Subsidies to investors have been controversial for 15 years, and questions of their justification and fairness have been raised again.
Although the announced analyzes of the justification of the investment, such a study has not yet seen the light of day, although on several occasions statements came from the Ministry of Economy that the subsidies pay off fantastically.
The last statement of the Minister of Economy from only a few days ago is that according to the analysis of giving state money to private companies, the donated state funds are returned fourfold in just 16 months.
On the other hand, the longer the subsidies last, the longer the domestic businessmen complain about the unequal treatment of foreign investors by the state.
Zoran Drakulic, president of the club Privrednik and owner of the company Point group Int, as a guest on N1 television, complained these days that foreign investors received subsidies of 84,000 and even 100,000 euros per job, while on the other hand we have large domestic businessmen who did not get any.
“I don’t know in the Privrednik club that someone received a subsidy. We received some small subsidies for employment in a new plant, but for – if I’m not mistaken – about 200 euros, which is insignificant in relation to these amounts we are talking about,” he said.
By the way, some companies received larger subsidies than this, such as the Barry Calebo factory, which received 120,000 euros per employee, or Henkel 144,000 euros per worker.
Milorad Filipovic, professor at the Faculty of Economics in Belgrade, and his associates made an analysis of subsidies from 2006 to 2016, which was later innovated with data until 2019, according to which the amount of aid is large in favor of foreign investors.
According to his findings, the state had helped 296 projects until then, of which 202 were foreign investors and 94 domestic, so the participation of domestic is a little less than a third. The difference in the allocated amount of subsidies is much bigger, so out of about 655 million euros of subsidies, 611 million were given to foreign investors, and only 44 million to domestic ones.
When asked about subsidies, the Ministry of Economy answered that in the last five years and the first quarter of 2021, out of 135 investors “who have the obligation to invest in equipment and other fixed assets and the obligation to employ with whom the state has concluded an agreement on incentives almost 30 percent of domestic economic entities,” ie 38 domestic ones received state support, and at the same time 97 users are foreign investors.
When asked about the amount of subsidies, we did not receive a specific answer, but that “according to the number of new employees, the amount of gross salaries of employees and the amount of investment, the intensities for the allocation of incentives are calculated.
For these reasons, their amount is not fixed, but depends on whether it is the employment of hundreds of people or a few dozen workers, whether it is highly qualified staff with high salaries or production workers, as well as whether it is more millions of investments or investments of a few hundred thousand euros.”
As Filipovic explains, the ratio of approved investments can also be influenced by the fact that about 70% of terminated contracts are with domestic investors.
“The most common reason is that they do not fulfill their investment obligations within the prescribed deadline, and sometimes that they fire workers. The reason why most of the subsidies are for foreign investments is that our investors do not have that much capital to invest or do not want or are not allowed to invest it. There is also this double attitude of the state, towards foreign and privileged investors and towards ordinary domestic investors. In our country, everything is strictly required to be in accordance with the regulations, while in the case of foreigners, and especially large ones that the president or the prime minister advocates, it can be seen through the fingers. The consequence of that different attitude is that domestic investors invest in unproductive investments, land, real estate or simply go abroad, Ukraine, Rusiia,” explains Filipovic.
Since 2014, the law on investments no longer explicitly mentions foreign investors, ie there is no separation of domestic and foreign businessmen.
Ljubodrag Savic, professor at the Faculty of Economics in Belgrade, points out that the conditions for obtaining subsidies are precise and divided into categories depending on location, activity, etc., and that somewhere help is given per employee, and in capital intensive activities in percentage of investment, Danas reports.
