – these are small markets, and connecting them through the opening of borders represents an incalculable advantage for investment and business. The Initiative’s most important advantage is that it makes the market of the Western Balkans more attractive for doing business, because I’m convinced that with its full implementation we will ensure the free flow of people, goods, services and capital. We need to understand that companies wanting to do business in Serbia are most commonly considering the potential of developing a broader regional presence.

Connecting the countries of the Western Balkans through the opening of borders represents an incalculable advantage for investment and business

The Open Balkan Initiative has to date achieved serious progress in terms of resolving long-standing nontariff barriers and obstacles, which has facilitated imports and exports of food products, in some cases by as much as 50 percent, while direct costs from taxes and fees have been reduced by up to 80 percent. This has all resulted in the volume of the trade exchange in the Open Balkan region increasing by almost 30 percent. The economy strongly supports the full implementation of the Agreement on Free Access to the Labor Market, which has already been signed and would enable the hiring of personnel who are in short supply through eased administrative procedures. Significant progress is also required in the areas of cross-border capital flows and reducing transaction costs, as well as in the liberalization of financial services.

How heavily engaged is AmCham as a chamber when it comes to supporting these efforts to ensure potential investors receive relevant information about Serbia as an investment destination?

– The American Chamber of Commerce has, for two decades already, been among the most important ports of call for American companies considering Serbia as a destination.

We are committed to our mission of being a pillar of support to the business of our members through the providing of crucial business information, networking and the establishing of mutual connections, all of which are of great importance to potential investors.

As one part of these efforts, Am- Cham’s business mission to Washington, D.C. during June included the holding of a series of very important meetings with representatives of relevant American institutions, organizations and companies, through the “Door Knock” format. I would single out the high-level meetings at the State Department, meetings with several congressmen and senior representatives of the Department of Commerce. We additionally held a roundtable with representatives of companies interested in coming to Serbia, as well as a series of bilateral meetings. The aim of our mission was to strengthen the institutional and economic preconditions needed to increase bilateral trade and opportunities for new investments between Serbia and the U.S., as well as to present the positive experiences of American companies already doing business in our market.

AmCham has been conducting surveys on the business environment and labor prospects in Serbia for the past 10 years. As we await the results of the latest, 11th survey, could you tell us what the previous ones showed?

— In the opinion of AmCham members, according to the previous survey, the most important factor for improving the business environment is represented by institutional reforms – improving the work of the judiciary and the rule of law, as well as reducing corruption. The third priority is the further development of eGovernment, with its development to date being assessed favorably, as well as the continuation of efforts intended to improve the efficiency of administration.

The ICT industry, biotech, energy, infrastructure, the automobile industry, agriculture and food production are attractive sectors for investment

Moreover, compared to previous surveys, a more transparent and efficient public procurement system stands out as a something of a higher priority. When it comes to investments from the national budget that are essential to long-term growth, AmCham members prioritize investments in education, as they also did in previous years. Compared to previous surveys, the essential need to invest in the environment was especially highlighted.

There has really been a lot of discussion recently regarding whether the IT sector is actually experiencing a decline after rising sharply. From the point of view of your members and the inquiries you receive regarding Serbia’s IT sector, how would you rate the attractiveness of this sector for further investment?

– According to estimates, over 190,000 people worldwide lost their jobs in the IT sector during the first five months of this year, which is significantly higher than across the whole of 2022. It was clear that the sudden growth of this industry, which primarily came as a result of the Covid-19 pandemic and the meteoric rise of e-commerce, would not be sustainable in the long run. On the flip side, it would be glib and superficial to talk about the “collapse of the IT industry”, rather it is more realistic to talk about its consolidation.

All estimates suggest that, over the long term, we are awaited by the development and growth of many “tech” domains, which will certainly be reflected in the level of investments in our country. Some recent inquiries that we’ve received, as well as conversations during the “Door Knock” mission to the States, provide signals in that direction, though it is too early to mention specific names. I will also add that I’m convinced Serbia should work on the creation of an ecosystem that would help us become a regional hub of research and development for innovative technologies, such as artificial intelligence and biotech, which would create opportunities to even more strongly attract new investments and for the modernization of the society and the state.