The business environment for foreign investors in Serbia has seen significant improvements in recent years, as evidenced by the higher inflow of FDI. The attractiveness of the domestic market is the result of stable and continuous communication of the FIC with the state institutions. Space exists for significant further progress on the establishing of predictable, measurable and equal conditions for all market players, but the progress made is evident.
Even though the period since the outbreak of the pandemic has been extremely challenging, the Serbian economy has proven fairly resilient to the crisis and remained attractive for continued foreign investment. The FIC White Book contains many of the answers to the question of how these results were achieved, while this interview with FIC Vice President and A1 Serbia and A1 Slovenia CEO Dejan Turk sheds further light on both good practices and further steps that are important to preserving and advancing the results achieved.
The White Book is the most authoritative and current guide to the improvement of the business environment in Serbia. What does it have to say to potential investors who want to invest in secure projects?
First of all, the White Book shows that Serbia knows what it can offer to foreign investors and that it is ready to support them in their business efforts in the country. This is largely the result of, stable and continuous communication with the state institutions, which are responsible for the development of the business environment and which over the years has shown clear progress in improving the business environment for foreign investors in Serbia. This has contributed to an increased inflow of foreign direct investment over the last few years. There is still room for further improvement, but a significant shift has nevertheless been made, as opposed to the period of five or six years ago.
How do you assess FIC cooperation with international institutions in working together to improve the business climate in Serbia?
The interest of investors in our country is strong, despite the impact of the current investment cycle, which was abruptly toppled by the pandemic. The inflow of foreign investments in 2019 was a significant 3.8 billion euros, and in 2020, according to the latest UNCTAD “World Investment Report 2021”, Serbia ranks third among economies in transition. I believe that the activities of the Council and cooperation with international institutions play a significant role in creating positive perceptions of, and interest in, the domestic market.
I believe that the activities of the Council and cooperation with international institutions play a significant role in creating positive perceptions of, and interest in, the domestic market
What good practices implemented by the Government during the pandemic should be continued and improved in order to help companies traverse the transition period ahead?
Primarily, a clear focus on the balance between the economy and healthcare should be maintained. Unlike other countries in the region, Serbia has pursued a policy of an open economy throughout the pandemic. This has resulted in the effects of the economic crisis being less visible compared to some other countries, while it has boosted competitiveness. For us, as foreign investors, this is the best indicator of how important the economy is to the Government.
All procedures that were not digitalised prior to the pandemic have slowed significantly due to the reduction in employee numbers in the administration. What can we learn from this? How can we accelerate change?
The pandemic has further emphasised the importance and necessity of digital transformation, on the one hand, and agility, on the other. The way an organisation thinks is a key starting point for making changes. In order for digital transformation to achieve its full potential, it is necessary to increase efficiency through the radical empowerment of employees and nurturing a corporate culture in which every mistake represents an opportunity to learn. Faster implementation is the result of efficient team organisation, process simplification, setting clear priorities and introducing quick and easy digital solutions.
Many people believe that working from home will remain with us even after the end of the pandemic. This is only one of several proposals by the Foreign Investors Council to improve the Serbian Labour Law. What steps do you expect in this area?
I expect even greater flexibility when it comes to employment and cooperation with employees, which will enable employers to create an environment that best meets the needs of work organisation, while respecting the rights of both employers and employees. The practise of working from home existed in our company even before the pandemic, although to a much lesser extent. The pandemic has shown us that we can be equally efficient, with 80 per cent of our employees working remotely, including the departments that didn’t previously have this opportunity – such as customer service staff. In addition, this regime has opened the door to the possibility of employing people from local communities and hard-to-employ categories, which is a major benefit – for both the employers and the economy – that should be exploited.
Which of the initiatives launched by the Foreign Investors Council in 2021 would you emphasise?
The importance of accelerating the digital transformation in all areas is essential, so I would like to emphasise the launch of the initiative for the Digitalisation of Financial Services and the engagement of the Working Group for the Law on Electronic Communications. Significant activities have also been implemented in the areas of personal data protection and working from home, which have been brought into sharp focus as a result of the pandemic. We should not forget further work on reducing bureaucracy and creating a predictable and safe business environment for foreign investors.
Unlike other countries in the region, Serbia has pursued a policy of an open economy throughout the pandemic… For us, as foreign investors, this is the best indicator of how important the economy is to the Government
The interest of investors in our country is strong, despite the impact of the current investment cycle, which was abruptly toppled by the pandemic
The regime of working from home has opened the door to the possibility of employing people from local communities and hard-to-employ categories, which is a major benefit – for both the employers and the economy – that should be exploited