Goran Pekez, president of the Japanese Business Club:

Japanese Companies Support Changes that Contribute to Stability

What is most important for members of the Japanese Business Club, but also all other investors, is macroeconomic stability, in terms of the predictability and stability of the business environment

The Japanese business community in Serbia is not as large as the communities of some other foreign countries, but it comprises several exceptionally distinguished and significant Japanese companies that are doing well in Serbia and whose operations contribute to the transfer of technology, job creation, employment of a qualified workforce and the progress of the local communities in which they operate.Their experience gained in Serbia is also very important for other Japanese companies that are potentially considering entering the Serbian market.

Like all investors, the important factor for Japanese companies is political stability, the macroeconomic situation and, above all, the predictability of the business environment.

“The situation in Serbia is good in this respect, although room for improvement exists,” says Goran Pekez, president of the Japanese Business Club, the function of which is to improve cooperation between the two countries and connect Japanese companies already operating in Serbia.

The constructive exchange of experiences and information of mutual interest, as well as joint approaches in dialogue with the government and society, form the basis of cooperation between companies within the club

Japanese companies pay close attention to the course of reforms in Serbia, especially the part that relates to everyday easing and simplifying of administrative procedures, tax and inspection policies. Within the framework of the business club, members mutually exchange experience and, in cooperation with other business associations and institutions, are engaged in issuing recommendations and directives that, when applied, could lead to improvements in the overall business climate.

The presence of Japanese companies in Serbia also has a special significance for the business community and the local workforce, as they have also brought to the country a special approach to the organisation of work in the form of the Kaizen business philosophy, which – thanks to its extremely good results – has also been accepted in America and Europe. This relates to the constant improvement of the production process and numerous small training courses in which the whole work collective is involved and where, with a very small financial investment, steady and remarkable results can be achieved in terms of raising the efficiency of the overall work process.

“In Serbia such principles are not only applied at the factory of the company where I work (Japan Tobacco International), but also, for instance, at Panasonic and Bosch,” says Pekez.

How many companies does the Japanese Business Club bring together today and in which areas of business are they active?

The Japanese business community in Serbia has 47 companies, among which are Astelas, Fujitsu, Itochu, Mitsubishi Corporation, Panasonic, Sony, Takeda, Toyota and Japan Tobacco International. Thus, different industries are part of our business club and we are all gathered around a common interest – doing business long-term and investing in Serbia. The basic premise of cooperation with various partners is to develop partnership relations, because only building trust and mutual cooperation can lead to results that will be a lasting and will make the overall economic environment more interesting for long-term investments.

What principles underpin the functioning of the Japanese Business Club and what would you single out as its most important activities in the previous period?

The idea of the Japanese Business Club is to contribute to strengthening economic relations between Serbia and Japan, and to facilitate networking between Japanese companies already operating in Serbia. Through joint action, the members of the club are tasked with contributing to improving business conditions and improving the business climate in Serbia. This relates primarily to the stability and predictability of the market, which are of key importance to the operations of existing investors and the attracting of potential investors. Of course, this doesn’t apply only to companies coming from Japan, but rather for all companies, regardless of where they come from. This is the only way that leaves room for creating business strategies that will enable the realisation of profits which companies use to pay taxes and employ people.

Strict application of the Law on Inspection Oversight and the predictability of tax regulations are prerequisites for attracting greater interest among investors

In which ways do member companies cooperate mutually and how does the club cooperate with other stakeholders in the business context – state institutions, the Serbian Chamber of Commerce and other business clubs and associations of foreign investors?

The constructive exchange of experiences and information of mutual interest, as well as joint approaches in dialogue with the government and society, form the basis of cooperation between companies within the club. Our goal is to build partnership relations with representatives of state bodies, because only cooperation and mutual understanding between the government and foreign investors can lead to the building of an attractive business environment in Serbia that will motivate existing investors to continue investing and potential new ones to start.

When it comes to cooperation between the club and other institutions, I would like to stress that we are open for cooperation with all institutions, given that achieving a better business environment and results of operations is not just our goal – but rather the common goal of all players on the market.

How do members of the club assess the overall conditions for doing business in the context of the macroeconomic environment and the current reform programme?

As I have already noted, what is most important for the members of the Japanese Business Club, but also for all other investors, is macroeconomic stability, in terms of the predictability and stability of the business environment. The situation in this respect in Serbia is good, but room for improvement exists.

That is exactly what we expect from the reform programme – progress in the development of the market economy, strengthening its capacity to respond to the pressure from competitive economies in Southeast Europe, as well as adequate mechanisms for maintaining a stable economic and fiscal environment.

What kind of institutional changes do Japanese companies consider as being the most important when it comes to improving the business environment?

Certain essential institutional changes have already taken place. There has been adoption, for example, of the Law on Inspection Oversight, which should lead to the reduction of the grey economy and the black market, which are burning problems of the Serbian economy and business that cause enormous damage to the state budget. Likewise, certain improvements have been made in regulating the import of medicines and public procurement, which our Club identified as one of the problems. However, the transparency and predictability of procedures related to the pharmaceutical industry remains a major challenge both for the country and for foreign investors in Serbia.

What do you expect from 2016?

What is very important is strengthening the predictability of the tax system in general, but also its consistent implementation in practice, as a way of stimulating the interest of potential investors. It is also important to harmonise regulations with the EU, especially in the domain of the pharmaceutical industry.

What specific principles of management and business culture do Japanese companies promote in Serbia?

Much can be learned from the Japanese in this respect, both in terms of the organisation of work and the organisation of life. One of the lessons is certainly Kaizen – the business philosophy applied by Japanese companies, which has – thanks to its excellent results – been accepted in America and Europe. Kaizen is basically a principle of constant “change for the better”, with the optimal use of all available resources, with particular emphasis on employee initiatives. Financial investments are small, but the changes in the way people work and think are big. Employees are encouraged to give their own suggestions for improving their workspace and the jobs they do.

In Serbia such principles are not only applied at the factory of the company where I work (Japan Tobacco International), but also, for instance, at Panasonic and Bosch

I think that is the best advertisement for the local workforce. We believe that our experience can be useful not only to other Japanese investors who are considering investing in Serbia, but also all other Serbian companies that wish to introduce Kaizen.