The system of incentives that Serbia grants to businessmen favors foreign companies and the subsidies alone are not sufficient for the development of the economy, said the forum “Subsidies, Economic Development and Investment Growth” organized by the New Economy and the Balkan Democracy Fund (BTD).
Marko Danon of the Center for Higher Economic Studies said that the structure of foreign investment is unfavorable because it is dominated by “labor-intensive firms” that engage relatively little domestic suppliers.
“Some 50 percent of foreign-owned jobs created from 2009 to 2016 belong to a group of companies with earnings slightly above the minimum. These are, for example, companies that manufacture cables, seats, car covers, “Danon said.
He added that about 25 percent of jobs in foreign firms earn about average earnings, such as motorcycle and household appliances companies.
Danon said “more sophisticated ways to attract foreign direct investment” should be considered in the coming period.
Zoran Drakulic, the president of “Privrednik” said that the investments of local businessmen have decreased by 40 percent because of the bad environment and the attitude towards the local businessmen.
“You cannot stimulate foreigners with 90 percent of all subsidies and domestic business with 10 percent of subsidies,” he said, adding that it is necessary to help small and medium-sized enterprises, because without them, Serbia is “vulnerable to any crisis.”
“You know what the biggest problem is? We have been promising for years that we will have communication with the Government – we do not have one, “said Draculic, adding that he was worried by colleagues from the Privrednik club who were beginning to” make huge sums of money in the region.”
Professor at the Faculty of Economics in Belgrade, Milorad Filipovic, said that over the past 10 years, subsidies of € 400 million have been allocated, most of which went to foreign investors.
He added that subsidies were given “both for sewing pants and socks, and for investing in the highest quality investment projects in the same ‘basket'”, but a shift has been made in this area because systematization of subsidies has been made in relation to where the investments are made. and what.
However, the production of cables for the automotive industry is classified as medium-high technology, so that by statistics, more than 33 percent of Serbia’s exports are made of medium- and high-tech products, in fact, they are mostly cables, he said.
He also referred to the allegations that “unemployment was drastically reduced”, saying that this was not due to employment growth but to the outflow of population, demographics and the way statistics are kept.
“If you do not report to the Labor Office automatically, you are automatically deleted and you are no longer unemployed. On the other hand, many temporary workers have been switched into employed ones because of the various controls, “he said.
Consultant Bogdan Petrovic said that “much will change” when the Assembly adopts a new law on state aid control, which is enacted as part of meeting the requirements of the relevant negotiating chapter with the EU.
That law will for the first time look at all state aid given to a business entity and if it exceeds a certain amount it will have to be reported to the State Aid Control Commission.
Petrovic said that the subsidies had so far “dripped from all sides”, so that investors would receive financial subsidies from the Ministry of Economy, construction land as a gift from local self-government, and as a third form of subsidies, all their infrastructure would be done.
“Various ways have been found for Fiat, training of workers, not to talk all was found in order to give some investors as much money as possible,” he said, adding that the “bill” for Fiat will go out to half a billion euro at the end of this year.