The total investments of American companies in Serbia amount to almost four billion dollars. Among the most important companies are Philip Morris, Coca-Cola, Ball Packaging, Microsoft, Oracle, IBM, NCR, Sitel, and in recent years from the automotive industry, such as Johnson Controls and Cooper Tires. We believe that despite the presence of these important names, there is still room for a stronger inflow of US investments in Serbia, which is why as AmCham we are looking forward to positive signals from the US administration and economy, and the recent arrival of US Development Bank DFC in Belgrade, says Amalija Pavic, Deputy Executive Director of the American Chamber of Commerce.
Is there room for improving economic cooperation between the United States and Serbia, especially after the signing of the Washington Agreement and the opening of the DFC office in Belgrade?
The opening of the DFC office in Belgrade is undoubtedly a positive signal to investors who plan to invest in Serbia and the region, but also support for existing investors who plan to expand their business. The arrival of such an important financial institution from the USA to Belgrade puts our country on the list of desirable investment destinations and opens the possibility for us to strengthen the economy, and through the inflow of foreign direct investment, which for several years has a high share in GDP and domestic investment whose level should be higher.
We are aware that Serbia is a small market that is not easy to put on the map of large investment countries such as America, but we believe that the Washington Agreement, with the economic support of the DFC, will further draw American investors’ attention to the region and Serbia as the region’s largest economy. We can expect to see the first effects this year.
In which sectors can the greatest interest of American investors be expected?
Traditionally, at the top of the list of interests are the IT sector and telecommunications, various manufacturing activities, especially the consumer goods sector, the pharmaceutical industry, the automotive industry, infrastructure and similar. In general, there are no sectoral constraints, and if we take seriously the improvement of the work of institutions, from the efficiency of the state administration to the judiciary, I believe that we will additionally make our economy attractive for larger domestic and foreign investments, including American ones.
What could the economy gain from a larger presence of American companies?
Investments, more jobs, inflow of money from taxes to the budget, transfer of knowledge and good business practices and, of course, as a result of economic progress, a higher standard for all citizens of Serbia.
As an association that brings together American and other investors in Serbia, how do you see the business environment and what would be your recommendations for its improvement?
Despite the strong impact of the pandemic on the global and domestic economy, members of the American Chamber of Commerce in Serbia (AmCham) assess the business climate as in previous years – moderately satisfactory. Also, they are moderately optimistic about the expectations for 2021. Most AmCham member companies (56 percent) expect an increase in business volume and growth, while as much as 30 percent plan new employment. The uncertainty that accompanies the pandemic has caused the expectations of our members to be on average one-fifth to one-third lower than in the same period last year. At the same time, it is a very optimistic fact that as many as two thirds of the membership are planning additional investments, which speaks of their long-term commitment and expectation of a quick recovery after the end of the pandemic.
According to the results of our eighth survey on investor satisfaction and trust, the biggest challenge in the next year, 70 percent of members see in the unpredictability of the pandemic, then in the efficiency of public administration (48 percent), while 46 percent resent the unpredictability of changes and application of regulations. The greatest administrative burdens for members stem from tax, customs and foreign exchange regulations that are high on the list of reform priorities. For that reason, our recommendations to the Government during the pandemic are further improvement of e-Government, and accelerated optimization and digitalization of all administrative procedures, as well as focus on health and in the fight against the pandemic and in providing regular health services.
In the aforementioned survey and annual publication 8th Pass Time, AmCham members highlighted non-economic factors as primary to improving the business climate – improving the rule of law, judicial efficiency and the fight against corruption. How do these things affect the business of foreign and domestic investors?
The pandemic and its effects on business have not changed the opinion of AmCham members about long-term priorities. As in the previous two years, the most important reform remains the improvement of the work of the judiciary and the rule of law, and the second priority is to reduce corruption. Members still see the third priority in improving the predictability of regulatory changes, especially bearing in mind that the number of public hearings on regulatory changes is declining from year to year.
When we talk about the rule of law, improving the work of judicial bodies and increasing their efficiency is one of the most significant challenges. The length of court proceedings is the most significant objection this year as well, which is pointed out by as many as 73 percent of the participants in the research, while the lack of adequate knowledge of judges is in second place. This is followed by inequality of treatment and lack of specialization of judges. Also, a number of respondents pointed out obstacles such as the limited possibility of e-communication with the courts and the unsystematization of court practice.
In addition to the rule of law, the successful fight against corruption is one of the key challenges facing the state. According to the perception of AmCham members, the majority of respondents believe that corruption is most prevalent in the field of public procurement, followed by administrative procedures and the judiciary, as well as the functioning of the health system, inspection services and employment in the public sector.
Commitment to a decisive and effective fight against corruption remains one of the loudest demands of the economy. Equal business conditions and healthy competition on the market without the presence of corruption will bring trust in business relations, eliminate negative selection and the functioning of mechanisms for the protection of rights and interests, Nova Ekonomija reports.
