Germany is one of the leading economic partners of Serbia, and more intensive cooperation with the companies, financial organisations and institutions of the strongest European economy is a great privilege for the Serbian economy
This is not only because of the capital they have invested and the export results of Serbia that German companies have increased, and the business they have brought to our companies and the jobs that they have provided for our citizens, but also because of the transfer of knowledge, technologies, modern business standards and business models that they have provided to the domestic economy,” says Marko Čadež, president of the Serbian Chamber of Commerce.
Germany has been the biggest investor and the most important economic partner of Serbia for a long time. Apart from that, what has a stronger connection with the German economy brought Serbia?
Economic and political cooperation with Germany is today at the highest level in the last decade and a half. Germany is at the top of the list of investors and foreign trade partners and is also the largest bilateral donor, which all together also make it a strong supporter of the Serbian economy in terms of strengthening regional connections and capacities for the process of European integration.
Germany has invested more than three and a half billion euros in Serbia through investments and grants supporting development projects and growth, and strengthening the capacities of the Serbian economy.
Commodity exchange and exports, supported by the investments and export activities of German companies that operate here, and increased interest of the German market in Serbian products, have recorded a ten year high.
In the first seven months of this year, exports of goods from Serbia to Germany have exceeded a billion euros (at the end of 2015, they were 1.5 billion), so it is certain that this year’s results will be a record.
With what degree of certainty can we talk today about possibilities for building stronger relations between the two countries in the field of industry?
In my opinion, the questions of possibilities and potentials are no longer raised. It is up to us to find ways to further valorise this mutual interest and strengthen our economy, in order to be able to best utilise the chance that is created through a partnership with much more developed industry. This is even more important given that the Serbian economy has been traditionally reliant on German technology – 75 per cent of machines and equipment in our factories are of German origin and German capital is invested in a growing number of companies that operate in Serbia.
Since the beginning of this year, more than a thousand German companies and individuals have ownership stakes in nearly 950 companies and more than 400 companies from Germany have been present in all vital sectors of the Serbian economy. Most of the 1.8 billion euros of investments, both relevant to the number of implemented projects and the number of investments, has been used for manufacturing plants production – automobiles, electronics, food processing, pharmaceutical, the chemicals industry etc.
Germany has invested more than three and a half billion euros in Serbia through investments and grants supporting development projects and growth, and strengthening the capacities of the Serbian economy
It is particularly important that German companies, be they large or small, come with long-term programmes when they decide to make investments: to produce here, to export from here, to engage local factories and people, and to stay here, constantly strengthening their production capacities and business operations in all sectors, from manufacturing to services.
They send the best message to other German businesspeople who have yet to come to Serbia. Recently, Prime Minister Aleksandar Vučić personally received yet more strong confirmation that large company Tönnies will arrive in Serbia, which is a chance for our industry. Moreover, the arrival of a retail chain like Lidl will be a great opportunity for our manufacturers.
Despite the fact that, according to DSW research, German companies have a positive opinion about the climate for doing business in Serbia, what would you say are the major obstacles that still exist for German companies operating in Serbia; and what does Serbia intend to do specifically in this respect, as well as through cooperation between the Chamber of Commerce and the Government?
Serbia has made significant progress in reforms and has improved the regulatory framework and overall business environment, which is highly appreciated German companies operating here, as well as new ones that have arrived recently and recognised that.
There are no better indicators than the data of the survey published in the middle of the year by the German-Serbian Chamber of Commerce stating that 90 per cent of those surveyed say that they would invest in Serbia again and that satisfaction is slowly growing, not only with current business operations but also with positive expectations and the number of those who have new investment projects for this market.
The government, in cooperation with the economy, will continue with reforms in order to make the public administration more efficient and to improve legal security even more, and to make the tax system more stimulating and the tax administration more responsive to the requirements of the business community for the purposes of further reducing corruption and increasing transparency in public procurements.
The German-Serbian Chamber of Commerce has actively participated in the work of the Mixed Chambers Council that was established by the Chamber of Commerce and Industry of Serbia as a permanent platform for open, constructive and high quality dialogue with the government and state institutions in order to consider and resolve the problems and initiatives of the business community jointly and on a regular basis.
German manufacturers in Serbia point out the need to engage a larger number of domestic suppliers. What can the Chamber do to increase the number of domestic companies able to be engaged in the supply chains of German manufacturers?
The internationalisation of our economy is one of the strategic objectives of the Chamber of Commerce and Industry of Serbia. Based on sectoral analyses of export potentials and individual market research, we carefully create tools to support our companies to produce and export more. In the process of representing the economy, we are greatly committed to removing obstacles for investments and business operations, and to increase sales of our goods on foreign markets.
We are also working on a new concept for representing our economy in the world. In parallel, we are intensifying activities on the promotion of investment and export potential, opening new markets, mutually interconnecting our companies and their connection with potential buyers and investors from abroad, and on the involvement of our companies in the production and supply chains of large companies.
The German-Serbian Chamber of Commerce states that 90% of those surveyed say they would invest in Serbia again, and that satisfaction is slowly growing
The Days of Suppliers that we organise have also proved to be greatly beneficial to large international companies, such as Germany’s Siemens and Eberspächer, and enabled them to meet with local suppliers and local businesses that have presented their potentials.
The cooperation that we have established with the strong association that is the National Association for Materials Management, Purchasing and Logistics (BME e.V.), which brings together around 9,000 German companies – potential buyers of our products, is of great significance and importance and provides tremendous opportunities for our economy. The BME can also help us in raising knowledge and skills regarding how to do business with German companies.
How do the German-Serbian Chamber of Commerce and the CCIS cooperate in the fulfilment of this objective?
Together with the Delegation of German Industry and Commerce, which has now become the German-Serbian Chamber of Commerce (AHK), we organised the participation of our companies in business meetings with potential German partners in the framework of the project “German Initiative for Finding Suppliers in the Countries of the Western Balkans” last year in Munich and this year in Dortmund.
For talks with German companies this year, of more than 400 companies that applied, 169 companies, including 43 from Serbia, have been selected from the metal processing, mechanical engineering and electrical industries, the industry of automobile parts and the processing of rubber and plastic. Companies from Germany have shown a lot of interest in including Serbian manufacturers in their supply chains by attending this event, and that includes large and reputable multinational companies.
In fact, cooperation with the German-Serbian Chamber of Commerce is very intensive. It is based on our common goal of assisting in improving the business environment for our member companies in Serbia and for their mutual networking.
Also, in cooperation with the German Chamber of Commerce and the Regional IHK Chambers, we have organised a large number of conferences in several German states in recent years, in order to introduce the Serbian market to German companies and to establish closer cooperation between businesspeople from the two countries.
We are grateful to German institutions, organisations and experts on their assistance in strengthening the capacity of our economy through the introduction of dual education, the training of export managers, the inclusion of our industry in European environmental integrations and, of course, in the reform of the chamber system in order to become more efficient as a service for both future investors and companies that already operate here. In particular, I would like to emphasise the importance of the initiative of the Chancellor of Germany, Angela Merkel, and the progress of the Berlin Process for the stability, prosperity and European path of Serbia and the entire region.
What specifically do the infrastructure and business connection of the countries of the Western Balkans within the framework of the Berlin initiative bring to the region’s economies?
From the perspective of the economy, all the benefits of strengthening regional cooperation and establishing strong relations in the Western Balkans can be summarised in two words: better competitiveness, not only of individual companies but also of the economies of countries that are members of the Berlin Process and of the region as a whole. Our companies have a natural interest in cooperating and our future is definitely in the slogan of the Chamber Investment Forum: “One Region – One Economy”.
Our economies are small and fragmented and our companies individually have relatively modest potential and relatively limited resources and production capacities to be able to compete more seriously with developed companies and those on the global market and to gain business in regional and international tenders.
Therefore, it is important that we do not close our national borders and that we work on improving the business environment and raising the attractiveness of the region for new investments and the creating of new jobs.
We should connect by means of infrastructure and businesses, and strengthen our capacities in order to produce and export more and to appear before investors and customers together as more competitive, as one region and as one economy.