SERBIAN ECONOMY
C H A L L E N G E S A N D O P P O R T U NI T I E S
Returning To Regular Flow
VOL . 2
CONTENTS
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WE NEED TO BE INDUSTRIOUS AND PRUDENT
COMMENT
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WE KNOW WHAT YOU NEED
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DIGITALISATION IS ESSENTIAL FOR RECOVERY
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FOOD QUALITY & SAFETY WITHOUT COMPROMISE
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BOLDLY MOVING FORWARD
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WE’RE REOPENING FACTORIES
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WE AWAIT INVESTORS
DEJAN ALEKSOV, MANAGING DIRECTOR AT BENU PHARMACIES AND MEMBER OF THE BOARD OF DIRECTORS OF THE PHOENIX GROUP
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SOUND FISCAL POLICY REMAINS A PRIORITY
SEBASTIAN SOSA, IMF RESIDENT REPRESENTATIVE IN SERBIA
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OTP GROUP’S RECORD RESULTS IN SERBIA
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MOUNTAIN GEM
CCIS AND USAID OVERVIEW OF THE STATE OF THE ECONOMY – “OVERCOMING THE CRISIS TOGETHER”
PREDRAG MIHAJLOVIĆ, CEO OF OTP BANKA SRBIJA AND EXECUTIVE SPONSOR OF THE INTEGRATION PROJECT OF OTP BANKA SRBIJA AND VOJVOĐANSKA BANKA
BOJANA KUZMANOVIĆ, SALES & MARKETING DIRECTOR, GORSKI HOTEL & SPA
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THE POWER OF THE VIRUS & THE SCALE OF THE CRISIS
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PROUD OF THE FIRST CENTURY
FEATURE
DEJAN STOJIĆ, PRESIDENT OF AMSS – THE AUTO-MOTO ASSOCIATION OF SERBIA
VLADIMIR VASOJEVIĆ, BELCHIM CROP PROTECTION SRB (LTD.)
BOBAN JANKOVIĆ, PRESIDENT OF THE MUNICIPALITY OF MIONICA
VLADIMIR STOJANOVIĆ, PRESIDENT OF THE MUNICIPALITY OF KUČEVO
MARIJA CVETKOVIĆ, PRESIDENT OF THE MUNICIPALITY OF GADŽIN HAN
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COMMENT
We Need To Be Industrious And Prudent Given the current state of the pandemic, it is likely that the Serbian economy will need consecutive infusions of money in order to stay afloat. However, new measures should take into account the fact that saving everybody is neither attainable nor wise
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ew measures aimed at supporting the Serbian economy, which has been stricken by the pandemic, are already in front of us, despite the new government having yet to be formed. There is nothing strange about this, given that the whole world is now aware that the rebounding of the economy in a sharp “V” curve is impossible. Indeed, it is widely believed
sition to dispense money to their economies generously. The Serbian government already positively surprised both experts and businesspeople by pouring €5.1 billion at the onset of the Coronavirus pandemic. The new instalment, estimated at €1.36 billion, is to be disbursed as of August. Although this amount is definitely much smaller than the first instalment, it surprised both the public
At the end of the day, it could happen that public money is spent but neither companies nor jobs are saved. The new government will have to address this challenge that the return to normality will rather take the shape of a “U” or “W”. Some economists actually speak about consecutive “Vs” as the most likely outcome, given that some of the biggest economies are still operating under the conditions of the pandemic, while others are grappling with ups and downs. Under such circumstances, state support is following the pandemic curve. Governments are spending more in order to save their economies and jobs. Direct support to national carriers, or larger budget deficits which were “big no-no-s” during the global financial crisis, are today a welcome practise. However, not all economies are in a po-
and experts, as it was claimed just a month before that there would be no additional financial infusion to the economy, as the state coffers simply could not sustain that. Of course, companies see the new package as welcome and necessary, but expect it to be followed by another more generous one, in the autumn, when a new wave of the pandemic is expected to strangle the economy. Will there be space for that? Experts argue that neither the first nor the second package were well conceived and distributed to those industries that needed help the most. Furthermore, the measures, they argue, lack economic logic – companies will
use them, but there is no mechanism that will force them to use resources efficiently. Instead, some firms may go into bankruptcy once it becomes evident that state money cannot keep them alive artificially. It would be helpful if the financial aid were followed by institutional changes aimed at improving the business environment and reforming the labour market, which will render the economy more resilient. Concerns that one-off measures are not an adequate answer are even more grounded if one takes into consideration that the global economy won’t be the same once the pandemic finally ends. On the contrary, it is believed that countries like Serbia, with less versatile and advanced structures, will fare better during the crisis, but will then fail to grow once the green economy, digital transformation and sophisticated services based on advanced technologies regain their importance. Indeed, any new package will have to balance between channelling support to the economic sectors that are most needed and those that may be “growth accelerators” in the times to come. To be sure, there is no need for them to be hand picked by the government. It will be enough for there to be a transparent, well-established mechanism for financing those companies that have already demonstrated their ability to transform themselves during the crisis. ■
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INTERVIEW
SEBASTIAN SOSA, IMF RESIDENT REPRESENTATIVE IN SERBIA
Sound Fiscal Policy Remains A Priority If the global crisis deepens, it will further impact Serbia through weaker external demand, the continued disruption of supply chains and tighter financing conditions. Under such circumstances, it would be crucial to have well designed public investments and a sound fiscal policy for maintaining the economy on the right track
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here is no sign at present that the economic crisis triggered by COVID-19 will soon be in the past tense. Under such circumstances, it seems reasonable to discuss all possible scenarios of the development of the crisis and conceivable policy responses in the given situation. In this interview, IMF Resident Representative in Serbia Sebastian Sosa offers valuable insight into the options available to Serbia.
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• What are the best- and worst-case scenarios when it comes to Serbia’s GDP growth in 2020? - Notwithstanding a sizeable policy response, the pandemic has had a significant adverse impact on Serbia’s economic activity, and we project real GDP to contract by three per cent in 2020, compared to the four per cent increase projected prior to the outbreak. The pandemic is hitting the economy mostly through reduced
external demand, weaker foreign direct investment and remittances, disruptions to regional and global supply chains, and domestic supply constraints. Although growth is expected to rebound next year, the projected 2021 GDP level is about five percentage points below pre-COVID-19 projections. Risks to the growth outlook remain substantial, given the heightened uncertainty about the duration and magnitude of the COVID-19 shock. A further worsening of the pandemic could lead to a more severe output contraction in 2020 and a weaker recovery in 2021. A deeper and more protracted global crisis would further affect Serbia through weaker external demand, continued disruption of supply chains and tighter financing conditions. • After massive support to the economy at the beginning of 2020, does additional fiscal space exist in the Serbian budget for a second wave of support to businesses? - The fiscal package deployed in response to the crisis has been the largest in Emerging Europe (about 6.5% of GDP) and included increased healthcare spending, tax deferrals, wage subsidies and universal cash transfers. A state guarantee scheme for bank loans to SMEs was also implemented. A second round of measures, amounting to 1.2% of GDP, was recently announced, including additional wage subsidies for SMEs and deferments of labour taxes and social security contributions. Although these measures should not create financing problems, they will raise public debt sharply and the remaining fiscal space is now very limited. Therefore, should the outbreak be more protracted than expected, any additional support will have to be strictly targeted to the most vulnerable firms and households. • The Serbian economy is largely dependent on foreign investments, goods’ exports and remittances. Which of those are the strongest and weakest links in the chain? - As I mentioned before, these are all important channels through which the COVID-19 shock is being transmitted to the Serbian economy. Real exports, which
have been growing steadily in recent years and were projected to grow by eight per cent this year before the pandemic, are now projected to fall by almost 10 per cent. Foreign direct investment, which peaked at 7.8% of GDP last year, is expected to fall to 4.7% of GDP in 2020, while remittances are expected to decline from eight per cent of GDP to 6.5% of GDP, impacting negatively on private consumption.
investment, including into green infrastructure and environmental protection. This will not only support economic recovery, but also boost Serbia’s potential growth. • There is a long list of reforms that slowed down due to the pandemic. Under the current circumstances, is it realistic to expect the tackling of areas like tax administration, public sector wages and employment systems, and the corporate governance of public enterprises? - The implementation of structural reforms has indeed faced delays during the pandemic. There are several structural fiscal reforms to underpin the improvement of fiscal discipline that we had hoped would be adopted in 2020 before the Policy Coordination Instrument (PCI) comes to an end, but that are now delayed. These reforms include the implementation of a new public sector wage system and the adoption of new fiscal rules. The introduction of a new public employment framework is also delayed, due to setbacks in technical assistance delivery related to the pandemic, but also considering the need to prioritise solid control of public employment and the wage bill throughout the crisis. The adoption of plans to develop Serbia’s capital markets has also been delayed.
The PCI enabled a strong policy dialogue between Serbian policymakers and the IMF, to help the country demonstrate its commitment to reform and to maintaining macroeconomic stability • Is there still time for public investment to be scaled up to support the recovery of the economy and boost potential growth, given that we are already in the second half of the year and that each time the new government is inaugurated it needs time to adjust and articulate its policies? - Public investment has indeed been affected by the pandemic. While we were projecting public investment in 2020 at 4.5% of GDP prior to the COVID-19 shock, we are now projecting it at 3.8% of GDP. The 2021 budget should envisage higher public
In this context, the reform agenda for the remainder of the PCI has been streamlined and refocused on crisis priorities, including monitoring fiscal risks and strengthening SOEs. The Serbian Finance Ministry is preparing a strategy and methodology to properly monitor fiscal risks, supported by World Bank technical assistance, prioritising fiscal risks stemming from SOEs, local governments, public-private partnerships, litigation and natural disasters. Moreover, a new ownership and governance strategy for SOEs is
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currently being prepared, with assistance from the EBRD. This reform should provide an integrated approach to overseeing SOE operations, as well as measures to improve corporate governance of SOEs. • What are the preconditions for a healthy fiscal policy during times when additional
will be important for maintaining Serbia’s reputation in financial markets. • You’ve warned that increases in public sector wages and pensions should be limited in 2021. How about support to vulnerable groups, such as those who lost their jobs, be that in the traditional
and increased public investment, including on green infrastructure and environmental protection. It should also allow for increased support to the most vulnerable households, including informal workers facing job and income losses. Expanding the coverage of existing targeted social assistance programmes could be helpful in this regard. • The current PCI programme will officially end in January 2021. Given that PCI was a new tool, what strengths did it show? - The PCI was designed to enable a strong policy dialogue with the IMF and to help a country demonstrate its commitment to reform and to maintaining macroeconomic stability. For Serbia, the PCI has indeed played that role. Under the PCI, which started in mid-2018, Serbia has achieved good results in terms of macroeconomic performance and financial stability. Prior to the COVID-19 shock, the economy grew at a healthy pace, supported by strong foreign direct investment and improved labour market conditions. Inflation remained low, while the resilience of the financial sector continued to improve, with non-performing loans reaching historically low levels. Fiscal performance was strong, with public debt on a firm declining path.
borrowing and rising public debt are realities of every country, Serbia included? - The COVID-19 crisis has shown the importance of building strong fiscal buffers during good times, in order to be able to provide substantial policy support in the case of a negative shock. In fact, due to a strong fiscal performance in previous years, Serbia faced the pandemic with enough fiscal space to respond with a large package of measures without jeopardising its fiscal sustainability. The fiscal deficit is expected to increase from 0.5% of GDP in 2019 to more than seven per cent of GDP in 2020, with public debt rising to about 60 per cent of GDP. However, given the projected economic rebound and the temporary nature of fiscal measures, the fiscal deficit should narrow significantly in 2021, ensuring the resumption of a clear downward trajectory for public debt. That
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Should the outbreak be more protracted than expected, any additional budget support will have to be strictly targeted to the most vulnerable firms and households or the irregular economy? Is there space for intervention and how should that be handled? - After the sharp, temporary increase in 2020, the fiscal deficit should narrow to about two per cent of GDP in 2021. In this context, and following two years of sizeable increases, public sector wage increases in 2021 should be strictly limited, while pension increases should continue to be guided by the Swiss formula, with no oneoff payments or ad-hoc increases. At the same time, the 2021 budget should create space for additional healthcare spending
These positive results allowed Serbia to face the COVID-19 shock with relatively sound macroeconomic fundamentals and enough policy space to deploy a substantial fiscal and monetary policy response to the pandemic. In terms of structural reforms, results have been mixed. Good progress has been made in improving the tax administration, enhancing public financial management and privatising Komercijalna Bank. But the implementation of the public wage system, public employment framework and SOE reforms have suffered significant delays. ■
PREDRAG MIHAJLOVIĆ, CEO OF OTP BANKA SRBIJA AND EXECUTIVE SPONSOR BUSINESS OF THE INTEGRATION PROJECT OF OTP BANKA SRBIJA AND VOJVOĐANSKA BANKA
OTP Group's Record Results In Serbia The integration of OTP banka Srbija and Vojvođanska banka, as a strategic move of the OTP Group, has the aim of forming a leading bank on the domestic market. This will provide a huge contribution to the further improvement of the user experience, innovation, digitalisation, development and the stability of the banking sector
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he needs of our clients direct us, while innovations inspire us. Guided by this, we strive to work better and differently in both banks, in order to contribute to our own business success and the success of our clients, notes OTP banka Srbija CEO Predrag Mihajlović. • Alongside your usual duties, you are also in charge of implementing the process of integrating OTP banka Srbija and Vojvođanska banka, while you have the role of the project’s executive sponsor. Can you tell more about the dynamics of this big and important job? - The integration process began at the end of 2019, while the merger of OTP banka and Vojvođanska banka is expected in the next year and represents the most complex project being implemented on our financial market. This strategic move by the OTP Group, which owns both banks, has the objective of forming a leading bank on the domestic market. The responsibility is great and full of challenges, but I’m primarily proud of the 3,200 colleagues who diligently perform their jobs every day at both banks, while at the same time being committed to the merger project. I consider that we have the strongest management structure that is able to successfully complete the task
of integration whilst maintaining a strategic focus on further improving the user experience, innovation and digitalisation. • What kind of results has the OTP Group achieved on our market to date by operating through both banks? - We recorded record results in Serbia last year, and that was a year in which one integration process was completed and another was launched. Total net loans amounted to 3.2 billion euros and with that we gained a market share of as much as 16 per cent, securing the number one position on the market, with annual growth of loans exceeding eight per cent. We achieved growth in net profits of 17 per cent, i.e. in the amount of 89.2 million euros, with which we took a strong second place on the banking market. Operating revenues increased by 15 per cent compared to 2018, reaching a level of 263.4 million euros. We also directed our activities towards cost optimisation, which resulted in them being reduced by six per cent and contributed to a significant increase in net results, and that’s not the end – we expect to see the full effect of optimisation after the merger of OTP and Vojvođanska banks. With our total assets of 4.7 billion euros and a market share of 13 per cent, we rank second in Serbia.
• Given that you are focused strategically on innovation, what novelties can your clients expect? - During last year and this, we’ve introduced numerous improvements to processes and functionality. In our online branch, clients can realise a cash loan, receive an approved overdraft facility, buy insurance... Sending money between friends and family members has been simplified with the P2P option within the scope of mobile applications. For users of Android phones, the mCard option has been enabled – allowing payments via mobile phones – and we will soon also introduce Apple Pay. The service we launched this month allows the withdrawing of cash loans via mobile phones – mKeš [mCash]. The National Bank of Serbia also encouraged us to further improve the user experience. With the introduction of the Instant payment system, citizens are able to carry out fast transactions and, as of this year, to make payments with the help of the IPS QR code. We are recognised as a pioneer of innovation and digitalisation, and we’ve also transferred that to domestic entrepreneurship. This year’s fourth Generator Game Changer is intended precisely for those who have a new idea or ready-made solution and who want to innovate, in order to help small and medium-sized enterprises. ■
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BUSINESS
BOJANA KUZMANOVIĆ, SALES & MARKETING DIRECTOR, GORSKI HOTEL & SPA
Mountain Gem Hotel Gorski, located close to the ski slopes in the tourist centre of Kopaonik Mountain, sets new standards for mountain tourism. It has luxury rooms and apartments, the most modern SPA centre, indoor and outdoor swimming pools and many other wellness facilities
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estifying to the level of satisfaction among guests is the fact that a large number of them wanted to book accommodation for the next winter season during their winter stay last season. As for the summer, during June and July we were completely full, notes a proud Ms Kuzmanović, speaking to CorD.
• Gorski Hotel & Spa is a real refreshing change, with new energy, a new and fantastic facility, in an exclusive location on Kopaonik. How do you different from other hotels? - Apart from that which you mentioned, I must point out that the hotel was built according to the highest aesthetic and architectural standards. The entire space is rich in natural light, which make the exclusive design shine even more. Our rooms are the largest on Kopaonik, and some of the most luxurious apartments also have balconies with unreal views of the national park. We offer guests a full service – a children’s playroom, board game room, parking and garage facilities, a spa centre with an outdoor pool that has a constant water temperature of 35 degrees, hidden from the eyes of passers-by, a terrace with views of the peaks, an innovative menu with the finest ingredients.
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During winter the entire skiing experience is incredibly easy and the best ever, because in addition to heading straight from the hotel onto the slopes - you can buy a ski pass at the hotel’s reception, and our ski resort has the most modern dryers, lockers and ski equipment that can rival Europe’s leading ski resorts. In addition to all of the aforementioned, within the scope of Hotel Gorski there is also a congress centre, which I can claim with certainty has shifted the boundaries of everything seen so far in the MICE aspect on Kopaonik. The congress centre exudes sophistication, and consists of a multifunctional hall covering 470m2 and equipped with the latest generation technology. It has partition walls that are soundproof, so we can divide it into two smaller halls with up to 250 seats. Three more halls are also available, one of which has its own terrace. The spacious lobby, with a bar and satellite kitchen, enables the organising of
- We welcomed the first independent ski opening with capacities completely filled, and this trend continued throughout the entire season. The winter months brought us more success than projected, with us we often lacking some rooms. We exceeded expectations, and the best evidence for that is the fact that a large number of guests wanted to make reservations for the next winter season during their stay. I believe that best reflects what their impressions were like, which can also be seen in the reviews we receive on online platforms. • Your guests are attracted the most by your unique Spa & Wellness Centre, with its outdoor pool that has a constant water temperature of 35 degrees. What kind of treatments do you offer? Do you have everything for complete relaxation? - That’s right, the spa is a favourite among guests, especially because of the outdoor pool
Behind all the successes are the professionalism, dedication and love for the job that we share service and socialising before or after an event. In short - we have everything that is expected of a new, modern and exclusive hotel in a destination such as Kopaonik. • Your first independent, winter season is behind you. What were your impressions and those of the guests?
that operates throughout the entire year. Apart from that, the offer includes a large number of facial and body treatments, singling out the special Gorski Ritual that lasts 100 minutes and guarantees relaxation of the mind and body. We place an emphasis on the use of the best preparations, which is why we use organic, American cosmetics Pevonia Botanica. There is
The spa centre also operates under a new regime. Sessions for the use of spa and wellness facilities are limited to three hours, after which the entire space is disinfected and aired. Behaving responsibly and maintaining health are our obligations that we perform professionally and conscientiously, which guests also recognise. • What are your plans like for next season? When it comes to your services, what would you highlight as singling you out from the competition? - Preparing offers and early bookings for the upcoming winter season are underway. Our goal is to maintain our leadership position and strengthen it further. In this regard, there also a VIP spa for two, which features a Finnish sauna, two water beds and a steam bath for true luxury in privacy and a new level of enjoyment. • Even before the opening of the hotel, you calculated that most of your guests would come from Serbia, and now that is certain due to the borders being closed. Will the pandemic nonetheless impact on your operations and, if so, to what extent? - As many as 80 per cent of our guests are domestic tourists, and in that sense the pandemic impacted on our operations only during the state of emergency, during which the hotel didn’t operate. We used that time to secure everything necessary for the season to continue successfully once the conditions were created. Guests inquired about our capacities all the time, which is why we were one of the first hotels to open in Serbia. As we have taken all the necessary preventative measures, guests feel very safe, and the result of that is that we were at full capacity during June and July, with excellent forecasts for August. Aware of the situation in which we all find ourselves, we also joined the programme of distributing vouchers for subsidised holidays, through which we offer guests a large number of outdoor activities, as well as extremely attractive packages. • Have you succeeded in adjusting your offer to the recommendations of epidemiologists? - Absolutely. That is something that represents a new precondition for safe work and stay of our guests, and to which we are most committed.
Gorski Hotel & Spa has everything that is expected of a new, modern and exclusive hotel in a destination such as Kopaonik Prior to the reopening in May, all rooms were disinfected, without exception, through the method of smoking the space. Disinfection barriers were installed at all entrances to the hotel, and hand sanitizers are located, apart from at the entrances, on each floor and in shared spaces. We have also prepared smaller bottles for guests, which await them in their rooms and which they can take with them when they leave the hotel. Masks, physical distancing and all other prescribed and recommended measures are respected, with the standard implementation of hygiene, which had to be at the highest possible level even before the pandemic.
will be some novelties related to entertaining children and organising additional activities. Apart from the ski centre with Wintersteiger equipment, a playroom with daylight and professional animators, a garage for 80 cars and outdoor parking for 40 cars, we often hear from guests that what sets us apart is our outdoor pool that provides privacy, great food and comfortable beds. The crowning glory of everything the hotel offers, and what makes the biggest difference, is our team. Behind all the successes are the professionalism, dedication and love for the job that we share. ■
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FEATURE
Just as it isn't known how long the pandemic will last, when a vaccine will be found and what kind of autumn awaits us, it isn't even known whether the new tranche of state aid will succeed in preserving Serbia's economic stability and thus prevent company closures and worker lay-offs
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The Power Of The Virus & The Scale Of The Crisis
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hen the Government of Serbia decided in early April to earmark 5.1 billion euros to help the economy and citizens cope as easily as possible with the consequences of the global pandemic caused by the spread of the Coronavirus, it was unknown how long the crisis would last, what its scope would be and who it would hit. Most of these unknowns remain until today, with no end of the pandemic in sight, and – according to epidemiologists
and economists – the coming autumn will not bring us any relief. On the contrary. It is unknown whether Serbian President Aleksandar Vučić had their forecast in mind at the beginning of July, when he announced that the state was not considering a new package of measures intended for the economy, or when he referred to those predictions twenty days later, announcing another tranche of 1.36 billion euros. And it remains to be seen whether that will be enough! ■
ALEKSANDAR VUČIĆ, President of the Republic of Serbia
ANA BRNABIĆ, Prime Minister of the Republic of Serbia
WE’LL HELP OUR BRAVE ENTREPRENEURS
WE’RE CONTINUING WITH REFORMS AND CAPITAL INVESTMENTS
In the next two months, our brave entrepreneurs, micro, small and medium-sized enterprises can count on help. We have provided for 60 per cent of the minimum earnings for all their workers, because we additionally want to help financially. We will defer payments of taxes and contributions for at least another month. We’ll try to did for another month after that, but I can’t promise. This is important for hospitality companies and travel agencies, and we will launch the project “My first salary payment” and will introduce an additional moratorium on loan repayments.
Serbia’s economic recovery is as important as its health recovery, which is why we’re thrilled by the fact that no foreign investor has given up investing in Serbia. This is a good signal, just as the stability of the construction sector is an important indicator in terms of further economic recovery. It is important for us to continue reforms in the medical sector and the social protection sector, and to continue with large capital investments. It is extremely important to transform the economy so that it is based on innovation.
JORGOVANKA TABAKOVIĆ, Governor of the National Bank of Serbia
SINIŠA MALI, Serbian Finance Minister
WE’LL PRESERVE THE FINANCIAL SYSTEM’S STABILITY
FINANCES STABLE, MONEY AVAILABLE, PROMISES FULFILLED
Considering that the emergency health situation is still continuing, the National Bank of Serbia has brought the decision to provide additional opportunities for our citizens and the economy to pay their obligations, thus fulfilling the legally defined goal of preserving the stability of the financial system. The National Bank of Serbia reacted efficiently and decisively to the first blow of the pandemic, enabling citizens and the economy to delay repayment obligations to banks and financial leasing providers for a period of three months. The importance and timeliness of this decision is evidenced by the fact that more than 90 per cent of debtors utilised this opportunity.
For 60 per cent of the amount of the minimum wage for two months, we will set aside 36 billion dinars, while postponing taxes and contributions on wages for one month will cost around 30 billion dinars. The first payment will be made by 10th August, with the second payment to follow in September. We started taking measures in March and are one of the few countries that will have six months of economic measures to support businesses. There are no mass redundancies, which was the scenario in many stronger countries than ours, and no factory closures, while our shops have been full the whole time. It would be most realistic to talk about the effects in September, because by then we will know what the inflows are, how the EU reacted to this aid package, how we are doing with exports and what the health situation is like.
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MARKO ČADEŽ, President of the Chamber of Commerce & Industry of Serbia
VIOLETA JOVANOVIĆ, NALED Executive Director
NO MORE LINEAR AID FOR ALL SECTORS
PREPARATIONS SHOULD BE MADE FOR A POSSIBLE SECOND WAVE OF THE PANDEMIC
We should be proud of the fact that the Government reacted quickly and adequately, that it saved the backbone of the economy and that there were no worker lay-offs. The situation will continue to be difficult, as it is everywhere in the world, but it is encouraging that everything that could have been done to keep the problems in the economy to a minimum has been done. The first tranche of assistance provided for everyone, for all business and all citizens, while now we are directing attention towards seeing which sectors have been hardest hit and who needs help the most. We no longer have the ability to help all sectors linearly.
Tourism, but also passenger transport and craft services, were initially forced to completely suspend their operations and they will need time to make up for what’s been lost. It’s for this reason that it’s very important that the Government recently adopted a regulatory framework to enable credit from the Development Fund for liquidity and working capital to businesses engaged in tourism, hospitality and passenger transport. The interest is high, but it remains to be seen what the result will be. One of the biggest challenges will be preparing for a possible second wave of the pandemic and maintaining operations until the danger of the virus has passed completely.
ZORAN DRAKULIĆ, President of the Privrednik Business Club
NEBOJŠA ATANACKOVIĆ, Honorary President of the Union of Employers of Serbia
THIS IS NOT THE TIME TO SAVE, NOW WE MUST SPEND
WE’VE DEVISED A PACKAGE OF MEASURES TO REVITALISE THE ECONOMY
Unfortunately, this crisis will be deep. Recovery will certainly last two to three years. I actually think that 2021 will also be problematic and difficult. It won’t go easily. Everything is a question: when will we find a vaccine and when will we emerge from everything; when will the borders open; when will the functioning of tourism, the economy, the aviation industry start? All of that will take time. It will cost a lot more if companies collapse and you then have to bring them back from the dead than it will to find a way to help them. This is not the time to save, money must now be spent and what can be saved should be saved, but much more selectively than in the first round.
The Union of Employers of Serbia has devised a package of 5+3 measures to revitalise the economy and minimise the impact of the Coronavirus pandemic on the national economy, which it has forwarded to Prime Minister Ana Brnabić. While welcoming the Government’s previous measures to support the economy, we proposed a reduction of VAT in the field of tourism and hospitality to 10 per cent, because these two industries are hardest hit by the pandemic, and the payment of VAT on realised invoices, as of 1st January 2021. We’ve proposed the abolishing of mandatory documenting of non-taxed costs of transportation fees for the arrival and departure of employees to and from work, reductions in the level of local utility taxes by 30 per cent and the postponement of payments of the newly introduced eco-tax, until 1st April 2021.
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DEJAN STOJIĆ, PRESIDENT OF AMSS – THE AUTO-MOTO ASSOCIATION OF SERBIA BUSINESS
Proud Of The First Century
AMSS is a national and independent association of citizens and drivers with more than 100,000 members and users of membership advantages, which has spent an entire century improving the areas of motoring and mobility. It has directed special attention towards improving traffic safety
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would like to emphasise the unique and significant role that AMSS plays in informing the public about the road conditions, which we do every day through numerous channels with millions of views. With that we contribute greatly to increasing traffic safety, stresses AMSS President Stojić. • You will be commemorating the 100th anniversary of AMSS in 2021. Will you be celebrating your centenary as a leader in the field of road safety? - There are few who can boast of a century of existence, and that makes us very proud. Circumstances have changed significantly
other responsible institutions. I would say that the emphasis is on successful mutual cooperation with common goals. The main and basic goal is to reduce the number of fatalities and injuries on the roads of Serbia. The resources that AMSS directs towards fulfilling that goal are reflected through numerous projects and campaigns that we carry out continuously. There is also the AMSS Centre for Motor Vehicles, as the most modern laboratory for testing and certifying vehicles, with an orientation towards very intensive scientific research work. Numerous projects and professional scientific gatherings, organised by AMSS
Motor sport represents an important part of our work and development, and we are proud of the ever increasing number of competitors and competitions over these 100 years, but we have always given our maximum and that will remain the same in the future. The range of services that AMSS provides to all motorised citizens has expanded continuously, and by guaranteeing the highest standards we strive to maintain our position as the association with the largest number of members, of which it currently has more than 100,000. When it comes to improving traffic safety in Serbia, our role and responsibility do not imply leadership in relation to
CMV, have yielded numerous positive results when it comes to improving traffic safety. • AMSS enjoys a good reputation not only in Serbia and the region, but also around the world. Is this best evdenced by the support you receive from the world governing body of motor sports, the Fédération Internationale de l’Automobile (FIA)? - The vision of future progress that we share with our partners at the international level helps us to direct our resources towards
meeting internationally recognised standards. We have the absolute support of the FIA in our work, as demonstrated by the visit of FIA President Jean Todt last May. We are currently working together on the optimisation of work under the newly created circumstances, but also on preparations in organising the international congress that we will host next year. Hosting delegates from all over Europe, Africa and the Middle East is a special honour and another indicator of the relationship that AMSS has with the FIA. Inevitably, motor sport represents an important part of our work and development, and we are proud of the ever increasing number of competitors and competitions, which further encourages the FIA to support us in the development of this branch of sport. • What motivated you to initiate the construction of a racetrack in Serbia. Do you have support for such a project? - I drove on numerous tracks abroad during my competitive career. As a former motor sport competitor, but now also as the AMSS president, I consider that Serbia deserves such a track, which will be able to respond to demanding competitions with all its capacities, thereby bringing together a large number of fans of motor sports in one place. Considering that this is a very demanding project that implies the combined work of numerous entities, I can state freely that we have the great support of all relevant institutions in this endeavour. ■
August
13
BUSINESS
DEJAN ALEKSOV, MANAGING DIRECTOR AT BENU PHARMACIES AND MEMBER OF THE BOARD OF DIRECTORS OF THE PHOENIX GROUP
We Know What You Need
BENU is part of German company PHOENIX, which has in its composition more than 2,500 pharmacies in 14 European countries. BENU has managed to establish itself as a market leader in Serbia in just five years and, despite the extraordinary circumstances, will welcome the end of the year with 400 outlets in the country
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e succeeded in achieving a lot thanks to our people, dedication, and the support of the parent company from Germany. The fact that our customers have accepted us proves that we are working in the right way, but that’s not a reason to relax now. On the contrary, says Mr Aleksov, before revealing numerous innovations to BENU’s operations. • Mr Aleksov, the BENU pharmacies concept is recognisable throughout Serbia. Could you tell us a little more about it? - The BENU pharmacy concept is led by a unique strategy that’s orientated towards the customer. You are awaited at each of our locations by friendly staff who are ready to help, listen, offer adequate advice and fulfil your expectations. Professional and trained pharmacists are aware that the customer is of the greatest importance to them and that they should pay full attention to them, regardless of the time or decision. We believe firmly that we can only be satisfied if we provide customers,
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i.e. patients, with a high-quality service and excellent advice. That’s the only way we can have satisfied customers. In addition to friendly, trained staff, all our pharmacies throughout Serbia have the same ambience and unified visual identity. BENU pharmacies’ range of products is carefully selected, classified and segmented exclusively, in accordance with customer needs. It isn’t easy to maintain the same level of service, because we currently operate at more than 380 locations in Serbia, with a plan to reach 400 BENU pharmacies by the end of this year, despite the difficult circumstances. Interestingly, we are also present on the territory of Montenegro and Bosnia-Herzegovina, with the same strategic approach and in accordance with market circumstances. • With the appearance of COVID-19, and considering that we find ourselves in very uncertain times when it comes to the future, were you able to learn from this and, if so, what could you learn?
- It is true that COVID-19 brought with it a certain dose of uncertainty, particularly in the period when we had to constantly adapt our business measures and the needs of our customers. And despite the difficult circumstances related to working from home, I can really highlight that we, as a company, very quickly managed to find alternative directions, to develop new business channels, such as home delivery, reserving products and collections from pharmacies, cooperation with volunteers who had a priority with us etc. We adjusted the working hours of more than half of BENU’s locations to suit the oldest citizens and organised the fast procuring of all hygiene products. All this ensured we are more agile, provided us with a sign to once again think well, reconsider and draw new conclusions about our business decisions, giving authenticity to our company. • We see that you focus on the constant educating of employees and the constant improving of your quality of service. Do pa-
tients and customers recognise that? Can they appreciate it? - I’m proud of the fact that all our employees are extremely professional, very dedicated and always keen on innovations and acquiring new knowledge. Education is part of the company’s daily internal programme, and quality of service is our focus and strategic direction that we will never abandon. It may sound unusual, but at frequent gatherings that management has with employees we hold open discussions and address every topic. It’s endearing to me how much my colleagues care about keeping pace with innovations and how broadly they view things. We really have great and dedicated people who maintain our system and services at the highest possible level. I’m sure that gives us an advantage; that customers recognise and appreciate that greatly. Indicators of this are that they often share positive comments with us, but also that they leave the pharmacy with a smile on their face. In a pharmacy expertise, precision and accuracy are very important – there is no room for mistakes or deviations. Our colleagues are aware of that and that is where we differ in relation to other branches. We often conduct various research activities through which we monitor work and relations with customers, listening to their needs, and we are capable of being very self-critical, because our goal is to remain a market leader.
the potential of Serbia. The fact that our customers have accepted us proves that we are working in the right way, but that is no reason to now relax. We should always be different, persevere with our strategic direction and continue the practise of teamwork, because only that leads to results. It was around this time last year that we took over state-owned pharmacies in Novi Sad. In the space of just one month, we renovated, rebranded and equipped them, and educated the personnel. It was difficult, but we succeeded. We are currently in the process of
We have great and dedicated people who maintain our system and services at the highest possible level... customers recognise and appreciate that greatly • Although you’ve been present in Serbia for a relatively short period, you’ve succeeded in establishing yourself as a market leader. What do you have to thank for the recognition of your brand? - BENU has been present on the Serbian market for five years. Viewed from this perspective, I’m also positively surprised. If we look through the life cycle of a brand, we are still in the first phase, known as the launch. In this relatively short period, we managed to achieve a lot thanks to our people, dedication and, of course, the support of the parent company from Germany, which recognised
resolving pharmaceutical waste in Novi Sad, while we’ve been cooperating for years with Belgrade’s Centre for the Care of Oncology Patients. This is our obligation, because we are socially responsible both towards citizens and towards Serbia. We set the standards, and my personal goal is to always have people alongside me who know how to appreciate this and who can follow and apply it. Our environment is dynamic, but we are all satisfied, positive and get along wonderfully. Therein lies the key. • Can you predict what tomorrow will bring? - Nothing can surprise us anymore. We have
learned a lesson and are now thinking three steps ahead. We’ve certainly ensured that people can work from home and we will continue with that practise. We have confidence and have proven that the level of responsibility is the same as when one is sitting in an office. We will move towards further developing the online shop, which is the future. We will strive to provide our customers with even greater availability and for our employees to continue
to be their ambassadors of trust. We will further develop loyalty through the development of loyalty programmes and, most importantly, we will continue to listen to the needs of customers and create a business strategy in accordance with those needs. BENU is a large, organised chain, representing the most widespread health institution in Serbia, and that’s why we must continue developing the trust of people. We want them to know that they can come to us even if they just want a consultation or advice. We will definitely work on that in the future - on the development of BENU advisory services in all major cities in Serbia, with the aim of contributing to raising community awareness about the importance of prevention, but also treatment when required. We are, and will remain, a reliable partner in protecting the health of our customers, as our slogan also confirms. ■
August
15
CCIS AND USAID OVERVIEW OF THE STATE OF THE ECONOMY – “OVERCOMING THE CRISIS TOGETHER”
Digitalisation Is Essential For Recovery On average, it will take one year for the Serbian firms affected by the Coronavirus pandemic to recover from the crisis, according to the results of the third iteration of the "Overcoming the crisis together" survey, conducted by the Serbian Chamber of Commerce and USAID's Cooperation for Growth Project, from 8th to 15th June. Microenterprises have been hit hardest by the crisis, while liquidity remains one of the key problems that firms have been facing. Digital solutions have been recognised as an essential part of a recovery strategy and business continuity
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he findings of the survey are valuable because they are “mirroring” the state of the economy and the reactions of businesses in the month since the end of the state of emergency. We have been monitoring the impact of the crisis on the Serbian economy since the Coronavirus outbreak by conducting three iterations of the survey. Representatives of 806 businesses participated in the first iteration of the survey, conducted in the last week of March – the third week since the beginning of the crisis. The second phase of the survey was conducted at the end of April, in
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the seventh week since the crisis’s outbreak, with the participation of 1,000 businesses. The third and final phase of the survey was conducted a month after the lifting of the state of emergency. Representatives of 396 businesses participated. Having all three iterations in mind, we can proudly say that the survey approached more than 1,500 companies distributed in different sectors, sizes and regions, grouped at the country level. It is also important to state that the third phase took place at the beginning of June, during a relatively stable COVID-19 pandemic situation in Serbia, explained
Dragana Stanojević, USAID Cooperation for Growth Project Chief of Party, speaking for CorD.
the deferral of tax obligations have been the most useful of the Government’s crisis response measures.”
IMPACT OF THE CRISIS Some 92 per cent of companies expect revenues to fall this year compared to 2019. The slope of the downturn depends partly on company size, but is mainly determined by industry sector. In contrast to expectations voiced during the state of emergency, the latest findings indicate a slight decline, to 16 per cent, in the number of businesses that believe their revenues will fall by more than half. Companies based in the Belgrade region are on average more likely to expect their revenue to increase this year than their peers from elsewhere in Serbia. Micro-enterprises expect to see the largest falls, with nearly a quarter believing that revenues will slide by more than 50 per cent. The number of firms that estimate they have lost at least half of their usual revenue has declined to a quarter (26 per cent). One in two companies put their revenue loss at up to 30 per cent relative to the same month of the previous year. Nevertheless, a large proportion of respondents (15 per cent) claim to be seriously affected (with earnings falling by 70 per cent). Most of these companies operate in industries such as tourism, transport, the creative industries etc. “Small firms have suffered the most. A fifth of all micro-enterprises earned 70 per cent less in June this year than in the same month of 2019. As suggested by the findings of the second round, the crisis is spilling over into the IT sector and various manufacturing industries. These results again highlight how important it is to devote more attention to the decline in performance in industries that have a major impact on other sectors in the same value chain (such as transport and warehousing). In the next period we will see how the global pandemic crisis will impact on value chains and how the inevitable disruption of traditional value chains will affect the economies,” explains Stanojević. “In a finding similar to those from the previous rounds of the survey, businesses believe that minimum wage support and
RECOVERY STRATEGIES - ADAPTING BUSINESS MODELS Firms have largely arranged for some of their staff to work from home (as reported by 59 per cent), the larger a company, the more prepared it has been to plan working from home. Industries more closely linked to brick-and-mortar spaces were less able to
reported responding to the downturn by either setting up online stores or gearing up to do so. Companies integrated into global supply chains were much more likely to alter their production algorithms or introduce new products (as reported by 40 per cent of these businesses). The most common strategy across all sectors has been to digitalise either business models or the whole access-to-market concept. Many companies have been able to find new niche markets and business models
When do you expect to see difficulties in paying your debts?
in the next 15 days
4
from 30 to 60 days
6
after 90 days
the next year
20 19 10 11
from 15 to 30 days
from 60 to 90 days
22
8
after 6 months
I don't expect difficulties
in percentage %
pivot to working from home, and so opted for other approaches to workforce optimisation. The shift to digital business models has proven to be a crucial approach in weathering the Covid-19 downturn. Some businesses were better prepared for the emergency and were able to strengthen their existing online channels (as reported by 30 per cent of all respondents), but most other firms also voiced their expectation that digital solutions will be required for recovery. A third of all firms report planning to develop new digital advertising channels, digitalise their business processes, and/ or adapt their product portfolios to new developments in demand. About 13 per cent
to best utilise their skills and survive. One in three companies see e-commerce and new advertising channels (digital marketing) as integral parts of their recovery strategy. Nevertheless, two-thirds of all companies are inherently unable to shift their businesses completely online. As in previous surveys, findings show that industry type is decisive in determining a possible shift. LIQUIDITY AND TIME TO RECOVERY Most companies are looking to fend off current and/or potential liquidity crises by managing their cash flow better (as reported by 72 per cent). Many firms are planning to introduce client risk assessments (42
August
17
Even through the serious crisis, the vast majority of businesses have been able to retain all staff for the duration of the state of emergency and into the post-lockdown period. It is especially heartening to see sectors that have a strong impact on supply chains reporting a degree of recovery, as is the case with 60 per cent of all transport companies.
Compared to the same month of 2019, how much revenue do you estimate to have lost? up to 30% from 30% to 50% from 50% to 70% more than 70%
25
49
14 12
in percentage %
per cent), negotiate payment extensions or advance payment terms with creditors, and take out liquidity loans offered by the Serbian Development Fund (33 per cent). Lastly, just under a third of those polled are planning to either borrow from their owners or from commercial banks or, alternatively, seek banks’ liquidity loans backed by national guarantee schemes. The take-up of factoring remains low, with plenty of room for improvement. “A majority of the respondents (80 per cent) continue to assume they will have issues paying debts and remain vocal in highlighting the seriousness of the private sector’s liquidity issues. No major differences are in evidence from the previous survey round (late April), as one in every two companies still expect to encounter difficulties in paying what they owe within the next 30 to 90 days. There has been a noticeable increase, to seven per cent, in the proportion of businesses that believe they will have issues with paying their debts in the coming year. Micro- and small businesses were more likely to report such expectations. The findings show one in three medium-sized/ large firms have plans in place to ensure they stay liquid”, says Stanojević. About 90 per cent of the firms surveyed expect to recover within one year: most (27 per cent) believe this will take between three
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and six months. Encouragingly, 11 per cent of all businesses feel business will return to normal in under a month. As expected, the hardest-hit sectors believe it will take longer to recover (more than a year in some cases). In comparison to the previous survey, there has been a noticeable increase in the proportion of firms reporting a partial recovery in production/service delivery.
CONSTRAINTS ON RECOVERY Firms believe the greatest obstacles on the road to recovery are a potential second wave of the pandemic and a repeated lockdown (as reported by no fewer than 73 per cent). Half of all surveyed companies (50 per cent) fear a drop in demand for their products or services. About 40 per cent expect to face issues with liquidity, access to finance, and/or changes to import/export policies. “The findings from all three survey iterations have been very helpful to keep a continuous understanding of the SME sector’s whereabouts in the first three months of COVID-19. During the autumn period, USAID’s Cooperation for Growth Project will conduct the Survey of 1,000 Businesses that will provide more useful information and follow-up on SME’s vital circumstances and struggles on the market”, says Stanojević. ■
Which measures related to your business model have you taken or are planning to take shortly in response to the crisis?
36
33
32
30 13
Digitalization
Digital marketing
New products Boost of New sales existing online channels sales channels
13
11
7
Partially Launching of Temporary suspending the new, suspending business online payment business operations channels operations
Taken or planned business model measures %
VLADIMIR VASOJEVIĆ, BELCHIM CROP PROTECTION SRB (LTD.) BUSINESS
Food Quality & Safety Without Compromise Belchim is a European company that has a knowledge base from the most agriculturally developed countries in Europe, such as Belgium, the Netherlands, France, Italy and Germany. The company's aim is to ensure that ever more agricultural producers in Serbia have access to their innovative plant protection products
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hrough its SMART Crop Protection™ programme, for intelligent, i,e. Precise, plant protection, Belchim has harmonised its programme with all increasingly rigorous environmental and safety standards. It invests in the development of new products through experiments that it conducts everywhere, both in Serbia and around the world.
tions, because plant protection is a dynamic area of agriculture that requires an holistic approach, rapid adaptation and flexibility. Our ultimate goal is to be a part of the production of better quality and safer food. With an understanding for the needs of local markets, with a team of dedicated people, we professionally help producers achieve good yields and high-quality produce.
• Your objective is to be part of the production of better quallity and safer food. How healthy and high quality is the food we eat today? - The production of better quality and safer food starts with us, that is with plant
• How can new, modern and technologically superior solutions be made more accessible to every agricultural producer, whether they are the owner of thousands of hectares or a small family farm?
Belchim works constantly to make its products increasingly safer, through so-called biological. i.e. ecological, solutions protection, because we believe that plant protection solutions must be tested, safe and available to every agricultural producer, on the one hand, while at the same time all of us consumers of that same food must be convinced that we are consuming safe food. Although we operate across Europe and around the world, we don’t believe that there are universal solutions for all markets. Our solutions are the result of many decades of monitoring and researching in real condi-
- Belchim develops professional solutions in all branches of plant production: viticulture, fruit, vegetable and field production. For us there are no small and large market segments or small and large producers, rather only optimal solutions that can help make our country’s agriculture more competitive. The specificity of Belchim’s development is in constantly identifying new solutions and adapting. This year, with our Japanese and European partners, we’ve also introduced several new products
to our market, which will soon represent the standard in plant protection. We are working to make our products increasingly safer, through so-called biological. i.e. ecological, solutions. • We can’t be an agrarian force as a nation, but we could achieve much more than we are at present, right? - Agriculture is the branch of the economy that we relied on for centuries when times were difficult. That is also the case now, during the time of the COVID-19 pandemic. We all need to work more intelligently, each in their own field. Smart agriculture starts with smart plant protection, which is promoted by our company. On the basis of many quality people in the field of agriculture that I met across Europe, I think Serbia has everything it needs for success, both in terms of knowledge and experience, and that it only needs to monitor world trends and accept those technologies that can help in achieving high yields. In Serbia there are already existing serious producers and companies that have already reached the very top, with their excellent yields and product quality. Our role is to share knowledge and connect people as much as possible, doing everything in our power to help that section of producers who are able to advance. Only in that way can we rely on average yields being better. We see this as a huge challenge. ■
August
19
BUSINESS
BOBAN JANKOVIĆ, PRESIDENT OF THE MUNICIPALITY OF MIONICA
Boldly Moving Forward Thanks to investments in infrastructure according to plans, the modernisation of devastated old industrial zones and, primarily, the opening of Miloš the Great Highway and the high-speed Nepričava-Valjevo road link, Mionica has the lowest unemployment rate in the Kolubara district, while the goal is for it to be even lower
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ionica is a among the most developed municipalities in Serbia and is due to enter the society of the best in a few years. Moreover, my desire is for us to be an example of how a small local government can progress from being among the least developed to the most developed, says an optimistic Mr Janković. • This year marks five years since you took over the helm of the municipality. Everything you’ve done has been done, as you once said, “at 200 per cent”. Was that enough? Are you happy with the performance? - We have certainly worked. We have certainly done a lot, but I’m among those people who think that they can always do better. I am satisfied, but I wish we could have done more than this. The fact is that my team, with the great support of the Government of Serbia, has done plenty in terms of improving the lives of citizens, and we intend to do as much as possible by the end of the mandate next year. When we set goals, we knew where we wanted to see Mionica in the period ahead, so we set a deadline for that period and undertake everything that leads us towards that
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• You stated recently that your goal is to ensure the same living conditions in the town and in the countryside in your municipality, which is small in terms of population but large in terms of territory. Is that feasible? - Our progress is largely linked to Miloš the Great Highway and the high-speed Nepričava-Valjevo road link. People have been moving away from our municipality en masse since 1998, when we were struck by a horrific earthquake. Young, promising and educated people left because they could no longer connect their future and their existence to their homeland, and that is something we are endeavouring to change; to create conditions for them to have a normal life, working conditions and a salary that can motivate them to return. Over the last few years we’ve worked intensively to ensure living conditions in our municipality are as good as possible, to lead
people to conclude that there’s no reason to suffer in the traffic congestion and pollution of major cities when they can find here everything that a major city provides them – good roads, electricity , water, work, cultural and sporting facilities, facilities for children, but even more than that. Here we have unpolluted nature, healthy water, healthy food, a peaceful life etc. • You planned to provide water to every village, high-quality roads and a sufficient number of jobs by the end of your term in 2021. Is that right? - We’ve done a lot in the previous period in terms of the quality of electricity supplies, and every village on the territory of the municipality will have its own water supply by the end of 2021. Everything we’ve done has been carried out in a planned way and on the basis of the expressed desires and needs of
Everything we've done has been carried out in a planned way and on the basis of the expressed desires and needs of the citizens, who stated their priorities in a public opinion survey
the citizens, who stated their priorities in a public opinion survey conducted on the territory of the municipality. Ranked in first place was securing their existence, i.e. job security, while water supply was ranked second and in third place came roads. Our villages are burdened by two problems - small estates of an average of two and a half to three hectares and outdated mechanisation – which ensures that no household can live from agriculture. It’s for this reason that we are focused on the industrialisation of one part of Mionica, and our goal is to provide a regular salary to one member of each household through the creation of new jobs. That would guarantee them security, while engaging in agriculture would provide for additional quality of life. When it comes to production, our goal shouldn’t be sales of primary agricultural products, but rather the opening of processing capacities. Mionica needs a large, modern dairy and a large plant for processing poultry. If we managed to achieve that we would be able to increase incomes, employ people and profit from the processing of our agricultural products, instead of leaving that income for someone else to earn. Organic production represents a great potential of our municipality, due to its geographical position and healthy environment. In this regard, through a pilot project last year we distributed 20 polytunnel greenhouses for organic production to small producers, mostly young people. They trade their produce on the local market, supplying hoteliers and hospitality facilities, and if they expand their capacities they will have enough produce for Belgrade, which is just 45 minutes away. This year we’ll continue the programme of distributing polytunnel greenhouses and educating the population about organic production on a larger scale. • You are building a new industrial zone that should help you stand shoulder-to-shoulder with the most developed municipalities in Serbia, from the fourth development group. When can this be expected? - A local law on the construction of a new industrial zone was passed this year, and it will change the complete picture of the municipality and enable it to stand shoulder-to-shoulder
with the most developed municipalities in Serbia, from the fourth development group. Until six years ago we had just one devastated and practically unusable industrial zone, which we revamped and made operational, and we are now working on the opening of a new one. It will be located just a kilometre and a half from the high-speed Nepričava-Valjevo road link and we should open it in November this year. The new industrial zone will change the complete picture of the municipality...
on our labour market. Our goal is for both highly educated and qualified workers to be hired, and we are here, as a municipality, to provide them with personnel of sufficient quality, either from the employment bureau or through retraining and additional training. • Where are the greatest economic potentials of your municipality, besides tourism? - Our investment in the further development of infrastructure, which is a prerequisite
This year we'll continue the programme of distributing polytunnel greenhouses and educating the population about organic production on a larger scale • You have three letters of intent from major companies operating in the auto and agricultural processing industries. How serious are their intentions? - We currently have three letters of intent from large companies in the automotive sector that are interested in starting or expanding their production right here in our municipality. These are companies that are linked to the automotive industry and the production of refrigeration equipment. Their opening will create conditions for employment, not only for the people of Mionica, but also for citizens of Valjevo and other municipalities, in the case that there are insufficient workers available
for the revival of economic and agricultural activities, is at the fore. Tourism is currently dependent exclusively on Banja Vrujci spa and Divčibare mountain resort, but we can offer much more than that. Through tourism we can interconnect and improve all branches of the economy, but also agriculture. Our chance is organic production, pristine nature, water that’s among the best quality in Serbia, excellent roads and close proximity to Belgrade, while people still represent our greatest wealth and potential. Industrious people, hosts who love their families and their region, and who fight for the progress of their loved ones and their homeland. ■
August
21
BUSINESS
VLADIMIR STOJANOVIĆ, PRESIDENT OF THE MUNICIPALITY OF KUČEVO
We're Reopening Factories The Municipality of Kučevo launched a series of activities in the previous period in order to create a favourable business environment for investors. New plants have opened, while the municipality also has an office that coordinates between investors, the local government, relevant government ministries and competent state agencies
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hen it comes to natural resources, the municipality of Kučevo has an incalculable wealth, and in order for it to live off tourism additional funds are required for new accommodation capacities, in order for tourists to stay instead of coming only on transitory visits. • You once had factories employing almost 2,000 workers, while today you can only dream of that. How can production be relaunched? - The production of Duboka mineral water by company Anđelković Al has been launched in Neresnica, Italians have invested in the Classiwood factory for timber and furniture elements, Swiss investors have invested in the MS Wood Group pellet factory, a Chinese business will open the Gangyan lime factory in March 2021, and in recent days a pre-agreement was signed on the sale of the ŠIK Kučevo complex between the current owner and German company Blockause. With the arrival of these companies we’ve reduced unemployment, and we now expect new investments so that we can employ professional, educated, young people and thus secure a better standard of living.
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• Despite the budget for development, you are unable to carry out most infrastructure works without the help of government ministries. What are you most in need of? - We have good cooperation with all ministries and succeed in completing many important works in our municipality with their help. Thus we last year received funds for the renovation of the primary school in Rabrovo, while this year we received 500 million dinars to asphalt of roads, and just last week a contract was signed for the reconstruction of the Rakova Bara – Tumane regional road. When it comes to the water supply and sewage network, at the end of this year we expect the completion of works on water flows, which are being implemented with the help of the competent ministry. The plan is to build a central water supply system and sewage network that would encompass all 25 settlements in the municipality. Our electricity network is good, with the situation stable, but we are certainly planning to construct new transformer stations. Our municipality covers an area of 721km2, so it is very difficult to maintain road infrastructure, which isn’t only important for residents, but also for potential investors and tourists. Last year we managed to finalise the
complete road to Ravništarka Cave, where there is an info centre, restaurants and our log cabins where people can come to rest. Thanks to funds from the Ministry of Tourism, we will be able to raise this complex to a higher level, with an additional 25-30 places in accommodation capacities. Our tourism is advancing, so we can be proud of Vidikovac, the “Krak Lu Jordan” archaeological site and the river Pek, where guests pan for gold, while the categorisation of rural households seeking to engage in rural tourism is underway. This is part of the project entitled “Whole village ethno village”, which is already being implemented in the village of Duboka. • Kučevo was declared an exceptional tourist destination in 2016. What would need to be done for yoou to live off tourism? - It is essential for us to receive funds to promote our tourism potential. Caves are our biggest attraction, as well as panning for gold in the river Pek, and we believe that, if we were additionally engaged in that, tourists could bring us organised nature walks, hikes to the Jelena Stena viewing point, hikes to the highest peak of the Homolje Mountains and bicycle tours. ■
MARIJA CVETKOVIĆ, PRESIDENT OF THE MUNICIPALITY OF GADŽIN HAN BUSINESS
We Await Investors The Municipality of Gadžin Han hasn't attracted any new investors in the last 10 years, because it had nothing to offer them. Things started to change last year, when works started on the opening of the industrial zone that has attracted the interest to the first investors
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lthough the employment bureau has registered excellent and professional personnel for various jobs, the municipality would be ready to organise training courses and additional qualifications if required, in order for as many of the 1,400 registered unemployed local people as possible to secure work. • Your municipality is the only one in Serbia that doesn’t have an industrial zone, but you are working on that. Are there any interested investors on hold? - We’ve used strategic documents to define industrial zones on the territory of the munici-
• Prime Minister Ana Brnabić recently paid you a visit and promised help in finding investors. What could be opened in the abandoned production hall that you visited? - That’s a hall of 2,500 square metres that’s located within the framework of the Elid company. After that company went bankrupt, it came under the ownership of the Directorate for Property, which would give it to our municipality if an investor is found. During her visit, the Prime Minister expressed her intention to bring a serious investor that we could give the hall to, on condition that it employs 50 or 100 workers. We would most like for that to be a clothing factory, in order to employ as
Four people are currently included in the project “It's never too late to start”, which runs for 18 months pality, and one of them, the north industrial zone, is located at the very entrance to Gadžin Han. We repurchased land and earmarked funds for the preparation of project-technical documentation. All that cost us 15-16 million dinars, and now we are preparing documentation for equipping it in terms of infrastructure, which includes access roads, water supply, sewage and electricity. We have investors interested in coming to Gadžin Han, but we need a little more time to finalise this job. Our budget is small, amounting to only 400 million dinars, which is why we need the help of the state.
many women as possible, because there are more of them registered with the National Employment Service. • Only two companies operate on the territory of your municipality: Elid, with 50 workers, and Resor, with about 100 employees. Could they expand their capacities and hire additional workers with subsidies or some other assistance? - Resor deals with the upgrading of utility vehicles and employs about a hundred workers, while Elid, with its 50 employees, is engaged
in the production of electrical materials of exceptional quality. Their products could satisfy even the most demanding markets, but they lack ISO standards and certificates, which are extremely expensive in and of themselves. If they had them, they could reorientate themselves towards exports and expand their production capacities, because the space available would enable that, and increase the number of workers, but they can’t do any of that without subsidies and significant assistance. Money and time are required for that, but I believe that would ultimately be good for everyone. • The project “It’s never too late to start” provides an opportunity for unemployed people to take the first steps towards developing their own business. Is there much interest? - This is a “Start-up Centre” that we opened in the building we bought from the former Zaplanjka, which we equipped with computers and video, then made a conference room and created optimal conditions for writing business plans. Four people are currently included in the project “It’s never too late to start”, which runs for 18 months. I think the project will be extended, and the idea is for the authors of the three best business plans to receive help from the state, both in terms of money and equipment, to launch their businesses. This is a good way to reduce unemployment and, even more importantly, to motivate people, primarily young people, to take their lives and their destinies into their own hands. ■
August
23
