Business Partner Germany by CorD Magazine

Partner October 2018

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ISSUE No. 10

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ISSN broj 2560-4465

Germany - Serbia

Business Partner GERMANY

H.E. Thomas Schieb, German Ambassador to Serbia ● Marko Čadež, President of the Chamber of Commerce & Industry of Serbia ● Dr Ronald Seeliger, President of the German-Serbian Chamber of Commerce (AHK Serbien); Vice-President of the STADA Group and CEO of Hemofarm ● David Lahl, Project leader, Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH ● Martin Knapp, Executive Member of the AHK Serbien Board of Directors ● Bojan Predojević, Managing Director at profine GmbH (profine d.o.o.), AHK Serbien Vice President ● Dijana Peskir, General Manager of STIHL d.o.o., AHK Serbien Board member ● Dirk Bantel, CEO of Panasonic Lighting Devices Serbia d.o.o., AHK Serbien board member ● Christian Braunig, Managing Partner at Confida Consulting, AHK Serbian board member ● Udo Eichlinger, CEO at Siemens d.o.o, AHK Serbien Vice President ● Dragan Simović, CEO of Gebrüder Weiss Serbia, AHK Serbien board member ● Živko Topalović, General Manager at ContiTech Fluid Serbia d.o.o., AHK Serbien board member ● Milan Grujić, Managing Director at ZF Serbia d.o.o. (Ltd.), AHK Serbien board member ● Milan Krstić, Business consultant, AHK ● Frank Baumann, Director, Goethe-Institut Belgrade ● Joso Bijelić, Director, InTeSe GmbH & Co.KG ● Milan Grujić, Managing Director, ZF Serbia ● Jovanka Jovanović, General Manager, Robert Bosch d.o.o. ● Clemens Sachs, Director, Leoni Wiring Systems Southeast d.o.o. ● Mladen Vukanac, General Manager of Sauter Building Control Serbia d.o.o. (Ltd.)

BUSINESS PARTNER GERMANY

GERMAN INVESTMENTS CONTRIBUTE SIGNIFICANTLY TO SERBIA’S ECONOMIC DEVELOPMENT

AN EXTRA MILE

MARKO ČADEŽ, PRESIDENT OF THE CHAMBER OF COMMERCE & INDUSTRY OF SERBIA

COMMENT

H.E. THOMAS SCHIEB, GERMAN AMBASSADOR TO SERBIA

content

PROFOUND REFORMS CANNOT BE SWIFT BUT WELL CONSIDERED

PHOTOS Zoran Petrović COPY EDITOR Mark Pullen mrpeditorial@mail.com

DAVID LAHL, PROJECT LEADER, PUBLIC FINANCE REFORM – FINANCING THE 2030 AGENDA DEUTSCHE GESELLSCHAFT FÜR INTERNATIONALE ZUSAMMENARBEIT (GIZ) GMBH

FOCUS

DESIGNER Jasmina Laković j.lakovic@aim.rs

SOUND FINANCES KEY TO SDG IMPLEMENTATION

SCEPTICISM REGARDING BORDER CHANGES

EDITOR Ana Novčić a.novcic@aim.rs a.novcic@cordmagazine.com

OUTLOOK FOR THE GERMAN ECONOMY

COMPLEX EFFORT WORTH TRYING

ECONOMY

focus

RE-INDUSTRIALISATION KEY TO GROWTH AND WELL-BEING MARTIN KNAPP, EXECUTIVE MEMBER OF THE AHK SERBIEN BOARD OF DIRECTORS

DR RONALD SEELIGER, PRESIDENT OF THE GERMAN-SERBIAN CHAMBER OF COMMERCE (AHK SERBIEN), VICE-PRESIDENT OF THE STADA GROUP AND CEO OF HEMOFARM

PROJECT MANAGERS Biljana Dević b.devic@aim.rs Nataša Trifunović n.trifunovic@aim.rs Vesna Vukajlović v.vukajlovic@aim.rs Mihajlo Čučković m.cuckovic@aim.rs

EDITORIAL MANAGER Neda Lukić n.lukic@aim.rs

OFFICE MANAGER Svetlana Petrović s.petrovic@aim.rs

GENERAL MANAGER Ivan Novčić i.novcic@aim.rs

FINANCE: Ajilon Solutions m.damjanovic@aim.rs EXECUTIVE DIRECTOR Maja Vidaković m.vidakovic@aim.rs

SERBIA – A KEY INVESTMENT MILAN GRUJIĆ, MANAGING DIRECTOR, ZF SERBIA, ONE OF TWO MANAGING DIRECTORS OF ZF IN SERBIA AND RESPONSIBLE FOR THE COMMERCIAL SIDE OF THE NEW ZF OPERATION

STORAGE AS A PERFECT MOZAIC

JOSO BIJELIĆ, CEO OF INTESE GMBH&CO.KG

PRINTING Rotografika d.o.o. Segedinski put 72, Subotica, Serbia BUSINESS PARTNER GERMANY PUBLISHED BY: alliance international media Makenzijeva 67, 11111 Belgrade 17, PAK 126909, Serbia

Phone: +(381 11) 2450 508 Fascimile: +(381 11) 2450 122 E-mail: office@aim.rs; office@cordmagazine.com www.aim.rs; www.cordmagazine.com No 10 ISSN: 2560-4465 All rights reserved alliance international media 2018

THIS PUBLICATION IS FREE OF CHARGE The views expressed in this publication are those of the presenter; they do not necessary reflect the view of publications published by alliance international media

content

BUSINESS PARTNER GERMANY

SECURING PRIVACY, SECURITY AND TRUST

DATA PROTECTION GERMANY

GOVERNMENT SUPPORT MEANS A LOT TO US

CLEMENS SACHS, MANAGING DIRECTOR, LEONI WIRING SYSTEMS SOUTHEAST D.O.O.

AHK SERBIA - THE LARGEST AND MOST IMPORTANT BILATERAL ORGANIZATION IN SERBIA

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FASTER DEVELOPMENT WITH EXPERT GERMAN ASSISTANCE MILAN KRSTIĆ, BUSINESS CONSULTANT, AHK

WHAT DOES THE ARRIVAL OF LIDL MEAN FOR SERBIA? LIDL SRBIJA

THE LITTLE GERMAN CITY WITH BIG FINANCIAL CLOUT FRANKFURT

AHK ACTIVITIES

EXCHANGE IS THE BASIS FOR EVERYTHING

FRANK BAUMANN, DIRECTOR, GOETHE-INSTITUT BELGRADE

MLADEN VUKANAC, GENERAL MANAGER OF SAUTER BUILDING CONTROL SERBIA D.O.O. (LTD.)

BERLIN

COMPREHENSIVE APPROACH TO EACH BUILDING

THE MOST ENCHANTING SPOTS TO WATCH THE SUNSET

GERMANY’S RESPONSE TO THE REFUGEE CRISES REFUGEE

KEY MESSAGES

key messages

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COMMENT

An Extra Mile Although Serbia is a place where many German investors like to be, it has for years been the country at the bottom of the list of the 16 countries in which the German-Serbian Chamber of Commerce surveys companies on their opinion. It is hard to understand why it is so complicated for Serbia to go the extra mile to make its business climate transparent

“I

t is still not easy to invest in Serbia. There are still limitations, such as land conversion and land ownership problems, complicated procedures and courts that are quite slow. We have ideas, resources and motivation, but we have extensive procedures.” This was stated by Ernst Bode, the long-serving director of industrial gas manufacturer Messer Tehnogas, who was quoted recently in a local newspaper and who is certainly very knowledgeable about Serbia’s investment climate. Messer itself had the foresight to invest in Serbia even before the transition of the domestic economy had started, back in 1997. Since then, however, Bode has been in the position many times to warn that Serbia is struggling to grab its chance and use its potential to attract foreign investors and push its economy forward. Things have changed undeniably over the years. According to official data, foreign trade in goods with Germany in 2017 totalled a value of 4,343.9 million euros. Total Serbian exports to Germany in 2017 amounted to 1,888.8 million euros, with Germany

ranked second on the list of countries to which Serbia exports. Meanwhile, total imports in 2017 amounted to 2,455.1 million euros, making Germany the number one ranked country in total Serbian imports, with coverage of imports by exports standing at 76.93%. These impressive figures were made possible due to the fact that many German companies chose to invest in Serbia, and – perhaps even more impressively – to reinvest and expand their operations in Serbia, thus also becoming strong import and export factors. More and more Serbian SMEs have recently started becoming partners in Germany’s industrial value chains, adding to the already very good export results of the domestic economy. According to the Serbian Agency for Business Registers (SABRA), there are 925 active companies with majority owners who are German citizens or legal entities registered in Germany. Total net investments from Germany in the 2010-2017 period amounted to 0.94 billion euros, making Germany the fifth largest investor in Serbia. However, as Bode noted, those who

German companies prize labour force productivity and knowhow, but are seeking decisive reforms in the field of the rule of law

are investing are still forced to go the extra mile if they want to do business in Serbia. Thankfully, there are examples of the opposite. Vorwerk Group owner Peter Collen, for instance, was quoted as saying that nowhere in the world has a location for this group’s factory been secured as fast as it was in Preljina near Čačak. Germany’s Leoni launched construction of a facility in Kraljevo this summer, representing its fourth facility in Serbia, after Prokuplje, Doljevac and Niš. Leoni is among Serbia’s leading exporters. The company’s exports last year amounted to €145 million, while exports worth around €152 million are planned for 2018. According to the annual survey conducted by the German-Serbian Chamber of Commerce, good examples like those mentioned above aren’t rare. About 85 per cent of the companies that participated in the survey said that they would invest in Serbia again. Companies are most satisfied with the productivity and motivation of employees, as well as with their level of education and labour costs. However, what keeps Serbia constantly at the bottom of the list of the most valued investment destinations (11th of 16 polled) is, as always, an insufficient fight against corruption and crime, and a lack of legal security and transparency in public procurement.

BUSINESS PARTNER GERMANY

INTERVIEW

H.E. THOMAS SCHIEB, GERMAN AMBASSADOR TO SERBIA

SCEPTICISM

Regarding Border Changes Serbia's EU accession cannot happen until relations with Kosovo have been clarified. The sooner both sides - with the support of the EU - agree on a normalisation agreement, the better. Germany is very sceptical of changing borders along ethnic lines - Thomas Schieb

.E. Thomas Schieb, new ambassador of Germany to Serbia, is a diplomat who’s already familiar with the Balkans, having once served at the embassy in Sarajevo. In this interview for CorD, Ambassador Schieb says that he believes in the European perspective of the region and says that Serbia and all other countries have the support of Germany on that path, which isn’t at all easy. Your Excellency, you have been Germany’s ambassador to Serbia since August. Upon departing, your predecessor – Axel Dittmann – said that relations between Germany and Serbia are at their historical best. What are your plans during your time in Serbia? - German-Serbian political, economic and cultural relations are indeed excellent. The political exchange is at a very high level, economic ties are strong and the outlook is very positive. Since the year 2000, German companies have invested more than two billion euros in Serbia and created almost 50,000 jobs. Germany continues to be Serbia’s top trade partner, with a bilateral trade volume of around €4.3 billion in 2017. Germany is also the largest bilateral donor in Serbia: More than €1.8 billion has been made available for various development projects in the past 18 years, with

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PARTNER

STABILITY

REFORMS

Germany continues to be Serbia's top trade partner, with a bilateral trade volume of around €4.3 billion in 2017. Germany is also the largest bilateral donor to Serbia

Peace and stability in the Western Balkans is crucial. The recent history of the region has not been an easy one

There is a close link between political reforms and economic development, as politics sets the framework for business activities and relations. Around 400 German companies are currently active in Serbia

is not easy, involving challenging political, economic and the priority areas being the environment, rule of law and social transformation processes. However, the Western sustainable economic development. Cultural relations Balkan countries can count on the support of the EU and are also extensive and diverse. German is the second its member states in this endeavour. most popular foreign language in Serbian schools, while The EU accession process needs to be accompanied the number of participants in Goethe Institute language by regional cooperation. This includes, in particular, finding courses tripled in the last two years. solutions to bilateral disputes and dedicating additional German scholarships are very popular among Serbian efforts to reconciliation. An important instrument in this students: the German Academic Exchange Service (DAAD) is the so-called “Berlin offers scholarships for Process”, a series of anSerbian students seeking to study in Germany. In adnual conferences of Westdition, Serbian graduates ern Balkan countries at can spend three months which joint projects are doing an internship at launched in the areas of the German Bundestag infrastructure, connectivon an IPS scholarship. ity, security, economics Young Serbs also have and youth cooperation. the opportunity to receive One of the success vocational training internstories is the Regional Youth Cooperation Office ships at German compa(RYCO), which emerged nies through the Zoran from the Berlin Process Đinđić Foundation. and is also funded within Just last month, durthe scope of German deing the renowned BITEF festival, we saw two fantastic German velopment cooperation. Youth from plays. Cultural exchange is very imMore than €1.8 billion has the six WEB-Partners meet regularly, organise study-trips and joint projects, portant, as it brings our two countries been made available for and communicate intensively on issues closer together –going beyond political issues to address citizens directly. various development projects of common interest. Those young people are the region’s future leaders, It is a great pleasure for me to be in the past 18 years, with and having them work together now is German ambassador to Serbia, and the priority areas being the actually a fantastic “investment” in a I intend to work hard to make these stable and prosperous WEB future. excellent relations even better. environment, rule of law

and sustainable economic To what extent is the continuation of Your résumé states that you have execonomic cooperation conditioned by perience in this region, having served development. Cultural quality of relations in the politiat the German embassy in Sarajerelations are also extensive the vo. How do you see the region of the cal domain; are those two elements and diverse Western Balkans today? connected? - Peace and stability in the Western - There is a close link between political Balkans is crucial. The region’s recent history has not reforms and economic development, as politics sets the been easy. There is still a lot of coping with the past, which framework for business activities and relations. Around sometimes endangers current regional relations. This is 400 German companies are currently active in Serbia, and why reconciliation is essential. The future of the Western I’m pleased to see these activities grow steadily, in both Balkans is the European Union, to paraphrase European quantitative and qualitative terms. The results of this years’ Council President Donald Tusk. The path towards the EU Serbian-German Chamber of Commerce survey also show

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clearly that we are on the right track: 85% of participating companies confirmed that they would invest in Serbia again. Together with our Serbian partners, we want to strengthen this positive trend and develop our excellent economic ties even further. Continuing structural reforms, fostering the private sector and improving the business climate is important leverage in that regard. Strengthening the rule of law, particularly in terms of investment security and the fight against corruption, will benefit Serbian and foreign investors alike, and is key to achieving sustainable growth, creating attractive employment opportunities and improving living conditions here in Serbia. We are ready to continue supporting Serbia in this endeavour.

logue, for example in the context of economic cooperation. We welcome cooperation between the two chambers of commerce. And we are optimistic that the aforementioned RYCO will bring young Serbs and Kosovars together to help foster mutual understanding. The quicker both sides - with the support of the EU agree on a normalisation agreement, the better. Ultimately, however, this is solely in the hands of Belgrade and Pristina. The German Chancellor stated recently that Germany doesn’t support the idea of changing borders in the Western Balkans. Does that statement serve to reject all speculation about the division of Kosovo, which is allegedly supported by some of your partners in the international community? - Germany is very sceptical of border changes along ethnic lines - German Chancellor Angela Merkel has stated this very clearly on several occasions recently.

You arrived in Serbia during a period of intensive discussions regarding the resolution of the dispute between Belgrade and Pristina. It is The EU accession process believed here that, within the EU, needs to be accompanied Germany is advocating for this issue to be resolved as soon as pos- by regional cooperation. This You’ve arrived in Belgrade direct from sible, with a comprehensive legal- includes, in particular, finding New York, where you headed the poly-binding agreement as the conclulitical department of the German Mission. How do you view this process solutions to bilateral disputes sion to the UN. How do you see that and what will you insist on? and dedicating additional global organisation today? - Germany fully supports the pro- We strongly believe that the United efforts to reconciliation. Nations is of fundamental importance cess of reaching the comprehensive An important instrument for safeguarding the rules-based innormalisation of relations between Serbia and Kosovo. Germany supports ternational order. As the only truly in this is the so-called the two sides in efforts to achieve universal body, it has a critical role to “Berlin Process” normalisation, facilitated by EU High play in preventing or solving internaRepresentative Federica Mogherini. tional conflicts - a role that has perhaps The full normalisation of relations would provide a vital never been more important than it is today, when the world contribution to regional security and stability. Moreover, seems to be in turmoil. the EU has made it clear that Serbia’s accession to the As one of its 10 non-permanent members in 2019 EU cannot take place until relations with Kosovo have and 2020, Germany hopes to contribute to the important been clarified. work of the UN Security Council, which is responsible for Germany is trying to support this normalisation diainternational peace and security.

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Among other factors, we think the Security Council should focus on conflict prevention. I´ll give you an example: climate. Climate change is one of the key challenges of the 21st century. We increasingly frequently see how the consequences of climate change intensify existing conflicts and have a destabilising effect on countries and entire regions. We therefore want to counteract climate risks as part of a preventative and stabilising foreign policy. It is important to build a toolbox to allow us to react as quickly as possible, if we can foresee crises arising. This requires a better information base and risk analysis, including in the Security Council.

discussion. How would you define relations between Germany and Russia? - Russia is an important partner to Germany, both politically and economically. Unfortunately, the annexation of Crimea by Russia, Russian action in Eastern Ukraine and Syria, Russian behaviour in dealing with the nerve poison attack in Salisbury and cyber attacks in Germany, presumably based on Russian sources, overshadow German-Russian relations. Nevertheless, it is important to remain in dialogue with Russia, since it is only together with Russia that major conflicts can be resolved.

How do you see the future of the EU and what do you consider as the greatest challenges in the process of strengthening and reforms within the Union? - I am a convinced supporter of the “European idea” and have no doubt Germany fully supports that the EU will overcome the process of achieving the whatsoever all challenges. As a matter of fact, I comprehensive normalisation think these recent challenges only of relations between Serbia show more clearly the necessity of a strong and united democratic alliance and Kosovo. Germany of states, i.e. the European Union. No single country can respond alone to supports the two sides in the migration challenges, financial their efforts to reach a crisis or terrorism. The necessity for comprehensive normalisation internal reforms is quite normal for of relations, facilitated by such a complex organisation. Many populist parties, even in EU High Representative EU countries, are offering seemingly easy solutions, playing with people’s Federica Mogherini fears, when in a fact there are no ready-made solutions. Europeans need to be patient, to talk to each other and to believe in and stick to their common values: democracy, respect for human rights, The world paid great attention to the latest meeting beliberty, equality, the rule of law and the desire for peace, tween Chancellor Merkel and Russian President Vladimir stability and economic prosperity. Putin, which media reported as being a long and detailed Many people consider that the UN has lost its strength, as evidenced by the inability to reach a compromise on burning issues like Syria, the Palestinian-Israeli dispute and the issue of Kosovo? - At a time when central actors are turning away from the multilateral system, Germany - as a member of the Security Council - wants to contribute to maintaining the rules-based order. Cooperation in the Security Council primarily means having a say in and taking decisions on all crises on its agenda, and we want to participate in the comprehensive and forward-looking management of this. We want to contribute to overcoming blockades and also see ourselves as a link between the Security Council’s permanent and elected members. Together we want to make the UN stronger again.

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INTERVIEW

MARKO ČADEŽ, PRESIDENT OF THE CHAMBER OF COMMERCE & INDUSTRY OF SERBIA

German Investments Contribute

SIGNIFICANTLY TO SERBIA'S ECONOMIC DEVELOPMENT Serbian-German economic cooperation shouldn't only be measured according to the volume of the trade exchange, which has respectable dimensions of scale. Links between companies from the two countries have increased significantly over the last few years, which is testified to - among other things - by the decisions of German companies to reinvest in Serbia, open research centres and include Serbian companies in their production and distribution chains

he German economy has undoubtedly played one of the most significant roles in the economic growth of the countries of Eastern Europe and the strengthening of their industries, particularly in their European Union accession processes. The countries of the Western Balkans, including Serbia, hope that the arrival of foreign investors, especially from Germany, could lead to similar results. We discussed the development of cooperation between the two countries with Marko Čadež, President of the Chamber of Commerce & Industry of Serbia (CCIS). Germany is only ranked fifth largest in tersm of investments in Serbia, despite an evident rise in investment over the past few years. How do you explain this? Why are German companies only discovering the Serbian market after great delays? - The investments of German companies in the Serbian economy have exceeded two billion euros, without the latest investments that were launched this summer, and Germany is, in any case, at the very top of the list of foreign investors in tems of the number of projects implemented and their value, and most importantly in terms of the quality of those investments and their contribution to the development of the Serbian economy. I wouldn’t say that German investors are late in discovering Serbia, rather that their number and the value of their investments in exist-

ing and new projects are growing in line with the advancement of the environment for investing and doing business in Serbia, and with the strengthening of Serbian-German political and economic relations. I wouldn’t even be as bold as to rank the countries, primarily because the official statistics on foreign direct investments in monetary terms, according to internationally accepted methodology, are led according to the statistics of commercial banks, and investments are registered according to the country of payment, and not according to the home country of the investor’s parent company. A lot of companies that have subsidiaries in other countries, especially German ones, finance their projects with money from bank accounts held in those countries, which ensures that, although they are investments by German companies, they are not presented statistically as German. How could their increased inflow be encouraged, beyond existing subsidy measures? - In addition to state subsidies, tax and customs breaks, reduced operating costs and various benefits that are offered to investors by local governments, and which together constitute a serious package of financial subsidies, Serbia has appeared before potential investors in recent years with a significantly improved business climate in all segments that investors evaluate. Our offer includes free trade agreements, a competitive and qualified workforce, whose qualities

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are additionally improved through the introduction of dual educatechnologies, modern business standards and business models that tion, and domestic companies that have shown themselves to be careflect on the domestic economy... They raise the technological level pable of engaging in the production and supply chains of internationof our economy, contribute to the growth of our production and exal corporations. No less important is the fact that businesses intendports, and change their structure in favour of products with a higher ing to invest in Serbia enjoy the maximum support of the Serbian govdegree of final processing. Our lists of exports increasingly include ernment, relevant state institutions and the Chamber of Commerce products with a higher level of processing: 89 per cent of our exports and local governments when it comes to makto the German market are industrial products, ing a decision on investing and preparing and while half of them are machinery and transOur offer includes free trade implementing that investment. This was also port equipment. agreements, a competitive confirmed by the statement of the owner of and qualified workforce, and company Vorwerk, who stated that nowhere Has Serbia reached the level at which it is able in the world where have they so quickly condomestic companies that have to attract investments in the production of aufirmed a location for their factory as was the shown themselves to be capable tomotive parts with a higher added value comcase in Serbia, in Čačak, where they launched pared to existing plants? of engaging in international their investment this summer. - The best example of Serbia’s ability to attract production and supply chains such investments is the decision of German comTo what extent are German partners particpany ZF Friedrichshafen to invest 160 million euipating in the reindustrialisation of Serbia? ros in our country, in a factory in Pančevo for the production of drive - Most German investments have been made in the manufacturing secsystems for electric vehicles. This is one of the world’s largest manutor, in the processing industry - automotive, electronics, food, pharfacturers of parts and systems for the automotive industry, a world maceuticals, chemicals... They are especially important for the Serbileader in the use of new technologies and electronic mobility, which an economy, not only because of the capital they bring, the opening - according to data available to us - invests two billion euros annualof export channels, the work they’ve brought to our companies and ly in research and development, and which plans to produce almost jobs for our citizens, but also because of the transfer of knowhow, half a million electric engines next year.

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At the same time, another good sign is that German companies from the automotive industry that are already present here producing and exporting their goods are not only expanding their existing capacities, but also opening their own R&D centres in Serbia, for example Continental in Novi Sad and Dräxlmaier in Belgrade.

Despite growth in the volume of goods exchanged between Germany and Serbia, we are still recording a significant deficit. What are the chances of improving that balance? - Germany is the top foreign trade partner of the Serbian economy, both in terms of the exchange of products and services. The volume of the trade exchange last year exceeded four billion euros for the first time, reaching a record level of 4.4 billion euros, which is twice as high as the trade exchange realised between the two countries a decade ago. That growth has also continued into this year. Starting from 2007, our goods exports to Germany have tripled - reaching a record of 1.9 billion euros in 2017, with significant contributions from German companies that produce in Serbia and which are listed among the biggest exporters in Germany and around the world. It is true that the trade deficit with the large German economy is not small, but today it has halved compared to the maximum of 2008, and we also have a surplus in the exchange of agricultural products and services, which is significant. Our desire is to ensure that our exchange is as balanced as possible. CCIS analyses highlight significant opportunities to increase sales of products from the furniture, metal, food and IT sectors, in particular software programming services, as well as increasing the revenues of the construction industry and tourism.

How effective is the joint programme of the German-Serbian Chamber and the CCIS in bringing together German companies and suppliers in Serbia? - I will mention only a few examples. Thanks to the Supplier Days events organised by the CCIS independently or with partners (the German-Serbian Chamber of Commerce - AHK Serbien, GIZ, the German Association for Managing Materials, Imports and Logistics - BME, NRW International GmbH), last year alone more than 200 Serbian companies had the opportunity to present their production and export potential, and to conduct almost 500 bilateral discussions with dozens of German companies. Germany’s initiative to find suppliers in the Western Balkans, this year held in Frankfurt under the organisation of AHK, enabled 133 companies from the region, including 31 from Serbia, to discuss future jobs with the representatives of 43 companies from Germany. Previous such events, held in Munich, Dortmund and Belgrade, have resulted in the signing of several dozen contracts. What are your expectations from the introIn addition to this, the CCIS, as a partner in duction of dual education when it comes to Our lists of exports finding suppliers, was also recognised by inimproving the quality and availability of the dividual companies from Germany, such as increasingly include products workforce? How many companies are involved Eberspacher - with which we this year organin this process? with a higher level of ised, for the third time, supplier days events, - Serbia is the first country in the Western Balprocessing: 89 per cent of our kans to receive a law on dual education, which and whose supply chain already includes Kragujevac-based companies Teknia KG and Gomexports to the German market will be applied as of the next school year and will ma line, as well as other companies that opercontribute to improving the quality and availaare industrial products, while bility of the workforce, and the improved harate here, from Siemens to Metro and Lidl. For half of them are machinery example, after last year’s supplier days event monising of education with the requirements of that we organised with company Lidl, with the the labour market and the needs of the econand transport equipment participation of over 50 of our companies, we omy. German investors, as well as those from have remained in constant contact with this retail chain and to date other countries where the dual education system works successfulsome 350 Serbian products have secured a place on Lidl’s shelves. Ally, highlighted its advantages and domestic businesspeople acceptready in November, ten of our companies - producers of agricultural ed and recognised it as a way of providing more functional knowlfood products - will be able to talk in Hamburg with members of the asedge and developing the skills of young people during their schoolsociation there that brings together around 150 wholesalers, importing. Through the pilot projects that we’re implementing with the supers of canned and frozen products, dried fruits, nuts, vegetables, honport of Germany, Austria and Switzerland, around 600 companies are ey and its by-products, and spices. Furthermore, under the organisaalready involved in educating pupils under the dual education modtion of the CCIS, 60 of our companies participated last year and this in el, opening the doors of their factories for learning through practisix international trade fairs in Germany, establishing more than 3,000 cal work and then hiring those who completed the practical area of contacts and signing contracts, pre-contracts and deals worth more their learning with them. With German support, we have so far develthan two million euros during the course of the fairs themselves. The oped six dual education profiles that are being taught to 62 per cent plan for next year is to secure the participation of the Serbian econof pupils, while as many schools and 30 per cent of companies are inomy in seven German fairs. volved in dual education.

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DR RONALD SEELIGER, PRESIDENT OF THE GERMAN-SERBIAN CHAMBER INTERVIEW OF COMMERCE (AHK SERBIEN), VICE-PRESIDENT OF THE STADA GROUP AND CEO OF HEMOFARM

Profound Reforms Cannot Be Swift But

WELL CONSIDERED Serbia is in the process of overall transformation, and this kind of total makeover takes time, requires expertise and seeks patience. It is of great importance for Serbia to become a member of the European Union, and in order to achieve this it has to continue conducting structural reforms and changing certain patterns of doing business and behaviour thoroughly and in the long run

aintaining economic growth at the current level and increasing it will require a constant commitment of the state to resolving the remaining internal weaknesses and lowering the fiscal imbalance, and would seek clear boldness in the implementation of structural reforms, says Dr Ronald Seeliger, President of the German-Serbian Chamber of Commerce (AHK Serbien), Vice-President of the STADA Group and CEO of Hemofarm. “When speaking about the EU,” adds our interlocutor, “I would always advocate for Serbia in the EU. It seems that the government still cares a lot about the EU path, but Kosovo and other important issues periodically come into focus and demand attention”.

In your opinion, what are the key reforms that the government should devote itself to in the period ahead? - The German-Serbian Chamber of Commerce conducts regular surveys among its members in order to check what companies think about the existing business climate. In response to your questions, our members would indicate the following preconditions as being key to future reforms: rule of law fully exercised in practise, a more intensive fight against corruption, further strengthening of legal safety and transparency in public procurement, improvement of the tax system and work of the Tax Administration, as well as the need for higher efficiency of the public administration. In addition to this, and in my role as a businessman, I would also like to point

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out one more thing: predictability of business operations, i.e. the possibility to do business within a clear, precise and expected framework is very important to every businessman, and Serbia must make better progress in this respect. Does it seem to you that the government is equally committed to reforms and the path to the EU as it was at the beginning of the first programme with the IMF? - The times are changing, the preconditions are different, global and local politics are transforming, and it is actually very difficult to compare and judge these things in this long period of time and without doing any serious research on this. I can only speak from the perspective of a foreigner living in Serbia for six years - I do think that Serbia has done a good job on fiscal and macro stabilisation, and succeeded in enhancing its financial sector stability. On the other hand, and as already mentioned, its ambitious structural reform plan has not yet been completed, and this will be the main challenge for Serbia in the years to come.

high-tech companies, I have heard about this but, as far as I know, it has not been confirmed by the state. Of course, it would be desirable if more investments with high technology and a high vertical integration came to Serbia, because such investments keep young, highly-qualified people in the country. But, prior to any decision about where to direct future state support, to all or only some branches, in-depth analysis should be carried out and a strategy made, taking in account what the general priorities of the state are: to support only one or different levels of labour qualifications. Speaking in one interview, you said that the Government could offer better opportunities to existing investors in order for them to expand their operations. What would encourage existing investors to reinvest and expand their businesses? - We are basically talking here about the same things that are

From the perspective of German companies operating in Serbia, where are the greatest and weakest shifts in facilitating the daily operations of companies? - Probably the most significant change still concerns the Labour Law, even though this law - after four years - certainly cannot be described as a new one. The sectors where the least progress has been made are in the acceleration of judicial procedures and the reduction of bureaucracy. The issue of whether and how to change the existing incentive system for attracting foreign investors and directing subsidies only towards high-tech branches is again current in Serbia. What is your opinion on this? - The existing system of subsidies dates back to 2006 and, of course, every system, no matter how good it is, should be adapted over time. Personally, I would always encourage the best experts in the field to sit down together, conduct good quality research, take the pros and cons, and provide advice on how to proceed with this. And, while doing this analysis, they should always have a look at what other states, neighbours, are offering at the same time. As I have lived here for six years, I have heard and read a lot about the positive and negative aspects of the existing incentive system. It has certainly brought new investors to Serbia, but it is hard to say if they came just because of the state subsidies. When speaking about directing subsidies only towards

important for attracting new investors: rule of law, zero tolerance for corruption, reduction of bureaucracy, predictability of government decisions etc. I was asked why I advocated for those who are already here. What is one of the main differences between the existing investors and newcomers? In short, existing investors are always the best brand ambassadors of the country in which they operate. That is why they need to be respected, supported, nurtured, so to speak. According to the latest AHK survey, more than four-fifths of our member companies operating in Serbia would reinvest. In this regard, I am particularly proud of one fact - German companies are actually those that prove this in practise through their reinvestments. There are Henkel, Continental, Leoni â&#x20AC;&#x201C; all of them are companies that have invested in Serbia again and again, built new factories and plants, hired additional people. I will also mention the example

Hemofarm is Serbiaâ&#x20AC;&#x2122;s largest exporter of medical products and one of the top-10 exporters in Serbia generally. We can be used as a good example of a company thatâ&#x20AC;&#x2122;s doing a great job in Serbia, but also worldwide

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of Hemofarm, the company I lead. Since 2006, only the German Stada Group, of which Hemofarm is a member, has invested some 300 million euros in the modernising of its operations, equipment and new plants here in Serbia. From your perspective as a businessman, how do you view the effects of the Berlin Initiative on interconnecting the economies of the region? - This is a good idea, but it still has to be implemented. We would all be happy if we no longer had to drive along endless queues of trucks at the border crossings. Just think of all that capital standing around useless! We had a chance just a few days ago to hear that waiting at border crossings costs the Balkans a billion euros every year, and that 80 per cent of the time needed for the transportation of goods is spent at border crossings, while only 20 per cent is spent on the road. In the interests of us all, I wish all those responsible in the governments and chamber organisations swift success in implementing the project. The initiative to create a regional economic zone is a good idea to reverse this trend. A large part of the trade happens within the region anyway. As a company that functions on both domestic and foreign markets, how would you rate the potential of Serbia’s internal market and Serbia as an export platform for pharmaceutical products? - I am very proud to be able to say that every third box on the Serbian market is a product of Hemofarm. This company is for sure the absolute leader on the Serbian pharmaceutical market, Hemofarm Banjaluka is No. 1 in Bosnia, Hemomont is the production leader in Montenegro, while we are also making strong progress on other markets. When it comes to export, about 70 per cent of our production is exported to EU counties, Russia and other states. Hemofarm is Serbia’s largest exporter of medical products and one of the top-10 exporters in Serbia generally. Since products that carry the Hemofarm brand can be found in the pharmacies of 38 countries on three continents, we can be used as a good example of a company that’s doing a great job in Serbia, but also worldwide. The complexity of Hemofarm’s mission is reflected in aligning

the portfolio of development by considering markets with all their needs and specifics; if you plan to win the business battle, you need to localise the global approach, adapt it to a specific market and listen to the customers carefully. If not, you will lose it for sure. So, Hemofarm is doing a good job in both segments – internally and externally, the quality we produce is our ID. How would you assess the quality of the workforce in Serbia when it comes to middle and senior management? - I will answer this question by sublimating two experiences, one I have as the CEO of the largest pharmaceutical company in the region, and one I have as the President of AHK Serbien. Serbia has a high-quality workforce and this is one of the main reasons why Hemofarm is successful. When they ask me what Hemofarm’s recipe for success is, I always say that this is exactly the combination of German technology and high standards with Serbian knowledge and good qualifications. After all, the best confirmation of what I’m saying is the following: the only foreigner at Hemofarm is me; all other directors and managers come from Serbia. Like Germany, Serbia is facing major demographic changes. Do German companies encounter obstacles when it comes to identifying a sufficient supply in the workforce? - Not only Germany or Serbia, almost the whole of Europe is facing demographic changes. Look at Slovakia, Romania, Hungary or Slovenia, for example. The situation in Serbia is still not as dramatic as it is in Western Europe, but for sure it is becoming more and more evident in daily business, especially with employees who have lower qualifications. The ageing of the general population, changes within the economy, education that does not suit the market’s needs, migrations of the workforce etc., these are all factors influencing the changes we all face. AHK advocated for the introduction of the dual education system to Serbia because we’ve had a good experience with it in Germany, where it was patented. It enables special bonds between schools and businesses, and brings a more capable and better-trained workforce. This is something we can do and where we can offer our help, but - of course - every country has to deal with this through a systemic approach.

According to the latest AHK survey, more than four-fifths of our member companies operating in Serbia would reinvest. Henkel, Continental, Leoni – all of them have invested in Serbia again and again

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INTERVIEW

DAVID LAHL, PROJECT LEADER, PUBLIC FINANCE REFORM – FINANCING THE 2030 AGENDA DEUTSCHE GESELLSCHAFT FÜR INTERNATIONALE ZUSAMMENARBEIT (GIZ) GmbH

Sound Finances Key To SDG IMPLEMENTATION The objective of the German Development Cooperation is to support the Serbian government in its efforts to improve good financial governance in the context of the 2030 Agenda. Adequate capacities to plan and execute budgets, as well as transparency, accountability and participation in budget processes, are crucial to the efficient implementation of the Sustainable Development Goals

ood financial governance is key to the effective and efficient implementation of the United Nations’ Sustainable Development Goals (SDGs). According to UN estimations, achieving the SDGs will require trillions of dollars worldwide. “A big share of these amounts will be channelled through national public financial management (PFM) systems,” says David Lahl, the GIZ expert David Lahl, the GIZ expert who manages the German contribution to this important project. “First of all,” says Mr Lahl, “governments need to mobilise resources, then they have to allocate funds to the institutions in charge of implementing the SDGs. Furthermore, government institutions need to have sufficient capacities to plan and execute budgets. Finally, transparency, accountability and participation have to be ensured in budgeting processes.” Considering your vast experience of introducing principles of good

financial management to developing countries, what are your key recommendations for the Serbian government? - I arrived in Serbia one month ago, so I’m still in the process of learning how Serbia’s public financial management system functions. However, as far as I can see, quite a comprehensive reform programme is in place in the area of public financial management, which is making progress on implementation. I think some analytical work still needs to be done regarding how public finance reform can contribute effectively to achieving the SDGs in Serbia. For example, the following questions should be analysed in slightly more detail: are the right amounts of funding assigned to the implementing institutions of SDGs or is there a need to shift funds according to the country’s priorities e.g. to the municipal level or certain sector-specific ministries? Do government institutions at all levels have appropriate technical capacities to manage funds for the implementation of the SDGs? Is additional revenue potential available that still could be used to finance the achieving of the SDGs, including funds sourced from taxes, development assistance, capital markets and the private sector? Which instruments could be used in Serbia to ensure budgets are aligned with the implementation of the SDGs? How can state institutions, academia, civil society, the private sector and development partners work together to promote accountability and transparency in the implementation of the 2030 Agenda?

The Serbian Ministry of Finance and GIZ can be extremely satisfied with the effectiveness of implementation of the Good Financial Governance project to date

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In which segments of financial and tax administration reform have you provided the greatest support to the Government of Serbia? - Our project aims to strengthen the public finance system and policy coordination for implementing the 2030 Agenda. The project advises the Ministry of Finance, the Tax Administration, the State Audit Institution, the Cabinet of the Minister without portfolio in charge of coordination of the implementation of the 2030 Agenda and the Public Policy Secretariat in five key areas: implementing the Public Financial Management Reform Program 2016-2020, the Tax Administration Transformation Programme, internal and external financial control, budget transparency and policy coordination for the implementation of the 2030 Agenda. The current active phase of the project started in 2018. Overall, German development cooperation has been supporting good financial governance in Serbia for more than 15 years. To mention just a few results of the project. The Economic Reform Programme for the 2018-2020 period was elaborated as a strategic document. A training program has been developed for the department responsible for combating irregularities and fraud in the handling of EU funds (Anti-fraud coordination service – AFCOS). For the Serbian Tax Administration, informative material and the brand “Your Tax Advisor” (in Serbian VAŠ POREZNIK) were designed and have contributed to better access to information on tax issues. Training of tax police inspectors on methods of tax crime investigation, carried out in cooperation with the Academy for Criminalistic and Police Studies, has increased the efficiency of the Serbian Tax Administration in detecting and proving tax crimes. In the area of coordination of the 2030 Agenda, mapping of the national strategies in relation to the SDGs has been conducted.

- During the formulation of the 2030 Agenda, Serbia took an active role in the process of defining the SDGs. Serbia was also among the first countries to establish a government body in charge of coordinating the implementation of the Agenda. In the meantime, Serbia has developed various strategies in different sectors that are highly relevant to the SDGs. However, as in many other countries, establishing a coherent framework remains a challenge.

We hope that by showing Dobrosav ‘Bob’ Živković’s illustrations of the 17 development goals we will raise interest in the 2030 Agenda among visitors of the Belgrade fortress, and we also invite your readers to visit this exhibition

How are you familiarising citizens with the 2030 Agenda? - It is important that citizens know the central messages of the 2030 Agenda and how they relate to them. That’s why we support efforts to disseminate information about the SDGs to the general public. For example, we are planning an exhibition about the SDGs in Kalemegdan Fortress Park from 17th September to 17th October 2018. Serbian illustrator Dobrosav ‘Bob’ Živković has created caricatures representing the SDGs in an entertaining way. We hope that by showing the Živković illustrations of the 17 development goals we will raise interest in the 2030 Agenda among visitors of the Belgrade fortress, and we also invite readers of your magazine to visit this exhibition. Only citizens who are informed about the SDGs will be able to hold their governments accountable to achieve of these goals.

How satisfied are you with the effectiveness of implementation of the Good Financial Governance project to date? - In an evaluation conducted last year, the project was rated as very successful. The evaluators underlined in particular the relevance of the project and its efficiency. Most of the intended results have been achieved. It can be noted that the performance of the Serbian Tax Administration (STA) has improved remarkably over the last few years. Consequently, total revenue available to the Serbian Government has increased. The outreach of the STA to improve voluntary compliance has been significant and has contributed to improving the public perception of the STA. Advice on Good Financial Governance was also very relevant to the process of European integration. While it cannot be said that all results are solely attributed to the project’s interventions, as the reform commitment of the Serbian government was also high, it can be said that the project’s interventions have contributed to improving PFM in Serbia. In your opinion, how successful has Serbia been in establishing a national strategic framework in relation to the SDGs?

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CORPORATE

MARTIN KNAPP, EXECUTIVE MEMBER OF THE AHK SERBIEN BOARD OF DIRECTORS

Re-Industrialisation

KEY TO GROWTH AND WELL-BEING For Serbia, re-industrialisation is the only chance to catch up with the Central European economies and in order to do that huge investments in modern technologies are needed. It isn't important whether these investments are made by foreigners or local companies, the main thing is that something happens in that direction

ccording to some estimates, the trade exchange between Germany and Serbia could reach €5 billion this year. However numbers need to be examined closer if we want to understand the story behind it, says Martin Knapp, Executive Member of the AHK Serbien Board of Directors. In your opinion, what are the key factors contributing to this growth and how sustainable is it over the long term? - It doesn’t make much sense to look only at the total volume of bilateral trade. The relation between import and export is at least as important. This relation is still very unbalanced, even if Serbian exports to Germany are steadily increasing. Macedonia is a very interesting case. It is the only country in the region with a surplus in its trade balance with Germany, and that’s a really big surplus. Macedonia exports three times more to Germany than it imports. However, this happens almost exclusively due to German investments in the country, as these companies are suppliers to German industry. In recent years, more and more such companies have also been investing in Serbia. Meanwhile, through our Purchasing Initiative, we help existing Serbian companies become suppliers of the German

industry too. Therefore, we can assume that Serbian exports to Germany will continue to increase in the near future. This year’s AHK Serbien survey again showed that most German companies present on the market would invest again. Could it be said that Serbia has established itself on the list of countries in which German companies express a constant interest or is it too early to talk about something like that? - I don’t think it’s too early to make such an assessment. When German companies go abroad, they usually go to stay. Of course, this doesn’t happen out of pure philanthropy. Rather, it can be explained by the fact that there are many medium-sized industrial companies in Germany for which investing abroad is a huge project that they cannot easily repeat elsewhere if they encounter difficulties. Therefore, they exert great efforts to protect their investment from risks. Furthermore, this also means that many German companies abroad are particularly interested in the development of their host countries’ economic, political and social environment. This is also reflected in the activities of our chamber. For example, once a year we organise the Serbian Visions Multi-Congress, which focuses on the civil societies’ commitment to a better future in the country.

Re-industrialisation can only succeed if enough people decide to work in production, directly at the machine and not just in the office

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At the same time, 38% of survey respondents said that they did not see any positive shifts in the business climate, and assessed the tax system, tax administration and the efficiency of public administration as being poor – and these are all areas in which Serbia receives expert assistance from German organisations and institutions. Where do you see key bottlenecks to implementing reforms? - I’m afraid a lot of things are the way they are because they always were. Take the travel order, for example, which a manager must sign when an employee goes on a business trip. You still have to apply to the bank in order to withdraw extra money from the company’s account for the business trip. When the employee comes back, the unused money must be returned to the bank. After that you are free to withdraw the money again... So far, no one has been able to explain to me what this is good for. Perhaps the whole thing is a relic from the time when there was still strict foreign exchange control. For sure it is just a detail, but it is characteristic.

Are there only minor differences between the surveyed countries or do you see room for Serbia to achieve significant progress on that list. Where and how could that rating be primarily improved? - Such rankings are interesting and are designed to encourage people to strive towards improvement. Nevertheless, most survey participants know only one or two of the countries really well. That’s why it’s hard to compare their answers. Other rankings seem to follow objective criteria at first glance, and another danger lurks there. Certain governments deliberately improve all areas of the business climate that are covered by the criteria of rankings like the World Bank’s ‘Ease of doing Business’ index. Everything else they leave as it is. In this way, these countries end up with high rankings even without a real improvement of their business environment.

With our Purchasing Initiative we help Serbian companies become suppliers of German industry and increase Serbian exports to Germany

Compared to other surveyed countries, Serbia is in the middle.

How do Serbia and the Western Balkans rate on the list of German companies when it comes to their search for geographically close locations with favourable entrance costs?

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- It’s right that the Western Balkans are nearby and costs are low, at least for the time being. One could consider that this region should have been discovered much earlier... Nevertheless, most companies only became aware of the Western Balkans when North Africa was in trouble, Hungary and Poland were becoming more and more expensive and problems arose in Ukraine... Now, since Turkey has also ceased to be an attractive location for new investments, everyone has suddenly discovered the Western Balkans... Following completion of the fourth successful initiative to identify suppliers from the Western Balkans, do you see some trends or lessons that we could draw to create better links between German partners and Serbian component manufacturers? - Some of these suppliers are already so busy that they can no longer accept new orders without expanding their capacities. To do this, however, they would have to find suitably trained specialists. But there are not enough of them on the labour market. That is why our chamber became involved in the field of dual vocational education. For Serbia, re-industrialisation is the only chance to catch up with the Central European economies. Re-industrialisation, however, can only succeed if enough people decide to work in production, directly at the machine, not just in the office… This means that working at a machine must be attractive, not only financially, but also intellectually. You would be surprised if you saw what kind of knowledge young metal workers, such as industrial mechanics or CNC operators, possess today. They’re the partners of engineers, not just recipients of orders. No engineer could implement his ideas without them.

How much have changes to date in the education system been carried out in line with the creation of a workforce that meets the future needs of the market? - Reforming vocational education and training could, of course, have been considered earlier, especially since full implementation of a new system takes years. But what sense does it make to think about what could have been done? The fact is that Serbia is now ahead of the rest of the region with its reform laws. This advantage must now be exploited by companies with the support of vocational schools and the local offices of the Chamber of Commerce & Industry of Serbia. According to the law, the companies and schools in which the system is going to be implemented next year must be decided at the local level. It is very encouraging that this year, one year before the official introduction of the system, dual vocational education and training is already being launched in many places throughout the country. This means that many companies and many schools have recognised the urgency of the issue.

It is very encouraging that this year, a year before the official introduction of the system, dual vocational education and training is already being launched in many places throughout the country

In your opinion, do people in Serbia give enough consideration to the effects of the fourth industrial revolution when it comes to the structure and volume of production in the country? - The digitalisation of the Western Balkans was the subject of a recent study that was conducted on behalf of a number of companies and institutions, including our Chamber. The study was presented at the Digital Summit in Skopje last April. It shows that the necessary expansion of the networks is progressing slowly. However, this is the case in other regions too, including Germany. Are there companies among the Serbian suppliers of German companies that can meet these challenges in technological terms? - Our Purchasing Initiative certainly wouldn’t be so successful if

companies weren’t able to meet the requirements of their German customers. Nevertheless, the vertical integration of Western Balkan industry is to be increased. Of course, this also means that a lot of money still has to be invested in modern technologies. It’s not so important whether this investment is made by foreigners or local companies. The main thing is that something happens in that direction.

German companies employed 25,000 people in Serbia four years ago, while today that figure has almost doubled. How would you estimate future trends, and what are the key factors when it comes to labour legislation, in which changes are expected by 2020? - It is very difficult to make prophecies on this matter. Firstly, there is the international aspect. What alternatives will be available to investors? What measures will other countries take to attract investors? Labour laws are an important factor. They must be employer-friendly enough to convince investors to come to the country. On the other hand, they must also be employee-friendly enough not to encourage the brain drain... Maintaining this balance certainly isn’t easy for a government. But the most important factor is the climate within companies. If employees and employers are constantly studying the labour law, something is already going wrong. We are happy that, in our German factories here in Serbia, the Labour Code stands unused on the shelf almost all the time.

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FOCUS

WHAT COMPELS GERMAN COMPANIES TO REINVEST IN SERBIA AND THE REGION?

Complex Effort

WORTH TRYING There are all sorts of barriers preventing foreign investors from enjoying economies of scale while investing in the Western Balkans, though the region does still deliver a solid return on investment. A good-quality workforce, coupled with national and local efforts in Serbia to improve the business climate, result in German companies being eager to expand and reinvest

here is a simple wisdom that any country in the Western Balkans may draw from: borders of any kind, be they physical or administrative, make life much more expensive and complicated. While the Berlin Initiative has in all ways proved inspirational for rethinking a rewired and reconnected region, not much has happened as yet. Being at least a little like Europe would be helpful if the region is to become more attractive for investments. The good news is that there are some positive things

too. Many German companies operating in Serbia say that the experience they have now ensures they don’t regret coming to this part of the world. Some of them are already reinvesting on a larger scale, adding more complex operations and tasks to their companies in Serbia. The Serbian government’s decision to quickly introduce dual education may now help to overcome one challenge that is becoming increasingly evident: it is becoming more difficult to find a well-trained workforce in some regions of Serbia.

DIJANA PESKIR, GENERAL MANAGER OF STIHL D.O.O., AHK SERBIEN BOARD MEMBER

Working In The Balkans Is Still A Complex And Expensive Business In the former Yugoslavia there was no border anywhere between Jesenice in Slovenia and Gevgelija in Macedonia. However, travelling along this route today sees you pass through four countries, and borders and customs are an expensive business. Transports take much longer, goods and vehicles stand around uselessly, and the cost of goods increases. And borders are only one problem. There is huge complexity caused be different legislation in every country, and complexity is not very attractive for investors. That’s why we support the decisions taken last year in Trieste by the governments of the Western Balkan countries. The intention is to create a common economic zone in the Western Balkans. I envisage this as a kind of ‘light EU’, in which at least the biggest obstacles to the free exchange of goods and services would be eliminated. It is good that chambers of commerce are actively involved in this process. In this way, we can hope that decisions will be taken according to the needs of the regional business communities.

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DIRK BANTEL, CEO OF PANASONIC LIGHTING DEVICES SERBIA D.O.O., AHK SERBIEN BOARD MEMBER

Excellent Relationship With The Local Government It is very important that the state trusts the municipalities and gives them as many responsibilities as possible when it comes to local economic development. At our location in Svilajnac, we have an excellent relationship with the local government and that is more than important. It is the only way to remove obstacles quickly and without much bureaucracy. The local government is directly interested in creating as many jobs as possible in the city. The further away the decision-makers are, the less familiar they are with local problems. It is therefore very important that the state trusts the municipalities and gives them as many responsibilities as possible when it comes to local economic development. Not everything has to be decided in Belgrade.

CHRISTIAN BRAUNIG, MANAGING PARTNER AT CONFIDA CONSULTING, AHK SERBIAN BOARD MEMBER

Investors Value The Cake More Than The Cherry For investors, factors such as a convenient location, the availability of suitable employees, legal certainty and political stability are much more important than incentives. Our company is present in all capital cities of the Western Balkans. Thatâ&#x20AC;&#x2122;s why we have a pretty good overview of investments made in the region. To start with the last part of your question, incentives are often the cherry on top of the cake, but a serious investor should not be influenced too much by them. Incentives will soon be used up, but an unsuitable location will cause problems for decades. Much more important than incentives are factors such as a convenient location, the availability of suitable employees, legal certainty and political stability. However, the ranking of these factors in terms of importance varies from investor to investor.

UDO EICHLINGER, CEO AT SIEMENS D.O.O, AHK SERBIEN VICE PRESIDENT

More Trained Specialists Needed Nowadays, when much more complex manufacturing processes are being relocated to Serbia, it is already becoming difficult to find the right people. Vocational training may help, while we are planning something bigger in this respect in Kragujevac. It was still easy to find employees just a few years ago. Many investors who came to Serbia at that time were looking mainly for unskilled workers who would just be able to assemble some parts. This has changed. Nowadays more complex manufacturing processes are being relocated to Serbia. Therefore, more and more trained specialists are needed, and in some regions of Serbia we simply canâ&#x20AC;&#x2122;t find them. In some areas it is already becoming difficult to find the right people. We are very pleased that there is now a law introducing dual vocational education. German and Austrian institutions, not least our chamber, have contributed to this law as advisors. Siemens was already involved in the pilot phase. We believe in dual vocational training, because we know it very well from Germany, where it forms the basis of the economic success of German industry and the prosperity of the population. However, vocational training always takes time. Until there is a larger number of dual-trained specialists in Serbia, we will help ourselves with measures of in-company training. We are additionally planning something bigger in this respect again in Kragujevac.

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DRAGAN SIMOVIĆ, CEO OF GEBRÜDER WEISS SERBIA, AHK SERBIEN BOARD MEMBER

We All Suffer Equally So Competition Remains Unaffected Outdated railway infrastructure, long waiting times for trucks at borders, a lack of transport permits for Austria and, last but not least, the migration of truck drivers to countries where they can earn more, are all impacting negatively on trade within the region. Goods that have to be transported never remain at their place of origin. They always find their way to the customer. But if this way turns out to be problematic, that transport will become more expensive. For example, freight rates will rise if wages increase as a result of the emigration of drivers. However, all countries in the region suffer equally from this problem, so that competition will remain unaffected. The situation is different for Austrian transport permits. Companies in non-EU countries like Serbia suffer most from a lack of them, because they depend on these permits.

BOJAN PREDOJEVIĆ, MANAGING DIRECTOR AT PROFINE GMBH (PROFINE D.O.O.), AHK SERBIEN VICE PRESIDENT

An Attractive Business Environment Speaks All Languages Good political relations with the countries of origin of potential investors are useful, but investments in a market economy are not made for political reasons - rather solely out of economic considerations. When we talk about politics and investment, politics has two main tasks: it must create an attractive environment that can compete with other countries, and it must promote the location so that companies around the world become aware of the country. Good political relations with the countries of origin of potential investors are useful, but investments in a market economy are not made for political reasons, rather solely out of economic considerations. The role of our AHK is so important because its advisory activities are subject to the principle of the greatest possible objectivity. There are AHKs all over the world, and German investors rely on the AHKs when looking for information about the advantages and disadvantages of an investment location, wherever it may be.

ŽIVKO TOPALOVIĆ, GENERAL MANAGER AT CONTITECH FLUID SERBIA D.O.O., AHK SERBIEN BOARD MEMBER

Satisfied Companies Reinvest A lot of German companies, including Continental, have more than one company in Serbia. The management certainly wouldn’t have done this if it weren’t satisfied with our factories in Serbia. Only if an investor is satisfied with his investment will he invest again in the same country. In any case, our chamber’s annual survey on economic trends shows that almost all companies that have invested in Serbia would do so again if they had to make the decision today. And, indeed, many companies have already expanded their capacities in Serbia. One German investor is just building his fourth factory! Á lots of German companies, including Continental, have more than one company in Serbia. The Continental group of companies has now also founded a development centre in Novi Sad, where hundreds of engineers will be employed, in addition to the existing productions of fluid systems in Subotica and conveyor belts in Veliki Crljani. The management certainly wouldn’t have done this if it weren’t satisfied with our factories in Serbia.

MILAN GRUJIĆ, MANAGING DIRECTOR AT ZF SERBIA D.O.O. (LTD.), AHK SERBIEN BOARD MEMBER

We Embraced The Opportunities Serbia Offers We chose Serbia and Pančevo after a thorough assessment process. Outstanding infrastructure, sufficient space for potential subsequent expansion, close proximity to Belgrade and a skilled labour force were important factors shaping our decision. What makes Serbia attractive to the German automotive industry? Since the start of our project, many have been asking why ZF selected Serbia as a location. This is a country where the automotive industry has so far only been minimally represented, and where suppliers have only recently been discovered. First you have to understand that, for us, as one of the world’s leading automotive suppliers, it is critical to have a globally balanced production network. Every car contains parts from hundreds of different factories located all over the world. Some of the respective manufacturing processes are very demanding, others require simple manual work.

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CORPORATE

JOSO BIJELIĆ, CEO OF INTESE GMBH&CO.KG

Storage As A Perfect Mozaic The racking systems of InTeSe meet all quality standards and are certified according to German standards, which has been recognised by numerous local and foreign companies operating in Serbia

he imperative is for storage space to be functional and for the temperature regime to be adjusted to the type of goods stored. The quality and safety of the rack construction are implied factors, as is an appropriate load capacity which, depending on the weight of the finished products being stored, is adjusted to each user, explains Joso Bijelić, CEO of InTeSe GmbH & Co.KG, speaking for CorD magazine. Warehousing storage is a very complex system, especially when it comes to the most up-to-date trends dealt with by company InTeSe. After years of successful operations, how would you describe storage today? - We can imagine storage as a kind of mosaic, composed of a multitude of different tiles. In order to create a consistent and complete picture, it is necessary for each tile to be put in the right place. It is essential for the parts of the mosaic to be precisely integrated in such a way that we get an image tailored to suit our clients, who have varying needs, tastes and desires. From the moment I founded InTeSe in Germany to this day, when we are a prominent European company, our mission has remained the same. We want to discover the kind of mosaic that is the most appropriate for our clients. And to create that for them and offer them even more than they expect. We also have a daily obligation to ‘raise the bar’.

What is everything that’s implied when it comes to modern storage and warehousing? - A modern storage facility/warehouse or logistics centre primarily implies the optimal layout of the storage space, in order to ensure the maximum utilisation of capacities in terms of the number of pallet spaces. After that comes the best possible internal organisation of the warehouse, with precisely defined locations of loading and unloading zones, commissioned zones and the arrangement of ramps for loading and unloading. The imperative is for a storage space be functional and for temperature regimes (ambient, chilled and frozen) to be adjusted to the type of goods being stored. The quality and safety of the rack construction are implied factors, as is an appropriate load capacity that’s adjusted to each user. Finally, and very importantly, the visual appearance must adhere to highest aesthetic and functional criteria. That is a “plus factor” - one that gives a special charm and warmth to storage spaces and which provides workers, who we always consider, with more comfortable working conditions and encourages their efficiency.

In addition to quality racking structures erected on almost indestructible floors, workers today also have at their disposal a new generation of lithium-ion forklifts, WMS software for the high-quality management of warehousing processes and other benefits

Since your arrival on the Serbian market in 2012, you have seen significant expansion of your list of clients, primarily foreign ones. What conditions need to be met in order for foreign companies to engage even more in investing in Serbia? - It is completely understandable that

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when foreign companies enter a market they must first find a business interest, compatibility and synergy, whether they enter that market through acquisitions or greenfield investments. Serbia, as a country of more than seven million inhabitants, is a very attractive and exciting market with relatively favourable labour costs compared to neighbouring countries and the EU, and this is its significant strategic advantage. On the other hand, it is common for us to have a situation where the administration does not show the required efficiency, which undoubtedly represents an obstacle to even greater foreign investment. Aggravating operational factors often include unresolved ownership relations. There is plenty of room for improvement in these fields, as well as in the domain of tax policy. We are confident that these improvements will also come. How much interest exists for your company to operate in central and southern parts of Serbia; do capacities exist there to expand operations? - We pride ourselves on our list of clients. Our racking systems meet all quality standards and are certified according to German standards, which has been recognised by numerous local and foreign companies operating in Serbia. Simply: they recognised the quality and references we have on the EU market and also the fact that we are “growing” dynamically on the market of the former Yugoslavia. From our initial arrival, by presenting the regional market with the DIN EN 15635 standard, which clearly indicates design, maintenance and handling in the case of damage to the racking system, we have insisted on a high level of safety of our clients. It is important to stress that InTeSe offers, from the very start of every project, full support to the client and establishes genuine partnership relations. This is especially so in the project development stage, when there is a lot of doubt about how to optimally design and utilise every square metre and volume of space.

installed over a million pallet places in Serbia and the region. The capital projects certainly include those with 10,000 or more pallet places. Our numerous buyers – starting from Henkel in Kruševac, Delhaize and DTS in Stara Pazova, DB Schenker in Novi Banovci, Siemens in Subotica, Milsped in Krnješevci, RALU in Rugvica - Croatia, VOLI in Podgorica - Montenegro and the current Atlantic Trade project in Velika Gorica – Croatia - have recognised us as a serious partner who can handle the burden of high-quality consultation, appropriate delivery times and the implementation of racking systems. Here I’m referring to storage capacities of between 10,000 and 85,000 pallet places. Given that you operate throughout the region, which experiences should be mutually applied or exchanged? - Experiences are very similar. The difference lies in which company you have as your partner, what kind of negotiators its representatives are, what the level of investment is, whether it’s a centre with a bigger or smaller capacity, what industry it relates to, what the deadlines are etc. Of course, we relate all of our acquired experiences and advice to the client, in order to help them solve issues that trouble them initially, all with the aim of ensuring the client receives the most efficient solution for the money invested and subsequent post-sales support which we place a special emphasis on addressing.

Serbia, as a country of more than seven million inhabitants, is a very attractive and exciting market with relatively favourable labour costs compared to neighbouring countries and the EU, and this is its significant strategic advantage

How many logistics centres have you equipped to date and how many projects do you have in the region? - In the period from 2012 until today, together with our production company META Regalbau GmbH, we have delivered and

What potential does this market have for the services and products you offer; and what kind of plans do you have in the region? - Extremely high – both in Serbia and other countries of the region! The construction of modern logistics centres that satisfy world standards has been applied here only recently, over the course of the last five to 10 years. Domestic and foreign companies have a great need to replace outdated storage capacities, which no longer meet today’s ISO and HACCP standards, with modern capacities. Third party logistics is also being developed, whereby companies are obliged to ensure highquality storage facilities for the companies to which they offer warehousing and distribution services. There is really a lot of potential and opportunity.

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ECONOMY

Outlook For The GERMAN ECONOMY In the final quarter of 2017 and first quarter of 2018, economic growth in Germany weakened distinctly from its previously rapid pace. In this period, real GDP rose by a total of 0.9% after seasonal and calendar adjustment. It thus fell well short of the expectations expressed in the December

hat was partly the result of negative one-off effects in the first quarter of 2018 â&#x20AC;&#x201C; such as exceptionally high sickness levels and a marked decline in government consumption. Overall, however, the

underlying cyclical trend probably normalised somewhat earlier than had been expected in December and has moved to a pace of growth that is only slightly above potential growth. The stimulus to growth that the manufacturing

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industry had provided in the previous quarters on the back of very strong exports came to a fairly abrupt halt with the new year. Business investment was nonetheless expanded considerably in the previous two quarters due to the high capacity utilisation, and housing investment also recently picked up again. The no longer quite so high pace of economic growth is likely to continue in the second and third quarters. The short-term prospects are comparatively uncertain, however. Leading economic indicators provide a mixed picture overall, and it is difficult to gauge the influence of sets, is likely to cause enterprises to the dampening one-off factors in the further increase their investment. first quarter and the size of potential Over the course of Buoyed by the good labour market rebound effects in the second quarter. In recent months, there has been a the projection horizon, cyclical developments, strong wage growth broad-based deterioration in busimomentum is likely to slow and unabated good consumer senamong households, private ness sentiment, but it still remains somewhat further in trend timent consumption is also likely to improve well above its long-term average. This terms, although this will, considerably. The retarding effect of should be seen, in part, as something lost purchasing power as a result of of a normalization following the previin 2019, probably be significantly higher crude oil prices ous record highs. The less optimistic temporarily masked by is unlikely to have much of an impact. sentiment, however, probably also Over the course of the projection reflects growing concern about the additional demand as a horizon, cyclical momentum is likely potential negative consequences of result of an expansionary to slow somewhat further in trend increasing protectionism, heightened terms, although this will, in 2019, geopolitical tensions and greater fiscal policy probably be temporarily masked by political uncertainty in some euro additional demand as a result of an expansionary fiscal area countries. In addition, industrial new orders have policy. The decisive factor on the supply side is the indeclined distinctly from the high level they reached at the creasing shortage of labour, which is making it more and end of 2017. However, the order backlog, which continued more difficult for industry to grow faster than potential to rise until March, points to ongoing robust demand in output. On the demand side, exports are rising distinctly manufacturing, and short-term export expectations and more slowly than last year. In the short term, the recent production plans, too, were markedly above average as decline in export expectations and in foreign industrial this report went to press. orders suggests muted growth. On the supply side, there has been a marked increase In the medium term, relevant factors are that growth in enterprisesâ&#x20AC;&#x2122; complaints of labour shortages. in German exportersâ&#x20AC;&#x2122; sales markets is likely to graduOverall, manufacturing should resume its cyclical ally ease off throughout the projection horizon and that upward movement following the period of weakness in German enterprises are, moreover, likely to lose market the first quarter of 2018, albeit with significantly less shares abroad. This will mean less lively growth in business momentum than a year earlier. This, in combination investment over time. Overall, domestic demand is likely with the high utilization of industrial tangible fixed as-

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According to this projection, growth of the German economy will be consistently higher than production potential, whose rate of increase is estimated at 1.5% for both the current year and 2019 and forecast to be slightly lower, at 1.4%, in 2020, as demographics mean that the labour supply will not rise much more. Aggregate capacity utilisation, already well above normal levels last year, will therefore continue to rise distinctly over the horizon of the projection. In 2020, the output gap could almost reach the level it achieved at the peak of the last economic cycle in 2007. The already sharp upward moveto gradually lose momentum â&#x20AC;&#x201C; interAccording to this ment in German exports continued rupted by the fiscal stimulus next year. at an exceptionally fast pace in the Householdsâ&#x20AC;&#x2122; disposable incomes will projection, growth of the final quarter of 2017. However, it rise more slowly as the considerable German economy will be halted abruptly with the new year, and slowdown in employment growth as a consistently higher than exports even suffered a considerable result of labour shortages will be only partially offset even by significantly production potential, whose decline in the first quarter of this year. Exports are likely to expand markedly higher wage growth. This is likely to rate of increase is estimated again over the projection horizon. curb the increase in private consumpGrowth rates are, however, likely tion. Private housing investment is at 1.5% for both the current to be more muted than last year and also likely to rise only moderately year and 2019 and forecast to fall short of the growth rates in Gerover the next few years, as capacibe slightly lower, at 1.4%, in man exportersâ&#x20AC;&#x2122; sales markets (see ties can be expanded only gradually in the construction sector, which is 2020, as demographics mean the section on the international environment on page 17). This is at least operating at full capacity. that the labour supply will suggested in the short term by the Overall, the scenario is thus of recently distinctly less optimistic an economy in a persistent and still not rise much more export expectations of manufacturing strengthening economic boom. After enterprises and the decline in new industrial orders from an increase of 2.0% this year, calendar-adjusted real GDP abroad. It is also implied by the potential lagged effects is likely to rise at an only slightly weaker pace of 1.9% in of the earlier appreciation of the euro. Going forward, 2019. In 2020, the pace of growth could moderate further the circumstance that German exports are heavily conto 1.6%.3 Distinctly lower GDP growth is thus anticipated centrated on capital goods and therefore likely to suffer for the current year than had been projected back in from the continued shift in demand from investment December 2017. This reflects the fact that growth in the to private consumption in China is likely to be a factor, final quarter of 2017 and first quarter of 2018 was much amongst other things. Exports to the euro area countries lower than had been anticipated. However, slightly higher could be depressed by declining price competitiveness. economic growth is being forecast for 2019, in particular, This is mainly because unit labour costs in Germany are which can be explained, not least, by the expansionary rising faster than in other euro area countries fiscal measures which have now been factored into the projections. Source: Deutsche Bundesbank, Monthly Report

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MILAN GRUJIĆ, MANAGING DIRECTOR, ZF SERBIA, ONE OF TWO MANAGING DIRECTORS CORPORATE OF ZF IN SERBIA AND RESPONSIBLE FOR THE COMMERCIAL SIDE OF THE NEW ZF OPERATION

Serbia – A KEY INVESTMENT

This June saw the German company ZF Friedrichshafen AG begin construction of a factory for the manufacture of drive systems for electric vehicles in Pančevo Investment of more than €100 million is planned, with hiring of up to 1,000 workers, just one part of the investment plans that Managing Director of ZF Serbia Mr Milan Grujić spoke about to CorD. When are you planning to launch production? - Production at this location is scheduled to start in the second quarter of 2019, and all our efforts aim to keep this deadline. Since the official groundbreaking ceremony on 21 June, the whole ZF project team has been working in cooperation with company headquarters and local partners on construction and development of what is to become the first ZF production plant in Serbia. Globally, ZF employs more than 140,000 staff at 230 sites in 40 countries, and last year generated revenues of 36.4 billion euros. What are ZF’s core products? - Today, the global automotive industry is facing enormous changes. ZF is not only following these changes, it actively contributes to shaping them. With its broad portfolio, ZF is advancing mobility, and services for passenger cars, commercial vehicles and industrial technology applications. The intensive sharing of technological expertise between the different areas makes ZF’s products attractive for many industries. ZF enables vehicles to see, think and act. We are on the cutting edge of innovation in the automotive industry. The company invests more than six percent of its sales in research and development annually – in particular for the development of efficient and electric power trains and also in striving for a world without accidents. Our company is a global leader in power train and chassis technology, and active and

passive safety technology, and is one of the largest automotive suppliers worldwide. As one of the world’s leading manufacturers of automotive parts, you work continuously to expand your production network, particularly in the domain of new technologies, such as electro mobility. What advantages do your factories and company hold over your competitors? - A particularly important factor for ZF , being one of the world’s leading automotive suppliers, is to develop and create a globally balanced production network. This is the only way we can produce competitively – because being successful requires technology and costleadershipanditalsorequiresabalanced presence in different countries and regions in order both to be close to our customers and to create competitive cost structures. Being a technology and cost leader is even more important as we help to shape the rapid changes in the field of mobility, while, at the same time, it is crucial to invest in the most varied products and technologies. Using the “Next Generation Mobility”

The company is a global leader in power train and chassis technology and active and passive safety technology, and is one of the largest automotive suppliers worldwide

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concept, we are expanding and adapting our strategy to meet new requirements. With the “Next Generation Mobility,” we at ZF are pursuing a big-picture approach. It covers the essential traffic and transport sectors of today and tomorrow, whether in the areas of micro mobility, city mobility, or long-distance transport. This approach is helping us to systematically close in on our vision of a safe and clean mobility that is convenient, affordable and fully automated, and one that will be available almost everywhere. Electro mobility will play a major role. Whether as hybrid or electric drive, it will play an increasingly important role if we want mobility to be emission free. In doing so, ZF is bridging the gap between today and the impending era of autonomous and electrical mobility, thus guaranteeing that our customers will survive this transition. Our customers in all markets and industrial sectors are benefiting from our “Next Generation Mobility” approach. Do you have any specific plans in Serbia for attracting the profile of personnel that you need? - The recruitment process, which is in progress since the beginning of the project, is aiming to select clearly profiled professionals that will become a part of the ZF team and help implement and operate this project in the future. We are looking for good qualifications and high motivation and our local team is already growing. ZF values their people and we understand that our goals and targets can be achieved only through the extraordinary commitment of our staff, who are our most important assets and we consider them as partners. We believe our new colleagues will be one of the success factors for the ZF plant in Pančevo so we want to attract the best of them to join our company. Our working environment is characterized by mutual respect for the work and achievements of others, while never losing sight of our employees, their families, society and the environment. Part of the appeal for top level experts in every field of business is certainly the potential of the project and the challenge this type of engagement offers to ambitious and hardworking individuals, but there is also a carefully planned employee care program and a number of personal advantages starting from competitive financial compensation, generous benefits packaging, and continuous education and performancebased and structured professional development opportunities.

The ZF factory in Pančevo is envisaged as a regional hub, from where will goods be delivered onwards to other destinations. What led to you choosing this specific location? - This location was selected after a careful assessment process recognizing the available infrastructure, potential for later expansion, transport options and recruitment possibilities, all contributing to ZF’s goal of creating a globally balanced production network for assuring a competitive production in a rapidly changing industry. ZF’s efforts, interest and intentions have been recognized in Serbia as an important investment and development potential which has provided great cooperation and support from local, provincial and country governments and the patronage of relevant institutions and the highest ranking officials. Under these circumstances ZF is now investing EUR 100 million in Serbia helping to shape the mobility of the future through an ongoing project with a sincere commitment of the project team, associates and all stakeholders. Do your CSR activities relate to investment in education, or are there some other areas that you consider as being important to the communities in which you develop your business? - The Group and its employees are committed to numerous national and international projects with an emphasis on education, community and art and culture, children and youth projects, education and training of young people as well as nature and land conservation. We have an innovative approach in developing pioneering products and technologies that helps us achieve our strategic goals and that are financially rewarding. We focus on the customer with our quality and our passion, offering them clear added value. We commit to people and support and encourage our employees in the fulfillment of their duties and responsibilities. We are result oriented, we set ourselves challenging goals and measure what we achieve. Locally, in the countries where we operate, we share and promote our values with understanding for local knowledge, people and culture, and specific needs, and we create projects to support local communities with the greatest possible impact.

ZF’s efforts, interest and intentions have been recognized in Serbia as an important investment and development potential which has provided great cooperation and support from local, provincial and country government and the patronage of relevant institutions and the highest ranking officials

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INTERVIEW

MILAN KRSTIĆ, BUSINESS CONSULTANT, AHK

Faster Development With Expert German Assistance The aim of German experts engaged through the Senior Expert Service is to help and advance the organisation of the operations of small and medium-sized enterprises, public institutions, associations and educational institutions, both in Serbia and other developing countries

he Senior Expert Service (SES), a German nonprofit organisation that’s supported by the German Ministry of International Cooperation, has over 12,000 experts at its disposal from all branches of industry, while more than 200 Serbian companies and other organisations have had the opportunity to host German experts and, with their assistance, improve and develop their business model. We spoke about this opportunity to improve the work of Serbian SMEs with Milan Krstić, business consultant of the German-Serbian Chamber of Commerce, AHK Serbien.

consultants in SMEs and non-governmental institutions in developing countries. Who are SES’s consultants and which specific target groups do you address? - SES consultants are active German retirees, experts with vast experience who engage in their activities with great enthusiasm and a strong work ethic. Consultancy services are provided free of charge, with the aim of helping and advancing the organisation of the operations of SMEs, public institutions, associations and educational institutions, both in Serbia and around the world. The SES central office has at its disposal over 12,000 experts from all branches of industry.

SES consultants are experts with vast experience who engage in their activities with great enthusiasm and a strong work ethic, and who provide their services free of charge

The German-Serbian Chamber of Commerce has offered support to Serbian companies and organisations to advance their business standards, in the form of the Senior Expert Service (SES). What are the aims of the SES programme and which business segments are in the focus of this programme? - The core activity of the SES Programme is based on mediation by consultants who are experts in various commercial and non-commercial activities around the world. This German non-profit organisation, which is subsidised by the German Ministry of International Cooperation and which has a programme represented by the GermanSerbian Chamber of Commerce in Serbia, deals with mediation and organising engagements of German expert

How are SES’s engagements organised and what kind of interest have you encountered among Sebrian entrepreneurs? - The costs of engagements in the local area, which implies the accommodating of experts, local transport and per diem costs, are covered by the serviced company, while all other costs - return air fair and health insurance - are covered by the SES central office. The German-Serbian Chamber of Commerce has represented the SES programme in Serbia since 2005, implemented over 200 SES engagements with Serbian companies and non-commercial entities.

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CORPORATE

LIDL SRBIJA

What Does The Arrival Of Lidl Mean For Serbia? The announced opening of Lidl stores in Serbia is fast approaching, and the impact of the arrival of this modern discount chain on a market that hasn't gained a new "major player" in a long time has been debated for quite a while already. Lidl's decision to enter the Serbian market is significant from multiple aspects - investment, employment, the engagement of the Serbian economy, increased competition and the actual offer that will be presented to consumers

hat’s precisely why we sought an answer to the question of what Lidl’s arrivals means for Serbia from Marko Čadež, President of the Chamber of Commerce & Industry of Serbia, Dr Ljubodrag Savić, Professor at the University of Belgrade’s Faculty of Economics, and Martina Petrović, Head of Corporate Communications Lidl Srbija. “GOOD OPPORTUNITY FOR LOCAL PRODUCERS.” Marko Čadež explains that he sees Lidl’s arrival as a good opportunity for domestic producers who are prepared to harmonise their production processes with international standards: “Together with Lidl Srbija, we organised a Supplier Day event more than a year ago, at which local suppliers of fruits and vegetables had the opportunity to present their products. Of the 30 suppliers who came to the gathering, as many as nine left having reached an initial agreement on cooperation.”

“MY EXPECTATIONS OF LIDL ARE HIGH” - Ljubodrag Savić, a professor at the Belgrade Faculty of Economics, says: “It should be noted at the start that many retail chains have come and gone since 2001. We were satisfied with some of them, but not so with others. Personally speaking, I have trust in the German economy, in the attitude of the German state towards citizens; that’s the kind of attitude I like very much. I expect Lidl - unlike some who came here to briefly offer their substandard goods at high prices - to offer excellent goods at prices that are aligned with the Serbian standard of living. “I would like to emphasise that Lidl has been present in Serbia since 2010 and is working seriously on conquering the market, and their plan is to open all initial retail outlets in multiple Serbian cities simultaneously. As a citizen, my expectations of Lidl are high; I wouldn’t like them to disappoint us.”

“LIDL BRINGS A UNIQUE SHOPPING EXPERIENCE!” Martina Petrović, Head of Corporate Communications Lidl Srbija, believes that Lidl, as the first modern discount retailer in Serbia, will improve the retail market and offer consumers a unique shopping experience: “Shopping at Lidl is simple and quick. Apart from these advantage, we are convinced that we’ll gain the trust of consumers through our carefully selected range of products and the offer of Lidl brands that are loved by consumers across Europe, and which haven’t previously been available in Serbia.” Lidl Srbija has noted on numerous occasions that preparations for the launch of its operations in Serbia have included the engagement of local industry, primarily in the construction of facilities - more than 50 subcontractors were engaged for the logistics centre and more than 200 on the construction of retail facilities: “We have come to Serbia to stay and to develope together. We consider it important to act responsibly towards our partners, fostering transparency and fair relations - because it is in that way that we make business predictable”. When it comes to its approach to employees, this company has introduced a unique approach to preparations for opening - training in the duties required for some positions lasted up to two years. “We are extremely grateful for the great interest that exists in gaining employment at Lidl Srbija. For us, investing in the development and satisfaction of employees is an investment of the highest importance, because the most important factor in even the most well-established system is the people,” says Petrović. In conclusion, Petrović adds that Lidl will bring the best price-to-quality ratio to consumers: “The Lidl system is based on efficiency and each business segment is designed so that we are able to realise savings, which we convert into more favourable prices for consumers.”

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JOVANKA JOVANOVIĆ, GENERAL MANAGER, ROBERT BOSCH D.O.O.

Innovation – The Main Driver Besides contributing to development of the automotive industry and growth of Serbia's GDP, an important aspect in which Bosch helps the development of the Serbian economy is in promoting employment

n the ITworld, everything is faster, and we need to be more flexible. Employment follows the same trend, says Jovanka Jovanović, General Manager of Robert Bosch d.o.o., at the beginning of her interview for this CorD special edition.

The latest list of Serbian exporters puts Robert Bosch d.o.o. at the very top. Besides this ranking, its employment of over 1,300 associates and large investments, how much does Bosch contribute to the overall economic development of Serbia? - Bosch Serbia makes an important contribution to Serbia’s overall growth – which is proved by the fact that in only one year we managed to go up from the eight to the fifth place on the list of 15 largest exporters in the Republic of Serbia. The total revenue generated by Bosch Group in Serbia amounted to €198 million at the end of 2017, mostly due to our activities in the automotive industry production where we are the world’s leading supplier. Apart from its contribution to the automotive industry and the growth of Serbian GDP, another important area in which Bosch helps the development of Serbian economy is promoting employment both in Pećinci Municipality, where Bosch factory producing systems, windshield wiper blades and arms is located, and overall in terms of intensive employment related to the development of IT projects. Bosch won an award of the Municipality of Pećinci as the employer creating the largest number of new jobs, and also as a pioneer in the introduction of dual education since 2013. In fact, Bosch factory in Pećinci is also the largest Bosch factory for the production of wiper systems in Europe.

their own vehicles as the most important means of transport, but that perception gradually changes, and in the future it definitely will not be the dominant mode of travelling from point A to point B. In the first phase, we plan to employ 60 software developers. The projects we work on include vehicle sharing, transport sharing and network-based driving assistance and support services for drivers. In the IT world, activities take place more rapidly, and we need to be more flexible, so employment also follows the same trend. There are several methods we apply in recruiting IT experts. Along with traditional job advertisements, we also organize employment fairs, have a good cooperation with the faculties and also accept the recommendations of our employees. Bosch colleagues from abroad spend several months in Belgrade working on employee training. Also, in cooperation with our partners, we organize additional programming language courses lasting for a year or more and aimed at providing competent personnel. In Serbia, Bosch invests several hundred thousand euros a year in employee training.

The total revenue generated by the Bosch Group in Serbia amounted to €198 million at the end of 2017

At the beginning of the year, “Bosch SoftTec” department was established. What does the work of this department consist of and how do you recruit qualified workers for these demanding jobs? - The main drivers of growth and development in Bosch are innovations. At the beginning of 2018, we set up a new department Bosch SoftTec within Connected Mobility Solutions Division, which develops software-based Infotainment and Assistance Solutions for Connected Mobility. Namely, people still consider

How do you see the Serbian innovation infrastructure from the viewpoint of the company with countless innovations, especially in ICT sector? - Innovation and development in general are following the development of the industry, as is the case with Bosch factory where almost 100 engineers work on developing new products and projects. There is already a certain number of registered patents as a result of the work of Bosch’s R&D department in Serbia. The automotive industry is one of the fastest growing industries in Serbia which also brings innovation. We are witnessing the opening of R&D centres in major cities in Serbia by international companies. With regard to innovation in ICT sector, developers have plenty of potential. One solution is definitely the cooperation with start-ups, which Bosch is already implementing worldwide, but also encouragement of associates’ initiatives and start up ideas by providing financial and other types of support. These ideas do not necessarily concern the business areas where the company already operates. This is how projects like Smart Agriculture or Smart Healthcare have been developed.

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CORPORATE

CLEMENS SACHS, MANAGING DIRECTOR, LEONI WIRING SYSTEMS SOUTHEAST D.O.O.

Government Support Means A Lot To Us

With a combination of the education of people, political stability and the knowledge transfer of investors, Serbia will become a country where innovations and technical solutions will find a good home, notes Clemens Sachs, Director of Leoni Wiring Systems Southeast d.o.o., in this interview for CorD magazine

EONI is already recognised in Serbia as the largest manufacturer of technological advancements in the automotive industry, but now it is announcing the next stage in the development of smart cable systems and elements from the digitalisation sector. Since arriving in Serbia in 2009, LEONI has significantly improved its production activities, expanded production programmes and increased the number

of employees in a relatively short period. What influenced such fast and efficient development? - There were several preconditions for these outcomes. The Leoni product portfolio here in Serbia mostly engages a manual workforce, which requires a huge number of workers and the labour market here fulfils this demand. Also, Serbian people have the right attitude to be motivated and always try to do their best. And on the top of that is the

The strategy is to be a full service provider for the Leoni customer and market requirements

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support Leoni always received from the local municipalities and from the Serbian Government. The LEONI Group, which employs nearly 90,000 people around the world, is directed towards the development of management of energy, smart devices and other innovative products. To what extent does LEONI Serbia applies the standard and procedures of the group’s central headquarters? - Leoni , as a global operating enterprise, implements a high standard packaged in the “Leoni code of ethics”, in all countries and each location worldwide. Ongoing improvements, controlled by internal and external audits, guarantee to our headquarters that all procedures are maintained and enlivened around the Leoni world of high standards.

part of our daily business. Given the fact that Leoni Serbia is on a growth trajectory, Leoni is always seeking more people with different levels of education. Not only do young engineers have a chance to learn and develop their knowledge, but also workers that have completed a lower level of education have the chance to develop themselves and forge a career within Leoni. LEONI also distinguishes itself through the practise of enabling young people to undergo quality internships in the country and around the world. How would you rate the level of education of employees in your factories in Serbia? - In general, I consider the education level of the people in our surroundings here, and in our plants, as being very good. Many people have high school diplomas and university degrees

LEONI PLANT IN NIŠ

Ongoing improvements, controlled by internal and external audits, guarantee to our headquarters that all procedures are maintained and enlivened around the Leoni world of high standards

LEONI is recognised in Serbia as the largest manufacturer of technological advancements in the automotive industry, but now you’re announcing the next stage in the development of smart cable systems and elements from the digitalisation sector. What are the preconditions for the implementation of such ambitious plans? - The Leoni strategy is not to be merely a simple wire harness producer. The strategy is to be a full service provider for the Leoni customer and market requirements. Of the Leoni portfolio, the part that relates to the Serbian locations - plants - is to produce high complex wire harnesses for Europe’s automotive market. Serbian locations are all specialised in the production of carspecific cables. This is a huge challenge day by day, requiring high knowledge and flexibility in production equipment, hardware and software, and certainly also in people. Your production capacities are related to local governments. Given your specific, high-quality staff, will you also be seeking new employees at the local level? - As I already mentioned, people are the main and most important

and mostly speak a minimum of one foreign language, which is important in an company that operates internationally. So, we will rate the source for recruiting new people on the market as good. What Leoni Serbia sees as being increasingly important for young people is the motivation package that an employer can offer new employees. A motivation package doesn’t only mean a salary, but also implies career opportunities. Even in an internationally operating company like Leoni, such chances are always provided. To what extent are Serbia’s infrastructure and education ready to accept world innovations and new technological solutions? - What we see with our eyes is that Serbia is on a good path to developing its economy and industry, and also infrastructure. The political situation is stable and the Government has a plan for the direction in which it will progress. This is a key point for investors from abroad. So, this implies that, with a combination of the education of people, political stability and the knowledge transfer of investors, Serbia will become a country where innovations and technical solutions will find a good home.

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FRANKFURT

By ELLIOTT WILSON

FRANKFURT STOCK EXCHANGE

The Little German City With Big Financial Clout Frankfurt’s experience as a major financial hub makes it an obvious centre for banks looking to leave London. If you fear for London’s future as Europe’s – and the world’s – foremost financial hub, recent headlines make for painful reading

ll summer long, representatives of global lenders have fretted in print and on TV about the city’s future. Leading financial institutions seem to be preparing for the worst: a “hard” Brexit that leaves London untethered from Europe. And they are making painstaking efforts to ensure they remain directly plugged into the single European market. So far at least, London’s loss has been Frankfurt’s gain. The tidy little city on Germany’s Main river has emerged as probably the largest beneficiary of the already long and tortuous Brexit process. Over the next few years, hundreds of well-paid risk analysts, derivatives traders and compliance specialist will sell their houses in London and look for new accommodation in the

rolling countryside of Hesse, one of Germany’s richest states, where Frankfurt is the largest city. Daiwa Securities, Nomura and Sumitomo Mitsui, three of Japan’s biggest financial players, have said they will shift their European banking and securities units to Frankfurt. Citi and Deutsche Bank are making similar moves. The US bank Citi will transfer the bulk of its EU trading operations there, while the Frankfurt-headquartered German lender Deutsche plans to build a new booking centre in its home town. Frankfurt Main Finance, the city’s financial lobby group, expects up to 10,000 London jobs to relocate there in the years ahead. But is this ambition achievable? Why is Frankfurt the main European focus for fretful banks rather than, say, Paris,

Amsterdam or Dublin? And will London’s longterm loss, as it is perceived by many analysts and the bulk of the English – and German-speaking media – really be so very great? The first question is easy to answer. Frankfurt already has skin in the game. It was a regional financial hub for centuries, but that process accelerated after the Second World War. When the Bundesbank, then-West Germany’s central bank, was formed in 1958, Frankfurt was chosen as its home. Forty years later, EU politicians settled on the city as the best locale for the new European Central Bank (ECB). Frankfurt may not boast Paris’ culture, or Dublin or Luxembourg’s competitive tax base, but it is an accessible city with great infrastructure, including a world-class airport and internationally renowned trade fairs. This centrality means Frankfurt is not only the beating financial heart of Europe’s largest economy, but also home to an institution (the ECB) that is likely to become the most important single regulatory body in the euro zone in the years ahead. All of which hands Frankfurt a powerful marketing tool when pushing to attract lenders looking for a stable city in which to set up shop, or from which to expand existing operations. “If you’re a Brazilian or a Chinese bank that needs to offer financing to clients in mainland Europe, do you want to have to negotiate separate agreements with 27 European nations,” asks Michael Mainelli, the chairman of Z/Yen Group, a London-based think tank. “No. And if that problem can be solved by moving to a European jurisdiction, it’s obvious what your decision will be.” Frankfurt is the only city in the post-Brexit EU that boasts the kind of soft-and-hard infrastructure that global lenders desire. Dublin and Luxembourg are capable, lovely cities, but also small and provincial. Paris is filled with excellent lawyers, actuaries and risk assessors. Under its new president Emmanuel Macron, the Fifth Republic is manically selling itself to global banks as a premier financial destination, pledging to slash taxes and onerous regulations. But this is a country that believes in the preeminence of the state over the private sector. “Whatever France says about being welcoming, the

big foreign banks know it is a closed shop where they will always play second-fiddle to the French banks, who exist to finance the government’s industrial policy,” notes Bill Blain, a strategist at London-based Mint Partners. “Foreign banks will never feel truly at home there.” Then there is the issue of cost. London is a hellishly expensive place to operate. Parisian prices can be just as eye-watering. Frankfurt by contrast is compact and far cheaper (although prices have risen sharply post-Brexit). Ostend, with its grand townhouses, is a 20-minute walk from the Bankenviertel, the banking quarter, while Taunus, a collection of villages to the north of the city, is easily accessible by road and rail. And while it will never be as vibrant as London (or Paris or Berlin), Frankfurt is finally doing something about its image as one of Europe’s most boring major cities. Its lower commercial and residential rents aid its cause in another, indirect way. The Brexit vote handed international lenders a golden chance to tackle the longstanding issue of the cost of human capital. For decades, banks chose to locate as many staff as possible in a single city, hewing to the idea that good decisions tended to be made by bigger teams. That was a boon to London – the location for many if not most of those employees – and to Britain’s coffers. Brexit changed this equation. “Banks were saying: ‘Hang on, why do so many of our mid and back-office staff work in Canary Wharf, one of the most expensive office locations in the world,” notes Christopher Wheeler, a bank analyst in London with Atlantic Equities. “Frankfurt, for many of them, was the obvious place to go. It’s a lot cheaper than London. I was there two weeks ago, and I marvelled at how many offices were going up there.” Frankfurt is at heart a banking centre, and its power and influence will expand in the years ahead. How great will be London’s loss? That is rather harder to answer. Anyone scrutinising the pages of UK financial media over the summer months would be forgiven for assuming that London’s best days lie firmly in the past. Given the number of banks shifting jobs to Frankfurt, it is a quick and an easy assumption to make. It is also probably the wrong one. The truth is that Europe needs London just as

When the Bundesbank, thenWest Germany’s central bank, was formed in 1958, Frankfurt was chosen as its home

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much as London needs the EU, and for several reasons. First, there is good a reason why London, and not Frankfurt, has for decades, even centuries, been Europe’s leading financial hub. The German city is a banking sector. But the UK capital boasts a deep well of financial expertise that stretches back centuries, possibly to before the Norman invasion of the British Isles in 1066. It boasts diversity, talent, the clarity of common law and the linguistic

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by a deep well of financial and non-financial talent (lawyers, actuaries, public-relations experts, boutique M&A specialists). “No matter what the digital age offers in terms of being able to trade across TV screens, it will always be better to scream at the guy next to you about a transaction,” says Mr Blain. Again and in the main, that benefits London over Frankfurt or anywhere else in Europe. One final point deserves to be made here. In the year since Britain voted to leave the EU, European cities from Frankfurt to Paris and Barcelona to Amsterdam have jockeyed and jostled, desperate to claw white-collar banking jobs away from London. So far at least – and noting that London has not yet suffered a genuine exodus of financial talent – Frankfurt appears to be the winner. Yet it could be argued that a weakened London hurts the entire continent, and is in no one’s best interests. In its latest Global Financial Centres Index, published in March, Z/Yen Group noted that Brexit was a “major source of uncertainty” for every European financial centre. While London retained its No 1 ranking in the annual survey, it lost 13 points over its previous score. Luxembourg’s ranking slipped to 18th, from 12th in 2016, with Frankfurt falling four places, to 23rd. Amsterdam, Paris and Dublin also lost ground. The real beneficiaries in this year’s poll were non-EU cities. Singapore and Hong Kong, genuine financial hubs tipped to be the biggest beneficiaries of Brexit, improved their tallies, as did every major city in Asia. Geneva and Zurich, non-EU Switzerland’s twin financial hubs, both climbed a few rungs. The main lesson to draw from the survey, says Mr Mainelli, is that Europe needs a strong London. “Frankfurt may attract a few second and third-tier banks, and some mid-office staff from global lenders. But if a hard Brexit means London is no longer the gateway to Europe, it’s not clear to me that another city in the EU can take its place. “And without a plausible alternative to London, the whole of the continent will slip down the ladder. And that helps no one.”

Frankfurt is the only city in the post-Brexit EU that boasts the kind of soft-and-hard infrastructure that global lenders desire

benefits of having a global language as its mother tongue. This critical mass of financial knowledge and ability is hard to find anywhere else on the planet and Brexit is unlikely to alter that equation, in the near term at least. “London will be London with or without banks,” notes Mr Blain. “Serious and complex financial transactions require a body of knowledge and expertise and the only place these exist in critical mass in Europe is in London.” London, he adds, is “hard-wired to have a mercantile approach to business. It approaches legal issues, risk management, capital markets, banking, from an international point of view rather than a local point of view. Germany has always focused on building and funding SMEs. As a means of further anchoring Frankfurt France, on its industrial policy. But Britain’s as a FinTech base, Deutsche Börse launched brilliance is financial engineering. That’s the FinTech Hub in Frankfurt in April 2016. the way it has always been.” This move supports the Hessian State Nor is the advent of high-speed voice Government’s FinTech initiative with its and video communications likely much to Tech Quartier, but also directly promotes alter this equation. Just as chief executives young FinTechs. The hub also represents a still fly half the way around the world to step towards increasing IPOs in Germany. eyeball an acquisition or engage with key The idea is to promote the overall ecosystem, from the FinTech hub for start-ups, through shareholders, bankers are still at their most the Deutsche Börse Venture Network for growth companies, to an IPO on the Frankfurt effective when physically surrounded by the Stock Exchange. largest possible group of their peers, and

Deutsche Börse FinTech Hub

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MLADEN VUKANAC, GENERAL MANAGER OF SAUTER BUILDING CONTROL SERBIA D.O.O. (LTD.)

CORPORATE

Comprehensive Approach To Each Building The decades of our company’s direct presence in Serbia have influenced the development of the automation market in Serbia in many ways and brought it in line with global trends

building becomes truly smart and efficient in every sense of the word only when it is made more comfortable, more active, more productive and more efficient for the tenants and employees through the use of data gathered from a modern Building Energy Management System, like the ones we produce, explains Mladen Vukanac, General Manager of Sauter Building Control Serbia, speaking for this CorD special edition.

technologies as their peers from far more developed countries. The decades of our company’s direct presence in Serbia have in many ways influenced the development of the automation market in Serbia and brought it in line with global trends. The smart automation of commercial buildings, like office buildings, shopping centres, hotels, sporting facilities, culture centres and factories, is where Serbia doesn’t lag far behind the rest of the world. Next in line, if we look at spread and complexity, is the automation of hospitals, residential buildings, schools and universities. These last categories are not as common in Serbia as they are in developed countries, primarily because they are not used in commerce and cannot provide a fast return on investment. Our data indicates that the situation is improving in residential construction as of late, and we can only hope that the time when necessary automation spreads to educational facilities is drawing near, primarily in order to control the quality of the air breathed by our pupils and students.

I am particularly happy to point out that our engineers work at the same level and employ the same technologies as their peers from far more developed countries

The SAUTER tradition, which dates back more than a century, only goes to prove the importance of energy efficiency as a way of managing one of our core resources. How far has this advanced when it comes to the construction and maintenance of smart buildings? - Use of the term “smart” is often encouraged in business communication and a lot of organisations claim to be using or in possession of a smart building, even if such claims are unsubstantiated. A building becomes truly smart and efficient in every sense of the word only when it is made more comfortable, more active, more productive and more efficient for the tenants and employees through the use of data gathered from a modern Building Energy Management System, like the ones we produce. Achieving this requires continuous interaction between man and technology.

Is Serbia keeping pace with the trends and where is this more emphasised – in residential or commercial construction? - Given that we are a daughter company of Swiss company “Sauter AG” from Basel, I can safely say that we are at the cutting edge of automation technology. I am particularly happy to point out that our engineers work at the same level and employ the same

What expertise can you offer? - We have a comprehensive approach to perceiving the needs and requirements of each building. Entire teams of specialists study the designs of all installations integrated into our system meticulously, doing their best to introduce improvements across the board. I would particularly like to emphasise the expertise of our engineers when it comes to the segment of work we call commissioning. I choose to highlight this segment in particular because this crucial process is so often neglected in our industry. Apart from that, we also have substantial experience in the field of green construction, as pioneers and one of the founders of the Green Building Council of Serbia.

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REFUGEE

By DR.MATTHIASMAYER

Germany’s Response To The Refugee Crises With the Islamic State group terrorising large parts of Iraq and Syria, the Syrian civil war raging with no end in sight, and the situation for refugees deteriorating in Jordan and Lebanon, more and more people in the Middle East have decided to flee to the EU in an attempt to claim asylum. The arrival of asylum seekers has tested member states’ ability to respond to crises with a united front, a test that they have failed

ventually, Germany was the only state left in the 28-member bloc that kept its borders open. German Chancellor Angela Merkel and her government had maintained this position despite fierce criticism from EU neighbours, German politicians and the German people. Why has Germany bucked the European trend, maintaining its open borders and welcoming approach toward refugees? The right to asylum was first guaranteed by Germany’s Basic Law in 1948 as a direct reaction to the Holocaust. It was defined broadly and without restriction: Never should people fleeing persecution or death be denied protection. Since the introduction of the Basic Law, Germany has prided itself on being a safe haven for those in need.

Shortly after the end of World War II, an export-driven boom caused the German economy to expand significantly, creating a large blue-collar labor shortage. Bilateral labour recruitment agreements were established with Italy, Spain, Greece, Turkey, Morocco, Portugal, Tunisia and Yugoslavia in the 1950s and 1960s. Migration was ostensibly temporary, and there were no policies in place to help guest workers integrate. In the early 1990s, when the war in former Yugoslavia forced a record number of people to flee the Balkans, German asylum policy faced its first litmus test. The wave of asylum seekers from the war-torn region engendered social tensions and xenophobia in Germany. In response to this backlash, the German government implemented

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the so-called asylum compromise, which came into force in March 1993. Its objective was to minimise the risk of the German asylum laws being abused, as well as to reduce the number of asylum seekers entering the country. German policymakers did not adequately address issues facing the growing foreign-born population until the early 2000s. At that time, there was a growing feeling that Germany would need to correct the integration mistakes of the past and become more welcoming to new migrants. This idea gained momentum in light of sectoral and regional labour shortages

upheavals in the Middle East, the number of people claiming asylum in Germany started to rise again in 2011, reaching more than 200,000 in 2014. In 2015, nearly 1.1 million asylum seekers entered Germany, but only 476,649 were able to file for asylum. Those who register face long waiting times to file their official asylum claims, largely due to the fact that Federal Office for Migration and Refugees (BAMF) did not have the administrative capacity to process such a deluge of applications. As early as 2014, the system showed signs of strain, as the number of registered

and the greying of the German population. In 2005, the government passed the Residence Act, which provided structural integration measures such as language courses and new channels for migration based on demands of the labour market. These regulations have been liberalised on several occasions and Germany is now one of the most open nations to migration among OECD countries. Around 20 percent of the German population has a migration background. Despite this progress, labour market outcomes for foreign-born residents tend to be worse than those for the German-born population. In 2015, 58.5 per cent of Germans between the ages of 15 and 65 were employed and contributed to the social welfare system, compared with just 44 per cent of foreign-born residents. Stark differences with regard to migration also exist between the former East and West Germany. In eastern Germany less than five per cent of the population has a so-called migration background, while in the former West Germany that figure is 23 per cent. Between 2000 and 2005, fewer than 100,000 asylum applications were filed per year, and between 2005 and 2010 that figure fell to less than 50,000. However, with violent

asylum seekers exceeded the number of filed asylum claims by almost 20 per cent. Germany has taken in far more asylum seekers than its European neighbors, and that gap is widening, with the UK, France and Italy only taking in a small proportion of the total number seeking asylum in Europe. Although the single largest factor driving asylum seekers to flee to Europe has been the Syrian civil war, the refugees arriving in Germany come from various countries of origin, and with different motivations for leaving their home countries in search of protection. A survey commissioned by the Bertelsmann Stiftung found that Germans are increasingly more comfortable with the notion that Germany is becoming a country of immigrants, particularly in the former West Germany. Although some right-wing movements have gained momentum, the numbers show that a large majority of Germans believe their country should be open to refugees. Even in July 2015, when the inflow of asylum seekers had already increased considerably, 93 per cent supported welcoming people fleeing war or civil conflict. Eighty per cent expressed the view that Germany should accept people seeking refuge

Germany has taken in far more asylum seekers than its European neighbours, and that gap is widening, with the UK, France and Italy only taking in a small proportion of the total number seeking asylum in Europe

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from political or religious persecution. Merkel is clearly the face of Germany’s refugee policy. Before the summer of 2015, Merkel’s style of politics was characterised by pragmatism and incremental steps, rather than following a sweeping political vision. Now, in a departure from her usual style, Merkel has made Germany’s open asylum policy her personal political project—despite strong resistance from many quarters. Although observers can only speculate, many cite two encounters in particular as critical to shaping Merkel’s stance on refugees. At her annual summer press conference in Berlin, Merkel

but it was not fully operational before autumn 2016. By late February 2016, the number of pending cases was approximately 393,000—more than double the figure from the previous year. Beyond the challenges of registering asylum seekers, many municipalities struggled to provide appropriate housing for them. Therefor. Germany needed to increase its capacity to process asylum claims efficiently, provide adequate housing, better integrate those with protection status into society, and keep careful track of the identities of asylum seekers in the country. It was equally important to keep the asylum system flexible so it can cope with fluctuating demand.

changed her tone. She clearly articulated that Germany was strong enough to help all of those in need. This was the first time she uttered the “We can do it!” slogan. Merkel made a decision that Germany would honor its historical commitment to protect refugees. She had found her political project, her vision, and was ready to fight for it. Even before Merkel took her stand, Germany’s openness had provided safety for many refugees. At the time, policymakers were too distracted by the Russian military intervention in Ukraine and the Greek financial crisis to react to the growing stream of refugees arriving in Europe. Now that Germany has allowed more than a million asylum seekers through its borders, it had to find a way to effectively and efficiently respond to the challenges that follow. German authorities on various levels were unprepared for the large number of refugees that arrived in 2015, leading to major delays in the asylum process. The country didn’t have common database of registered asylum seekers that could be accessed by relevant authorities. It was also problematic from a security perspective. BAMF implemented a new information technology,

Integrating refugees in the labour market was a central task, both so that refugees had control over their own lives and so they can contribute to the economy and society. Germany needed a comprehensive process to achieve this, one that complements a strengthened asylum process with language training, establishment and certification of informal and non-formal competencies, professional orientation, placement in apprenticeships, and further education. The German Institute for Economic Research (DIW) predicted that the macroeconomic effects of the refugee migration will yield a net positive after three years at best and 10 years at worst. Consequently, investments that increase and accelerate labor market integration would be economically beneficial. Policymakers around the world should be watching the decisions made in Brussels, Berlin and Ankara closely. The response of Europe and its neighbours is setting new precedents and standards for the handling of large movements of displaced people. Decisions being made during this year will have a major impact on the way such issues are handled globally in the future.

Germany needed to increase its capacity to process asylum claims efficiently, provide adequate housing, better integrate those with protection status into society, and keep careful track of the identities of asylum seekers in the country

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CORPORATE

Creator of A New Working Culture New working environments will be developed on a 20-hectare site with the creation of a production facility of the future that will make Wilo a digital pioneer of the pump industry

ilo, one of the world’s leading premium suppliers of pumps and pump systems for building services, water management and the industrial sector, employing over 7,600 personnel across the globe, has launched the greatest site development project in its company history. In 2022, to commemorate its 150th anniversary, this Dortmund-based pump manufacturer will reinvent itself, starting with a new plant structure on a 20-hectare site – Wilo Campus. New working environments that will be developed on a 20-hectare site, with the creation of a production facility of the future, will make Wilo a digital pioneer of the pump industry. This project, valued at roughly 200 million euros, will feature a brand new “Smart Factory” and “Wilo Future Office”, exemplifying the digitalisation of Wilo’s core business processes, from production and logistics to marketing and sales. The “Wilo Campus” concept presents modern, communicative workplaces and so-called “hot desks”. These are workstations that can be shared by several employees and can be chosen on a daily basis, as required. The intention is to remove barriers between individual workstations and create space for an open working culture. In Serbia, local subsidiary Wilo Beograd has been active for more than a decade and a half. With 16 employees and three offices – in Belgrade, Novi Sad and Niš – Wilo Beograd oversees the Serbian and Montenegrin markets. During the past 15 years of its existence on the local market, the company has amassed a huge number of satisfied customers and business partners, and works continuously to build trust in relationship with partners. Tetovska 72, Belgrade Tel: +381 11 2853 258, 2853 259, 404 38 20, 404 38 21, 404 38 22 office@wilo.rs; www.wil.rs

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Economic Empowerment And Housing Hand-In-Hand

German organisation HELP is today active worldwide with many aid and development projects, including in the Western Balkans region

ince the launch of its operations in Serbia, Help has enabled those in need to gain equipment and the ability to cope with change in line with the principle of the provision of self-assistance. Help’s assistance to employment and self-employment through in-kind grants, including vocational and professional training, have resulted in support for nearly 7,000 families in Serbia since 2002. During the same period, through social housing solutions, Help provided 1,281 families with adequate living space (refugees, internally displaced, local socially vulnerable residents and returnees). Furthermore, Help has also been developing its re-socialisation programmes since 2014. As a complementary activity to its re-socialisation programmes, Help is also improving the living conditions of the most vulnerable sections of the population through the securing of safe and decent housing, thus enabling affected families to focus on livelihood enhancement activities and serving as an initial impulse for further increasing their standard of living. Help’s activities on economic empowerment and the actualisation of the independence of individuals within socially vulnerable and marginalised local communities and national minorities are presently directed towards the most vulnerable areas, such as south-eastern parts of the country. Currently, thanks to projects funded by Germany, the EU and Sweden, Help is implementing economic empowerment and social housing solutions for vulnerable groups through the 2018-2020 period, with a volume of around 11 million euros. Those projects aim to improve living conditions through the creation of employment opportunities and the provision of durable housing solutions.

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DATA PROTECTION IN GERMANY

Securing Privacy, Security And Trust

In today’s global digital world, data flows have grown 45 times since 2005 and are projected to grow an additional nine times larger by 2020.For most enterprises, securing all those data flows is a tricky business. A company's livelihood depends on how effectively it can maintain compliance, optimise risk management and use root cause analysis to detect threats. The same can be applied to personal information

ransparency is a long established feature of the law of the European Union. It is about engendering trust in the processes which affect the citizen by enabling them to understand, and if necessary, challenge those processes. It is also an expression of the principle of fairness in relation to the processing of personal data expressed in Charter of Fundamental Rights of the EU. Under the General Data Protection Regulation (the “GDPR”), in addition to the requirements that data must be processed lawfully and fairly, transparency is now included as a fundamental aspect of these principles. Transparency is intrinsically linked to fairness and the new principle of accountability under the GDPR. It also follows from Article 5.2 that the controller must always be able to

demonstrate that personal data are processed in a transparent manner in relation to the data subject Nowhere in the world are there stricter requirements for data protection and privacy than in the EU – and within the Union, no other country stands for data protection more than Germany. If you want your business to be successful in Germany, you should know the reasons. They have to do with the country’s history. Germany has given rise to two political systems in which the surveillance of its own people played a fundamental part of control, manipulation and oppression. The shared experience was that no one could trust in their privacy, and deviant behaviour could be punished severely. Both systems are his-

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CORPORATE tory, and much has been written and said about the political reasons and implications. And the consequences are still very present today. Therefore, topics related to privacy, data protection and thus, security, cause stronger reactions in Germany than in its neighbouring countries or in regions of the world with even fewer cultural similarities. The Federal Republic of Germany is a federation of 16 states which are not just provinces but states with their own original sovereign rights and legislative responsibilities. The supreme power of the State is divided between the federal and the state governments. The federal system of government also affects the supervision of data protection. In Germany, there are a number of different authorities that are responsible for ensuring compliance with data protection laws and regulations. Data protection supervision in the private sector comes under the responsibility of the states. However, there is one exception: the telecommunications and postal services companies. Those firms are monitored by the federal government which has assigned that task to the Federal Data Protection Commissioner.

In Germany, by far the major part of administrative tasks and activities are performed at state level, and supervision of compliance with data protection provisions is a state government responsibility In most states the supervision is exercised by the Data Protection Commissioners, e.g. in North Rhine-Westphalia. A business company is supervised by the authority that has jurisdiction over the district where the company has its headquarters. In Germany, by far the major part of administrative tasks and activities are performed at state level, and supervision of compliance with data protection provisions is a state government responsibility. This function has been assigned to independent supervisory authorities, viz. the data protection commissioners. The State Commissioner for Data Protection is responsible for supervision over the state’s public authorities and organisations including local government authorities. In North Rhine-Westphalia, supervision of the public sector comes under the responsibility of the North RhineWestphalia Commissioner for Data Protection and Freedom of Information (BfDI). Public bodies in North Rhine-Westphalia for instance include the ministries, the youth welfare offices, the police, schools, municipal hospitals, savings banks, the Chambers of Industry and Commerce etc. Furthermore, the BfDI also supervises the State Parliament, the courts and

“Together With Passion“ CFND is among the leading logistics companies in Serbia, providing waterway transport services for all types of bulk, general and project cargo along the rivers Danube, Rhine and Main, connecting the Black Sea to the North Sea

FND is a logistics provider specialised in transport on inland waterways within the Danube basin. Founded in Belgrade in 2010, the company has since 2015 been part of the Rhenus Group, a global logistics services provider with an annual turnover of 4.8 billion euros. With its own modern and chartered fleet, CFND transports around 500,000 tonnes of goods annually. Around 70 per cent is transported between Hungary and Serbia, on the one hand, and Romania and the ports of the Black Sea, on the other. The remainder is dedicated to upstream traffic to Austria, Germany and the Rhine ports. CFND’s clients include the most important international trading companies specialised in agricultural goods and fertilisers, as well as various specialised project and oversized cargo companies. Besides inland waterway transport services, which represent the core business of this Serbian company, CFND also offers transshipment and storage services, as well as road and rail services alongside inland waterways. Thanks to Rhenus’s network of more than 40 locations throughout Europe, CFND can provide the full chain of inland waterway transport, with door-to-door services including pick-up and final delivery runs. Integration into this strong German group has enabled CFND to strengthen and expand its logistics services.

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the public prosecution services in North Rhine-Westphalia in so far as those institutions fulfil administrative functions. Obedience to data protection laws and regulations by federal authorities and other public bodies under federal government control is monitored by the Federal Data Protection Commissioner. Public organisations that are within the Federal Data Protection Commissioner’s remit include, inter alia, the Federal Ministries, the Federal Employment Agency and other federal agencies, the Federal Border Police, and the German Federal Police. PERSONAL DATA PROTECTION When it comes to personal data protection, Germany has been, and still is, the forerunner on privacy and data protection

Over time, the BDSG was subsequently amended and now contains separate provisions for data processing in the public and private sectors. In addition, Germany has specific privacy provisions for electronic information and communication services and yet another set of privacy rules for the providers of services that transmit electronic signals (the Telecommunications Act). Through these different laws, Germany transposed the EU (EU) Directives albeit in a very complex and differentiated manner. In keeping with the EU Directives, Germany generally prohibits the collection and use of personal data unless the law specifically permits this or the data subject has given his or her informed consent. German law also follows the Directives on issues relating to rights and remedies of data subjects, security requirements, restrictions on location data, minimisation of data and safeguards against transmitting personal data to third countries with lesser standards of protection. The provisions, however, often call for the balancing of competing interests – especially the right of free speech, as well as the public’s right to know and the application of the principle of proportionality. As a consequence, these provisions have resulted in extensive and varied case law. As this book focuses mainly on aspects of cybersecurity law, the authors of this chapter will often refer to online-related cases and laws. This does not mean, however, that the same principles do not apply to ‘offline’ cases as well. First and foremost, the GDPR extends its territorial scope, which means that non-European companies may also fall within its scope, making it the first worldwide data protection law. It applies to all companies worldwide that target European markets and in this context process personal data of EU citizens (irrespective of where the processing takes place). Secondly those that process data of European citizens in the context of their European establishments. The GDPR tightens the rules for obtaining valid consent to process personal information. Valid consent is one of the two possibilities to justify data processing, with the other being legal justification. The GDPR also introduces mandatory privacy impact assessments (PIAs). It requires data controllers to conduct PIAs where privacy breach risks are high to minimise risks to data subjects. This means that before organisations can begin projects involving personal data, they will have to conduct a PIA and work with the data protection offices to ensure they are in compliance with data protection laws as projects progress.

Before organisations can begin projects involving personal data, they will have to conduct a privacy impact assessments and work with the data protection offices to ensure they are in compliance with data protection laws

law. In 1970, the German state of Hesse enacted the world’s first Data Protection Act. German Federal Data Protection Act (BDSG) established basic principles of data protection, such as the requirement of a legal permission or the data subject’s consent for any processing of personal data. In 1983, the German Federal Constitutional Court held that the individual even has a constitutional right to ‘informational self-determination’. The background of this groundbreaking verdict was a census planned for the year 1983, which essentially focused on the census of the entire German population by the means of electronic data processing. The people of Germany were anything but pleased with this idea and – as a consequence – more than 1,600 complaints were filed at the Federal Constitutional Court against the census law that had been specifically adopted for the census by the German parliament. Finally, in December 1983, the German Federal Constitutional Court declared certain provisions of the Census Act to be unconstitutional.

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AHK ACTIVITIES

AHK SERBIA

The Largest And Most Important Bilateral Organization In Serbia AHK Serbia represents the interests of its member companies, provides informational support for their business operations and works on developing and improving the German-Serbian trade and cooperation in all aspects of the economy. With over 340 member companies, the Chamber represents the largest and most important bilateral organization in Serbia

ccording to a survey by the German-Serbian Chamber of Industry and Commerce (AHK Serbia) on the economic environment in Serbia, implemented annually among its member companies, 85 percent of its members would re-invest in Serbia. This is why AHK Serbia is a strong partner in creating a business environment and a leader in bringing together foreign and domestic businesspeople and investors.

SERBIAN CITIZENS SEE GERMANY AS THE MOST DESIRABLE INVESTOR

In late 2017 the German-Serbian Chamber of Commerce implemented its first survey on how Serbian citizens perceive the German economy on the one hand, and German investments in Serbia on the other. Germany is the most desirable investor in our country for Serbian citizens. This view was expressed by as much as one third of the citizens, with the main reason stated by nearly 40 percent of them being the economic, commercial and industrial development of Germany. The German-Serbian Chamber of Commerce will intensify the exchange of experiences among companies during the forthcoming period, to bring the success of the so-called German model of business to others, particularly since the citizens of Serbia hold it in very high regard. PROFESSIONAL CONFERENCES AND SUPPLIER INITIATIVES The German-Serbian Chamber of Industry and Commerce (AHK Serbia) has been organizing conferences for a number of years. The conferences were attended by delegations of German companies, most frequently from the fields of energy efficiency and renewable energy sources. The goal of these conferences is for Serbian enterprises and institutions to acquire informa-

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tion about the latest technologies from experts and companies from Germany, and to learn about the status of our market from renowned Serbian experts. The Chamber organized the professional conference “Biomass and Biogas in Serbia” on 20 March 2018, gathering over 150 representatives of Serbian and German companies and institutions. Leading experts from Germany and Serbia provided an overview of renewable energy sources in Germany, of key market trends, the potential for biomass use in Serbia, subsidization of the use of wood biomass. As part of a visit by an economic delegation led by the Minister President of the state of Baden-Wurttemberg Winfried Kretschmann, the German-Serbian Chamber of Industry and Commerce organized a panel discussion on 16 April about the conditions for doing business in Serbia, along with B2B meetings between German and Serbian companies, since many companies from federal German states, including Baden-Wurttemberg, recognized the economic potential of Western Balkans countries as a market good for both import and export, as well as a manufacturing location.

In June 2018 the Chamber and the Bavarian state Ministry of Economy and Media, Energy and Technology, organized a study trip from Serbian and Montenegrin companies on the topic of Hydro-power, focusing on small hydro-power plants as part of the programme “Bayern - Fit for Partnership” aimed at familiarization with the latest technologies and the utilization of hydro-power potential and solving certain challenges in the construction of small hydro-power plants. Endeavouring to connect the economies of the two countries, the German-Serbian Chamber of Industry and Commerce (AHK Serbia), German economic representations in WB countries (AHK), and the German Association for Management of Materials, Import and Logistics (BME e.V) have organized the “German Initiative for Finding Suppliers in WB Countries”, a regional B2B project held for the fourth year in a row for companies from Serbia and WB countries. More than 30 Serbian companies have held B2B meetings during the Suppliers’ Day in Frankfurt with a total of 133 companies from Germany. Germans are increasing looking for suppliers from Serbia because of the competitive prices and good quality, and they are particularly interested in the metals processing sector, automotive industry, materials made of plastic and metals, and electronic components.

DUAL EDUCATION As a leading force, the German industry has resisted numerous challenges precisely due to its well-trained workforce and dual education system that has been in use in Germany for nearly

a hundred years. AHK Serbia took active part in adapting and implementing the dual education system in Serbia. The Chamber is investing efforts into maximizing the quality of information and education for businesspeople regarding their responsibilities in the process of introducing dual education in Serbia.

SERBIAN VISIONS – THE ONLY MULTI-CONGRESS IN SERBIA – VISIONS FOR OUR BETTER TOMORROW The Serbian Visions Multi-Congress gathers 60 nongovernment organizations, professional associations, and institutions endeavouring to bring about a better future for the citizens and the country. During the third multi-congress held

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keynote speaker the renowned writer, journalist, translator and diplomat, Mr Ivan Ivanji, who held a speech entitled “An Extra on the Grand Stage”. during the weekend of 25th and 26th November 2017, presentations, panels, discussions, lectures and film screenings followed one another every two hours in all the conference rooms of the Radisson Blu Old Mill Hotel in Belgrade. Over 3000 visitors had the opportunity to choose and visit one of the 60 events that covered a broad range of current topics - from human rights, through European integration, to current economic issues. Serbian Visions plaques were awarded for the first time during the opening ceremony of the third Serbian Visions multi-congress: the plaque for the best vision was awarded to the Central-European Development Forum (CEDEF), while the plaque for the best social engagement was awarded to the Lawyers’ Committee for Human Rights - YUCOM. The fourth “Serbian Visions”event will be held on 24 and 25 November 2018.

REPRESENTATION OF FAIRS IN GERMANY

AHK MEMBERS’ DINNER

The business dinner for representatives of member companies is a very popular event among the members. A keynote speaker from the local economic-political scene opens the event with a brief presentation on a current topic, followed by discussion and a cocktail in a relaxed atmosphere, to intensify the exchange of experiences and opinions among members. On 6 March 2018 AHK Serbia had the honour of having as its

German fairs are known worldwide, because they attract a large number of visitors and exhibitors from all parts. The Chamber makes it possible for companies from Serbia to present their business at the largest German fairs, providing a number of advisory services and representing the international fairs in Munich, Cologne and Nuremberg (Toy Fair). SEMINARS AND EDUCATION AHK Serbia is regularly organizing a number of workshops, seminars, educational sessions and trainings for employees of member companies in the field of finance, law, management,

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human resources, or energy efficiency, with the aim of providing members with the opportunity to learn, meet one another, exchange experiences and discuss new topics and current issues as part of their numerous educational encounters. AHK WORKING GROUPS

Members of the German-Serbian Chamber of Industry and Commerce need not travel to Munich to feel the atmosphere of the largest national German festival. The 2nd AHK Oktoberfest was held on 13 and 14 October 2017, with the support of last year’s partner, the Messer Tehnogas AD company and numerous sponsors - member companies of AHK Serbia, within the premises of the company - event partner, gathering their numerous partners and guests from the business and public life of Serbia, enjoying this two-day event. The 3rd AHK Oktoberfest in Belgrade will be held on 04 and 05 October 2018, at the distributive centre of “K Hotels”, Pančevački put 38, in an original Bavarian setting with German beer, diverse Bavarian cuisine, recognizable dirndl dresses and contests of holding pitchers and drinking beer. The amazing atmosphere will be enhanced by the best-known local brass band, the Dejan Petrović Big Band.

The German-Serbian Chamber of Industry and Commerce is organizing a working group for HR managers of member companies of AHK Serbia, and a working group for the fields of energy efficiency, and communications and public relations. In addition to lectures, participants discuss all issues that were the topic of lectures and exchange experiences in an informal setting, greatly facilitating and improving their everyday working processes.

SPEED BUSINESS MEETINGS INCREASINGLY POPULAR IN SERBIAN BUSINESS CIRCLES

AHK OKTOBERFEST - THE BEST-KNOWN GERMAN FESTIVAL IN BELGRADE

Modelled after the best business practices of Western European countries, the concept of rapid business meetings of company representatives from various business sectors in a business setting represents a form of innovation in the method of expanding networks of contacts and initiating future cooperation between member companies of the organizer. This year’s Speed Business Meeting gathered around 60 member companies of the German-Serbian Chamber of Industry and Commerce (AHK Serbia), the Canadian-Serbian Business

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The Christmas reception, also a very popular event, gathers the members before the Christmas and New-Yearâ&#x20AC;&#x2122;s holidays. In a ceremonial atmosphere, with the presence of a keynote speaker - a high representative of political and economic life in Serbia, the annual cycle of work is rounded off. AHK FOOTBALL TOURNAMENT - FAIR PLAY FIRST OF ALL

Association (CANSEE) and the Swiss-Serbian Chamber of Commerce (SSCC), with the aim of direct introductions and improvement of cooperation between the member companies of the three business communities. AHK SOMMERFEST AND CHRISTMAS RECEPTION

The third AHK Football Tournament, a sports and recreational event gathering football teams from member companies during an all-day football and cheer-leading contest, was held on 9 June this year, with 24 teams taking part. Victory at the 3rd AHK Football Tournament was taken by the team of the Hemofarm A.D. company.

Every year, AHK Serbia organizes a Sommerfest in June, and a Christmas reception in December. The Sommerfest, a networking event, gathers the members in a relaxed atmosphere before a brief summer break. Dinner, music, prize competitions and cocktails comprise this event, popular among the members.

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INTERVIEW

FRANK BAUMANN, DIRECTOR, GOETHE-INSTITUT BELGRADE

Exchange Is The Basis FOR EVERYTHING “For Serbia, and as someone representing a foreign cultural institution, I would of course be happy if the most relevant events are those with some European or International components.”

he Goethe-Institut established its presence in Serbia in 1970 and always represented one of the most prestigious cultural institutions. The great culture of this great nation has for almost five decades played a notable role in cultural projects not only in Belgrade, but also throughout Serbia. We discussed the Goethe-Institut’s role today and future plans with Goethe-Institut Belgrade Director Frank Baumann The Goethe-Institut has had a very significant influence on Serbian culture for decades. How would you today, a year after you took the reins, evaluate cooperation? - Cooperation is the key word. Of course it’s important not only to implement projects, to support initiatives and festivals, or to improve language teaching services and so on, it’s also important to get recognised, to be visible and part of the culture scene in Serbia. This is what we are working on. During my first 18 months in Belgrade I had a chance

to learn a lot about Serbian culture, Serbian interest in my home country, and what is requested from the Serbian side as our contribution. We collaborate with many partners, some of them for decades, others for the first time, but the key task for success in my eyes is always to find a good balance between supply and demand. I mean, a lot of things are sought from us, usually very well-reasoned requests, which provide proof of the high competence of our Serbian partners. Let it be films, theatre plays, lecturers or Jazz groups: the suggestions we receive are often very appropriate. On the other hand, there are some things we want to – or have to – offer, in accordance with our rules and policies. Certain art exhibitions, photo workshops or film screenings we do on our own initiative. One way or another, we aim for maximum impact, good success and adequate media coverage. And even if not every shot hits, we hope to be relevant in a way with what we do, like everybody. After 18 months (and 48 preceding years), I think we are maybe not there, but we’re on a good path. Which cultural events and projects have you supported in Serbia during the past year and what can we expect in the period ahead? - Well, we aim to cover the whole variety of cultural fields every year, and we regularly fail in this, mostly due to limited resources. This is why we try even harder to access third-party budgets, like EU-funded projects, special initiatives or foundation funds, with some positive results lately, but it’s never enough, as you know. From around a hundred cultural programmes of the last year, I can mention at least our successful First Films First initiative, supporting young film directors from all over the region to bring themselves into the position to finish their first feature film. In music, we did some nice Jazz pro-

Goethe is also a brand – we think globally and act locally, and sometimes the other way round

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grammes, like the Nils Wogram’s Root 70 concert, or the fantastic Dorcol Sessions in Kosmodrom. One outcome of this was an invitation to five great Jazz musicians from Belgrade to the legendary Moers Jazz Festival in May this year. Culture is exchange, not a one-way street. And photography is another topic where we were particularly engaged. A spectacular exhibition within the Belgrade Month of Photography in April, small but fine workshops with artist Andreas Rost from Berlin, the large-scale Barbara Klemm / Erich Salomon exhibition in Podgorica (as we are also responsible for Montenegro) are just a few examples. We approach the next year with fresh approaches, including our 7th GoetheFEST Film festival, support for important festivals like BITEF, the Belgrade Jazz Festival, Beldocs, Ring Ring, KROKODIL, Devetka etc., the usual suspects of high importance and relevance, but also smaller and more remote events throughout the country, whenever and wherever possible. Germany’s culture and art scenes are second-to-none. Can we expect the arrival of some significant German artists? - Thank you, and of course you know that significance doesn’t naturally come along only with big shots. At the end of the day, it’s relevance (and budget) that determines the artists we invite. If you are expecting Rammstein, Gerhard Richter or Jürgen Habermas, I’m afraid I have to disappoint you. Well, you never know, of course. At this time, I’m careful with names, as long as no contracts are signed. Follow us on Facebook, please, and let yourself be surprised!

bia, the Belgrade City Library, the University Library “Svetozar Marković”, the City Library of Novi Sad and the Library Department at the Faculty of Philology in Belgrade are among our partners. All collaboration happens to bring some of the best German library experts to Serbia, in order to exchange experiences and network with Serbian colleagues for mutual benefit. Which cultural events in Serbia, and primarily Belgrade, could you assess as being European or global? - That’s a bit of a tricky question. Which cultural events in Germany are the most important, which have global relevance? And what does that actually mean? Are Berlinale or Documenta more important than, for example, Cologne Carnival? For some they are, some prefer the carnival. Others don’t care. I would like to keep it the other way around, asking people which events they would rae as having the greatest importance. For Serbia, and representing a foreign cultural institution, I would of course be happy if the most relevant events are those with some European or International components. Exchange is the basis for everything, and then it’s of minor importance if someone likes to mention BITEF or Oktobarac or the Museum of Contemporary Art: relevance, like beauty, lies in the eye of the beholder. Regional embedding is important, because the more “global” something gets, the more it might lose its authenticity. EXIT is certainly a great festival of international relevance, but what is “Serbian” about it? It’s a brand, I think. Goethe is also a brand - we think globally and act locally, and sometimes the other way around.

The Goethe Institut’s library has always been known for having the best possible choice of literature. To what extent have you digitalised your capacities? - Yes, this is still our aim. It’s a great library, especially now after renovation, with its full size windows, allowing full size transparency, from both inside and outside. I was told that there are up to 70,000 passers-by on Knez Mihailova every day… Regarding digitalisation, the Goethe-Institut doesn’t have a special focus on this, nor on archiving, but still we strongly promote digital reading and offer a variety of digital services, such as the so-called eLibrary. Our physical library stock is slightly over 12,000 titles, while our eLibrary offers more than 20,000 titles. Apart from that, our library has had a self-check service since 2015. And the latest acquisition we can offer, as of 2017, is a user-friendly, cloud-based library software named Koha. And, like all departments of our house, the library collaborates with important partners in Belgrade and throughout the country: the National Library of Ser-

From the perspective of a fellow citizen of Belgrade who’s simultaneously a foreigner, how would you assess life in Serbia, particularly Belgrade, not only in terms of culture, but generally? - What I see and learn about every day is a fantastic microcosm. Belgrade is an interesting, vivid, beautiful and sometimes not so beautiful mixture of places and faces, kafanas and offices, traffic jams and open highways, dark underpasses and sunny footpaths. It’s obvious that there are lots of hidden treasures yet to be discovered between Dorćol, Senjak and Ada Ciganlija. But that’s only one part. I’ve got friends here. Listening to them is the real key to understanding life in Serbia. You are asking about my perspective. Like elsewhere, a little cash in your pocket makes it easier to stroll through the streets. You can easily feel included, even if you don’t speak the language fluently. I like that flow, whenever I can catch it.

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The Most Enchanting Spots To

Watch The Sunset

BRANDENBURG GATE

BERLIN

Berlin has lots to offer by day and by night, but the moments of sunset might be the most breathtaking. Berlin is not Barcelona, Miami or Rio. Most of the year the weather is poor. Berlinians donÂ´t have beaches to hang out and they have to pack all their outdoor activities into some short weeks a year

ut, it is like that it turns out that the Berliners live out the summer to the fullest. One way to do so is pretending to live on the beach with a big promenade where you can watch people passing by, sip some cold drinks, meet good friends, listen to some cheesy music or just dream away while watching the sunset.

TEMPELHOFER FELD This is one of the most special places in Berlin, and watching a sunset here has a kind of vast, otherworldly quality to it. Tempelhof is the defunct airport of the GDR. Today its former landing strips provide a unique track for joggers, cyclists and skaters. In summer the huge area,

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TEMPELHOFER FREIHEIT

which includes a permaculture and community garden, is transformed into a festival-like affair, as friends gather with music, food and beer and give thanks to the last light of the setting sun. LANDWEHRKANAL This gorgeous, grassy banked canal draws hoards of people to its edge during the closing hours of the day. Watching the light turn the water into dreamy pinks and oranges is something special, and the collective atmosphere, when

the sunset hits your face, is tangible. There are a few options to choose from along the riverside; Admiralbrücke tends to draw a lot of people playing the guitar, while the Hobrechtbrücke or Glogauer Brücke offer great sundowner respite, and you can always trust in the Späti round the corner when you need a refill. ALT-STRALAU Not far from Elsebrücke, this former east Berlin neighborhood is settled in a bank of the Spree river. The sunset here by the

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KLUNKERKRANICH

TV TOWER

Spree riverbanks is stunning. Find a spot at Regattaufer Park and watch this spectacle of nature. Gaze at the boats floating, coming and going, and enjoy the scenic views of the Island of Youth on the other side. BRANDENBURG GATE One of the most famous and important monuments in Germany. A former symbol of the divided city that is now a symbol of unity. It was built in a neo-classical style in the 18th century. It’s a beautiful structure and a must-see while in Berlin. It’s also breathtaking at night when it is all lit up and sunset hits your face. KLUNKERKRANICH Klunkerkranich is an amazing rooftop restaurant and events space that sits on top of the Neukölln Arcade. It boasts incredible views over the city, and having a beer among the quirky, up-cycled decor and furniture and plants is a perfect way to end a day watching the sunset. They also host live concerts

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MODERSOHNBRÜCKE WITH A FULL VIEW ON THE WARSCHAUER STRASSE

TEUFELSBERG

and bring in some of Berlin’s best DJs. Usually, a small donation that goes towards their efforts will get you inside. LANDWEHRKANAL

OBERBAUMBRÜCKE

TEUFELSBERG The Radio Tower on the ICC Exhibition Grounds in Grünwald is open to the public every evening except Mondays until 11pm. Here you have majestic views over the forest and River Havel, and panoramic views of the Siegessäule and the TV Tower. It’s a pretty heavenly place to usher in the evening. OBERBAUMBRÜCKE This beautiful, historic bridge offers sun seekers spectacular views of the Spree river and Berlin’s skyline. There are always street musicians adding more atmosphere to the moment while boats cruise along the river and into the sunset – it’s pure romance. TV TOWER This one’s going to cost you a little more in money and patience and you’ll have ti navigate the long queue, but once you get there golden light will be streaming into your view from the tallest building in Berlin. The viewing deck is around 200 square metres and open until midnight. Make sure to arrive early – or the sun might go down without you.

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KEY MESSAGES

Scepticism Regarding Border Changes H.E. THOMAS SCHIEB, German Ambassador to Serbia

Serbia’s EU accession cannot happen until relations with Kosovo have been clarified. The sooner both sides - with the support of the EU - agree on a normalisation agreement, the better. Germany is very sceptical of changing borders along ethnic lines

Re-Industrialisation Key To Growth And Well-Being MARTIN KNAPP, Executive Member of the AHK Serbien Board of Directors

For Serbia, re-industrialisation is the only chance to catch up with the Central European economies and in order to do that huge investments in modern technologies are needed. It isn’t important whether these investments are made by foreigners or local companies, the main thing is that something happens in that direction. According to some estimates, the trade exchange between Germany and Serbia could reach €5 billion this year. However numbers need to be examined closer if we want to understand the story behind it.

German Investments Contribute Significantly To Serbia's Economic Development MARKO ČADEŽ, President of the Chamber of Commerce & Industry of Serbia Serbian-German economic cooperation shouldn’t only be measured according to the volume of the trade exchange, which has respectable dimensions of scale. Links between companies from the two countries have increased significantly over the last few years, which is testified to - among other things - by the decisions of German companies to reinvest in Serbia, open research centres and include Serbian companies in their production and distribution chains

Sound Finances Key To SDG Implementation DAVID LAHL, Project leader, Public Finance Reform – Financing the 2030 Agenda Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH Our objective is to support the Serbian government in its efforts to improve good financial governance in the context of the 2030 Agenda. Adequate capacities to plan and execute budgets, as well as transparency, accountability and participation in budget processes, are crucial to the efficient implementation of the Sustainable Development Goals. Good financial governance is key to the effective and efficient implementation of the United Nations’ Sustainable Development Goals (SDGs).

Profound Reforms Cannot Be Swift But Well Considered DR RONALD SEELIGER, President of the German-Serbian Chamber of Commerce (AHK Serbien), Vice-President of the STADA Group and CEO of Hemofarm Serbia is in the process of overall transformation, and this kind of total makeover takes time, requires expertise and seeks patience. It is of great importance for Serbia to become a member of the European Union, and in order to achieve this it has to continue conducting structural reforms and changing certain patterns of doing business and behaviour thoroughly and in the long run.

An Attractive Business Environment Speaks All Languages BOJAN PREDOJEVIĆ, Managing Director at profine GmbH (profine d.o.o.), AHK Serbien Vice President

Good political relations with the countries of origin of potential investors are useful, but investments in a market economy are not made for political reasons - rather solely out of economic considerations.

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KEY MESSAGES

Exchange Is The Basis For Everything FRANK BAUMANN, Director, Goethe-Institut Belgrade

The Goethe-Institut established its presence in Serbia in 1970 and always represented one of the most prestigious cultural institutions. The great culture of this great nation has for almost five decades played a notable role in cultural projects not only in Belgrade, but also throughout Serbia.

Investors Value The Cake More Than The Cherry CHRISTIAN BRAUNIG, Managing Partner at Confida Consulting, AHK Serbian board member

For investors, factors such as a convenient location, the availability of suitable employees, legal certainty and political stability are much more important than incentives.

Working In The Balkans Is Still A Complex And Expensive Business DIJANA PESKIR, General Manager of STIHL d.o.o., AHK Serbien board member

There are many barriers that should be removed to make the Western Balkans a kind of a ‘light EU’, in which at least the biggest obstacles to the free exchange of goods and services would be eliminated.

More Trained Specialists Needed UDO EICHLINGER, CEO at Siemens d.o.o, AHK Serbien Vice President

Nowadays, when much more complex manufacturing processes are being relocated to Serbia, it is already becoming difficult to find the right people. Vocational training may help, while we are planning something bigger in this respect in Kragujevac.

Excellent Relationship With The Local Government DIRK BANTEL, CEO of Panasonic Lighting Devices Serbia d.o.o., AHK Serbien board member

It is very important that the state trusts the municipalities and gives them as many responsibilities as possible when it comes to local economic development.

We All Suffer Equally So Competition Remains Unaffected DRAGAN SIMOVIĆ, CEO of Gebrüder Weiss Serbia, AHK Serbien board member

Outdated railway infrastructure, long waiting times for trucks at borders, a lack of transport permits for Austria and, last but not least, the migration of truck drivers to countries where they can earn more, are all impacting negatively on trade within the region.

Satisfied Companies Reinvest ŽIVKO TOPALOVIĆ, General Manager at ContiTech Fluid Serbia d.o.o., AHK Serbien board member

A lot of German companies, including Continental, have more than one company in Serbia. The management certainly wouldn’t have done this if it weren’t satisfied with our factories in Serbia.

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KEY MESSAGES

We Embraced the Opportunities Serbia Offers MILAN GRUJIĆ, Managing Director at ZF Serbia d.o.o. (Ltd.), AHK Serbien board member

We chose Serbia and Pančevo after a thorough assessment process. Outstanding infrastructure, sufficient space for potential subsequent expansion, close proximity to Belgrade and a skilled labour force were important factors shaping our decision.

Storage As A Perfect Mosaic JOSO BIJELIĆ, Director, InTeSe GmbH & Co.KG

The racking systems of InTeSe meet all quality standards and are certified according to German standards, which has been recognised by numerous local and foreign companies operating in Serbia.

Faster Development With Expert German Assistance MILAN KRSTIĆ, Business consultant, AHK

The aim of German experts engaged through the Senior Expert Service is to help and advance the organisation of the operations of small and medium-sized enterprises, public institutions, associations and educational institutions, both in Serbia and other developing countries.

Serbia – a key investment MILAN GRUJIĆ, Managing Director, ZF Serbia, is one of two Managing Directors of ZF in Serbia and responsible for the commercial side of the new ZF operation

This June saw the German company ZF Friedrichshafen AG begin construction of a factory for the manufacture of drive systems for electric vehicles in Pančevo.

Comprehensive Approach To Each Building

MLADEN VUKANAC, General Manager of Sauter Building Control Serbia d.o.o. (Ltd.)

The decades of our company’s direct presence in Serbia have influenced the development of the automation market in Serbia in many ways and brought it in line with global trends

Government Support Means A Lot To Us CLEMENS SACHS, Director, Leoni Wiring Systems Southeast d.o.o.

Innovation – The Main Driver

JOVANKA JOVANOVIĆ, General Manager, Robert Bosch d.o.o.

Besides contributing to the development of the automotive industry and growth of the Serbian GDP, an important aspect in which Bosch helps the development of the Serbian economy is to promote employment, both in Pećinci municipality and in general intensive employment related to IT projects.

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