Serbian Strategy 2022

BY TANJA MIŠČEVIĆ, SERBIAN MINISTER OF EUROPEAN INTEGRATION

We’re Returning To The Essence OfThe“EuropeanPath”

Success in the European integration process cannot today be measured on the basis of major strides towards membership, or the opening of clusters that’s incomprehensible to citizens. The time has come for us to get back to the basics of European integration, and the most important reason we embarked on the “European path”. The reason are the benefits and improvements for our people according to the benchmarks of European regulations and standards

The circumstances, and therefore also the challenges in which the European integration process unfolds in Serbia and around our entire region, have never been more demanding and complex over the past few decades. The reason lies least of all in the change to the methodology of membership negotiations. There are few generations that have witnessed major and historic changes during their lifetime. Since the end of the Cold War, when we were silent observers, our generation is now on route to witnessing another change of epochal propor tions. This time around, we have an opportunity to contribute to navigating such changes as painlessly as possible. Changes to the economic, social and security map of Europe impact on

the goals that we set being more realistic, and even more existential. We find ourselves at the end of a year in which energy security will not be assessed purely on the basis of success in the costly diversification of sources of energy supplies, but rather by securing primary ener gy sources to enable the functioning of our economy and the satisfying of the basic needs of our citizens. And the European integration process is no exception either. Success in the European integration process cannot today be measured on the basis of major strides towards membership, or the opening of clusters that’s incomprehensible to citizens. The time has come for us to get back to the basics of European integration, and the most important reason we embarked on the “European path”. The reason are the benefits and improvements for our people according to the benchmarks of European regulations and standards.

What is most important to us?

First and foremost, advancing the rule of law. This is a priority of this government and it is our task to achieve all the benchmarks of the accession process as soon as possible, primarily in order for our citizens to see that implementing planned reforms secures a sig nificantly higher level of legal security for all of us, as well as greater trust in public institutions.

On the other hand, it is also important for our European partners to see the decisiveness

of all branches of government for Serbia to be more functional and stable.

In cooperation with the Venice Commission, work has continued on the drafting of judicial and prosecutorial laws that are expected to be adopted at the beginning of next year, in accordance with the deadlines stipulated by amendments to the Constitution. The autono my of the judiciary and the independence of the public prosecution will this be strengthened. These changes, according to which the selecting of judges and prosecutors will no longer be under the jurisdiction of the National Assembly, but rather will be the responsibility of the High Council of the Judiciary and the High Council of the Prosecution, will further contribute to justice being more accessible to all citizens of Serbia, and thus also contribute to improving the standing of judicial professions in society.

These changes to the judicial system will impact on more effectively combatting cor ruption. The next important document that we are starting work on is the drafting of the new Strategy for the fight against corruption, which will be adopted during the first half of next year.

The most important factor for the third important issue in this area, freedom of the media, is certainly the continuation of work on amendments to the Law on Public Information and Media and the Law on Electronic Media. These regulations should secure a favourable

environment for freedom to access informa tion, the flow of ideas and opinions, and the realising of the public interest, which will lead to an orderly and rich media market. Likewise, it will also result in the implementation of more transparent and fairer co-financing of media content in the public interest, as well as increasing transparency in media owner ship and advertising, while strengthening the independence of the media regulator.

In terms of visa liberalisation, work will con tinue on further alignment with the EU’s lists of third countries that require a visa, particularly those deemed as posing a risk of irregular migration, for the sake of the security of the EU, but above all for the security of Serbia. In parallel with that, we will work on an important segment of strengthening regional cooperation in the struggle to combat migrant trafficking.

When it comes to financial support from the EU, we are especially grateful to the European Union that it managed to find a way – even under the conditions of a serious energy cri sis across Europe, and in addition to regular support for the implementation of reforms in the domain of energy – to also approve an additional urgent budget aid grant amounting to 165 million euros. We will use that money to mitigate the negative consequences of the crisis on citizens and the economy, particularly on small and medium-sized enterprises.

We also had an opportunity to hear the willingness of the EU to designate addi tional funds of 500 million euros for the implementation of priority infrastructure projects in the region, and we expect with great optimism that decisions will be made as early as the Summit of Heads of State and Government in early December enabling us to start implementing projects that we’ve prepared to finance with EU grants.

For the Economic and Investment Plan for the Western Balkans, a decision was made back in August to provide grants amounting to more than 220 million euros to ensure the implementation of projects in the areas of transport, energy and digital connectivity, as well to improve healthcare infrastructure. We expect new decisions to be brought by the end of this year that actually mean that we will further develop our roads, energy and environmental facilities, which are of huge importance to our sustainable development and connectivity with our neighbours.

This is also an opportunity for me to mention another important segment of the accession

We are especially grateful to the European Union that it managed to find a way – even under the conditions of a serious energy crisis across Europe, and in addition to regular support for the implementation of reforms in the domain of energy – to also approve an additional urgent budget aid grant amounting to 165 million euros. We will use that money to mitigate the negative consequences of the crisis on citizens and the economy, particularly on small and medium-sized enterprises

process, and that is the segment represented by cross-border and transnational cooperation programmes, which Serbia also participates in under the multiannual financial framework 20212027. These ten cooperation programmes with neighbours Hungary, Romania, Bulgaria, Croatia, Bosnia-Herzegovina, Montenegro and North Macedonia are supplemented by transnational cooperation programmes for the Adriatic-Ionian and Danube regions, as well as the interregional cooperation programme among cities (URBACT). Through all these programmes, over the course of the next seven years, users from Serbia and the other participating countries will have at their disposal almost 400 million euros – these funds will be used to connect people, work together on development and thus improve understanding and coexistence.

In order for us to observe the scope of the results of these programmes, I will remind you that 1,366 projects with a total value of over 400 million euros have been implemented to date, which included the participation of as many as 1,660 institutions and organisations from local communities in Serbia.That’s how, for example, we reached a total of 878 kilometres of constructed

or modernised roads, pedestrian walkways or cycle lanes, financed more than 180,000 units of various equipment that’s used, among others, in hospitals, schools, museums etc. More than 67,000 people have received training for various additional skills, while more than 220 facilities have been reconstructed or constructed in local communities on both sides of the border. What is important to us is that the European Commission has approved almost all programmes for the next stage, some of which have already started being implemented, and the first public calls to submit project proposals are currently underway for Ro mania-Serbia programmes and the transnational programme for the Danube region.

These actually represent just a selection of the elements confirming that European Union accession is a process that has many aspects that are important to the daily life of citizens, which is why it’s particularly important for us to improve communication on the significance and benefits of Serbia’s EU membership. Civil society, and all citizens of Serbia, have an open invitation to help us in this task, in order for everyone to better understand what the European integration process actually means.

WITH H.E. MR. EMANUELE GIAUFRET, HEAD OF EU DELEGATION TO SERBIA

Common Energy Future

At the recent summit of Western Balkan countries, held within the scope of the Berlin Process, the EU promised assistance to the region worth a billion euros, which represents a continuation of the process of shaping our common energy future. That’s why we first requested that Serbian Mining and Energy Minister Dubravka Đedović comment on the importance of this announcement for Serbia.

“The costs paid by the state to purchase electricity and energy products over recent months, under conditions of record prices on the stock exchanges, are extremely high, and any financial support that makes it easier for us to endure this winter is important for Serbia. We are grateful that the EU, even under the conditions of a worldwide energy crisis, recognised the importance of supporting the Western Balkan countries. That support is important not only when it comes to dealing with short-term rises in costs, but also when it comes to continuing to provide support to projects that will boost our energy security over the long term, as is the case with diversification of gas supplies,” says Minister Đedović.

EU support during this period is important because it shows solidarity with candidate countries that aren’t yet EU members, but that are on the road to European integration, adds the minister.

“With the signing of the Sofia Declaration on the Green Agenda for the Western Balkans, Serbia, together with the region’s other coun tries, has accepted to work together with the EU to achieve European targets in the domain of climate change, which is a serious challenge for us,” explains our interlocutor. “Countries enter the energy transition pro cess from different positions, in the sense of their energy mix, the potential economic and social costs associated with the transition process, as well as unequal opportunities to access European funds. Among other things, countries that aren’t EU member states are at a disadvantage compared to EU countries that have similar levels of coal in their energy mix when it comes to the kind of support they can receive through European funds. That’s why adequate support from the EU and financial institutions – for the implementation of targets in the areas of climate, energy and energy transition – is important not only for

Cooperation with the EU in the area of energy is important independently of the energy crisis. It was important prior to the crisis and will still be important when the crisis abates

Photo: Nebojša Babić

PARTNERSHIP

We are grateful that the EU, even under the conditions of a worldwide energy crisis, recognised the importance of supporting the Western Balkan countries

Serbia, but also for the other countries of our region, in order for this transition to be financially sustainable and socially equitable.

What are the implications of this process of building a common energy future when it comes to Serbia’s sources of energy supplies and the country’s energy independence?

- The energy crisis has caused problems that have extended beyond the scope of the energy sector and individual member states, which is why many of the measures implemented during the previous period were adopted at the EU level. Moreover, in crisis situations, energy security doesn’t depend only on what each country can do for itself, but rather also depends on cooperation with other countries to a large extent, and on the existence of infrastructure that enables the transport of energy and energy products. That’s why one of Serbia’s main responses to the energy crisis, apart from strengthening its own capacities and increasing its reserves of all energy sources, has been to connect with other countries and participate in initiatives that can ensure our increased energy security.

Hungary is supplied with Russian gas via Serbia, as a transit country, and part of our gas reserves have recently been held in stor age facilities in that country, which provides Serbia with additional security in more easily traversing the winter period. It is also planned to begin construction of an oil pipeline to Hungary, with which we will also ensure the greater security of crude oil supplies. Public company EPS, together with Elektroprivreda Republika Srpska [Bosnia-Herzegovina], is building the Buk Bijela hydroelectric power station, which will bring an additional capacity of 115 MW to our power system. With EU sup port, a gas interconnector is being built with Bulgaria, which will enable gas from Azerbaijan and the region of the Caspian Sea to reach Serbia, as well as gas from the LNG terminal in Greece, while we are also planning to build a gas interconnector with North Macedonia.

TRANSITION

The road to green transition is a long-term commitment of Serbia and the reality is that we will increase the share of renewables in the energy mix over the coming decades

These projects are all important to increasing Serbia’s energy security and strengthening its resilience against possible supply disruptions, but also to strengthening our country’s role in the broader context of ensuring energy security across the region.

COOPERATION

One of Serbia’s main responses to the energy crisis, apart from strengthening its own capacities and increasing its reserves of all energy sources, has been to connect with other countries

from thermal power plants, i.e., almost two-thirds of our energy is currently produced from coal. We unequivocally need to decarbonise our energy system, because that’s the only way it can be sustainable over the long term. The decarbonisation plan must be realistic and

When it comes to the implementation of targets in the areas of climate, energy and energy transition, adequate support from the EU and financial institutions is important not only for Serbia, but also for the other countries of our region, in order for this transition to be financially sustainable and socially equitable

Despite strong challenges, the EU is sticking to the stance that there is no alternative to Green Transition. How capable is Serbia, which in the sphere of energy is still dependent on coal to a large extent, of conducting this transition at such a sensitive economic juncture? - The road to green transition is a long-term commitment of Serbia and the reality is that we will increase the share of renewables in the energy mix over the coming decades. However, we must be aware that our basic energy comes

sustainable, in order for Serbia to preserve its energy stability at all times. Wind and solar energy are important from the perspective of environmental protection and potential capacities that can be built, but we must take into account that this production is variable, and that the needs of consumption are constant.

That’s why priority projects in the field of electricity generation include the construc tion of reversible hydroelectric power plants Bistrica and Đerdap 3, which also serve as

Photo: Nebojša Babić

energy storage facilities. The construction of new capacities should also be harmonised with the development of the power trans mission and distribution network, in order for the development of the energy sector to be sustainable, efficient and economical, and for this all to result in us having a higher degree of energy security and safety.

We currently have more than 500 MW of energy generated by renewable sources. The plan is to launch long-delayed auctions next year, which will secure a new 400 MW of electricity from Renewables in our system. We are simul taneously working to improve the regulatory framework, so that over the medium term the network will be able to receive eight times the current capacity. One important question is whether this RES-generated electricity will be exported, or whether the new capacities will contribute to electricity being beneficial to citizens and the economy. I believe we will find a model that’s in the best interest of citizens, but that is also sustainable for investors.

The process of improving energy efficiency is unfolding in parallel, through various projects that have received financial assistance from the state, including a programme of subsidies for households to replace windows and doors, improve insulation and install solar panels. Under the auspices of the National Programme for the Energy Rehabilitation of Residential Buildings, Family Houses and Apartments, subsidies were secured for approximately 25,000 households, with the Ministry of Mining and Energy, together with local self-govern ment units, allocating 2.66 billion dinars. In cooperation with the World Bank and the EBRD, conditions have been secured for the continuation of this project, with which more than 100,000 households will be covered.

You stated recently that, thanks to its mineral resources, Serbia will be an important country in the period ahead, on both the Eu ropean and world markets of rare minerals. What does that mean in practical terms?

- Serbia is a country that is extremely rich in mineral resources, in comparison to its size, including those mineral resources defined by the European Union as being critical. That list, which since 2020 has contained a total of 30 raw mate rials and minerals, includes mineral raw materials and materials that are able to meet the needs of new, environmentally friendly technologies

Nebojša Babić

I believe that the least we can do when it comes to the mineral wealth of our country, which also belongs to future generations, is to know precisely what we have available and what our potential is like when it comes to mining

aimed at developing renewable energy sources, storing electricity and new “smart” technologies that are important for economic development both today and in the future.

I believe it is a great advantage for Serbia that it has at its disposal some of those critical raw materials, which also includes lithium – a substance that’s unevenly distributed around the world and possessed by only a few coun tries. When you have potential, you also have possibilities to consider whether you will take advantage of that potential and in what way, while considering the opinions of everyone –from experts to ordinary citizens – and having all the relevant information, including studies, analyses and experiences from around the world. I believe that the least we can do when it comes to the mineral wealth of our country, which also belongs to future generations, is to know precisely what we have available and what our potential is like when it comes to mining. Our reserves of lithium, or lithium carbonate that can be obtained through the processing of ore, amount to 10% of the world’s needs or 60% of the needs of the EU. If we were to utilise the entire value chain in production, we

could produce around a million electric vehicles, which would mean more than 10 billion euros for our GDP. That’s the responsibility we’re talking about, but protecting biodiversity, the quality of human life and the environment are also our responsibilities.

In your opinion, what is essential for these kinds of major mining endeavours to be carried out with full adherence to high en vironmental standards?

- The state’s task is to work in cooperation with the mining profession to enable us to utilise the wealth that we have in a rational, responsible and efficient way, preserving nature and taking care of the community. A lot has changed in mining, in terms of the technologies that are used and enable much better control and the reducing of risks to the environment caused by mining. Mining plays an irreplaceable role, not only when it comes to its contribution to GDP and the huge number of people working in mining companies, but also in the broader context of energy independence and further economic and business development. In this sense, the key point containing the greatest possibility to influence the situation is for mining activities to be carried out in a sus tainable way. Our goal should not only be to preserve mining, but rather to enable further development and modernisation, in which one of the most important things is to constantly raise requirements and criteria when it comes to environmental impact. The lithium issue is politicised to the extent that we forget to dive down to the essence of the problem, and that is whether we can exploit it while adhering to all environmental standards. An environmental impact assessment study hasn’t even been done yet; we haven’t even started dealing with that, because the project has been halted. Geological research is important because it shows just what mineral raw materials we have and in what quantities, but that’s just the first in a series of steps and conditions that must be fulfilled in order to achieve the exploitation of a resource from confirmed reserves. It is precisely due to the fact that these are such sensitive decisions that we must be open to dialogue, at the very least, to hearing all the facts, checking out the studies and world experiences, and first and foremost to hearing the opinion of experts from the profession, which is the most authoritative in this case.

Photo:

EMIL SOVILJ, CEO,

D.O.O. (LTD.)

Growing With NIS And Learning From NIS

company has been developing in accordance with new requirements.

Working with and for NIS enabled you to gain valuable experience in the construction of industrial facilities. Does this mean that you are today able to completely design and build storage tanks for oil, petroleum derivatives and LPG, and does NIS remain an important investor for you?

We have signed a contract for the reconstruction of the com plete oil and gas terminal in the city of Niš, which is the largest reconstruction project of storage facilities owned by NIS - announces Energotehna’s Emil Sovilj proudly.

When you established Energotehna, your primary focus was on the construction of gas pipelines, with the work subsequently diversifying over time. How is the company organised today?

- The base of Energotehna has always been the construction of energy facilities. We are today much more recognised as a company that’s able to offer a complete solution to problems when it comes to the implementation of those kinds of projects. With the obtaining of a license for the construction in the oil and gas industry storage facilities, which is issued by the Ministry of Construction, we expanded our activities to include civil works. We are still active in the energy sector, but the projects are now much larger and more demanding. And the

- Gazprom, as the majority owner of NIS, is our biggest energy company and our biggest partner, alongside which we grow and learn. We were awarded in 2018 as the best works contractor at Gazprom in three out of four blocks within the NIS. We have just signed a contract for the reconstruction of the complete oil and gas terminal in the city of Niš, which is the largest reconstruction project of storage facilities owned by NIS and implies civil and mechanical works with the delivery of materials. This project was requested with a completion deadline of November 2023.

The new Government of Serbia recently announced the reform of the energy sector, which will include investments of 12 billion dinars. What should this reform bring us; will it reduce energy dependence?

- We are a market that will always be energy dependent, but we can use that dependence to our advantage, provided we are clever enough. The sooner we grasp the fact that all the surrounding economies are dependent on energy sources, and that they lack their own capacities to satisfy those needs, we

We should enable neighbouring countries to diversify their energy portfolio through Serbia. We will thereby also become more energy independent, as we will have the possibility of procuring energy products from several sources. If we produce energy ourselves, which is good, that will still be just one supplier (ourselves). But if we have many potential suppliers, we will increase the security of supply and reduce the purchasing price for energy, because we will be able to choose from whom we buy. In accordance with that, I believe that 12 billion should be partly spent on storage facilities, partly on transport and partly on production. We will consequently always have a choice of directions to procure energy

will realise that the winner isn’t the one who possesses the capacity to satisfy their own needs, but rather the one who is essential to others meeting their needs. By adopting the stance that we are a transit country – in terms of the transit of people, goods and energy – we will gain a good strategic position and become essential to both the East and the West. It is precisely in light of this fact that I believe an emphasis should be placed on the development of transport and storage capacities.

Energotehna is a domestic Serbian company that provides services and engineering solutions for the construction and mechanical industries. According to the company’s CEO, their success is due to flexibility, learning, professionalism, dedication, and relations towards employees, partners and clients

OnlyReforms Can Overcome Crisis

During this time when one global crisis is followed by the next, it is extremely important to select those reforms that will help pre serve economic growth, jobs and steps that move the society closer to European integration. We discussed this issue with NALED Executive Director Violeta Jovanović.

What are, from your perspective, the most important topics that you’re dealing with today and to what extent has the current economic and political situation impacted on the order of priorities?

- Digitisation is one of the topics that inevitably weaves its way through different segments of our activities, and the pandemic has additionally

highlighted its importance and effectiveness, first and foremost in the providing of public services to citizens and the economy. In that sense, the development of digital infrastructure and the popularisation of electronic services, the modernisation of healthcare and municipal services – through the introduction of advanced digital solutions – are activities that have been in our focus for a number of years and which we are working on with dedication in order to cre ate opportunities for new economic activities, reductions in costs and improving the efficiency of the work of the public and the administration with the aim of accelerating development.

Rising inflation and reduced economic activity put pressure on legal business operations and prompt businesses to flee to the zone of the grey

economy, so we are continuing the systemic fight against the grey economy that began in 2014 by now providing support to the government in this undertaking through our work on the proposal of a new programme to combat the grey economy and an accompanying action plan. We expect the adoption of this programme to be one of the first activities of the new government, as that’s a key strategic document in securing fair and equal market conditions.

At this time when environmental topics are gaining ever more significance and attracting increasing public attention, environmental protection and sustainable development represent an unavoidable sphere of our in terest. Testimony to this is also provided by the fact that providing support for the implementation of the Green Agenda is one of the key reform priorities for the next three years. The collecting and recycling of various waste streams – such as batteries, light bulbs, glass and other packaging, food waste – and the implementation of smart deposit systems

projects with which we want to contribute

are

Major changes and turmoil at the planetary level, such as the COVID pandemic, war in Ukraine, ever-present inflation, but also global environmental problems, are challenges with effects that could be mitigated or overcome through priority reforms that NALED is actively working on implementing and will be engaged in during the following period

EURO INTEGRATION

The European Union represents an inexhaustible source of best practices in practically all areas that are of importance to the operations of NALED, which we also endeavour to apply in the domestic environment

to the establishing of sustainable systems for the collection and reuse of materials, as well as the establishment of a circular economy in our country.

In an ever-more competitive race to attract investment, it is necessary for us to think about our region in the way investors see it, and that is as one market. That’s also why it’s important for us to work as much as possible to create a level playing field for doing business and on the procedures encountered by investors. The network for a business friendly environment (BFC SEE), which brings together six economies of our region, deserves the credit for having harmonised and improved conditions for doing business in more than 100 local governments that have passed, or are going through, the process of securing business friendly certi fication for their towns and municipalities.

We are witnessing progress being slowly achieved, particularly within the framework of the Berlin Process, on the construction of a single regional market. In this context, what is the role of NALED’s platform for a favourable business environment (BFE)?

- The Platform for a Favourable Business Environment (BFE) relies primarily on the suc cessful results of the existing BFC SEE network, which has provided a significant contribution to improving the business environment in the municipalities of the countries participating in the network: Bosnia-Herzegovina, Croatia, Montenegro, North Macedonia and Serbia. Apart from this, the network has encouraged the exchange of high-quality reform solutions, such as the issuance of electronic building permits and simplified registration procedures for seasonal workers, the improvement of inspection oversight and digital fiscalization. We intend to draw on these successful results through the future platform that we’re working on in cooperation with GIZ and partner institu tions from the region, thereby ensuring a quality dialogue and the exchange of knowhow on the

PROSUMERS

We want to improve the way independent energy producers, so-called prosumers, are taxed, in order to increase interest in turning to cleaner sources among citizens and businesses

COOPERATION

In an ever-more competitive race to attract investment, it is necessary for us to think about our region in the way investors see it, and that is as one market

By establishing a common regional standard for a business friendly environment, our desire is to secure improved living and work conditions for the 20 million citizens and 1,150,000 businesses in these lands

implementation of reform processes in the six economies of the Western Balkans, with the aim of encouraging economic development, the hiring of workers and faster integration into the European Union. This platform will be based on three pillars: encouraging local economic development; improving the business environment; and promoting partnerships and a public-private dialogue.

You are also focused on work in the domain of renewable energy sources and support for the development of innovation and the digital economy. To what extent can these sectors contribute today to the growth of the social product, which will be pretty modest this year?

- Innovations are undoubtedly a very important driver of the economy and society as a whole. The countries that allocate significant funds for the development of innovation, and where work is constantly being done to improve the innovation ecosystem, have the highest GDP growth. When it comes to Serbia, our innovation ecosystem is developing at a good speed, the state has recognised its importance, just like the ministries and funds that invest increasingly in innovative businesses, but also large companies like Philip Morris, which has recognised the potential and decided to sup port the start-up community and innovators, through the StarTech project, by providing more than three million dollars in grants and support to improve the regulatory framework

for innovation. We also call on other private companies to follow this example. The best indicator of the level of development we’ve reached when it comes to innovation is the Global Innovation Index, according to which Serbia is ranked in 55th place among 132 coun tries. There is room for improvement, primarily in the area of cooperation between science and business, private sector investments in research and development, access to alterna tive sources of funding, as well as in the area of the development of clusters. When we deal with it in an authentic way, we can expect the knowledge economy to come to represent one of our greatest development potentials. On the topic of renewable energy sources, important things have been launched. NALED contributed to the work of the Ministry of Mining and Energy on the adoption of the legal framework governing this area, as well as the important regulation on the balance of responsibility, on which active work was done during this year and which represents a prerequisite to be able to conclude the financial structure for numerous projects in the field of renewables.

As of 1 st January 2023, eAgrar will be launched, which you worked on developing together with the Ministry of Agriculture. What will this great stride forward in dig itisation mean for the agricultural sector?

- This is an electronic platform that will enable more than 400,000 farmsteads to register and submit applications for subsidies online. This kind of practise brings numerous benefits, both to farmers and the state authorities that are responsible for these issues. The registration method to date required farmers to set aside their own time and collect more than 90 pieces of data in 10 different documents, with 70% of that information being superfluous, such as proof of land ownership, as that information already exists in the databases of various state bodies. Moreover, they were also required to pay fees for various statements and certifi cates worth two million euros annually. With the help of eAgrar, the pre-existing procedure will be shortened as much as fourfold, while the costs of application will be reduced by 80%.

We have already noted that the global economic situation is increasingly difficult and that this will certainly also be reflected

in Serbia. Would the fiscal unburdening of earnings help the economy in the situation in which we currently find ourselves?

- Reducing taxes and contributions on salaries is one of the recommendations that has appeared in NALED’s Grey Book for the longest time. We believe that such a measure would contribute significantly to reducing the volume of the grey economy and stimulate employers to engage workers through legal channels. Judging by this year’s survey of the stances of businesses with regard to the grey economy, most businesspeo ple (49%) cited high taxes and contributions as the biggest problem they face and the key reason tax obligations are avoided. We have conducted analysis of the taxation system that we will soon present to the public, and we will propose possible directions of reform that would benefit both employees and employers. It

is primarily necessary to focus on tax reliefs for the lowest salaries and the minimum earnings, which is earned in Serbia by between 350,000 and 400,000 people and is highly taxed com pared to other countries – this expenditure last year amounted to 18,200 dinars on “minimum earnings” of 32,000 dinars, or around 57%. More significant changes to the taxation model are needed to further unburden taxpayers. One of the possible solutions is to increase the non-tax able part of the salary at the level of minimum earnings, reforming healthcare contributions, while there are other potential solutions on the table that should be considered.

When it comes to considering the reform of contributions, NALED also proposes the pos sibility of abolishing healthcare contributions and switching to the financing of healthcare from universal taxes.

You are among the pioneers of public-pri vate dialogue. Is there enough of that kind of dialogue today, when it is necessary to wisely choose the moves that will enable the preserving of economic activity?

- The fact that NALED internally brings together all three sectors of society – private, public and civil – that have been working together for years on the improving of the business environment and the implementing of reforms in various are as, indicates unequivocally that such a dialogue exists and has continuity. It is also certain that there should be more of it and that it should be of a higher quality. The conclusion is that it functions significantly more successfully when the institutions sit opposite an interlocutor that takes the form of an association that expertly represents the interested public, and not the interests of individuals.

Some forms of public-private dialogue have improved significantly compared to previous years, as is shown by the Regulatory Index of Serbia, which analyses comprehensively the manner and quality of adopting regulations. According to the latest data available for 2021/2022, public hearings were held for more than 90% of laws that are important to the functioning of the economy, there has been a reduction in the share of laws that are adopted under urgent procedures to only 6%, while three quarters of ministries satisfy criteria in terms of the informing of the public about their work. However, further room for improvement certainly exists.

We have conducted analysis of the taxation system that we will soon present to the public, and we will propose possible directions of reform that would benefit both employees and employers

IVAN BULAJIĆ, DIRECTOR, SRBIJA VOZ

Trains Are Once Again The Pride Of Serbia

At Srbija Voz, the vision and strategy of passenger relations is based on three pillars. The first is punctuality, the second is the attitude of train crews towards passengers, and the third is communication with passengers in real time. Srbija Voz is making the biggest changes in organizational and personnel strengthening, but also in changing the corporate culture

bia. However, perhaps the biggest changes we are making are in digital communication. We have set ourselves a high standard that every service information must be published on the site within 15 minutes on a 24/7 basis, and that we have no more than 10% of unanswered calls to our call centre.

More than half of our passengers already buy tickets using the Srbija Voz mobile appli cation. The application has almost 100,000 registered users and is just behind booking. com in popularity in the travel category. We are really proud of this success.

Our goal is to create a modern and efficient operator with transparent operations and high standards of passenger care - announces Director Ivan Bulajić and points out that this is the only way they can be ready for the entry of the private sector into the market, which will happen sooner or later.

Can we say that Serbia is one of the leaders today in terms of investment in railways?

- There are two criteria by which no country in the region can be compared to Serbia. The first is the total value of projects in the stage of preparing documentation and executing works in relation to GDP, which in our case is an incredible 8%, and the second criterion is the average age of passenger trains. Srbija Voz is particularly proud of the fact that 70% of trains in national traffic are under 10 years old, which is considered new in the railways. With the delivery of 18 new Swiss Stadler Flirt trains next year, that percentage will be even better. Both of these criteria put us at the very top in the region.

More than half of our passengers already buy tickets using the Srbija Voz mobile application. The application has almost 100,000 registered users

The strategic goal of Srbija Voz’s operations is the return of as many passengers as possible, with constant improvement of services. Is that how to change the image of the railways?

- Passenger expectations have changed in the last decade perhaps more than in the entire previous century. At Srbija Voz, we base our vision and strategy of relations with passengers on three pillars. The first is punctuality, the second is the attitude of train crews towards passengers, and the third is communication with passengers in real time.

In the past few months, we have done a lot of work on improving the user experience. We announced the public procurement of new uniforms for crews of top design and provided them with training in cooperation with Air Ser

The future arrived in Serbia with the first high-speed train. How does that future look to you today?

- The commissioning of the first high-speed line of 200 km/h Belgrade - Novi Sad was truly a huge technological leap for the railway and a completely new standard of service for our passengers. From March until today, almost two million passengers opted for this mode of transport between the two cities, but there is still a lot of work ahead of us. In the next two years, we shall get ready to open the remaining part of that line to Budapest, and through Hungary we will be able to connect with Austria and Germany.

On the other hand, the condition of lo comotives and carriages on the Bar line is completely unsatisfactory. The age of this part of the fleet is between 20 and 40 years. That is why we have included in the plan for 2023 the procurement of eight new locomotives and 20 sleeping cars for speeds of 200 km/h, which will drastically raise the standard of travel to Montenegro.

We are making our biggest changes in the organizational and personnel strengthening of Srbija Voz and in changing the corporate culture.

The New Shine Of Traditional Brand

Many years of experience and im peccable technical expertise in the production and overhaul of transformers have secured us a leading position among partners and customers around the world. We are proud that we managed to save that precious brand ~ says CEO Zoran Milutinović.

Comel doo Belgrade has decades of tradition in electrical equipment, but it has also continued the tradition of the internationally-known Minel Transformers brand. How did that happen?

- Comel was founded in 1990, and in the beginning it was only engaged in the sale of products and the provision of services in the power industry.

Through responsible behavior in the entire business and company values oriented to wards the fulfillment of sustainable devel opment goals, we have achieved successful cooperation with many global corporations over several decades. This tells of the wide selection of products that we were able to offer our clients at any time.

Our story with power transformers began in 2013 through cooperation with the local Minel Transformers factory, which has been known as one of the world leaders in its field since 1960. They managed to continue production and successfully deliver their products even during the conflict of the 90s, but in 2015, after a long and difficult period, Minel was forced into bankruptcy. The once busy production facilities fell silent after more than half a century of continuous work, the machines stopped, and the factory was about to close...

Nevertheless, efforts to maintain pro duction by our company and the factory managers paid off. Comel signed a contract on production cooperation, which made it possible to restart the plant in bankruptcy proceedings. That year, we took over the complete production programme, equip

ment, technology and expert staff of Minel transformers.

After that, our real struggle began to maintain the domestic brand and restore confidence in the continuation of the long-standing tradition.

The experience and impeccable technical expertise in the production and overhaul of power transformers has provided Minel with a leading position among partners and customers around the world, and we have managed to save that precious brand. In December 2020, with the end of bankruptcy and the final purchase, Minel continued life as Comel Transformers.

Was the return to the market difficult or easier than you expected?

- With a complete team of experts, workers and management, production continued

Comel was established in 1990, and since 2015 it has been continuing the long-standing tradition of manufacturing and overhauling power transformers under the Minel Transformers brand. For Comel, this acquisition marked the opening of new business horizons

where it left off. Comel Transformers is proud to continue delivering reliable products and creating engineering solutions that meet the challenges of current and future business. We are proud of the tradition of guaranteed quality, but our goal is to introduce innova tions in technological processes, compliance with EU directives and monitoring new trends in pollution reduction and environmental protection.

For Comel, this acquisition marked the opening of new business horizons, because the production of energy transformers opened a completely different dimension to our business. We worked intensively on relations with foreign customers and the return of the factory to the world market.

Why do you see December 2020 as a turning point?

- After a five-year period of business in difficult conditions due to bankruptcy proceedings, most of the production was stabilised and the Minel brand fully became the part of the pro duction of the company Comel Transformers. After the official purchase of the factory in December 2020, we started investing in infra structure, equipment and the development of modern production processes.

Our team was joined by new experts and managers who were brought in to restore the company’s status as a leader on the power transformer market. It was a sign to the entire region and former customers around the world that traditional quality has returned with a new shine. In less than two years, we completed a complete reconstruction of the production hall, replaced the most important machines and installed a selfconsumption solar power plant.

What are you producing today?

- Over the past sixty years, the factory has produced and delivered more than 2,000 new power transformers of various voltage levels. Minel’s transformers have reached the most remote parts of the world, countries of Asia, Africa and the American continent.

Today, our main production line con sists of oil transformers for distribution and transmission networks, with nominal voltages up to 220kV and nominal powers up to 250MVA. We design and manufacture all our transformers according to customer

We managed to save a precious Serbian brand that came out of a period of stagnation as Comel Transformers

requirements, international standards and EU directives. Besides the production of new transformers, overhauls are an important part of our programme. Also, assembling, testing and commissioning at the place of installation are an integral part of our offer and mean we must fulfil all of our customers’ requirements.

You also mentioned overhaul... Is it a par ticularly important part of your business?

- Transformers are a vital part of any energy system, so it is necessary to ensure relia bility and efficiency in their operation even in unforeseen situations. In this sense, we can perform regular maintenance as well as capital repairs of energy transformers of any global manufacturer. Our overhaul team is professionally trained and support ed by many years of experience and the necessary resources to service all types of breakdowns on transformers of voltage up to 410 kV and power up to 725 MVA. This part of the programme includes diagnostics and monitoring, preventive and regular maintenance, delivery of spare parts and professional support from our engineers. In our high-voltage laboratory, we can perform

all routine, type and special tests for all new transformers and for overhauled ones. In this way we provide our customers with security in terms of the reliability and energy efficiency of our transformers.

Although this year was marked by the economic crisis and the war in Ukraine, Comel managed to realise all its planned projects...

- The economic crisis certainly brought diffi culties that we all faced, especially with re gard to the procurement of raw materials and equipment. Nevertheless, we have aligned our long-term goals with these challenges and we will go on... Since the beginning of the crisis, apart from projects on the Serbian market, we have implemented solutions for several large projects important for energy networks in Bosnia-Herzegovina, North Macedonia and Montenegro, as well as three large projects in the EU, more precisely in Latvia and Romania. We think the coming period will be more demanding in terms of adapting to new business conditions, but we are determined in our efforts that fulfilling the sustainable development goals is our most important task.

Rubbish Is An Urban Mine

Based on his decades of experience, the owner of Jugo Impex thinks that 2023 will be a very difficult year, that as a society we should strive for energy independence and invest in systems that will be able to use all forms of energy - solar, wind energy, and energy from waste

You have been involved in recycling since 1994, and E-recycling began in 2010. How did that happen?

- Besides being a recycling industry, Jugo Impex is also a manufacturing industry. We have closed a part of the circle of the circular economy by making our own products from recycled materials that we sell on the mar

ket. Jugo Impex is a completely market-ori ented company that is influenced by the metal stock exchange and everything else that happens in our business of recycling.

E-recycling was created in such a way that the input is constantly known, but for its operation it needs a high education level in society, and for everyone who participates in it. It cannot work just with market forces, because its process is extremely expensive and the output cannot cover all the costs of operation and disposal of electrical and electronic waste. Like everywhere in the world, laws have been introduced in our country according to which consumers pay for the recycling of all electrical devices that become waste after use.

These are two different concepts of recycling and it is impossible to put both companies under the same roof, which is why it was best to separate them, which turned out to be correct.

How do you become a leader in the re cycling industry of Serbia? By constantly acquiring new knowledge, continuously investing in technology and introducing state-of-the-art equipment?

- Leader in the recycling industry is not a title you give yourself, but your work and environment put you there. Our goal was never to become leaders, but we do our work to the best and highest quality that we can. We felt that we had to work non-stop, to adopt new technologies, to produce machines ourselves, to find new markets... When you do that for ten or twenty years, you get into a position where others recognize you as a leader.

In our part of the world, not even a fraction of the potential of the recycling industry has been used. How many “green jobs”, those that protect the planet, can recy clers open in each of the countries of the Balkan region?

- In this part of the Balkans where we are, recycling is partly a consequence of the problem of environmental pollution, water, air and land. Awareness is slowly growing, but we are still far from realistically planning environmental protection as most of us would like. We need synergy of the entire society and the setting of the right values for goals. Realistically, we waste a lot of energy that we need, we do not collect waste or put it in the right place. After so many years

Former pioneers, and today's leaders in the field of recycling, they operate through two recycling companies - one for electrical and electronic waste and the other for industrial waste. These two differ widely in terms of the complete organization of work, output and input

of introducing recycling systems, special waste streams, we have reached the status where there are raw materials and the next step should be to use them to create new products. A major problem is the slow and long procedures in the administration for obtaining the necessary documentation for working with waste and raw materials, which is one of the problems that hinders development in the entire Balkans.

The economic environment is improving, investments are being made in infrastruc ture, factories and plants are opening, which brings improvement for your indus try. What do you expect from the state?

- As I said, the main problem for us is the speed of administration, adapting to stand ards and understanding the recycling indus try. Many regulations have been passed, but they are poorly implemented. It is good that many manufacturers have set up business, which has increased the capacity of the recycling industry. This has greatly increased the volume of raw materials on the market, and therefore accelerated the investment cycle in the recycling industry and increased gross income. I repeat, the administration must work faster and better at every level in our country. We have no right towards our country to inhibit any development in the industry. For everything bad we have sanctions, also where it is easy to close things, but it is difficult to create something new.

How can we help people understand that by recycling waste, the planet can be made a better place to live, that nature is restored to balance, that future generations learn to value the resources they have?

- As time goes on and as we increasingly use natural resources in terms of minerals and metals, we shall come to a situation where they no longer exist. The basic source of all these elements will be urban mines, i.e. waste. We have to take it seriously and not wait for it to happen without being ready to use our resources. For people to under stand where we are going and what we are doing, we must primarily regain confidence in ourselves as a society, and at the same

If

time create a synergy of everything we know, think and want.

If municipal waste was not collected for two months in a neighborhood of residential houses, many people would understand what waste is. Or if you gave benefits for finely recycled waste, on the price or somehow differently, and charged double or triple for badly recycled waste, we would learn the rules and come to the right values, which are necessary for us in every part of life.

How many employees do you have at Jugoimpex, and how many of them are in E-recycling? Are you planning to expand your capacity and hire new people?

- Jugo Impex has about 100 employees, and E reciklaža has 240. Employment plans are always present, we constantly invest in technological development and we try to make our outputs 100% pure raw materials, which is the goal of a real recycling industry. An increase in capacity and something new is possible in 2023 if the market for metals and recycled materials that we produce partially stabilizes.

How much do negative global developments affect recyclers and your company’s plans? What are your expectations for 2023? - Everything that is happening in the world, the crisis that occurred partly because of the war in Ukraine, and partly because of the increase in interest rates, affects all of us by losing value in every way. I don’t expect big changes in 2023, I think it will be diffi cult, more difficult than 2022. I’d be happy to be wrong, but with the current interest rates, you can’t get long-term loans easily, it’s hard to maintain a constant income to service everything.

I am of the opinion that 2023 will be a very difficult year where we will all have to change our habits and development strategy in the coming period. I would like us as a society to start striving for energy independence and to invest in systems that will be able to use all solar energy, all energy from wind and waste in one system. This is necessary for us, because if we don’t do it, we will face serious disruptions in the energy sector in the future, which will greatly affect liquidity and cause high prices of our products.

benefits were given for the removal of finely recycled waste, and double or triple the charge for poorly recycled waste, we would learn the rules