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Investors Acknowledge Improved Business Environment in Serbia

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The news that more Serbian cities and municipalities have found a place on the “European Cities and Regions of the Future” list by the British Financial Times (FT) is a result, according to economists and experts in the field, of efforts to improve the investment climate and the support provided by the state of Serbia to investors.

Mihailo Vesović, the Director of the Department for Strategic Analysis, Services, and Internationalization at the Chamber of Commerce of Serbia, assessed for Tanjug that investors are most interested in the efficiency and effectiveness of their investments. “They are interested in how much they had to invest, how the local and state administration treated them, and, ultimately, how much time and money they saved in the process to achieve a certain result,” he said.

According to his statements, besides Belgrade, the list of future cities includes Leskovac, Kragujevac, Šimanovci, Zrenjanin, and Subotica in their respective categories.

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On the Financial Times list “European Cities and Regions of the Future” for the year 2024, Belgrade is ranked at a high seventh place in the category of large European cities regarding human capital. Meanwhile, Leskovac secured the first place as the most attractive micro-city for investors in terms of cost efficiency.

Kragujevac is ranked eighth in the category of medium-sized cities for cost efficiency, while in the category of micro-cities for cost efficiency, Šimanovci secured the fourth place, Zrenjanin the fifth, and Subotica the sixth. “This indicates that investors are not only heading towards Belgrade, Novi Sad, or Vojvodina but are also going to other parts of Serbia, which means there has been a significant shift in the investment climate in those parts of Serbia that we may have recognized as regions lagging behind in their economic development,” pointed out Vesović.

As the best example in the list of micro-cities in terms of efficiency, he highlighted Leskovac, a city recognized for its textile industry. “In the last 10 years, there have been several significant investments in Leskovac, not only in the textile and pharmaceutical industries but also in the construction industry. This is due to the exceptional availability of the workforce in the city,” he explained.

Regarding Kragujevac, he mentioned that the city has a significant engineering tradition, primarily in the automotive industry, where, in addition to “Stellantis,” many other engineering companies in the metal industry are also present and operating.

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Director of the Department for Competitiveness and Investments at NALED (National Alliance for Local Economic Development) Dušan Vasiljević emphasized to Tanjug that the assessments from this publication recognize what has already been identified in analyses and reports to NALED in the previous period, namely that the business conditions in our municipalities and cities have significantly improved recently. “A positive aspect is that we have had our municipalities and cities on this list of future European cities before, but there weren’t as many as now, as six of our cities and municipalities have been ranked among the 330 future cities of Europe,” he said.

“Potential investors pay close attention to which cities are on that list, what is marked as their advantages, and what as disadvantages. They see that this year we have many cities from Serbia, so it is a sign that they may focus on some of these six cities and municipalities on that list, and perhaps other cities will be interesting to them, which is good for both those cities and our country,” he said.

He added that in the coming period, unlike earlier times when the focus was on reducing unemployment, the task will be to ensure an adequate workforce for all investors who may be interested in investing in Serbia. Vasiljević particularly emphasized the importance of infrastructure development and noted that all the cities that performed well on this list in the previous period are well-equipped with infrastructure, both in terms of roads and electronic infrastructure.

Ivan Nikolić, the Director for Scientific Research and Development at the Economic Institute, told “Politika” that he is not surprised by the positioning of Serbian cities in this way at all. Surveys conducted among investors present in our country for the medium or long term show their absolute satisfaction with the investment climate.

“The cities that made it to the FT list, I presume, are ranked based on the number of investors, the volume of business, the size of the investment… Foreign investors simply recognize Serbia as a stable market with many advantages and potentials. Starting from labor costs, which interests them the most, to securing highly educated young people who can be involved in high-tech processes. A new aspect is also the potential for placing goods from Serbia. I mean the free trade agreement with China, which is expected to come into effect in the middle of the year,” emphasizes Nikolić.

He also emphasizes that various state incentives should not be neglected, although such assistance is provided in most other countries. The fact is that we are among the countries recognized as recorders in terms of foreign direct investment inflow, so there are many reasons why all these cities in Serbia are recognized as places worth investing in.

“Serbia has not been recognized as a desirable investment destination just recently; it has been going on for quite some time,” concludes Nikolić.

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