Business journal Synergy, 2nd edition

NO. 2 | OCTOBER 2013. BUSINESS JOURNAL OF THE NATIONAL ALLIANCE FOR LOCAL ECONOMIC DEVELOPMENT FREE COPY

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IN FOCUS

Business Friendly Environment WWW.NALED-SERBIA.ORG

The Minister's PrioritiesRegulatory reform, resolving the public debt, burden, cutting income tax and creating better conditions for SMEs - these are the strategic priorities

A TALK WITH SAŠA RADULOVIĆ

28page

Europe's LocomotiveGermany is the world’s fourth economic power after the USA, China and Japan. What is the secret of its success?

PARTNERS FOR SUCCESS

70page

Together for investmentThe first eight certificates awarded to business friendly municipalities in South East Europe

IN SYNERGY

16page

VRŠACIMPRESSUM WORD FROM EDITOR

DIRECTOR Violeta Jovanović / [email protected]

EDITOR IN-CHIEF Milica Stefanović / [email protected]

EXECUTIVE EDITORIvan Radak / [email protected]

DESIGN AND PRE-PRESS Zoran Zarković / [email protected]

CONTRIBUTORS Jelena Bojović, Milica Mandić, Jovana Ćirić, Daniela Dodig, Aleksandar Nikolić, Marko Marić, Slobodan Krstović, Hans Estermann, Miloš Damjanović

ADVERTISINGMilica Mandić / [email protected]

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Expose by NALED30/VII Makedonska street 11000 Belgrade, Serbiat: +381 11 33 73 063 f: +381 11 33 73 061 e: [email protected] www.naled-serbia.org

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SYNERGY : business journal of theNational Alliance for Local EconomicDevelopment / editor in chief MilicaStefanović. - 2013, no. 1 (june)- . -Belgrade (30/VII Makedonska street) : Expose,2013- ([Belgrade] : Birograf ). - 27 cm

Tromesečno. - Ima izdanje na drugom jeziku:Sinergija = ISSN 2334-8402ISSN 2334-8593 = Synergy (Belgrade)COBISS.SR-ID 199587084

The contents of this publication may be used only when quoting the source of information “SYNERGY – NALED’s Business Journal”

If you wish to receive the printed edition of SYNERGY, please subscribe at www.naled-serbia.org/journal

Every year we ask ourselves and our po-liticians the same question – when and how will things get better? We have great

expectations of others, but others are so difficult to change. Only one thing is definitely under our control to influence – ourselves. So if we are among the lucky ones who work in the private sector we should give our best at work (not just a minimum effort), so that our company can grow and develop, so it can pay regular salaries and taxes to the state to finance our roads, schools, streets, hospitals. If we are lucky enough (or unlucky for that matter) to struggle in the market as entrepreneurs – we should all do business fairly and treat our employees and the state correctly, as only then can we expect fairness in return. And finally, if we are among the minority that has the opportunity and duty to change the business environment for the better, we must set ourselves the highest expectations – to put the common interest above the individual and undertake reforms that may be hard in the beginning but lead to long-term prosperity. With political power comes great responsibility. And a better business environment heralds a better age for all.

Milica StefanovićEditor-In-Chief

THEME OF THIS EDITION Zoran Perišić, Mayor of Niš and member of NALED Supervisory Board

We live in a country where rapid eco-nomic growth is one of the strategic goals of both state and local govern-

ment. To reach this goal, we rely on Serbia’s advantages such as its unique geographic posi-tion, rich industrial history and well-developed industrial practice, and on its immense potentials in energy, agriculture and tourism. However, the proof of Serbia as a country with a good investment climate needs to come from us – its local governments. We need to ensure business-friendly environment for existing businesses and potential investors, which means a well thought-out, coordinated model of cooperation among all socio-economic stakeholders in the local community. For all of us, the essential task and duty is to reduce Serbia’s unemployment which has reached almost a million people, and to raise the quality of life. We have at our disposal the models of EU countries that are assisting us in our efforts, and their experience that can be used as a foundation for our steps forward. We are aware that there are numerous challenges on the path towards healing the economy in cities and municipalities, and that increasing efficiency in the use of available resources is not so simple. For these reasons, we in NALED designed the Business Friendly Certification

programme. This provides clear guidelines for local governments on the steps they must take to improve their investment climate, and shows the environments best suited to starting a business and expanding it by bringing in investors. Local governments are responsible for making this process as efficient and fast as possible. Economic development mechanisms are spri-nging up: new industrial zones and technology parks, public-private partnerships, business incubators and large public investments. But if they are to enhance growth and employment at the local level we must act fast, be well organized and, most importantly, share our experience and best practice examples so we can develop in a balanced manner. Our great potential is also seen in the under-used linkages between academia and business, the cooperation of all sectors of society, their joint involvement in realising strategic pri-orities and establishing new mechanisms of inter-sector coordination and cooperation. In this task I see an important role for NALED as the only private-public association connecting businesses, local governments and the civil sector. All of us have ample prospects depending on our local resources, but we have no time for missed opportunities and lack of vision. We must be active in all arenas that affect local economic

development. I strongly believe that we will man-age, with great effort and through well-planned actions and by learning from our mistakes. In a not too distant future we will be waking up each day in our own communities to see newly acquired European features embedded in our local identities. And naturally, we will all be economically empowered to achieve new goals and launch new development efforts.

Contents

News from NALED

Local government

Businesses

Legislative framework

In Synergy

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6 7october 2013 |SYNERGY

NALED Government's indispensable partnerNALED needs to become an indispensable and key partner for all future Government cabi-nets in the implementation of regulatory reform, application of laws and development of local economic development policies. In addition to the issue of organization's sustainability, this has been identified as the key priority by the Alliance management at the annual Board retreat held on 21st August in Belgrade. On this occasion, the management agreed on the recommen-dations to the new Government for the most important reforms that should be conducted in the period to come. Among other things, NALED’s recommendations include the necessity for Labor Law amendments, improvements to construction permit issuance system, tax ad-ministration reform, combating shadow economy, reform of inspections, adoption of Law on Investments and Paperwork Reduction Act. The retreat gathered the members of NALED Managing Board – Vladan Atanasijević, MB President and the Director of Asseco SEE, Ramon Weidinger, MB Vice President and General Manager of Coca-Cola HBC Serbia, Ana Brnabić, MB vice President and Executive Director of Pexim foundation, Bratislav Gašić, MB Vice President and Mayor of Kruševac, Mihailo Janković, General Manager of Knjaz Miloš, Nemanja Delić, Mayor of Sombor, as well as NALED Executive Office management - Violeta Jovanović, Executive Director, Jelena Bojović, Policy Director, Milica Stefanović, Marketing Director, Marko Stanojević, Finance and Administration Director. After the retreat, NALED management hosted a dinner for long-term partners at the restaurant Klub književnika.

Sir Paul Judge visits NALEDA renowned British businessman and the Chairman of British Serbian Chamber of Commerce Sir Paul Judge visited Serbia in September. On this occasion he met with the Prime Minister Ivica Dačić and they discussed cooperation between the two countries and the improve-ment of economic relations. During his short stay, his agenda also involved a visit to NALED. The delegation of British Serbian Chamber of Commerce met the Alliance management and the representatives of municipalities Odžaci and Kula. These two municipalities participate in the project Cross Border Cooperation for Investment Promotion (CBC IP), implemented by NALED in cooperation with partner organizations and municipalities from Croatia, and financed by the European Union. The guests from Great Britain were presented with key investment potentials of the two municipalities from West Bačka District, after which Sir Paul Judge expressed his willingness to provi-de his advice and contacts and assist Kula and Odžaci in defining their offer and approach towards potential investors.

60 students from Diaspora completed summer internships in SerbiaFor years, our country has been among the top five in the world by the “brain drain”. The return of young people studying abroad, to apply their knowledge obtained in encouraging local economic development, was the main motive why NALED initiated the project “Meet the State of Serbia”. In July this year, with the support of the Embassy of Switzerland and Telenor foundation, NALED organized the third cycle of summer internship for 23 students from Diaspora who spent three weeks in local governments and companies in 10 cities. with this group, the number of students NALED engaged as summer interns in the previous three years, to familiarize them with the functioning of public and business sector in Serbia, went up to 60. This summer, the closing ceremony was held at the Residence of Embassy of Switzerland, and the hosts were the Ambassador Jean-Daniel Ruch and the President of NALED Mana-ging Board Vladan Atanasijević. In front of numerous representatives of diplomatic corps, mayors and business people, Ambassador Ruch stressed that the students studying abroad are representing Serbia in the countries they live in and can make a significant contribution to the improvement of business and investment climate in Serbia.

Illegal charges by institutionsThe first half of the year did not bring better business conditions as there were no significant effects of actions taken and some of the announced measures were not even adopted. On the other hand, a new problem has emerged, which was first identified by NALED. It is the illegal behavior of institutions, including the Republic Geodetic Authority, Veterinary Directorate and the Commission for Protection of Competition. As determined by NALED, for months these state institutions have been charging fees in their jurisdiction in the amounts that were not appro-ved by the Ministry of Finance. Additionally, the RGA is still illegally charging two fees for a single service, and poor procedure has also been noticed in the Tax Administration, whose branch offices refuse to give the lump tax status to new taxpayers that meet the conditions, and with such practice, the state is imposing an illegal cost for their bookkeeping. NALED presented these findings in public in July, causing severe public reaction to such practice of state institutions, and the Ministry of Finance announced to impose penalties to irresponsible institutions by freezing the payment of their salaries in case they do not acquire appropriate approvals.

A front against shadow economyWhat is the cost of chocolate sold off car hoods, who pays half or the entire salary in cash and how has shredded tobacco moved from the counter to being hidden below it? What is the harm of such and similar forms of grey and shadow economy? It is 24% of GDP or approximately EUR 7.5 billion of annual turnover outside the law, leaving citizens and businesses deprived of funds for improving the infrastructure and servi-ces, encouraging economic development, investing in education and health care. Even more significant consequences entail possible harm to citizens’ health, as well as the loss of a large number of jobs. Bearing in mind that dealing with shadow economy in a long-term crisis should be one of the most urgent items on the agenda of Serbian Government, NALED decided to engage the companies that are most affected by illegal trade of products. Through a media campaign, proposing and advocating for concrete solutions, the newly-established front aims to encourage the Ministers in the Government to adopt systemic measures to suppress the ones that have no intentions of working by the law and to stimulate with incentives the ones that wish to return to legal flows. The interest for joining the campaign was shown so far by Phillip Morris Operations, Japan Tobacco Interna-tional, Coca-Cola HBC Srbija, NIS, Kon-sing, Gomex, Stefkom, Bambi, Mondelez...

News from NALEDNEWSNET(WORKING)


The quickest way to a building permitIn Serbia, obtaining a construction permit takes up 269 days on average. Public enter-prises and the sector laws they work by, are one of the main obstacles to increasing the efficiency in the process of issuing constru-ction permits. This, as well as other problems, resulted in Serbia being ranked 179 within World Bank's Doing Business Report in terms of dealing with construction permits, out of a total of 185 countries. One of the most commonly stated solutions is to deny the decision-making power to public enterprises so that they are not able to slow down or stop the process. They should, however, still be in charge of providing construction paperwork that falls under their jurisdiction. Regarding this matter, NALED, in cooperation with USAID Business Enabling Project, organized round tables with representatives of local elec-tricity supply operators and utility companies for water management and sewerage. The two well-attended meetings discussed the Concept of reform of construction permitting procedure, recommending introduction of one-stop shops in municipalities, for investors to complete all steps towards a construc-tion permit. Additionally, there is a need for introducing a comprehensive IT system for monitoring the flow of each individual request, resolving land property-legal issues, simplifying the process of planning docu-ments adoption. As usual, we have the answer to the question HOW. What remains is the famous WHEN? Until we receive the answer and a solution from the line institutions, we will keep watching the reality show Building a factory, on Serbian Broadcasting Service (RTS) and observing it in everyday life.

“Ask WHEN” is back!Starting from fourth quarter, the videos humorously presenting some of the biggest administrative problems in Serbia will once again “spin” on the channels of Serbian Broadcasting Corporation (RTS), after NALED and the public broadcaster signed a new Memorandum of Understanding. The agreement means continuation of the joint campaign “Ask WHEN” initiated in June last year, allowing the citizens and businesses to indicate poor burea-ucratic procedures hampering their day-to-day life and work, and NALED will tend to resolve them in cooperation with line institutions. Over the previous year, the campaign “Ask WHEN” assisted in resolving a range of problems, most important certainly being the elimination of 138 para-fiscal charges and reduction by 2/3 of paperwork for exercising the right to maternity leave. The Agreement was expanded to broadcasting TV stories on best practice examples in local governments coming from the ranks of NALED members. Additionally, it was agreed that the Alliance and RTS would launch another campaign titled Counter-Meter, to announce the worst counter of the month, based on reports by citizens and businesses. NALED intends to resolve the problem of long lines before counters and unnecessary paperwork requested by the line institutions.

News from NALED

Savings from changes to income tax - zeroThe guillotine of regulations and reco-mmendations from NALED’s Grey Book did not find their way to the Government’s agenda in the second quarter. None of the proposed solutions have been adopted, and no para-fiscal charges were eliminated. On the other hand, the second quarter was mar-ked by amendments to tax laws, the most significant being the new solutions in the law on Individual Income Tax. The tax rate was reduced from 12% to 10% and at the same time, the contributions for social insu-rance were increased from 22 to 24%. The calculation, which was thoroughly analyzed only by NALED, showed that even though this measure was presented as means of savings for businesses, it practically saves a

monthly amount of – zero dinars. These are only some of the key findings of the Report on Regulatory Reform Status in the second quarter, presented by NALED in July. On that occasion, NALED also presented the results of the third cycle of Business opinion survey. It showed that the Government’s anti-crisis package did not receive a passing grade, because 30% of businesses conside-red it poor, 12% find it good and 35% of companies are not familiar with it. In the second quarter, the businesses were more pessimistic than in the first three months. The share of businesses that expect a reduc-tion in their revenues was increased by 10% (from 34% to 44%). There were more busi-nesses expecting lower investments – a 5% increase (33%), and a 2% increase among companies finding there will be a decline in employment (25%).

In late September, at the II international municipal fair in Rijeka (NEXPO 2013), the institutions from Croatia, Serbia, Macedonia and Bosnia and Herzegovina (BH) signed a Memorandum of Understanding on esta-blishing the Regional Network for Business Friendly Environment in South East Europe – the first regional institution to be in charge of improving and harmonizing the business conditions and investment promotion in these four countries. The regional network was formed by partner organizations participating in the project Business Friendly Certification South East Europe (BFC SEE) – NALED, Center for local economic development of the Faculty of Economics in Rijeka, Local Econo-mic Development Network of the Federation of BH, headed by the Federal Ministry of Development, Entrepreneurship and Crafts, Local Economic Development Network of the Republic of Srpska, headed by Ministry of Economic Relations and Regional Coopera-tion, as well as the Association of the Units of Local Governments (ZELS) and Macedonian Chambers of Commerce (MCC). Hereby, the President of NALED Managing Board Vladan Atanasijević expressed satisfaction for having NALED’s certification program, as a best practice example from Serbia, acknowledged in the region as well. The mayors of certified municipalities are satisfied as well. “Since 2010 when we first obtained the certificate, the mu-nicipality of Ruma has attracted three times more investments than in the previous period, when we were not certified”, said the Mayor of Ruma Goran Vuković. The establishment of Regional network and joint fair appearance of the first certified municipalities from South East Europe was supported by the German Government via GIZ Open Regional Fund for Modernization for Municipal Services.

Action plans for the eight best PPP ideasas soon as next year, through public-private partnerships, eight local governments could attract EUR 19 million worth of investments. The projects submitted by Niš, Zrenjanin, Nova Varoš, Doljevac, Raška, Kanjiža, Tutin and Prijepolje have been selected as the best within the competition “PPP as development potential” implemented by NALED with the support of USAID Sustainable Local Development Project. These local governments have already been visited by consulting teams involving lawyers, economists and bankers who will be assisting in turning these ideas into specific action plans. In November, NALED will organize an investors' conference, where the top eight projects will be presented to investors. The municipalities have proposed a large variety of ideas. Nova Varoš wishes to develop a cogeneration biomass plant through PPP, Kanjiža and Doljevac intend to construct large logistical-distribution centers for trade in agriculture products, while Zrenjanin strives to en-rich its touristic offer by finding a partner to invest in the development of Rusanda Spa. The municipality of Prijepolje plans to build a regional freezer storage for local produce, Tutin de-velops a project for collection and processing of forest fruits and medicinal herbs, Niš wishes to invest into a manufacturing-educational wine-fruit facility, and the municipality of Raška wants a recycling yard. A total of 29 project ideas were submitted at the competition ran by NALED and USAID and 32 local governments were entitled to participate.

The first regional network for a business friendly environment

NEWS


News from NALED

On the occasion of marking 45 years since the production of the first bottle of popular sparkling bevera-ge in Serbia, the company Coca-Cola Hellenic, in cooperation with NALED, the Ministry of Regional Development and Local Government and the Ministry of Youth and Sport, organized a competition for the construction of 45 active zones – open-air gyms in cities and municipalities all across Serbia. During two months of competition, Coca Cola received approximately 1.7 million votes of citizens who wished to support their municipality! Particularly large interest and rivalry was seen among small municipalities, where Bela Palanka and Babušnica fought until the very end for the first place. On 1st August, the organi-zers calculated the votes and declared 45 municipalities to receive an open-air gym. Already in September, the Minister of Youth and Sport Vanja Udovičić, the Mayor of Pančevo Pavle Radanov, Operations Ma-nager of Coca-Cola system Dimitar Andonov and the Director of SGS and member of NALED Executive Board Marinko Ukropina, cut the ribbon at the opening ceremony for the first active zone in Pančevo. By the end of the year, another 9 open-air gyms will be opened, and the remaining 35 by May 2014.

45 open-air gyms for the most active municipalities

The third quarter of this year started with good news that the business friendly territory in Serbia was expanding. Another eight local govern-ments obtained NALED's Certificate. A particular success was the fact that Loznica and Kragujevac were the first cities to successfully pass the recertification process, proving that they strongly believe in the advantages of going through the process of obtaining the Certificate. At the ceremony held at the National Assembly of Serbia, the officials of Kovačica, Kula, Nova Varoš, Odžaci, Sombor and Vršac received this recognition for the first time. The Certificates, proving that local governments have efficient and transparent administration, partner rela-tions with the existing businesses and all preconditions for the arrival

of new investors, were awarded by then-Deputy Prime Minister for Eu-ropean integration Suzana Grubješić. The ceremony was opened by the President of NALED MB Vladan Atanasijević, and the participants in the panel dedicated to solutions for improving the business conditions in Serbia were Dragovan Milićević, State Secretary in the Ministry of Foreign and Internal Trade and Telecommunication, Michael Hasenau, Deputy Ambassador of Germany to Serbia, Howard Ockman, Director of USAID Sustainable Local Development Project, Alexis Lope-Bello, General Manager of Comtrade, Slobodan Petrović, General Manager of Imlek, Alexandros Daniilidis, General Manager of Heineken Serbia and Toplica Spasojević, Vice-President of NALED Advisory Board.

Local Economic Development Experts Forum After two and a half years of successful work, NALED’s Local Economic Deve-lopment Offices Network transitioned into the Local Economic Development Experts Forum. “It is a mechanism for efficient networking of professionals working in local administration in the fields of business support, investment promotion and project preparation. It is important that we learn from each other, to replicate successful solutions from one municipality in another, to improve our communica-tion with businesses, national institutions and donors” said Olivera Subotić, Head of LED Department in the City Administration of Pančevo and the first President of LED Experts Forum. Milan Ranđelović, Forum Vice President and the Head of LED Office of the City of Niš added: “If doctors, accountants and lawyers have the-ir bars and their professional associations provide results in the affirmation of pro-fession, can LED Forum assist in the acknowledgement of the role and significance of LED Offices and primarily the recognition of professionals dealing with LED in local governments? I truly believe that it can and I invite all involved in LED to take active engagement in the work of NALED’s LED Experts Forum”. According to him, one of the main challenges facing the Forum is for it to establish itself as a partner and interlocutor to various institutions creating the business environment and influencing the local economic development, such as the Ministry of Economy, Ministry of Finance, Ministry of Regional Development and Local Government, national institutions (SIEPA, NARD), donors and many others.

Eight municipalities received the national Business Friendly CertificateAt the working luncheon with NALED members, the Minister of Regional Development and Local Government Igor Mirović pre-sented the programs and measures of the reformed Government to encourage economic development on local and regional levels. In his words, the municipalities should not fear the announced tax reform because the reduction of wage tax will not cause significant reduction of local revenues. The Ministry is currently working on drafting the National Strategy of Regional Development and on creating the conditions for the use of IPA funds. The Minister announced the initiative for listing the major infrastructural and regional projects to be implemented with a long-term plan and that will not depend on the change of government. The Minister

stated the priority projects were the cleaning of Great Bačka Canal, highway Pojate-Preljina, highway Novi Sad-Ruma. He announced an open call for infrastructure development in industrial zones, to be conducted next year. The Vice President of NALED Managing Board and the Mayor of Kruševac, Bratislav Gašić, appealed to the Ministry to support the Business Friendly Certification program and certified municipalities, that should be given an advantage in open calls for economic development incentives, bearing in mind their proven capacities and potentials. “Certified municipalities serve as a success model and a best practice example to other local governments. Certification is a good process and it should be supported” the Minister concluded.

No great decrease in local revenues

NEWS

13october 2013 |

On the spotCONSTRUCTION WORK(S)

» Magna Seating opened a plant in Odžaci for manufacturing upholstery for car seats. The total expected amount of investment is EUR 5.5 million, and the number of new jobs will be 750.

» Petroleum Industry of Serbia (NIS) initiated the construction of the first wind farm in Serbia in Plandište. Investment value: EUR 160 million.

» Johnson Electric starts the construction of factory in Niš. Inves-tment value: approximately EUR 20 mil. Jobs for 1,000 workers.

» German company Fresenius Medical Care started building a new factory in Vršac. Investment value is EUR 16 million will result in 429 new jobs.

» The U.S. Cooper Standard invests EUR 6 million into new production facilities in Sremska Mitrovica. The first phase will bring jobs for 580 people and another 300 jobs will be created in the second.

» Dutch company Royal Agrifirm group bought 35% of domestic company Sto posto. The investment value in the following three years will be EUR 30 million.

» Cablex opened a new factory in Platičevo near Ruma. Investment value: EUR 2 million.

» Cico Collection opened a new factory for jeans manufacturing in Zrenjanin. Investment value: EUR 3 million. By 2017 there will be 1,500 new jobs.

» BIM-tex invested EUR 1.4 million in Leskovac, for a new cotton yarn production facility.

» Construction of waste water processing facility initiated in Leskovac. Investment value: EUR 22 million.

» German company Leoni started building a second factory in Serbia, in Doljevac, to employ 1,500 people.

» Michelin to build a facility in Pirot. Investment value is EUR 170 million, jobs for 700 workers.

» Swarovski starts its construction in Subotica by the end of the year. The investment value in the first phase will be EUR 15 million, 100 new jobs.

» MK Group starts sugar production in Pećinci, in January 2014. The value of new facility will be EUR 20 million.

» Falkensteiner Michaeler Tourism Group invests EUR 30 million in Stara Planina mountain.

» Šid to receive a cargo center on 120 ha. Investment value: EUR 120 million. Jobs for 100 workers.

» Construction of new facilities of Italian Lames Group, German Bauchemie and Lebanese VVT soon to be initiated in Sremska Mitrovica.

» Company Gorenje plans new investments through a joint venture with the Government of Serbia in factories in Zaječar, Valjevo and Stara Pazova. Jobs for 700 people in the next 3 years.

» Turkish textile company Jeanci Serbia will hire approximately 500 new workers in Leskovac by the end of the year.

» German Grammer opens a new factory in Aleksinac. 520 new jobs by the end of 2014.

» Geox acquired land in Vranje to construct a 20,000 m2 factory. Jobs for 1,250 workers.

» Takata arrives to Serbia – the airbag production company will hire 1,000 people.

Most significant investments in the 3rd quarter of 2013

Source: eKapija, Bizlife

Expected investments in 2013/14

After Greiner Packaging and Standard-gas, the municipality of Odžaci is richer by another new investment

– on 2nd October, Magna Seating officially opened its factory of car upholstery and other car seats components, which was enough to shift this until-recently asleep municipality from the category of under-developed to the ranks of developed local governments. Magna moved its facility to Odžaci from Czech Republic, and the enti-re production is intended for international market. As much as 4 million vehicles of well-known global ma-nufacturers such as Smart, Renault and Ford are equipped with this company’s seats. So far, they have invested EUR 5.5 million into the production facility of 4,300 m² in Odžaci industrial zone, and the planned investment is ten times bigger. The municipality gave 2.5 ha of construction land without compensation, entirely equipped industrial zone with all infrastructure lines and ensured fast

The third large investment IN ODŽACI

issuance of all necessary permits. The factory currently employs 314 people and by the end of 2014 it will have a total of 450 workers. All employees in Magna attended special training in order to ensure maximum flexibility and efficiency of the production process. This trai-ning is an additional investment by Magna, to assist in the development of local labor force

and adaptation to the needs of automotive industry. According to the Plant Manager Zoran Sokolović, Magna was looking for a favorable location to expand

its business in South East Europe and they found it in Odžaci: “We worked together with the Government of Serbia, Government of AP Vojvodina, municipality of Odžaci and Canadian Ambassador in order to create the required conditions for this investment. For example, the municipality provided many benefits in the recently established indu-

strial zone and they assisted with

The factory currently employs 314 workers and by the end of next year there will be a total of 450 employees

Magna seats are used by Smart,

Renault and Ford

the development of infrastructure, such as the access road. The availability of site for constructing the factory, the qualified labor force at low price, developed infrastructure, geographic location – these were the reasons we opted for Serbia and Odžaci.”Magna Seating is part of Magna International that has factories in 29 countries in the world

and hires 123,000 people.

Zoran Sokolović, Director and Plant Manager of Magna

ork(s)construction

12 SINERGIJA


Market, funds and scholarshipsSERVICE INFORMATION

MOVE FOR BUSINESSDeadline for application: 31st December 2013Donor: Philip MorrisBeneficiaries: Entrepreneurs and newly-established SMEsPurpose: Support for business start-up or expansion Maximum amount of funds: RSD 200,000.00

SUPPORT TO SME DEVELOPMENT Deadline for application: N/ADonor: European Bank for Reconstruction and DevelopmentBeneficiaries: BusinessesPurpose: Support for businesses to improve their performance and competitivenessMaximum amount of funds: EUR 10,000.00

SUPPORT TO CSO PROJECTSDeadline for application: N/ADonor: Royal Norwegian Embassy Beneficiaries: NGOPurpose: strengthening the rule of law and anti-corruption, defense and security sector reform, strengthening human rights, economic development and entrepreneurship, environment protection Maximum amount of funds: EUR 100,000.00

INCENTIVES FOR RECYCLINGDeadline for application: 31st January 2014Donor: Ministry of Energy, Development and Environment ProtectionBeneficiaries: BusinessesPurpose: Reuse of waste as secondary material or for generation of energy and plastic bags productionMaximum amount of funds: N/A

SUPPORT TO EU INTEGRATIONDeadline for application: 31st December 2013 Donor: Fund for an Open SocietyBeneficiaries: state and provincial institutions, municipalities, NGOs, associationsPurpose: actualization of the education reform issue and its placing on the political agenda, acceleration of Serbia's EU accession process, judicial reform and establishing full guarantees for its independence, harmonization of regional development of Serbia and strengthening of cross-border cooperation etc. Maximum amount of funds: N/A

Open call for employers: Youth staff training in workplaceDeadline for applications: 17th November 2013Organizer: USAID Sustainable Local Development Project (SLDP)Participants: Companies with minimum 5 employees with seat offices in one of the 32 cities and municipalities involved in USAID SLD project Within this program, the employers will be able to quickly and efficiently find and train employees who suit their needs, thus saving time and money. The program involves free selection of staff with the required qualifications, their employment and administration of their engagement. During the two-month practice, the candidates will receive a fee of 60% of minimum gross salary, provided by USAID SLDP based on the Trai-ning agreement. The training is intended for youth aged under 30, for jobs in production and service sectors.

Seminar: Democracy, civil society and youth participationDeadline for applications: 31st December 2013Organizer: Latvian national agency for Youth in Action programParticipants: Young leaders, project managers Venue and date: 8th – 20th December 2013, Cairo, EgyptLatvian national agency for Youth in Action program organizes a conference Democracy, civil society and youth participation, aiming to facilita-te exchange of experience and discussions to the topic of youth in community and politics. The conference target group involves representatives of public sector, embassies, international community.

(DIS)COUNT ON GOOD THINGSUse beneficial terms of purchase or nominate your offer for NALED market and enjoy the promotion - www.naled-serbia.org/berza

Database of funds

Scholarships info Professional development in the country and abroadwww.naled-serbia.org/training

Comprehensive information on sources of funding www.naled-serbia.org/compendium

Advertising in DanasDaily newspaper Danas, corporate member of South East Europe Media Organization (SEEMO) and Association of newspa-pers Project Syndicate, offers a discount for all NALED members for advertising and PR space. Danas, daily newspaper with national coverage, is one of the rare newspapers in Serbia not using tabloid methods to increase its circulation. It is famous for providing strong support to Serbian non-government organizations, promoting EU accession and the rights of minorities.

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Training: Policy, strategy and systemic support to the development of rural environments Deadline for applications: 1st November 2013Organizer: Israel agency for international development cooperation (MASHAV) and Center for Development Studies Participants: State institutions, local governments, NGOs, businessesVenue and date: Israel, 13th January – 5th February 2014 The training is organized by Israel agency for international development cooperation and Center for Development Studies, with the support of Israel Ministry of Foreign Affairs. During the 3-week study tour to Israel, the participants will have the opportunity to better understand the im-portance of integration of business activities, national policies and local interests, in order to achieve local rural development and the use of local resources. Additionally, the participants will learn about how the national and regional policies can serve as support to rural development, what is the role of agriculture and what financial and organizational mechanisms there are for revitalization and development of rural environments.


IN SYNERGY

are also important. For Germany, Belgium and Netherlands are much more important than some bigger countries”, Annen stressed and congratulated NALED and partners on realization successful project.

COOPERATION AT THE HIGHEST LEVELAs presented at the event, the certification project is a unique initiative in this region, directed towards improvement and harmoni-zation of business conditions, strengthening the image of SEE as investment destination, raising competitiveness, increasing economic cooperation and capital flow. In this regard, the topic of the first panel discussed the means of support for economic growth. Along with Minister Maras, the panel involved the Minister of Economic Relations and Regional Cooperation of RS Igor Vidović, Minister of

Ivanec, Bjelovar, Sanski Most, Prijedor, Ruma, Pirot, Strumica and Veles are the first local governments in South

East Europe that improved the municipal administration and business environment in accordance with a unique international BFC SEE standard, thus obtaining the right to hold the regional Business Friendly Certificate. The standard, involving 12 criteria and more than 80 sub-criteria required for the deve-lopment of partner relations between local administration and businesses, was developed by NALED and with the support of GIZ Open Regional Fund for Modernization of Municipal Services (GIZ ORF MMS), expa-nded outside of Serbian borders – to Croatia, Macedonia and Bosnia and Herzegovina. The realization is supported by partner organizati-ons – Faculty of Economy in Rijeka, Ministry of Economic Relations and Regional Coope-ration of the Republic of Srpska, Ministry of Development, Entrepreneurship and Crafts of the Federation of BH, and Association of Local Self-Governments and Macedonian Chambers of Commerce from Macedonia. The first certificates were awarded at the II Regional congress on business friendly environment in SEE, the ceremony held on 12th June in Zagreb Westin hotel, attended by numerous high Government officials, repre-sentatives of local governments, diplomatic corps and businesses. In front of more than 120 guests, the congress was opened by Croati-an Minister of Entrepreneurship and Crafts Gordan Maras, President of NALED Executive Board and the Director of Contango, Darko Vukobratović, the Dean of Faculty of Economy in Rijeka Heri Bezić and German Ambassador to Croatia Hans Peter Annen.

program, and 27 of them managed to fulfill the conditions for acquiring the national Business Friendly certificate. In the previous five years, these municipalities attracted investments of several billion EUR, proving that they are true local economic development leaders. When Financial Times ranked 5 certified municipa-lities among top 10 investment destinations in Europe for 2012/13, it was yet another valid confirmation of the program quality. We are confident that we will achieve such effects on the regional level as well. The countries of South East Europe can make use of the crisis period and, through certification program, ensure better starting position than the competition and be ready for a new investment cycle. The chances of attracting foreign capital are far better if we share common standards and act together towards the investors, as a region – Vukobratović said. Dean Bezić said that the investors are looking for recognizable cities and municipalities, and they can stand out through certification, which is the path towards standardization of services. “The investors do not have time to go into the specifics of each municipality and make their decisions based on standards. This is the reason we supported this project and I would like to

Cities and municipalities in certification processIn addition to Ivanec, Bjelovar, Sanski Most, Prijedor, Ruma, Pirot, Veles and Strumica, the Business Friendly Certification South East Europe project involves another 10 participating local governments. Among Serbian municipalities, the ones that are closest to receiving the Certificate are Bujanovac and Stara Pazova, and it is expected that Inđija will also win this recognition. As for Croatia, Macedonia and BH, it can be noted that the certificate is equ-ally attractive to big cities and small municipalities. In Croatia these include Rijeka, Osijek and Crikvenica, in BH Banjaluka and Ljubuški, and in Macedonia – Štip and Struga. Attracting investment

is a joint regional task "Our economies rely on neighbouring markets and for this reason I fully support economic cooperation ideas such as certification” said the Croatian Minister of Entrepreneurship, Development and Crafts Gordan Maras at the opening of the II Regional Congress on a business friendly environment in South East Europe on June the 12th in Zagreb, involving a declaration of the first municipalities from four countries that fulfilled the regional standard of efficient and transparent local administration, BFC SEE

thank NALED and GIZ for including us”, said Bezić, adding a message to municipalities that they should hire professionals if they do not have sufficient internal capacities to work on improving the municipal administration and investment promotion. At the end of introductory session Ambassador Annen added that the region needs direct fo-reign investments, and they require a business favorable environment, as well as transparency and accountability of administration. He said that reforms were required in all countries in the region, since all of them received bad marks from the European Commission. “The investments in the region are modest because investing encounters great risk and numerous obstacles. This is a situation where Mayors can make a difference. They can work on planning and infrastructure and reduce costs and deadlines for issuing permits. Neighbors

Business Friendly Environment

The first eight Business Friendly certificates awarded to municipalities of South East Europe

SUPPORT FOR THE REGIONAL CERTIFICATIONMinister Maras stressed that Croatia finds regi-onal cooperation to be highly important, which is why he fully supports this project of Business Friendly Certification in South East Europe. In his words, in further developing of economic relations, cooperation on both national and municipal level is extremely important. In the previous several years, Croatia has done much to make itself approachable for investors. An incentive policy was introduced, but there is also a need for structural reforms. Currently ongoing is the procedure for adoption of law on strategic investments, to refer to all investments higher than EUR 20 million. It will involve dra-stically shorter deadlines for issuing all required permits. He added that up till now, there was a problem of local governments not treating big investors in the right way, and this is one of the areas where certification can help a lot. Finally, Minister Maras noted that even though Croatia is leaving CEFTA agreement, this does not me-an that they will not cooperate with countries in the region and that they do not find this market important. We gladly use Serbian products such as Eurokrem and Jaffa, the same as people in Serbia are extensively using Vegeta – said Maras.

The President of NALED Executive Board Darko Vukobratović reminded that NALED has been implementing the certification program in Serbia since 2007. One third of all local go-vernments in Serbia are improving their busine-ss environment through NALED’s certification


Development, Entrepreneurship and Crafts of Federation of BH Sanjin Halimović, State Secretary in the Ministry of Foreign and Inte-rnal Trade and Telecommunications of Serbia Stevan Nikčević, General Manager of company Coca-Cola HBC Serbia Ramon Weidinger and Executive Director of Macedonian Chambers of Commerce Mitko Aleksov.In addition to law on investments, Minister Maras once again stated the significance of CEFTA region market for Croatia, reminding that starting from 1st July, foreign trade cooperation would be performed based on the agreement South East Europe countries have with the European Union, which would negatively influence the competitive-ness of Croatian exporters due to unfavorable tax treatment. On the other hand, we found that the region will have much benefit from Croatia’s EU

accession, primarily in terms of road and railroad infrastructure investments. Minister Vidović gave positive impressions about the reforms conducted in countries in the region so far, and he particularly emphasized the improvements of business environment in BH with the introduction of a new system for company registration that will significantly reduce the costs and time for business start-up. Federal Minister Halimović stressed the com-plexity of administrative organization and po-litical system of BH, finding that it makes local governments the driving power of development and improvement of legislative framework. They are the parts of a locomotive that should pull us forward – towards new investments. “We have not utilized all the resources we have. We had highly unfavorable investment conditions

10 to 15 years ago and it was hard to expect qua-lity investors”, said Halimović.State secretary Nikčević agreed that investment promotion was a joint task of the region. He stressed that the manners and incentives for investment promotion were mostly similar and most frequently involved land allotment and subsidies for new jobs. Additionally, the coun-tries in the region have recognized the sectors they hope to show the best results in terms of

attracting new capital, and most commonly these sectors are agriculture and infrastructure. Nikčević believes that economic cooperation in the region was spurred by CEFTA, which significantly improved the economic exchange. On the other hand, the problem is that there are still too few investments among countries in the region. The views of businesses were represented by the General Manager of Coca-Cola HBC and Vice-President of NALED MB Ramon Weidinger, who had spent a year and a half managing this company in Croatia. Weidinger reminded that Coca-Cola system has seven factories in six mu-nicipalities in the region, and distribution cen-ters in another 20 locations. Among the region's advantages he primarily emphasized the same language. On the other hand, the main problems are Governments' decisions affecting the competitiveness of businesses. “We measured the production costs and we noticed that our facilities in SEE are partly not competitive. We compared Zagreb to Austria and we found that our production in Croatia was more expensive than if we manufactured in Austria and exported to Croatia. Production in Serbia is also more expensive than in Bulgaria.” Weidinger pointed out several specific problems he encounters as an investor. “We have not been able to acquire ownership rights over certain land parcel for 6. 7 years, causing us much cost. We also have large expenses for water fees” he said. The first panel was closed by the Executive Di-rector of Macedonian Chambers of Commerce Mitko Aleksov, who emphasized that the certifi-cation program represented a plan for municipa-lities wishing to improve their business climate and attract new investments, and a seal of quality for companies considering to invest in South East Europe. “If the local business environment is not improved, the companies will have problems such as Coca Cola. The certification stimulates competition among mayors, leading to the creation of better conditions for doing business in the region” Aleksov concluded.

RECOMMENDED BY MAYORSThe ministers’ panel was followed by a discussi-on on the topic of how to promote investments on the local level. The seats on the stand were

taken by the representatives of cities and muni-cipalities that were the first to successfully pass the certification program. Milorad Batinić, Mayor of Ivanec and Vice Pre-sident of Croatian Parliament, emphasized that the first task of all municipalities is to establish efficient administration. “The certification pro-gram has certainly assisted us in this endeavor. Our primary goal is not to receive a stamp for having a good environment, but become better than we currently are and learn more than we know at the time being” Batinić said. The first man of Bjelovar, Antun Korušec, spoke about the problem of slow issuing of construction permits and reminded that his city was among the leaders in Croatia by the speed of issuing these permits, as well as the number of resolved requests. In his words, this is a consequence of longtime work and inve-stments into human resources. “The people now realize that they cannot keep permit requests in drawers. Overly bureaucratic countries and the collision of many laws are additional problems. We have too many administrative barriers before we get to clean documentation. We will need to reduce the number of regulations. Additionally, if we descend jurisdictions to a lower level, we will all be much more efficient”, Korušec emphasized. When it comes to promotion, the Mayor of Ruma Goran Vuković said that there can never be too much promotion and that all opportuni-ties should be used, such as the investment pro-motion campaign at Belgrade airport, organized by NALED. “Everything we did in this field has contributed to the attraction of 12-13 inve-stments over the past few years, whereas from 2003 to 2008 there were only three. However, promotion should not be just advertising for its own sake, but to be honest so that the investors are not let down” Vuković said. The political environment is also crucial for attracting investments, said the Mayor of Prijedor Marko Pavić. He said that this was the first item in his plan. “We created favorable in-ternational and inter-religion relations. Then we created a good relation between the city assem-bly and local administration. Seven out of eight parties are ruling and all decisions are made by a two/thirds majority. This brings certainty

for investors since they know how the local go-vernment functions. Now we have investments going on because Prijedor was recognized as a secure destination. The seal of quality in the form of Business Friendly Certificate will only verify this”, Pavić added.Targeted investment promotion is also nece-ssary. Mustafa Avdagić, Mayor of Sanski Most, stressed that this local government is focused on its Diaspora. “The first group that left Sanski Most did not make large investments, since these were mostly people with high school education, but now their children are investing in Sanski Most. The certificate will help us a lot, since these young people acquired education abroad and they monitor the way municipalities treat businesses”, stressed Avdagić.Vladan Vasić, Mayor of Pirot and a member of NALED Managing Board, emphasized the importance of human resources in local governments. “The human factor is the first and most important, and for this reason we do not hesitate to look for outside assistance. However, there are people in Pirot who can deal with great investments and I believe that certification can help us position ourselves as a good destination on the investment map of South East Europe”, said Vasić, adding that there is an urgent need

to resolve the issue of institutions that act as states within the state. “They need to change or become decentralized”, Vasić pointed out.At the end of panel, Goran Jović, Deputy Mayor of Veles, added that investment promotion is also affected by the positive relation of local administration towards the existing businesses. This is why he particularly stressed the obliga-tion of forming a Business Council as one of the most important certification criteria. “Veles council involves representatives of businesses, local governments and unions who directly communicate and resolve both big and small problems on a high level”, Jović stressed.The mayors of certified municipalities urged the Government to introduce higher level of decentralization in the region, to facilitate inves-tment promotion. They believe that there is no fear this would lead to misuse at the local level because they would perform some functions better than the national Government. They also find that the local government should not be discouraged if the investments do not flow in shortly after the implemented reforms because the investors will most certainly come once all “horizontal and vertical line” obstacles have been removed. The panel was followed by the official ceremony of regional certificates award.

Congress recommendations

9 principles of effective investment promotion1) Regional approach2) Predictable business environment 3) Standardization of services4) Transparency and responsibility5) Decentralization of authority6) Political stability7) Targeting investors 8) Quality staff9) Communication with businesses

Success story: Gucci in RumaSince 2010, when they entered the certification process, the municipality of Ruma has managed to attract three times more investments than in the previous years, when they had not been certified as business friendly. The greatest interest of investors was seen in the fields of machine and metal-processing industry (one of the greenfield investments in 2012 was made by British manufacturer of engines and turbines, Albon Engineering & Manufacturing) as well as the leather and footwear industry Ruma was famous for in former Yugoslavia. Thanks to 80 years of tradition in leather-processing and production of footwear, top-quality of raw materials (neat leather from Ruma is one of the finest in Europe – soft but durable, with no defects), qualified labor force, adequate greenfield and brownfield locations, good marketing and most of all – proactive and committed local administration, Ruma has managed to attract global footwear manufacturers and bring back the old glory and new glamour to this until-recently asleep industry. The results followed up not long after the award of Business Friendly Certificate and after investment promotion campaign at Belgrade airport in 2011, involving posters with red leather shoes and the slogan “Ruma - Fit for Profit”. At that time, the company Insert, producing women’s footwear Antonela Rossi and working for world’s famous brands such as Prada, Christian Dior, Louis Vuitton and Valentino, initiated one of the most significant greenfield investments in Ruma – the construction of a 5,000 m2 facility in working zone “West”. A year later, in 2012, the global leader in the field of clothes and fashion accessories, company Kerring Group, bought the Leather factory Ruma to launch the production of leather products of luxury, sports and lifestyle brands for the global market. It is sufficient to say that Ruma currently produces footwear for brands like Gucci, Saint Laurent, Alexander McQueen, Puma and further on. Kerring Group is present in more than 120 countries, now including Serbia, it employs 33,000 people across the world and achieves annual revenues of nearly EUR 10 billion. Ruma truly is “fit for profit”, so there is no wonder that it is among the first 8 municipalities in the region certified in 2013 as business friendly according to international, improved standard of Business Friendly Certification in South East Europe (BFC SEE).

IN SYNERGY Business Friendly Environment

Gordan Maras, Minister of Entrepreneurship and Crafts of Croatia


Marinko Ukropina, Managing Director of SGS for the region and member of NALED Executive Board

Branislav Nedimović, Mayor of Sremska Mitrovica and member of NALED Executive BoardIN SYNERGY

One of the main motives for SGS Belgrade, as the largest certifica-tion institution in the region, to

become involved in Business Friendly Certi-fication (BFC) by BFC standards, stemmed from the very definition of verification process. “Verification is a systematic and independent process, determining the degree to which the verification criteria have been fulfilled”. The Certificate confirming the degree of fulfilling the criteria of business friendly environment should act as a valid proof for all stakeholders (particularly inves-tors) that the certified local governments will provide administrative and logistical services for business start-up and expansion, in an efficient and effective manner. In case an investor plans to have multiple business facilities operating in various municipalities, the certification ensures consistent approach in the work of local administration. It also allows the networking

I will try to make a brief overview of inves-tment-related issues and events, primarily greenfield investments, in the period since

2004 when this issue became topical in our country. There are many factors that determine whether or not a greenfield investment will be realized in a certain location, but the most important include the country’s legal certainty, stability (political, above all), regulated prope-rty-legal issues, developed planning documents, system of incentives and many others. The shy steps that used to be taken in the beginning, most frequently by the local governments with high level of awareness, have finally led to a point where all local governments dream or plan to have at least one such investor (so far, approximately 80 local governments succee-ded at least once in their efforts). However, with a big H, there is a key question of local government performance in terms of previously stated factors that condition the realization of such investments. In terms of first two factors – legal certainty and stability, the decisive role is in the hands of the Serbian Government, while the other factors require full initiative of the local governments. It is certain that NALED with its municipal certification program had a great role in raising awareness on the need for foreign investments and the concept of market competition in investment promotion and overall im-portance of business friendly environment. In terms of conditions local governments provide to investors, there are a lot of varieties in Serbia. From this aspect, I would classify all local communities into three groups: The first one involves municipalities that have still not defined the urbanistic areas for potential investments in their planning documents. The second group involves the ones that defined the

and exchange of experiences among local governments in Serbia and the region. By fulfilling 12 comprehensive certification criteria, the municipalities are certain to be-come equal partners with successful foreign and domestic organizations and to stand out among other municipalities. This way, the program contributes to the improvement of business environment in Serbia and invest-ment promotion. Among other things, the Business Friendly Certificate testifies to the responsibility and tendency of local administration to act in accordance with ethical principles and it represents a good starting point for

zones and completed urbanistic regulation, but for lack of funding have not yet shaped it with infrastructure. The third group has completed all of the above and are on the go for a strong marketing campaign for investment promotion. But the first requirement that needs to be met to allow the municipalities and the state to deal with local economic development and inves-tment promotion is the existence of appropriate regulatory framework. And it’s here that we encounter two problems. The first was partially removed in 2007 with the adoption of new Law on Local Government placing local economic development under municipal jurisdiction. The second is the lack of legal solutions providing a definition of investment from the aspect

of state interests and the game rules that need to be respected by the state, local government, all institutions and the investors themse-lves. In addition to defining the concept of investments that should be supported and encouraged by the state, I believe that we also need a developed system of measures for stimulating

investments significant for the state or local community. In drafting the Law on Investments, the Government should include the most

significant business associations and think-tank organizations such as NALED, and they should certainly make use of extremely vast experience of Serbian Investment and Export Promotion Agency SIEPA, which was the main agent in attracting greenfield investments to Serbia. The path is well paved but what’s missing is to make the incentive procedures more transparent, so as not to compromise the entire process. There is no doubt that, in the forthcoming period, the topics of greenfield investments and job creation will be more and more significant because the Serbian economy simply craves for new employment, and this is the path to econo-mic recovery. To achieve this great, but accessi-ble goal, the first thing we need is political will, which is now definitely here, as well as adoption of regulations in the form of law that would govern the area of investments and bring legal certainty to investors. There is a need to make a political decision on developing a system of me-asures to achieve these goals, bearing in mind that our competitors in the race for investors, primarily the countries in the region – Croatia, BH, Macedonia, Albania, Bulgaria, Romania are most certainly not sitting idle with their arms crossed. For this reason, the investment challenges should be declared the No.1 issue of the entire political elite, as it leads the path of recovery and growth which is saved only for the politically stable and predictable systems.

In drafting the Law on Investment, the Government should

include the main business associations such as NALED and

use the vast experience of SIEPA.

Only half the municipalities in Serbia have any greenfield investment

The Law on Investments should define the following:• Who are the investors• What is considered an investment of state significance• Types of investments supported by the state • The measures for stimulating investments (subsidies,

co-financing of industrial zone development, potential tax benefits etc.)

• The activities of various stakeholders involved in investment realization process

• Obligatory treatment by institutions, companies and or-ganizations in the investment realization procedures and deadlines and penalties for not complying with the rules

NALED's Certificate gives investors proof of good municipal services

the development in accordance with other international standards such as Quality Management System - ISO 9001, Environ-mental Management System – ISO 14001, Information Security Management System – ISO 27001. Through implementation of Business Friendly Certification and other interna-tional standards, SGS Belgrade, as the lea-ding control organization and certification authority in the region, will certainly strive to make a contribution in improving the overall business environment in the Repu-blic of Serbia and the region, in an increa-singly demanding market competition.

12 criteria of business friendly environment 1. Strategic approach to local economic development

2. Administrative capacity to support businesses (LED Office)

3. Partner relationships with the private sector (Business Council)

4. Efficient system for issuing construction permits

5. Database management of business related information

6. Proactive approach in investment promotion and marketing

7. Credit solvency and financial stability

8. Promotion of job creation and human resource development

9. Promotion of public private partnerships

10. Adequate infrastructure and reliable utility services

11. Transparent and stimulating tax policy

12. Use of information technologies

Extending the BFC standard in the regionNALED has taken the far-reaching initiative to expand BFC certification to the region of South East Europe (Croatia, B&H, Macedonia), creating BFC SEE standards. Extending certification to a wider region allows a comparative analysis of the BFC criteria and impact of the process, providing a basis for re-evaluation and improvement in the work of local governments


Branislav Bugarski, Provincial Secretariat for Inter-Regional Cooperation and Local Government IN SYNERGY

Since the year of 2000, foreign inve-stments have served as a topic used by all politicians, in both positive and negative

context. From the announcements that foreign investments would ensure better conditions of life and a stronger economy, to warnings that we would be used as cheap labor force and for application of “dirty” Western technologies, without gaining anything for ourselves. I belong to the group that looks at these investments from a positive aspect (limiting my statements to production-service character investments). After all, it is a fact that foreign investments are important for developing countries, as they allow you to achieve economic growth without direct borrowing, create new jobs, gain new technologies and ultimately, increase your exports (and imports, certainly, but with a po-sitive balance in final calculation). In Serbia, all three levels of authority have paid attention to this issue: the republic, the province and cities and municipalities. Even though we had a very difficult starting point, being burdened with war conflict (giving us a very bad image) and just made the initial steps towards normal and organized democratic society (representing an additional risk in the eyes of the investors, as we were treated as unstable business environment) we have made great efforts and managed to achieve a decent result in spite of the fact that our country’s Prime Minister was assassinated. Today, there are more than 230 foreign com-panies operating in AP Vojvodina, with 66,000 employees and EUR 6.6 billion invested. Could it be better – it certainly could. In general, even though it was not strategically documented and assigned, the role of public sector in this effort was recognizable. The Republic was in charge

of developing the legal framework, while the Province and cities and municipalities created conditions in the field, by completing the planning documentation and utility connecti-ons in potential locations. All levels got actively engaged to have as many foreign investors come and visit Serbia, Vojvodina or individual cities or municipalities. In my humble opinion, the Province and municipalities significantly con-tributed to improving the image of Serbia. Still, I cannot ignore the fact that these foreign inves-tments were often the subject of political abuse and irrational decisions – there were cases of some investments being negatively presented in the media and of individuals boasting of success for projects they did not take part in.

MISSED OPPORTUNITIES AND WHAT CAN BE DONE NOWIn addition to regional conflicts and internal political turbulences, another big problem that has not been resolved to this day is the poor organization on the national level in terms of promotion of Serbia. It is just sad how the good ideas fell through and how little funds were invested in Serbia’s marketing. We cannot expect potential partners to see us in the positi-ve light if we do not present ourselves that way. To achieve this, we need to communicate more and use every opportunity to present ourselves. Topic that is endlessly debated are the subsidies per job created. My experience as the Director of Vojvodina Investment Promotion Fund

is very clear: without incentives, we are not competitive in global and European investment markets. Furthermore, another important issue is the education of local political officials, who should learn to always look at the broader picture. In particular cases, we have encounte-red situations of public servants giving promises they knew were not in accordance with the law, making such municipalities automatically disqualified in the eyes of investors or causing future harsh accusations by the investors regar-ding the public sector efficiency (which were certainly justified in some cases). Finally, telling the truth proved right in all cases, no matter how bad it is. It is clear that there will always be problems, it is only a matter of how reliable you are as a partner to resolve the issues by working together. It may sound trivial, but apart from relevant technical details, the investors’ subjecti-ve impression will be influenced by toilette cleanliness (which is not our strong point if we are being honest), use of foreign languages, behavior in meetings. One thing we need to understand: being poor is not something to be ashamed of, but lacking the effort for beating poverty, thus acting smart about it, is.

EXISTING RESISTANCE FACTORS AND HOW TO REMOVE THEM I have already spoken about some of the pre-requisites to attract foreign investors. However, a more important question is whether we can do something to be more competitive and what can that be?! If we start from an assumption that the main three conditions are favorable legal framework, infrastructure and labor force, we can easily recognize and perform a self-analysis of whether and what we achieved. The lack of comprehensive and mature approach among politicians, lack of courage and cheap populist moves have significantly slowed down this pro-cess. The best example for this attitude towards creating a better business environment is the case of Law on Planning and Construction from 2008. The idea of the Law to set up a system has unfortunately lost the battle to populism and lack of patience. After long and hard work on its development, this Law was supposed to allow all investors to have public and transparent insight into the opportunities and plans of a

certain local government. Where and what they can build, and which size the facility can be. Unfortunately, once again we faileded to follow the law in full scope, as the legalization was not performed. These are difficult topics, but they will have to change in the decades to come, most of all through a change in our approach and mentality. As for the legal framework, the liberalization of Labor Law is another very important aspect for investment promotion. We cannot expect to protect the slackers together with good workers. The investors have also often demanded the im-provement of courts. The inefficiency of judicial system has been a problem since the 90s and we

still have not managed to resolve it. Regarding infrastructure, much progress was made in this field. We still have not made the best use of the existing capacities, but this comes as a result of complicated legal grounds on one hand, and the inefficient courts on the other. Nevertheless, in terms of workforce, our opportunities are great. For example, Vojvodina established an educati-on center allowing people to obtain knowledge and use it in the labor market. Additionally, we have another mechanism to partner with inve-stors in teaching people the skills in accordance with the employers’ needs.

STANDARDIZATION OF WORK THROUGH CERTIFICATION By not implementing the law, we actually slow down the entire investment process. Had you started developing planning documents in 2010, by 2012 you would have completed the work and in 2013 you would know what can be offered to investors and under what conditions. It is certain that this job is neither easy, nor simple and it lasts for quite a long time. On the other hand, the development of the state and the system has still not been completed by anyone and it is certainly a demanding and large-scale effort.

In order to resolve this problem, the first thing to do is to change the awareness in public administration, in two directions – by communicating that there is a need for systemic approach to work and that there can be no shortcuts. This needs to be understood by politicians and administration. The second important step is to change awareness among administration to understand that they are exclusively a service for citizens, and that they receive their salaries to act as such. This was exactly the reason why the Government of Vojvodina, the Secretariat for Inter-Regional Cooperation and Local Government, decided to start the process of harmonizing the work

of local administration in entire Vojvodina. We called it “Vojvodina standard”, partially overlapping with NALED’s Business Friendly Certification. This means that each local government needs to have three elements – development strategy, Local economic development office to implement the strategy and the system of 48 hours for responding to citizens enquiries. The work done by NALED, certification and standardization of muni-cipalities, is extremely important because it prepares them for investment promotion. Still, the obtained certificate does not mean that the job is done, as it is a permanent process the municipality needs to perform continuously. They need to constantly plan, implement, control and make corrections for future plans, thus constantly improving themselves. Finally, I find it important to say that the level of development and existing capacities can be limited, but there are certainly great potentials in the country, that can be of assistance in building these capacities. Expecting solidarity and assistance is one thing, but more impor-tant, the cities and municipalities in Serbia need to take responsibility for their future and economic growth, of course, with the support of everyone involved in this work in Serbia.

Investments is hindered by our failure to implement the lawPoliticians and bureaucrats need to drop the practice of taking shortcuts

Amateurism and superficial approachThe idea of economic representatives fell through the day (in my opinion, in the very beginning) when these professionals were not supported with allocated budget and clearly defined goals. One cannot expect to make a good deal without the funds to organize a presentation or rece-ption, lunch or dinner, or travel from Berlin to Hamburg or from Paris to Lyon. Such amateu-rism and superficial approach is the worst enemy and the greatest obstacle to better results.

A huge problem is disorganization at the national level in the promotion of Serbia. Not enough money is spent on marketing.


Aleksandar Nikolić, Local Economic Development Coordinator, NALEDIN SYNERGY

allowing easier communication and contri-buting to faster acceptance of new business requirements and principles. Working as an economic diplomat abroad, I have had the opportunity to see for myself that foreign investors particularly appreciate the multitude of trade agreements Serbia has with other countries, such as the arrangements with Turkey, Russia, Belarus, Kazakhstan, EU countries and EFTA. Particular importance for easier business of domestic companies comes with the regional agreement CEFTA, while it is also certainly inevitable to note the existence of preferential arrangement with the USA, allowing duty-free export of certain types of industrial products to this most developed market in the world. All of these agreements together provide domicile-status companies with free access to a market of more than billion potential consumers. What spurs much attention among investors, representing a huge competitive advantage of Serbia compared to other countries, is the existence of free trade agreement with Russia. Except for former

Soviet republics, no other countries in the world have such agreements and incentives. In terms of tax burden level, with corporate income tax of 15%, VAT of 20%, and indivi-dual income tax of 10%, Serbia is somewhere in the middle of the list compared to its neighbors. While the tax burden here is much lower than in Croatia and Slovenia, on average they are higher when compared to Bulgaria, Montenegro, Bosnia and Herzegovina, Albania and Macedonia. On the other hand, when the calculation also includes tax incentives and

subsidies provided to foreign investors, there is a conclusion that Serbia is more attractive than its neighboring countries. It is one of the three countries in the region allowing the so-called tax holiday (for investments of more than EUR 9 million and 100 new jobs), and the only one where this offer involves all industries. Additionally, tax holiday can be used for up to 10 years – which is the longest period for such opportunity in the region. In addition to a variety of tax exemptions, the Government of Serbia also ensures significant incentives for foreign and domestic investors. Together with the unique trade agreement with Russia, I would say that the financial incentives tip our sales pitch in promotional activities for attracting investors to Serbia. Since 2006, our Government has been provi-ding subsidies for foreign direct investments through a special program of financial support awarding grants of EUR 4,000-10,000 per new job created, depending on the location, for investments of at least EUR 1 million (or EUR 500,000 in the so-called devastated areas), that is, 50 new jobs. This measure has rather far-reaching impact when compared to similar initiatives in other countries in the region. It is also important to stress the importance of large investment projects, and the arrival of globally recognized brands, such as Fiat, Bosch, Siemens, Panasonic. These projects indicate that Serbia has large absorption potential and can take up large investments. In practice, the arrival of large companies often

acts as a magnet for other companies to come, especially the ones from the same or related industry. Much to the dismay of all dealing with inves-tment promotion of our country, whether local or national initiatives, Serbia is also characteri-zed by numerous disadvantages that prevent or negatively affect further inflow of foreign direct investments to Serbia. My personal impression is that for these companies, the greatest problem in making a positive investment decision is the slow and inefficient state administration. Most remarks are made in regards to excessive bureaucracy, complicated administration, non-transparent and burdensome procedures for obtaining the necessary permits, slow judicial system and high level of corruption. I have had the opportunity to experience how hard it is to explain a foreign company owner that the issue of construction permit may take up more than 8 months of their time. Why foreigners find it hard to understand – it becomes clear after looking at the World Bank’s Doing Business report for 2013, ranking Serbia as 179th out of 185 analyzed countries with regards to this in-dicator. At the same time, many countries from our surroundings are rated much better, for this and for other indicators. I will only mention Ma-cedonia, ranked 65th based on the time needed for issuing permits, and 23rd in terms of overall business conditions (Serbia is ranked 86th).In addition to the mentioned problems, a number of foreign investors have also been complaining about the complicated taxation

Our country’s strong points are its location, good labour force and free trade agreements; the downside is bureaucracy and a complicated tax system

system. This is an additional challenge, because along with the national tax system, there are a plenty of local fees that vary locally. Even though the corporate income tax is relatively low, this effect often gets annulled through a multitude of fees charged by local authorities. What is common for all investors, no matter what country they come from, is that they demand transparency, political and economic stability, maximum possible predictability and fast and efficient administration and courts. In the time to come, the overall development of our country will largely depend on the amount of realized foreign direct investments, especially having in mind that the conditions of low liqu-idity among businesses, limited loan opportu-nities, insufficient exports and lack of modern technologies would pose a significant obstacle to continued economic development in Serbia. The effects of foreign investments have deep im-pact and do not come down solely to an inflow of certain amount of money and employment of domestic labor force. They also contribute to the development of domestic industry, creation of a more competitive market, arrival of modern technologies, increased productivity, higher exports and country’s better payment and foreign trade balance. There is no doubt that the FDI are a necessary requirement for a successful transition of Serbian economy and its integrati-on into the global market.

SERBIAEAST

opens the door to the Famous brands testify to maturity for large investmentsIt is also important to stress the importance of large investment projects, and the arrival of globally recognized brands, such as Fiat, Bosch, Siemens, Panasonic. These projects indicate that Serbia has large absorption potential and can take up large investments. In practice, the arrival of large companies often acts as a magnet for other companies to come, especially the ones from the same or related industry.

The author Aleksandar Nikolić has many years of experience in investment promotion activities within USAID and as an economic diplomat in Macedonia and Slovenia.

Most foreign investors that have serious interest in expanding their business in the region of South

East Europe see Serbia as an interesting locati-on in terms of being favorable for investments. Certainly, one of Serbia’s greatest advantages is its geographic position – the location on the crossroad of two international corridors (road Corridor 10 and Danube Corridor 7) connecting the West and Central Europe with Turkey and Middle East and facilitate access to Black Sea region. This is particularly important for European companies in the stage of expansion, the ones that see Serbia as an important hub for further placement of their products towards the East. On the other hand, the European companies wishing to reduce their production costs find benefit in the fact that Serbia is neighboring four EU countries, ensuring excellent logistical connections and easier access to this market. Another very important advantage of Serbia is high level of education and qualifications of the available work force, which is an obligatory demand of almost every investor. Our workers are often described as hard-working and edu-cated people, with strong business spirit, easily adaptable and open to changes, with additi-onal positive remark that a large share of the workforce speaks foreign languages,


IN SYNERGY

had enjoyed subsidies and closed markets, the public sector was blown up highly above the needs. Competition became the new philosophy after 1990 and it lead to drama-tic changes. 350.000 jobs were lost in old industries that moved to low cost countries. Although the federal government came into town, it did not solve the problem. Federal institutions in Germany are highly decentralized and so only about 35.000 new jobs accompanied the move of the federal government. Berlin local economic development was completely reorganized in the early 1990s. No longer subsidies where the trigger, but concentration on future industries. Attractive locations could be found in abandoned industrial buildings, fitting the expectations of creative minds, as well as in city centers and in newly developed industrial parks. A network of technology centers and attractive assistance for new businesses completed the offers and LED managed to attract investment and reloca-tion from branches, which were defined as the future of the local economy. They had a local basis as well as first class markets worldwide with their new technologies and high quality production and services: Transportation technologies and automo-tive, Medical and Biotech, Energy, Service industries, and last but not least the Media and Creative Industries. Special teams in local economic development agency and city administration put together tailor made offers to the companies fitting into the new strategy. Specialists started tra-velling in Germany and around the world to meet the decision makers. Whenever an interesting investment was on the agenda, an offer from Berlin was on the table. The strategy was seconded with a bundle of measures to make the city of Berlin more attractive. Three universities and more than 100 scientific institutions were playing a pivotal role in the proce-ss. Substance, international reputation and concentration on the growth sectors changed the image of an interesting, but traditional location. Berlin is now seen as

the place for innovation, creativity, talents and networks. Founders and established companies find the right location, the right people, attractive networks and easy access to markets. Thanks to assistance from the EU and federal government they can rely on a most modern infrastructure, qualified workforce, access to technologies and enjoy an environment which more than 10 million tourists are visiting every year for culture, lifestyle, shopping and pleasure. Local economic development has its share in this success of a 3,5 million capital city by concentrating on the unique selling points of an economy in transition

The German economy is probably one of the most stabile ones in Europe. Nevertheless it is subject

to constant changes. It has to face tough international competition and is fighting for technological leadership as well as for its share in international markets. Economic policy is setting the framework for dealing with structural changes and competition, national infrastructure has to be kept on a high level and programs for qualification and bringing new technologies to markets are developed.All this is useful and helps meeting the requirements of a competitive envi-ronment. Germany is a federal republic with 16 states, all of them with their own responsibilities, i.e. in economic actions, education and infrastructure. But all business is local and thus the local autho-rities and stakeholders in local economic development have to play an important ro-le in taking chances and overcoming risks. About 8.000 towns and municipalities are the backbone of economic development. They are setting the conditions for projects, for investment and employment.

Towns, municipalities and regions are active in local economic development. They are free to do it as part of their administration or with businesslike organizations. But finally it is not the form of organization, people making the difference. Part of the

success is inclusion of local business and NGOs in formulation and implementation of local strategies and measures. There is not the one and only way to deal with change. Major threads for the local economy where met by local policy in different ways. Germany is well known for its industrial basis. It is automobile, machinery, chemicals that dominate the image of the industry. But most of it declined in the 70s, 80s and 90s of the 20th century. Dortmund in the German industrial heartland Ruhr for 100 years was the synonym for coal and steel, seconded by its fame for beer. Not much of it was left after the decline of mining, concentration of steel industry and internationalization of the brewing industry. After 1960 some 80,000 jobs got lost in industry, only coal mining jobs came down from 40,000 to zero. All actions and protests could not stop the decline. Even Billions of subsidies for the old branches could not save the region.Local economic development department of Dortmund city administration took the chance that came along with a new univer-sity founded in the late sixties. It started with about one thousand students, today

there are more than 25.000 being educated in Dortmund. But that is not enough to develop the economy in a city of 600.000. The focal point for the turnaround in the economic structure was to combine the sci-entific background with business. The city

should be attractive for service industries, new technologies and creativity. It worked with the foundation of a technology park next to the growing university as a corner-stone of modernization policy. Electronics, Software, Biotech, Logistics were the centers of new development. The image of the city of Dortmund changed completely: it is no longer traditional industries but high tech and service industries. And of course football, but that is another story.Berlin started from a different situation. After having been divided into an eastern sector and the western part for 50 years, reunification was the turning point for the old structures. Although under different political systems, on both sides industries

Dr Hans Estermann, NALED Strategic Development Advisor

How Berlin and Dortmund regained their power

The author works as Strategic Development Advisor in NALED, with the support of German Government and CIM center. During his decades-long experience, among other things, he held the managing positions in state administration for economic and local deve-lopment in Berlin, Cologne and Dortmund

and offering tailor made solutions for all interested parties.Each municipality can tell its story how to de-al with challenges. The successful ones follow a simple recipe: they analyze where they co-me from and have a clear vision where to go. Politics and administration are focusing on growth factors and streamline their organiza-tion. If it should be successful LED has to be integrated part of local policy. Qualification, environment, quality of life, social benefits and culture make the location attractive and are brackets of prosperity. Investors are loo-king to figures, but also like to enjoy benefits of an outstanding environment.

Successful German local governments follow a simple recipe: they analyze their background and have a clear vision of where they are going

Whenever an interesting investment appeared, Berlin had an offer ready

Adlershof Technology park Berlin © Wista

Euref Campus Berlin

© Berlin Partner


A TALK WITH...

A prominent proponent of regula-tory reform known in public as an economic analyst and author of

articles harshly criticizing the authorities, he describes himself in one of his blog posts on the B92 website as an electrical engineer who left Serbia for Germany in the 80s and started his career in Siemens. He has lived and worked in countries all over the world. He developed and managed companies from their beginning in a garage to the point when they had more than 150 employees. He has been CEO, member of the manage-ment team and board of directors in several companies. He returned to Serbia in 2005 and stayed because he liked it: “hard but beautiful, most difficult for the children, for their education and the future”. In Serbia, he was a licensed bankruptcy manager, expert associate to the Council of Europe, OSCE, U.S. Embassy, GIZ, NALED, advisor to the Association of SMEs. Today, he is the Serbian Minister of Economy. On taking office, his first time in the role of Minister, Saša Radulović spoke about the plans and programmes of the reshuffled gov-ernment to improve the business environment and encourage economic growth, at a working luncheon with NALED members and partners on 23 September 2013. “One of the key issues we brought up, something first Deputy Prime Minister Aleksandar Vučić insists on, is to achieve a healthy and sustainable state and economy based on private ownership, profit, new jobs, production, exports. The stra-tegic guidelines that will serve as a framework for developing state policy are classified in four main categories: regulatory reform, professional-ization of the public sector, resolving the issue of excessive debts among businesses, reducing the burden on labour and creating better business

conditions for small and medium enterprises” – said the Minister of Economy Saša Radulović opening the discussion.

What are the Government’s priorities in the field of regulatory reform? Labour Law, the Law on Planning and Construction and the Law on Privatization supported by good regulations will be the first priority. This will be followed eliminating unnecessary regulations that cause substantial problems for businesses. There should be fewer fees, but they could be higher and easy to administer. I was against the company sign fee and we have made progress in this area to-

gether with NALED. I would go even further, but there is the issue of our country’s eco-nomic situation. We also have a problem with implementing the law. The Budget System Law introduced a provision that the level of fees cannot be determined arbitrarily but has to re-flect the cost of service provision. This has not yet been implemented. We will ask all agencies to adjust their fees to reflect the cost of their service, nothing more and nothing less. A fee is neither a revenue nor a tax. Taxes are applied to consumption, income, profit, property.

Can we expect the introduction of Think Small First principle, which is practiced

in the EU, meaning that in the course of adopting regulations, the first thing to evaluate is its impact on the SME sector? This could be the Ministry’s slogan, because we really act that way. We think small first, big after.

What amendments to the Labour Law can be expected and when? These are severance pay and easier dismissal of employees. It is unreasonable for sever-ance pay to be calculated on the years of employment record. An immediate result is that people aged over 40-50 can never find employment, as no one is ready to take on the risk of such a long employment record. Because if your company falls on bad times and has smaller revenues, you will be forced to dismiss people and so pay unrealistic sums in severance pay to these people. So the Law that should protect the workers has a completely perverse effect. I think the expenses of hiring someone and providing training for them are enormous, so allowing easier dismissal is in fact a measure for stimulating employment. What I do not agree with is for fixed-term employment to be extended beyond one year.

What are the effects of the current tax system in Serbia?The effect is two aspects of the grey economy – illegal employment and tax evasion in terms of VAT from customs and excises. One leads to the other. We need to release the burden on labour. This will directly benefit production and export because these provide employment. If you compare the balance sheets of an exporter and a producer selling the same product, the difference is seen in labour. When you take a look at the tax

Domestic companies will be the basis of our development

Saša Radulović, Minister of Economy

If I’d thought it was hopeless I wouldn’t have joined the government. I think there is a will for change. I like to win, what about you?

Regulatory reform, professionalization of the public sector, resolving the issue of excessive debts among businesses, reducing the burden on labour and creating better business conditions for SME are the country’s strategic priorities


A TALK WITH...

burden, it is much bigger for the producer than the exporter, because the largest salary component is salaries and wage deductions. Our tax system is unreasonable. For example, if you expect a wall painter who arranges a EUR 300 deal to paint an apartment and pays EUR 120 to the state to be in the legal system, it is simply not a realistic expecta-tion. Our calculations show that the grey economy amounts to 30% of GDP and there was a large impact on the budget when, for example, a large portion of tobacco products shifted to the black market. Combating the grey zone and illegal market is one of the government’s priorities. Since 2008 we have lost 300,000 jobs. If we include informal job positions, there was a loss of more than 600,000 jobs. When the crisis struck, small businesses saw a 50% drop in revenues. People were formally dismissed and then hired illegally. The workers say that they won’t complain because it is more important for them to feed their families.

Will municipal budgets be affected by the announced income tax reforms? All statements that the reform of labor fees and taxes will burden local government and leave a large hole in local budgets are untrue. It is possible that after the reform there will be more money that we would have to return to the budget. I would like to say that individual income tax is never the major revenue of local government anywhere in the world, this is simply a fact. What are the main novelties in terms of regulations on bankruptcy?In Serbia, there are many devious activities in the field of bankruptcy, which is something that must not happen. For this reason we will

change parts of the Law on Bankruptcy, to make it more transparent and to strengthen the role of the creditors. I would be happy of we didn’t have 3,000 companies in bankruptcy and the economy in the state it is. We will work on ensuring that people understand what bankruptcy serves for. For example, in your regular work, you take risks, open new markets, make investments and there are many situations where investments don’t pay off. Bankruptcy is one of the mechanisms for a regulated way to get out of a bad investment. I am speaking about a system where there is no criminal or fraud, but the company encounters problems due to bad decisions and poor risk assessment. Bankruptcy stops the proceedings and gives the company an opportunity to see

which of its parts are healthy and how they can return to the market. If they manage to do so, we have completed the reorganization.

What fate awaits companies in restructu-ring and privatization?The state has taken an obligation towards the World Bank to resolve the status of 179 co-mpanies in restructuring by mid-2014, and we will respect this obligation. These compa-nies are a cancer in the Serbian economy and we will try to mobilize the whole community in resolving this problem. In the months to come, we plan to publish a complete list of all these companies with their main data. The portfolio of the Agency for Privatization covers 615 companies. They employ 102,000 people. Additionally, we have 900 companies with a certain share of state-ownership. We asked all 615 companies to make their “ID cards”, meaning that, in addition to financial statements, they should involve an inven-tory of property, liabilities, list of clients, suppliers, partners. I wonder how we ever performed privatization without even basic company data.

How will you encourage economic develo-pment and new investment? What will happen with the model of subsidies?Subsidies are not a model for sustainable economic growth. An economy based on sub-sidies is not a healthy one. Foreign investment is more than welcome, as well as investment projects, but the focal point should be dome-stic companies, and I don’t mean only those belonging to Serbian citizens but also foreign partners who came and started a business in Serbia. This is also domestic business. In talks on economic affairs with the US and German ambassadors, they both asked the same thing – you can’t rely on foreign direct investments alone, what is your strategy for domestic business? This must be the foundation for the development of society. We will make a significant shift in economic policy and focus on domestic companies. Taxpayers pay taxes that are then used to provide subsidies and incentives for their foreign competitors. This is not moral, nor sustainable. We will focus on

domestic businesses and our own strengths.

Should the state interfere with the economy – or should we let the invisible hand of the market do the work? I don’t want be in the camp that believes the invisible hand of the market has the answer to everything. What is the value of an ounce of gold in the middle of the Sahara? When you have no one to sell it to, it is worth nothing. For a market to function, you first need to develop it.

Is there a shock absorber to regulate the social component?We need to have a universal system of social protection, and not the current one that costs us RSD 108 billion with another 50 billion in local government budgets. On the one hand, we have people who bring children to subsidized kindergartens in SUVs, and on the other we have people with nothing to eat. No country in the world is rich enough to have such a social system. To start rationalising and resolving the issue of efficient business, we need a good social system.

Saša Radulović, Minister of Economy

What will make this Ministry different from the previous one? I can promise you that this Ministry will be transparent, that we will have zero tolerance for corruption, racketeering will be a thing of the past, I will have zero lenience towards it. The state will be at the service of citizens. The Ministry will publish all the spending of state institu-tions. Taxpayers’ money must be handled transparently and this will be one of the first things, along with the public

enterprises’ “ID cards” that we will make accessible to all.

Is there political will for all the reforms you have announced? Political will is a vague category. I start from the assumption that it exists, and I work as if things have already been agreed and accepted, it is the only way I can and will work. We have to get things moving. If I’d thought it was hopeless I wouldn’t have joined the govern-ment. I think there is a will for change. I like to win, what about you?

There should be fewer fees, but they could be higher and easy to administer. I was against the company sign

fee and we have made progress together with NALEDAll statements that the reform of labor fees and taxes will burden local government and leave a large hole in local budgets are untrue


Philippos Karamanolis, President of MB of Hellenic Business Association and the President of Eurobank Executive BoardINTERVIEW

The current economic situation in Ser-bia could be described as fragile, as we have seen opposite signals in terms of

developing various macroeconomic indicators. For this reason, fiscal consolidation should be the Government’s main priority in the forthco-ming period. Two substantial issues in this field are the reform of state-owned companies that are currently substantially burden the budget, and the reform of health insurance and pension system due to unfavorable demographic tren-ds”, says Philippos Karamanolis, the President of MB of Hellenic Business Association and the President of Eurobank Executive Board, beginning the interview for business journal Synergy.

“The positive thing is that there are expectati-ons of economic growth of approximately 2% this year, while the inflation is under control and according to the estimates of the National Bank of Serbia, it should fall within the planned frame (4% plus minus 1.5%) relatively soon. Similarly, there has been a significant increase of exports, around 24% in the first 6 months of this year, which led to significant reduction of deficit in foreign trade exchange, bearing in mind that the imports remained more or less the same. However, one should still note that the fiscal deficit will most certainly be more than the planned 3.6% of GDP and that unemployment rate still remains very high, around 25%. Along with a very small inflow of foreign direct investments, this does not leave much space for optimism that the situation will soon be improved. At the same time, there are also many opportunities. Along with obvious examples, such as agriculture and energy, I believe there is great potential in sectors such as software development, weapon industry

Reform of the health and pension systems

MUST BE THE PRIORITY

etc. Additionally, the recently agreed strategic partnership with UAE could prove to be a tu-rning point for future economic development. Finally, Serbia could make better use of special connections with the neighboring countries of former Yugoslavia and the existing free trade agreements with countries such as Russia and Belarus.”

Have you noticed that Serbia is developing a better business environment? Which areas have evident progress and which are the ones requiring more effort?It is somewhat surprising that there is obviou-sly a clear consensus between the private sector and the authorities on the need to improve the business environment, and in recent years there has been quite little progress in this field. This

is regularly confirmed in various international researches on the ease of doing business, com-petitiveness etc. In the Global Competitiveness Index report of the Global Economic Forum, Serbia is ranked 101st out of 148 countries, which is the lowest rank among all former-Yugoslav republics. The areas that require improvements are the ones continuously stressed by the leading bu-

siness associations in Serbia, such as NALED, AmCham and FIC, and international organiza-tions such as World Bank and IMF. These areas are very easy to identify based on poor results of Serbia in the mentioned researches. The examples of areas that require most efforts for improvement are the procedure for issuing construction permits and the speed and effici-ency of judicial system, though there have been some positive changes in this domain recently. As a positive example, I would state regular dialogue with the Government representatives and state authorities.

How do you see Eurobank’s results in such environment in Serbia?We are very satisfied with our bank’s performa-nce, bearing in mind the unfavorable economic environment and numerous challenges in the previous 3-4 years. We remained profitable throughout the entire crisis, and additionally strengthened our position in terms of capital and liquidity, which is of greatest importance for banks nowadays. Our capital adequacy ratio of 22.7% at the end of last year is by far above average in the banking sector and the bottom limit of 12% prescribed by NBS, while our market share in deposits is much bigger than the share of branch offices. We remain a system bank in Serbian market, as one of the leading foreign investors and financial institutions with

1,500 employees who daily meet the needs of nearly half a million clients all across our network of 100 branch offices in the country.

There are a lot of appeals by the public that banks could make higher contribution to economic development, but they are not eager to reduce the interest rates, making capital less accessible, particularly to small enterprises and those who wish to start a bu-siness. What can be changed in this regard?I have to admit that I do not entirely agree with such claim. I believe that all major banks are liquid enough, that they are looking for good projects and companies to finance and that they are ready to offer very competitive prices where they find such conditions exist. The si-gnificantly reduced loan activity is more a result of other factors such as low demand, because the clients postpone their decisions to invest, and higher caution of financial institutions on a global level, due to the economic crisis and stricter regulatory requirements in terms of capital and liquidity. As for loan interest rates, they depend on vario-us factors such as the rate paid by the banks for deposits, regulatory expenses, such as reserve requirements that are still high in Serbia, the key policy rate of NBS for loans in dinars and the still high cost of risk, bearing in mind that there is a 24% rate of non-performing loans

It is odd that the government and business agree on the need to improve the business environment, and yet little progress has been made. The effectiveness of the courts and issuing construction permits are the areas that need most effort

CSR ChampionEurobank in Serbia is one of the first five winners of NALED CSR Certificate. What does this recognition means to you and why is it good to have such a certificate? In general, are businesses in Serbia sufficiently socially responsible? It was our great pleasure and honor to be the only financial institution participating in pilot CSR certification of companies, organized by NALED in cooperation with other respectful institutions. This program aims to set the standards of corporate responsi-bility in Serbia, recognize and promote best practice examples, thus encouraging others to adopt the corporate social responsibility principles.The certification process, based on best global practices, was extremely strict. It lasted for 6 months and involved evaluation of our work based on 140 indicators, divided into 5 groups: corporate governance, local community, environment, employees and market. Our bank successfully completed this process and obtained the certificate “Champion of Social Responsibility” awarded by NALED. This was a very useful exercise for us, ma-king us think about the work we do, from a different perspective. It is also significant for our relations with international financial institutions (such as EBRD and IFC/World Bank), that require high standards of corporate responsibility from their partners. The awareness of corporate social responsibility in Serbia is growing, even though it is still mostly limited to multinational companies and some Serbian businesses. Therefore it is important to recognize and make acknowledgement of companies that are more active in this field, and to assist other companies to engage and include CSR principles into their daily operations.

34 SYNERGY 35oktobar 2013 |

among business entities, that is, one in four loans are proble-matic. Another indicator of whether the loans are expensi-ve is the fact that only a small number of banks in Serbia are profitable, and even those that gain profit are achieving low return on the capital invested.

From the perspective of President of MB of Hellenic Business Association, what is your view of the interest among Greek companies for our country bearing in mind the problems Greece is currently facing? How much have the Greek companies invested so far?Historically, Serbia and Greece have always had good diplomatic and economic relations and they foster close ties due to similarities in cu-lture and mentality. If we add up the geographic proximity of the two countries, it is easy to understand why Serbia is one of the main investment destinations for Greek companies in their international expansion. So far, Greek companies have invested more than EUR 2 billion in Serbia, which makes Greece one of the greatest foreign investors in the country. Our members are active in many business sectors, such as finance, hospitality and enter-tainment, energy, construction materials, retail and manufacturing etc. Greek banks have a sha-re of approximately 15% of the banking market in Serbia, and many of our other members are among the leaders in their sectors.The current debt crisis in Greece did not have large impact on the presence of Greek companies in Serbia. Only a small number of companies left the country, primarily because their local operations were not profitable, but there are also new investors, for example in the fields of media and construction, because Greek companies keep looking for alternative sources of growth and profitability abroad.

What do other members of Hellenic Business Association see as problems Serbia should resolve as soon as possible, in order to maxi-mize its opportunities for faster growth?

Our members are facing more or less the same problems regarding their daily opera-tions as all other companies doing business in Serbia.

Which bureaucratic problems, administra-tive procedures or legal provisions were the most unpleasant surprise in Serbia and which are relatively easy to change?My general impression is that the state institutions in general are functioning quite well. However, in our work we faced certain problems that need to be resolved, such as inconsistent court practice regarding lower-

level mortgage to property being sold or large, and partly illogical, increase of municipal fees in some areas. Additionally, it is very hard to explain the long procedures for obtaining all required permits for construction works or reconstruction of branch offices or other facilities in the environment where investments are more than necessary, and the quality of our works guaranteed. And finally, I cannot help but mention that introducing legislation with retroactive effect is not in accordance with the development of stable and predictable business environment, which is a pre-requisite for attra-cting foreign investors.

Philippos KaramanolisINTERVIEW

Introducing regulations with retroactive effect

does not harmonise with the development of a

stable and predictable business environment

What is Your Knowledge on

Investment Promotion1. Define the concept of foreign direct

investment.

a) These are all investments realized from

countries abroad without intermediaries

b) These are investments by a foreign company

to local businesses and resources, to esta-

blish management and permanent interest

over them

c) These are strange investments going in an

unknown direction

2. What is the difference between foreign

and domestic investments?

a) There is no difference, the effects of foreign

and domestic investments are entirely the

same

b) Foreign investments are larger so they are

also better

c) Foreign investments bring an inflow of

foreign capital, technology transfer and

access to international markets

3. Who brings the most jobs and revenues

for the local government?

a) The existing businesses

b) Greenfield investors

c) Brownfield investors

4. What is a greenfield investment?

a) Reconstruction of an old factory

b) Privatization of socially-owned enterprise

c) Construction of new facilities on the land

intended for this purpose

5. What is the difference between

investment promotion and attraction?

a) Investment promotion is a narrower

concept than investment attraction, which

involves both communication of investment

offer and improvements to business

environment, incentives and subsidies

b) These are two entirely different concepts –

investment promotion refers to advertising

of a certain location and investment attracti-

on means direct negotiations with investors

c) There is no difference, these are two words

for the same concept

6. Which investors should be targeted by

promotion programs?

a) Production and import-oriented investors

b) Production and export-oriented investors

c) Shopping malls and retail chains serving the

domestic market

7. What benefits can local government offer

to investors?

a) Exemption from paying fees for utility

services

b) Exemption from paying individual income

tax

c) Exemption from paying the land

development fee

8. Is targeted approach to investment pro-

motion important and why?

a) It is not important at all, municipalities

should promote all industries and see what

works first.

b) It is important because cities and munici-

palities need to focus their limited funds on

priority industries and those investors that

are mostly likely to come.

c) It can be important if we know who and

what to target.

9. Arrange in chronological order the

following targeted marketing activities

(from a to f ):

A visit by foreign investors to the location

Developing marketing messages

Contacting investors via mail, e-mail or phone

SWOT analysis and benchmarking

Investment mission abroad / trade fair

Identifying target industries and investors

TEST

Find the right answers on page 81


to small and medium enterprises, attract foreign investors, support to domestic businesses, job creation, simplification of procedures for inves-tors, improve communication between local governments and national institutions. They should also improve the work of agencies with the task of promoting investments to Serbia.

Slobodan Georgiev: I've partially responded to this question already. The state should create infrastructural framework for all regions and assist when the local governments are not able to do it themselves. The local governments should be bolder in determining their vision of development and implementing the projects that should enable the achievement of this vision. Cities and municipalities in Serbia need to work jointly on larger investment projects. They should unite their regions on their own and act together towards investors.

What can private, public and civil sector do together for the benefit of the entire community?

David Lythgoe: Private firms can contribute by challenging shady practices, lobbying for better

labor laws, cleaning up their own act, etc. The public sector must focus on fighting corruption. The civil sector can be a crucial catalyst to clean practice, by working on specific issues from a non-profit perspective.Public awareness is essential. Remember how accident rates fell when the new traffic safety law was passed? Not because of heavier punish-ments, but because of raised awareness - when the campaign stopped, accident rates rose again. In the same way, greater awareness of the nature

and benefits of a real market economy is the essential need.

Miroslav Krišan: The municipalities should include the private and civil sector in the process of defining priorities and strategies of socio-economic development, and into important decision-making for the entire community. Such cooperation should also be seen in joint activities and projects of infrastructural equipping, citizens’ education, youth support as they are an impor-tant factor in community development, invest-ment promotion. In the municipality of Kovačica, the Local economic development department has the key role in connecting local government with businesses and civil sector.

Slobodan Georgiev: They can unite their interests and work together in many areas. The entrepreneurs should be the agents of ideas, the civil sector should adapt them to the needs of the community and the public administration should work on eliminating the obstacles for the realiza-tion. Organizing the Local budget forums, BIRN has identified large interest among local entrepre-neurs for the work of public administration, but the fact is that their communication is not always good. The civil sector should be the initiator of a more constructive debate between the public and private sector regarding specific activities: better public finance management on one side and pro-motion of corporate social responsibility in the private sector. Additionally, the status of domestic

and foreign investors should be equalized, because the local governments often do not have under-standing for domestic entrepreneurs in the same manner they listen to foreign businesses. And ba-sically, all of them should be treated as domestic, since they work in the same environment. Good cooperation among these three sectors could be useful for explaining and presenting many things so that they are more close to citizens, in a period of societal reforms that require significant sacri-fices from all participants in the process.

David Lythgoe, Miroslav Krišan and Slobodan Georgiev3D INTERVIEW

What is your interpretation of the term “business-friendly municipality”?

David Lythgoe: A business-friendly municipa-lity is one that combines high service levels at realistic, transparent tariffs with low taxes and ad-ministrative burdens. These things depend on ef-ficient current management to make the most of current resources, and efficient capital investment in infrastructure and human resources to make the most of scarce capital. This efficiency requires an understanding of the market economy and the role of government in ensuring a 'level playing field' - and otherwise not interfering. It requires innovative thinking, good planning, and simple, transparent and corruption-free administration. A municipality that can provide this is friendly not only to business but to all of its citizens.

Miroslav Krišan: It is a municipality with developed cooperation with businesses, efficient administration, adequate infrastructure and utility services, good human resources, pla-nning and strategic documents. In late 2012, the municipality of Kovačica was certified as business friendly environment and for us, it is a valida-tion of all our efforts for establishing efficient local administration focused on businesses and citizens and approaching the European values and standards. By improving the functioning of all services in municipal administration, modern-izing the work process and establishing better direct communication with potential investors, our municipality has made a great step forward in attracting potential investors.

Slobodan Georgiev: Through several projects, BIRN has actively worked with Serbian local governments, aiming to increase the administra-tive capacities of these cities and municipalities. The assumption is that the local administration is the basis for creating conditions for business friendly environment. Therefore, primarily those local governments that made long-term invest-ments in human resources and formed teams able

to respond to various challenges have managed to create a system where a potential employer feels comfortable. Additionally, the local government should work more on redefining its identity, improving its image and attempting to present in a simple manner who they are and what they do best. In order to achieve this, there is a need to improve various aspects of life in a city or municipality: from infrastructure to recreational areas, hospitality development etc. Shortly, a local government needs to convince an employer that it is a good place to live in, and then it will be easier to start a business as well.

What are the main obstacles for local economic development in Serbia?David Lythgoe: Unfortunately most are not at the local level. There are many, but the main ones are unpredictability, high taxes, complicated, time-wasting administration, an old-fashioned labor law and high interest rates.Companies like predictability that allows them to plan. Lacking, unclear and partisan policies (that are likely to change after the next election) do not help, nor do corrupt practices. Wage deductions (income tax and contributions) are high, at over 40% of gross pay, even for low-paid workers. Few countries burden low incomes so heavily. The la-bor law desperately needs reform on many points.Companies like clear, simple administrative pro-cedures. A good example for other institutions is APR (the Business Registers Agency) which has rational and modern procedures.Miroslav Krišan: In my opinion, the greatest

obstacles involve insufficient funding for small lo-cal governments (small budget); complicated and long procedures for obtaining various consents and permits from institutions that are not under municipal jurisdiction (Electric power distribu-tion, police department for emergency situations, Vojvodina waters etc.); the national subsidy policy that favors only large companies that create more than 100 new jobs, which creates a disadvantage for small and medium enterprises, as well as small communities that mostly involve such small facilities; excessive tax burden for newly-founded companies.

Slobodan Georgiev: The lack of what we listed in the previous answer, as well as excessive reliance to the state. The local governments should ask only for general guidelines from the state, and pe-rform all other activities with their own resources and through inter-municipal partnerships. The obstacle originating in the Government of Serbia, relates to the lack of willingness to provide more significant jurisdictions to local governments. Belgrade should show greater trust towards local authorities and encourage them in their efforts to attract people with new business ideas. In this sense, the state should do a lot more on the deve-lopment of traffic infrastructure: roads, Internet, energy potentials and environment protection.

Which steps should be taken by municipalities, and which by the state, in order to encourage business development and new investments?

David Lythgoe: Municipalities should fight co-rruption, make cross-party consensus strategies and find innovative ways to improve services and commercialize utilities while lowering taxes.The state should fight corruption; provide clear policies; simplify administrative procedures; re-duce wage deductions with a simple, progressive scale (with lower deductions, the grey economy would shrink by itself); make the courts quick and clean; create a framework for professiona-lizing local utilities and try harder to understand the market economy. Serbia needs to change the reputation of being “European Bangladesh" to the image of economy with higher value-added. Its tradition of good education can be re-established and develop excellent human resources if and when the education reform is understood as priority.Both the state and the municipalities should refrain from subsidies except in very special cases. Subsidies usually encourage unsustainable business. Think of this: the government taxes companies, and spends part of their money on supporting some of them (and another part on itself). This means that many companies are paying a few of their selected competitors. But governments everywhere are notoriously bad at choosing businesses to support, this is the mar-ket's job. What’s worse, domestic businesses are often made to pay to help their foreign compe-titors establish themselves in Serbia.Any available funds should be used instead to make VAT payable on receipt, and reduce taxes and deficits to provide macro-economic stability that can reduce interest rates.

Miroslav Krišan: The municipalities need to listen to the needs of businesses and do every-thing in their power in order to improve the local business conditions. Our municipality took the first step by fulfilling the 12 comprehensive crite-ria for a business friendly environment. We expect the state to pay more attention to the development of smaller communities, support

David Lythgoe, Business Development Manager, Halifax Consulting

The state needs to have better understanding of the market economy

Serbia is not the EuropeanBangladesh

Miroslav Krišan, Mayor, Kovačica

More attention and funds for the local level

Slobodan Georgiev, Project Coordinator (BIRN) Serbia

First we need to prove that we are a good place for living


NALED Quarterly report - The status of regulatory reformLEGAL FRAMEWORK

Although spring is the time of blossom and growth, according to NALED’s Quarterly report, the regulatory

reform in Serbia has not bloomed, so the bu-sinesses and citizens were not able to enjoy the fruits of better business environment. Amendments to tax laws that marked the II quarter were focused more on increasing the budget revenues than reducing the burden to businesses. The example can be seen in the amendments to Law on Individual income Tax: from 30th May, the contributions for pension and disability insurance have been increased

from 22% to 24%, the individual income tax has been reduced from 12% to 10% and the non-taxable portion of income has been increa-sed to RSD 11,000. NALED calculation shows that the resulting savings for employers were – zero. The winner is the Pension and Disabi-lity Insurance Fund (PDI Fund) – that is, the national authorities, with increased revenues by RSD 27 billion, the employees can expect net salaries to rise by RSD 47 and the greatest loss is of municipalities (RSD 20 billion). This way, the local governments approached the level of revenues they had achieved in accordance with

Drastic increase in fines for TAX OFFENSES

In focus: the key results of reforms in the III quarterIn the third quarter of 2013 there were no significant regulatory activities or they were significantly slower due to Government reconstruction and expectations of staff changes that followed, which have not been finalized yet.• New laws and amendments important for businesses have been adopted: Audit Act, Acco-

unting Law and the long expected Factoring law.• The Bill on Legalization of Facilities is currently in the Parliament procedure, but it does not

resolve the issue of legalization of illegal facilities whose owners were the most responsible in the acquisition of such facilities.

• In September 2013, the Register of Bidders has started functioning, kept by Business Regi-sters Agency.

• One of the first recommendations of Grey Book from 2008, which required systemic change in the manner of work of Tax Administration – unified payment of taxes and contributions is in the process of implementation and will be performed in January 2014.

• For 29 laws relevant for businesses, there are 169 by-laws that still not have been adopted to ensure full implementation of the laws.

• So far, the Government has not achieved results in the reform and rationalization of state administration.

the Law on Local Government Financing from 2007. Such solution can have only two effects. Either the local governments will reduce their expenditures, if possible, or they will have to find a way to increase the budget revenues, possibly by increasing their own revenues (increase of local fees). If they opt for the latter, there is a risk of reduced revenues in local governments, due to contraction of businesses, their transition to shadow zone and accumula-tion of tax debt. Amendments to Law on Tax Procedures and Tax Administration brought a highly significant novelty, meeting the demands of businesses unify the conduct of Tax Admini-stration, by introducing a binding decision by the ministry in charge of finance, and to have these decisions available in electronic form to taxpayers, free of charge. These amendments are a significant step forward towards the increase of legal certainty of doing business in

Serbia and it is certainly the most important legislation novelty introduced in the second quarter of 2013. However, the amendments to these laws have also brought some controversial novelties, primarily in terms of short deadlines. Namely, a new paragraph has been added, prescribing that an institution, organization, or other entity in charge of registering entities that perform certain activities into an adequate register cannot erase such entity from the register without proof of termination of tax liabilities issued by relevant tax institution, not older than five days. This provision is contro-versial even in case of liquidation of companies and erasing of foreign representative offices, and particularly in the process of erasing of companies due to bankruptcy. For removing the mistakes in tax returns, the parties receive only three calendar days, which can be a particular problem when they receive an inspection report on Friday or before holidays. The citizens and businesses should be careful about penalties that have been dramatically increased (two to five times), which is not adjusted to the type of offenses and financial strength of taxpayers. The new rules for submitting the decisions also call for caution. The Tax Administration considers you received a decision upon 15 days when they delivered it to the post office. According to the amendments to Law on Pro-perty Tax, the property tax basis for taxpayers that keep the books is the fair value (interna-tional accounting practice) or market value of

property (effective from 1st January 2014). Law amendments have determined more pre-cisely the entities that pay the property tax. In terms of taxation of land property, the subject of taxation is expanded to include the right to use of construction land, in order to integrate the land use fee into property tax, bearing in mind that in accordance with the amendments to the Law on Planning and Construction, the land use fee shall be payable only until 31st December 2013.Certain steps forward were noted with the beginning of work on drafting the law on in-spections and law on planning and constructi-on, but there has not been significant progress with amendments to Labor Law. A particular problem is that the Government and Parlia-ment are still enthusiastically adopting laws without a thorough public debate and impact assessment – evaluation of costs and benefits. In the second quarter, out of 29 adopted regu-lations relevant for businesses, 20 (69%) were passed in urgent procedures. The Government did not adopt any re-commendations provided by businesses through Comprehensive Regulatory Reform process or NALED’s Grey Book. There are still 66 unresolved CRR recommendations that would save businesses EUR 36 million and 56 recommendations from Grey Book. Additio-nally, no para-fiscal charges were eliminated. According to the By-Law Barometer, only 7 by-laws significant for businesses were adopted in the second quarter, with an average delay of 719 days!

II quarter: bureaucracy at work• Verification of health insurance cards is

still a bureaucratic torture for businesses, due to lack of communication between the Tax Administration and Republic Health Insurance Fund. In order to finally resolve this problem, NALED insists on urgent implementation of Central Regi-ster of mandatory social insurance and elimination of health insurance cards.

• Since April, certain national institutions have been illegally charging the fees for their services for which the amount is not determined in the law, since they did not acquire consent from the Ministry of Finance.

• The Republic Geodetic Authority is still illegally charging two fees for one servi-ce, as this is in direct collision with the Budget System Law.

For removing the mistakes in tax returns, the parties receive only three calendar days, which can be a particular problem when they receive an inspection report on Friday or before holidays

41october 2013 |

Calculator of local fees and charges Comparative analysisLEGAL FRAMEWORK

Amendments to the Law on Local Government Finance have imposed the burden of reforms to cities and

municipalities, and in the situation of crisis in public finance, they were forced to divert this burden to the largest and most productive companies in their communities. Therefore it is no wonder that the fees and charges to bu-sinesses do not cease to rise. During this year, the average signage fee for a production com-pany has been increased from RSD 55,411 to RSD 81,306, which is a rise of 46%, as shown in the analysis of NALED’s Calculator of local business expenses. For mobile operators, the signage fee has increased up to 100% in some areas. On the other hand, signage fee for banks has declined by 5%, from RSD 340,290 in 2012 to RSD 324,150 in 2013. In amendments to the Law on Local Go-vernment Finance in September 2012, the Ministry of Finance and Economy determined the upper limit of the amount of signage fee that can be up to three average salaries for

large companies, and two average salaries for the middle-sized. The exception are banks, insurance companies, cement manufacturers, mobile operators that were put in the same basket with casinos, gambling and betting houses and night bars and discotheques, and therefore have to pay as much as 10 average salaries for signage fee. The situation turned out best for entrepreneurs and small enterpri-ses that were abolished the obligation to pay signage fee. If we consider the character of fee this burden has, it would be expected that the amount of

DIVERT THE BURDENMunicipalities Forced to

of Reforms to Businesses

40 SINERGIJA

According to many businesses, eco-nomists, politicians and analysts, the answer is undoubtedly – yes. Howe-

ver, other experts claim that this argument is untenable when the tax burden to labor is compared to the system in other countries. Regardless of the answer to the given questi-on, we may ask ourselves another one – Is it possible to reform the current labor taxation system in Serbia in a manner that would redu-ce the tax burden to labor? The answer to the second question may be easier than the first one – having in mind the current level of bud-get deficit of the Republic of Serbia and a high level of debt, the proposed reforms that would reduce the burden to labor are not realistic to consider in mid-term. Finally, and maybe most importantly, one needs to wonder why it is important to reduce the tax burden to labor in Serbia. Bearing in

fee is primarily determined in line with the location attractiveness, but this is not the case in reality. The determining factor is the busi-ness sector a company operates in, followed by the company size. So the biggest amounts are paid by companies in finance sector, telecommunications, petroleum products processing, primarily because these are the sectors with highest profits. There is fear that companies that are subject to increased burden, such as mobile ope-rators, will change their work practice and start using a dealership-partnership principle of sales, instead of their own shops, which would mean a loss of revenues for municipa-lities based on signage fees and additionally – loss of jobs. In general, frequent changes in the amounts of fees lead to lack of stability and predictability of business environment, which has a negative impact not only to the existing businesses which is the main source of revenues for a municipality, but also to new investments that are the engine of econo-mic growth. In this sense, the state needs to assist local governments, firstly by changing the regulations that would provide them with greater powers and the opportunity to develop their attractiveness to investors and promote investments on their own.

Signage fees the lowest in Veliko Gradište and SuboticaA great difference in the amounts of signage fee is noted not only among municipalities, but also among various business sectors in one municipality. Some local governments opted for lower amounts, thus strengthening their attractiveness to investors. For example, Veliko Gradište and Subotica are the most competitive for production of electrical appliances.

NALED’s Calculator of is a unique online application, allowing calculation and comparison of local fees and charges in 60 cities and municipalities in Serbia. For more information, visit kalkulator.naled-serbia.org

mind that high tax and contribution rates are an issue mostly (sometimes even only) businesses complain about, an average individual might think that the only ones that would benefit from reduction of taxes and contributions would be the businesses and employers. However, in reality, things are a lot more complex. Through the tax system, the state directly influences the price of labor and capital, thus stimulating or de-stimulating eco-nomic growth, investments and employment. The higher the tax burden, the labor becomes more expensive (from the employers’ perspe-ctive) and vice-versa. This way, tax burden to labor significantly impacts the competitivene-

ss of labor force of a country such as Serbia. Labor taxation through obligatory payments to the state is performed through wage taxes and various types (mandatory) social contri-butions. The main difference among these required payments in relation to labor is that the purpose of funds for social contributions is determined in advance and the purpose of funds collected through tax is not. The effective burden to an average salary in Serbia, imposed to the employer and the employee is 64.3% of net salary and 46.2% of gross salary. From the perspective of em-ployer, the most important data is the share of taxes and contributions in total expenses for

TOO HIGHIs Income Tax

in Serbia?

The effective burden to an average salary is 64.3% of net salary and 46.2% of gross salary, and its share in

total expenses for an individual worker is 39.2%


Comparative analysisLEGAL FRAMEWORK

an individual worker (gross 2) which is 39.2%.Is labor taxation in Serbia (taxes and contribu-tions per employee) high, low, too high or too low? For an employer who needs to bear the burden of labor taxation, they will most certa-inly always be “too high “; on the other hand, for the state that collects the funds from taxes and contributions into its budget, taxation may even be “too low” compared to the needs and expenses of budgets and social insurance funds. Therefore one can conclude that the answer to this question is relative. From the analytical point of view, we sought the answer to whether labor taxation in Serbia is high, low or average in international comparisons. Based on a comparative analysis, we may conclude that tax burden to labor in Serbia is not “too high”, at least when tax burden to average salaries is compared to the European average. Moreover, the table shows that tax burden in Serbia is below the average, both if you look at old member countries (EU-15) and the new ones (EU-10 and EU-6). However, we will be able to conclude that the condition in Serbia is not as good as they may seem from the above, if we look back into the issue of labor taxation of lower and lowest salaries in Serbia, and the progressivity in labor taxation. In 2008, Serbia was ranked fifth by the level of labor taxation rate for wages of 33% of average salary and ninth in terms of wages of 50% of average salary. The lack of progressivity in labor taxation signifi-cantly contributes to this situation.Regarding labor tax progressivity, there is a noticeable diversity among European labor taxation systems. Ireland is the leader in this field – the difference between the tax wedge for salaries above and below the ave-rage is high 18.1 points, followed by Luxembourg (14.2) and Finland (11.8). On the other hand, Serbia belongs to the countries with least progressivity (the difference between tax wedge for salaries abo-

ve and below the average is only 1.2 points).This fact by itself is not necessarily bad. Progressive tax systems perform a re-distri-bution from richer society members to the poor ones. Is something like this desirable or not, it is a matter of social consensus regarding the society organization and the attitudes on the issues of social justice. In most European countries, there is (more or less) a consensus that a certain degree of re-distribution among the rich and the poor through the tax system is a desirable practice.

However, it is indisputa-ble that by introducing a more progressive labor taxation system, Serbia could significantly reduce the tax burden to the lowest salaries, without reducing the total amo-unt of tax revenues. This would highly increase the competitiveness of labor-intensive indu-stries in Serbia, which

involve great international competition and create conditions for reviving the economic production and stimulate economic growth and employment in business sector.

Legal framework from the perspective of members: Law office KOSIĆ

For the purpose of improving the con-ditions for doing business and aligning the regulations of the Republic of

Serbia with those of the European Union, Serbian Parliament adopted the Law on De-adlines for Settling Liabilities in Commercial Transactions, which has been in effect since 31st March 2013, with significant consequen-ces in real economy. The Law clearly expressed the lawmakers’ intent to accelerate the payments and introdu-ce greater certainty and control and to acce-lerate the enforced collection of claims, but they did not perform any analysis as for which sectors and in what manner the Law will be implemented in, and what the consequences would be. On the contrary, the Law is binding for all companies in their mutual business re-lations, and in deals between the public sector and business entities. The Law stipulates that an agreement between business entities cannot determine a deadline for settling financial liabilities longer than 60 days, and for agreements between the public sector and business entities, it cannot be more than 45 days. If a deadline is not defined, or if there is a longer deadline, the debtor is obliged to settle their liabilities within the deadline prescribed by the Law. In exceptional cases, the agreement may determine a longer dead-line in case the agreed liabilities involve in-stallment payments, when the agreed deadline cannot exceed 90 days. Additionally, an agree-ment between business entities may define a deadline longer than 60 days, on the condition that a debtor needs to secure payment within the agreed deadline by submitting a bank gu-arantee to the creditor, containing adjectives ''irrevocable', ''unconditional'', payable on first

demand without objections'' or availed bill of exchange by the bank. This basically completely abolished the main principle of the freedom of agreement, with serious penalties. The consequence of such provisions is that the business entities most often opt not to apply these provisions, for two reasons. Given that they need to adapt to the purchasing power and realistic market conditions, the small and medium enterpri-ses, are not in a position to limit their partners in any way, so as to ensure their survival and competitiveness in the market. The position of large companies and systems is that they follow their corporate principles, applied in every country they operate in, so they most frequently hold to the principle of not issuing guaranteed bills that can even be misused.Specific situations we encounter best illustrate the problematic implementation of the Law. Here is an example. twoparties concluded an agreement on the delivery of goods with payment in 23 monthly installments, while the goods are delivered at the moment of conclu-sion of the agreement. Bearing in mind the im-portance of the deal for the seller operating in production, which needs the funds for further production, they must accept the buyer’s request in order to stay competitive in the mar-ket. The buyer, due to internal policies, is not able to comply with the statutory provision of giving securities, so the concluded agreement, though reflecting the will of contractual parties,

is not in accordance with the Law. In implementation of the Law it is particularly noted that the rights and obligations of debtor and creditor largely differ, that is, the law provisions put the debtor into a much worse position. The creditor is entitled to demand a RSD 20,000 fee from the debtor if the finan-cial liabilities are not paid within the statutory deadline, regardless of the deadline agreed by will of contractual parties. In addition to financial penalty, the debtor is obliged to pay the interest on arrears and is also subject to starting of legal proceedings with a penalty of up to RSD 2 million! The lack of alterna-tives for contractual parties often leads to parties governing relations without a written agreement, refraining from agreements and deliberately violating the law. One cannot ignore the fact that the imple-mentation of the Law ensured control by the state in terms of deals between the businesses and public sector and the control of collection of mutual claims, which can be considered a positive side of the Law. The provisions of this Law and the problems with its implementation, even though it was pa-ssed as part of harmonization with EU regulati-ons, can be very problematic for new investors. Given that the Law brought new uncertainty through sanctions and selectivity in penalties and, similar to other laws, its implementation proved to be controversial, the initiatives for its amendment have been started.

The Law encouraged illegal actions and arranging deals without signed agreementsThe first initiatives started for amending the Law on Deadlines for Settling Financial Transactions, due to problems in implementation

Country Tax wedge for the following amount of salaries (expressed as share of average salary)

PROGRESSIVITY (change in tax wedge rate)

PROGRESSIVITY (change in tax wedge rate)

50% 67% 100% 167% 50 - 167% 67 - 167%

Albania 34.1 27.9 28.9 29.8 -4.3 1.9BH-Federation 30.6 29.3 32.3 35.3 4.7 6.0BH-Rep. Srpska 31.7 31.6 32.5 33.2 1.5 1.6Montenegro 36.3 38.6 40.9 42.8 6.5 4.2Croatia - 38.2 40.9 44.8 - 6.6Macedonia 44.9 37.6 38.5 39.2 -5.7 1.6Serbia 37.6 38.4 39.2 39.7 2.1 1.3Turkey - 35.0 37.4 40.2 - 5.2Average-B5 35.9 33.9 35.4 36.7 0.8 2.8Average -B7 - 34.6 36.3 38.1 - 3.5Average -EU6 - 38.3 41.4 44.2 - 5.9Average -EU15 - 36.9 41.4 46.8 - 9.9

Tax burden to labor, comparison of Serbia with the region

The conclusion is that, speaking about an ave-rage worker with an average salary, the level of tax burden is not above the European average. However, in terms of taxation of lowest and below average salaries, Serbia is in a much worse situation. The reforms in 2007 and 2013 did not bring significant ease to the burden on lowest salaries in Serbia, and there is a lot room and many good reasons to try and make labor tax burden lower. Given that the wage tax rate in Serbia is 10% and that the non-taxable amo-unt is RSD 11,000, there is very little room for introducing progressivity and significantly reducing the burden to lowest salaries. One of the possible approaches would mean abo-lishment of the current health insurance and unemployment insurance system, as well as the respective contributions. One part of this open space could be used to raise the pension and disability insurance contributions, which would improve the sustainability of Pension and Disability Insurance Fund (PDI Fund). Still, the largest (maybe entire) space that would be open for taxation could be used for wage taxes. This would create an additional maneuver space for introducing progressive taxation, and consequently lower tax burden to the lowest earnings.

In terms of tax burden to lowest

and below average salaries, Serbia is

ranked much lower than the European

average

Source: own estimation; OECD; World Bank (2010); World Bank (2008).


“Good tax policy is good tax administra-tion” as far as the famous public finance economist Richard Bird goes.In fact, there is a lot of truth in this saying. New tax laws and changes to existing tax laws always have to be implemented by the tax administration – or “No taxation without implementation” to re-phrase the slogan of the American inde-pendence movement. From a tax culture economist’s point of view, a ministry of finance can only define the tax code de jure while it is the tax administration

(and its workforce) that defines it de facto by choosing ways and defining rules for implementing the law. With the Serbian EU candidate status, new challenges lie ahead when aligning the tax laws with the acquis communau-taire chapter 16. Again, it will be the

burden of the tax administration to guarantee the implementation of

those changes.The Serbian tax administra-

tion (STA) has embarked a systematic reform paths with its "Tax Administra-tion Corporate Strategy

2011-2015", which is con-secutively developed also for the later years to come. While this strategy contains reforms for almost every as-

pect of the STA’s work flows, let me briefly focus on three

broad areas for this analysis which are of fare-reaching cha-

racter: voluntary tax complian-ce, electronic communication,

and organizational reform.Firstly, the Serbian tax admini-stration has decided to become more client- or citizen-oriented. By fostering voluntary tax compliance a lot of admini-strative costs can be reduced. As a result, to the ordinary citizen the STA shall appear as a service-oriented entity that supports the citizens in fulfilling their tax duties, and not as the grabbing hand (“taxation is

legalized robbery”- not!). Basically it me-ans implementing the principles of good financial governance in the revenue colle-ction process (this has also been outlined in the government’s document “Needs of the Republic of Serbia for International Assistance In the Period 2011-2013”). More transparent processes and better information for the taxpayers will increase both administrative effectiveness and accountability of the tax administration. For that purpose, the top management has engaged in organized communication processes with different groups of taxpayers. Among others, a tax dialo-gue forum has been established, where representatives from enterprises can interact directly with high-ranking tax officials and ask technical questions for clarification. Also, the STA is listening carefully to the different economic sectors to find out the problems and needs for the different enterprises. Nevertheless, changing the mindsets of both tax officials and taxpayers will take time. For example, the German tax administration has been struggling with exactly the same issue for about a decade. And still the process is not finished as old habits and old prejudices have to be overcome sustainably. Secondly, in the future the whole taxation procedure will be based on the foundation of electronic communication. E-filing, unified online tax-accounts and interactive online tutorials on how to use the online resources of the STA will offer a modern way to interact with ones’ tax administra-tion. Eliminating the different forms for different sources of income and uniting all income flows on one single form is going

Dr Birger NerréSenior Project Leader, Public Finance Reform in Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH*

Spotlight on tax administration reform in Serbia

to make it far easier for any taxpayer to fill out his or her tax declaration. While taxpayers at the Large Taxpayer Office (CVPO) have already had to file their tax declarations electronically since 2008, it will become mandatory for all taxpayers as of January 1, 2014. Until then, the Serbian tax administration will launch an educati-onal campaign to inform taxpayers about the whole process and its consequences for the interaction with the tax office. In Germany, e-filing is not obligatory yet. Varying from federal state (Land) to fe-deral state, electronic income tax declara-tions as a proportion of total declarations have reached over 50 per cent in some states – which is still far from the desired quota of 100.Thirdly, after analyzing its organizational structure and comparing it to the changing needs of the administration, the STA will be undergoing significant organizational reform – as well in its systematization as in the number of organizational units, i.e.

tax (branch) offices. The actual number of 172 branch offices will be reduced significantly (probably to around 30 plus satellites/sub-branches), leading to a com-pletely different organizational scheme and reorganized information flows. Earlier this year, already the four regional centers’ functions were redefined, eliminating the second organizational level between headquarters and the branches. All in all, the STA will thus become both more effective and efficient, respectively. Nevertheless, the underlying re-organization process will take its time. To sum up, there is a lot going on at the Serbian tax administration at the moment. Further challenges, especially due to the EU negotiation process, lie ahead. The success of the reforms depends on both tax officials and taxpayers. Both groups have to embrace the change – which could be a challenge as it means to overthrow old ways of thinking. All in all, a tax cultu-re cannot be changed in a heartbeat.

On behalf of the German Federal Ministry for Economic Cooperation and Development, the GIZ project “Public Finance Reform” works closely with its Serbian partners on selected reform issues. Among others, you can watch voices of the tax administration and taxpayers explaining various issues around taxation in Serbia on “Anatomija Poreza – Rez PoRez” (Tax Anatomy - weekly on TV Pink)

Serbia will surpass Germany in the level of electronic tax returnsTo achieve success, it is important for both the Tax Administration and taxpayers to accept change

LEGAL FRAMEWORK


Introducing the company: EnergoprojektBUSINESSES

We knew that Energoprojekt has constructed a lot, but it was only when we saw the photographs of

all large projects at one place that we became clear why it is referred to as the British Empire – where the Sun never sets, because at each po-int some of its construction sites in the world are busy with work. The times have changed, but this Serbian construction giant is still successfully operating in 17 world countries, the workers at some construction sites going to bed as the working day starts at some others. In 62 years of its existence, Energoprojekt has become a complex business system, now involving 10 companies in Serbia (Energopro-jekt Holding, Entel, Oprema, Visokogradnja,

Niskogradnja, Industrija, Hidroinženjering, Urbanizam i Arhitektura, Garant and Energo-data), as well as 20 companies, representative offices and branch offices abroad. It all began in late 1951 in Belgrade, when it was founded as a consulting company, and even back then its engineers believed in the idea “expertise until completed realization”, that remained its motto ever still. In the beginning they worked across the country, and then, with the support of the state and Tito’s connections in non-aligned countries, Serbian constructors opened the door to the world. Already in mid 1970s, the Financial Times wrote that Energo-projekt was among the top 10 construction companies in the world, and its best period was in 1981-1991 when it hired more than 7,000 workers and had a share of 30% in the export of construction works in former Yugoslavia. Almost all big Serbian companies that were dominant in domestic and international markets in the 1990s no longer exist. Still, Energoprojekt has managed to overcome the many challenges in the previous two decades and maintain all of its business resources and activities. For some time, the company has come to consider “crisis” as a new, permanent business environment, and maybe even a new “business framework”. Firm policy towards foreign markets is one of the factors of stability

that contributed to the company stability during the 90s as the hardest period at home. Reputation, references and flexibility allowed them to work abroad even in the period of tra-gic events in former Yugoslavia. Of course, all of this could not have been achieved without the people who believed in themselves and the company they work in. In Energoprojekt, they find one of their greatest advantages to be the fact that a large number of employees come to the company straight from college, and many of them spend their entire service here – as Borjana Vićentijević, Head of Marketing and Corporate Communications in Energoprojekt Holding told us.Today, the company employs approximately 2,300 people, who currently work on projects in Russia, Kazakhstan, Jordan, Algiers, Peru, Nigeria, Ghana, Uganda, Qatar... Still, Ener-goprojekt stresses that currently their most attractive project is the one they perform in homeland: subcontractor works on RTB BOR – reconstruction of copper smelter and the construction of sulphuric acid factory. Except for Energoprojekt, there are almost none engineering organizations in Serbia with such integrated, multidisciplinary activities, vast experience acquired in various projects and a multitude of markets – and for all these reasons, the company may be rightly considered a

The crises have not beaten the quality

The construction company Energoprojekt has vast experience in numerous consulting and construction works, in the fields that deeply influence the economic and social development – water, energy, environment, infrastructure, architecture, industry, real estate, information technologies, insurance and re-insurance of property and liabilities. All of these segments are united under one roof, led by Energoprojekt Holding

The largest power substation opened in AfricaIn late spring, a member of Energoprojekt system, Energoprojekt Oprema and its company Energo Nigeria completed and delivered to the investor, Power Holding Company of Nigeria, the electric power substation Oke – Aro, in the same-named densely populated area of Lagos, which is the most populated city in Africa. By its size and most likely by its power as well, it is the largest substation on the Dark continent. The substation is connected to four existing high-voltage transmission lines, which provide it with energy of 330 kV voltage and it will be connected with another two transmission lines currently under construction. Rekonstrukcija topionice bakra

i izgradnja fabrike sumporne kiseline u Boru


Serbian brand. Energoprojekt annually conducts projects worth more than EUR 400 million, and their successful performance abroad is best proven with ratings on the lists of renowned U.S. magazine Engineering News Record, which ranked them 229 out of 250 top international constructors in 2012, being the only listed co-mpany from the region, and they also ranked 144 out of 200 best international consultants.

A LONG SERIES OF WELL-REALIZED PROJECTS The water management system Chira-Piura in Peru, constructed in stages for 30 years straight, hydro power plant Bayano in Pana-ma, fair in Lagos, the Ministry complex in Kuwait, hydro power plan Sigalda in Iceland,

the Mosul dam in Iraq, highway in Malaysia, conference center and hotel Sheraton in Harare that is still seen as a symbol on many souvenirs from Zimbabwe, the stadium Shah Alam in Malaysia, hydro power plant Tekeze in Ethiopia, which was declared the project of the year in the category of sustainable projects in 2010, the Senate building in Tashkent in Uzbekistan. In our country, the most successful projects were hydro power plants Vrla I-IV, Bajina Bašta, Đerdap, thermal power plants Kolubara, Nikola Tesla, Kosovo, Kosto-lac, sports hall Pionir, Hyatt hotel, Belgrade Arena, underground train station Vukov spomenik, office building of Energoprojekt, residential complexes Block 29, Block 15 and Block 12 and many, many more.

A RETURN TO OLD MARKETS THAT DEMAND QUALITYIn many parts of the world, Energoprojekt developed a reputation of a company doing good work. In the previous couple of years, they received many invitations to come back to the markets they used to build at, such as Iraq, Libya, Russia and Uzbekistan. Even though some of them were closed for years, the quality of projects and the energy invested by Energo-projekt were obviously memorable. For years, Energoprojekt employees have been publishing their anecdotes from construction sites across the world, in their internal newspa-per. We came across one from Iraq: In 1984, during the construction of a military base in Iraq – project 202 C, Energoprojekt workers

came to a saying describing their hard work: “The God gave us Sunday, Tito Saturday and Allah – Friday. Then Strahinja (Site Manager) comes and takes awayboth!”

THE HISTORY OF GREAT NAMESThe seat office of Energoprojekt in Belgrade was visited by many of the world’s ministries, ambassadors, officials, such as the presi-dents of Central African Republic, Gabon, Uganda, Republic of Guyana, Guinea Bissau, Zimbabwe, the Prime Minister of Malaysia as well as the delegations of Iraq, Angola, Central African Republic, Russian Federa-tion, Uganda, Algiers, Colombia, Beijing, Zambia, Japan, Iraq… When a construction site in Zimbabwe was visited by President Mugabe, who arrived unannounced, the company representatives wanted to give him something to remind him of the visit. As they had nothing more suitable on hand, they gave him the famous badge symbolizing company business sector, explaining that the symbol is given to indispensable workers who spent long time in Energoprojekt. Witty Mugabe thanked them and added: But I have to tell you that I cannot come to work tomorrow, I have a Government session.

INVESTING IN NEW TECHNOLOGIESEnergoprojekt recognized the importance of introducing a strong IT system back in 1966 when they founded the company Energodata operating exclusively in IT field. Today, it is the leader in the area of information engineering for large business systems and financial insti-tutions. Energodata engineers have recently developed a software package Tax+, aiming to centralize the management of tax returns for large taxpayers, to increase their efficiency to a higher level. Tax+ automatizes the process of submitting and paying tax returns and contributions withheld, corporate income tax withheld, tax for advanced-final determining of corporate income tax and value added tax. It includes all tax sources for taxpayers and generates an electronic return, and upon being signed with a qualified electronic signature, it is being automatically submitted to Tax Administration.

Are you satisfied with this year’s business results? Was it better than in the previous year?This year, 2013, has been particularly hard for all companies in Serbia, even though there has been notable ambition of politicians to pay more attention to improvements of business conditions and improve the practice of hiring domestic companies to perform announced investment projects. The slow activation of these investments and the overall economic situation have classified this year among the most difficult years for doing business.

What is the procedure of getting projects in Serbia, and how is it arranged abroad? All the projects we get go exclusively through tenders. The time of “direct deals” and exclu-sive projects has passed. On markets abroad, we participate in tenders with international competition and we win. We find the hardest situation at home, where there is a rule of fa-vored companies that take over most projects, through credit and financial arrangements, concluded out necessity, under the conditions eliminating the domestic companies. In the previous 10 years, credit arrangements with various creditors have opened the door for the arrival of foreign companies. It is important to note that engagement of their own and other resources is extremely facilitated for them, Energoprojekt does not have such benefits in neither of the 17 countries in which we realize similar projects. If Energoprojekt manages

to fight for a more significant role in realizing infrastructure projects in the country, we would improve our references when concluding agree-ments abroad.

What measures should the executive authorities take for the recovery of construction sector?The first step is to work on reducing the shadow economy and unconditional respect of fiscal discipline and tax and other laws and regulations of the Republic of Serbia. The con-ditions of work for domestic companies should be equaled to the conditions provided to foreign companies hiring international staff in Serbia. It is essential that, in negotiating credit arrangements, they ensure maximum space for hiring domestic companies under most favo-rable conditions. There is a need for increasing the efficiency of courts in resolving commer-cial disputes. The authorities should form a development bank to provide support to

small, medium, as well as large companies, for export activities and work abroad. There is a lot that should be done, but the main thing is to adopt a mid-term and long-term recovery program and hold on to the program. The various “programs” that had been adopted so far served only on paper while the politicians gained votes by making empty promises. They used up all credits and the words said in public need to be taken more seriously.

What is your view on the activities of NALED? Performing its activities, NALED signifi-cantly contributes to changing the habits and the manner of thinking for businesses and local governments, which is the basic “building block” of the entire society. Thus, it also achieves its mission to change the institu-tional environment and entirely influence the business reforms. This is something many public and business sector representatives in Serbia need. It is good to see the membership grow constantly, as the leaders of social and economic processes recognize the need to come together in associations, to exchange experiences, articulate common positions and needs of businesses, municipalities and citizens, and communicate these views to de-cision-makers on national and international level. We will continue to support NALED within the Supervisory Board and through joint activities in the field of regulatory re-form and development of a business friendly environment in Serbia.

1. Thermal power plant Kostolac

2. The construction of sulphuric acid factory in Bor

3. Sheraton conference center and hotel, Zimbabwe

4. Office building Etisalat in Abu Dhabi

5. Belgrade Arena

1

2 3 4

5

Introducing the company: EnergoprojektBUSINESSES

Interview with Vladimir Milovanović, General Manager of Energoprojekt Holding


Dr Tanja Pavlov, Center for Migration, Group 484BUSINESSES

“Many people I know there [Serbian citizens in the U.S.] think about coming back home and founding a business. As satisfied as you may be there with work and life in general, you are always drawn to returning back home, you saved some money so maybe you start something of your own...” – these are the words of an entrepreneurs aged 31, who returned to Serbia after studying in the U.S. He started a search engine optimization company in Serbia, in cooperation with a cousin from Australia. Even though the company is registered in Serbia, 90% of the clients are from Australia, and the rest from USA and Great Britain. They are currently considering expansion of business to New Zealand. He stresses quality as the key to a successful business: “In Australia, we already refuse some small clients because we maintain the image of high-quality work.” He also stresses the importance of paying taxes and legal business. He has made donations for cultural and charity purposes in Serbia, as well as for the soccer team of his college in the United States. This is one of the examples of transnational entrepreneurs, who draw increasing interest among decision-makers in their countries of origin and the academic community. Why is that so? The Silicone Valley is an illustra-tive example indicating the significance of transnational entrepreneurship – in 2006, the companies founded by Chinese and Indian im-migrants achieved revenues of USD 52 million and employed 45,000 workers. Investing in their countries of origin and increasing their mobility to create entrepreneurial networks in far-out locations, transnational entrepreneurs

become agents of globalization. For example, in Silicon Valley, entrepreneurs born in Taiwan develop social and professional networks to initiate their business endeavors in USA, and then use them to accelerate establishment of new companies in Taiwan. Even though we may find examples of similar endeavors in our media, there have been no researches on such transnational activities in Serbia. For this reason, the Center for Migration in cooperation with the Institute of Social Sciences conducted a pilot research to analyze whether this type of entrepreneurship exists among Serbian entrepreneurs, what its characteristics are and what type of state support there is, that is required for successful functioning of this kind of entrepreneurship.

Transnational entrepreneurs connect us to the world

We interviewed 15 and sent out electronic surveys to 47 transnational entrepreneurs. We also did interviews with 11 representatives of Government and non-government sectors. The research showed that the citizens of Serbia, whether they live in Serbia or abroad or both, do develop transnational entrepreneurship as well, connecting Serbia with the world. We involved entrepreneurs of various age, mostly from 31 to 52. There were more men (63%) than women (37%). We found them in a variety of business sectors – mostly in information and communica-tion technologies (25%), trade, finance, construc-tion and education, but also agriculture, health care, art, aviation… These are small companies, with seat offices in Serbia or abroad. Destination countries of surveyed entrepreneurs were mostly

Great Britain, USA, Australia, France and Germany. They place their products and services to various international markets – in Australia, USA, Canada, European countries, Asia, former Soviet Union, West Balkan countries etc. What these entrepreneurs are specific for is that their parallel involvement in two or more social environments allows them to maximize their resources in a creative and efficient manner. The knowledge and ideas they acquired abroad allow them to develop specific niches, thus re-ducing the competition. “Our airplane has been recognized as a type, it is the first in the world. It is registered in civil registers all across EU, members of ЕАSА. And it is a brand. A Serbian airplane in Europe. We did it with six times less money – with my engagement, experience, persistence, by working day and night. We took something that already functions, improved all deficiencies and made a new airplane 100% made in Serbia.” (1972, returned from Italy, airplane production)They achieve competitiveness through high level of services and low prices. They overcome the small market, low purchasing power and poor business environment in Serbia by placing products and services to the foreign markets. Dual citizenship allows them to act in both ea-stern and western markets. They use networks abroad to start their business, for advertising, for image development, achieving credibility and being hired. They also assist in overco-ming the absence of connections with political structures required for successful business in Serbia. The networks in Serbia are mostly pri-vate and are used primarily to acquire reliable and good human resources. In addition to con-tributing to business development with their knowledge, innovation and contacts, they also bring their values and make a contribution to developing a work culture appreciating quality, performance-based advancement, legal busi-ness, loyalty to clients, importance of planning and long-term investing with no expectation of easy profit, etc. “Trust needs to be built for years, it is not achieved over night. In the West, you cannot say I am a friend of this and that, I am someone’s relative, this is my uncle, would you hire this and that for me – no. In the West, you either know how to do business or you

don’t, you either can or cannot.” (1966, lives in Hungary and Serbia, chemical industry)The motivation for starting a business in Serbia stems from a combination of social and econo-mic factors. The social factors are reflected in strongly expressed patriotism and the desire to contribute to country’ economic development. There are also family reasons, the wish to have children growing up in their homeland, to be close to friends and family, well spent leisure time etc. “I find it my duty to contribute to improving the situation here. Because Germany was not built by the English, Americans, French or Russians, but Germans, and they did it twice, and Japan was built by the Japanese twice. No one helped them, we are the ones that should build Serbia up...” (1970, returned from Great Britain, IT) However, these entrepreneurs also point out the business opportunities in Serbia. They are mostly opportunities to achieve competitive-ness in terms of quality and prices, since the costs of registering a business and operating in Serbia are lower than in destination countri-es. There is educated workforce that is paid less than abroad, e.g. in the information and communication technology sector. There are open possibilities for cooperating with markets abroad, particularly towards two big markets – Russia and China. Still, transnational entrepreneurs indicate the obstacles to successful work in Serbia more than opportunities. They firstly indicate the unpredictability and insecurity of doing business in Serbia compared to stable business environment in destination countries. “How can you plan your next year if you don’t know whether foreign exchange losses [in Serbia] would be EUR 5,000 or 500,000? How can you plan your next year if you don’t know whether the state will impose additional expenses or

whether they would be imposed by mistake, because someone did not know how to classify a tariff heading, which is actually what happe-ned a month ago?” (1982, returned from USA, petroleum products) They further explain: The way of work in Serbia often includes political connections, corrup-tion, monopole, illegal employment, there is also widespread counterfeiting of products, all leading to unfair competition. There are still complicated administrative procedures and lack of information about business operations, particularly economic-legal issues. The laws are adopted ad hoc, with no understanding of how businesses function in practice and no impact analysis of these laws to daily operations. The funds are unavailable, taxes and contributions are high, a high degree of insolvency (“the land of debtors”). The state does not take enough measures to encourage entrepreneurship, espe-cially small and medium enterprises, and there is still a negative attitude towards entreprene-urship and lack of entrepreneurial spirit.Therefore, if we go back to the beginning of this article and remember the ones who think of returning home and/or start a business in Serbia, there are three key incentives for them and their contribution of economic growth of Serbia: 1) make them visible, that is, identify the transnational entrepreneurs in priority business sectors in Serbia, 2) regularly inform them about the manner of work in Serbia and involve them in defining and realization of de-velopment goals, and 3) develop a stable social environment and business climate, as well as an entrepreneurship culture. The revision of “Development strategy of competitive and innovative small and medium enterprises in Serbia 2008-2013” is an excellent opportunity for transnational entrepreneurs to get involved in its development and implementation.

Remarks about the business environmentThe way of work in Serbia often includes political connections, corruption, monopole, illegal employment, there is also widespread counterfeiting of products, all leading to unfair competition. There are still complicated administrative procedures and lack of information about business operations, particularly economic-legal issues. The laws are adopted ad hoc, with no understanding of how businesses function in practice and no impact analysis of these laws to daily operations. The funds are unavailable, taxes and contributions are high, a high degree of insolvency (“the land of debtors”). The state does not take enough measures to encourage entrepreneurship, especially small and medium enterprises, and there is still a negative attitude towards entrepreneurship and lack of entrepreneurial spirit.

The author Tanja Pavlov is the Director of Group 484 Center for Migration and a researcher in the field of migration

Returnees from abroad use the advantages of Serbia to succeed in developed countries’ markets


Visiting a factory.....Ball packaging EuropeBUSINESSES

Ball packaging Europe factory in Zemun was the first and for a long time the only greenfield investment in Serbia,

which testifies a lot about the business envi-ronment in the middle of previous decade. The entre attended by top of Government and large interest among the media, comparable only to the arrival of FIAT, marked the beginning of May 2004 and laying of the foundation stone. Today, it is a plant giving out the impression, already at the gate, of a system where there is no detail not covered by procedures. At the first step already, you receive a booklet with instructions on how to behave, where to step, how to protect yourself in emergency situations. But when you enter the building you realize it is not as strict as you might have thought. The Director who knows all of his 180 employees. And they know him. Not overly formal communication contributes to an atmosphere that can rather be seen in small family businesses than in international companies.

This factory produces most of the cans the citizens of Serbia and South East Europe drink of every day. In the first half of the year, it was the eighth largest exporter, with a placement of EUR 72 million. “The can production process is simple. The technology has existed for deca-des and what has developed is the speed and precision, while the level of scrap has declined” says the Plant Manager David Banjai as we enter the production facility. Two production lines are managed by 19 people in one shift, so at a large space you only occasionally run into employees. They have very interesting working hours – they work first shift for two days, then the second for two days, then the third. After that, they have four days off.The production begins with unwinding of large coils that pass through a vertical press. The press shapes them into so-called cups. The conveyor belt then transports them to a series of horizontal presses, where they are shaped into cans and the machine cuts the unnece-ssary part off the top. A line of thousands of

cans head towards the washing part, to remove any dirt or grease that emerge in the shaping process. The next step is applying decoration with pad printing. A painted can is sent to fur-nace to have the paint set up. The can interior also needs to be lacquered because the bevera-ge must not come in contact with aluminum, to prevent corrosion. The machines apply a special coating and send the cans back into the furnace to polymerize the coating. Up to this point, the can remains flat. In the following stage it goes through a series of tools shaping its neck, and the cover is to be placed in the course of can filling. The last part of work is performed by cameras that check each can and search for any deficiencies. If the can passes the inspection, it is sent to storage. “One line produces 2 to 2.5 million cans, mea-ning that the entire factory daily produces 4 to 4.5 million cans. All process waste is baled and sent for re-melting. It is sent back to aluminum producer and then returned to us. The cans from Beer Fest are delivered in the same place.

The goal is to have as few used cans ending up in landfills as they are pure resource. If you make aluminum from used packaging, you save 95% of the energy you would use to make it out of bauxite. It is hard to say how many cans end up in landfills, but we are certainly a lot behind the developed cou-ntries” Banjai says, but he stresses that we are taking a good direction, with the adoption of a positive Law on Packaging and Packaging Waste that will lead to application of primary selection of household waste. Banjai, who had built his career abroad and worked in Siemens before Ball, and then accepted the challenge of returning and running a factory in Serbia, does not sound as most managers appearing in public. He is very optimistic in terms of this country’s po-tentials. In his words, the same goes for the company, which doubled its production two years ago by introducing an additional pro-duction line. “We have not encountered any problems we have not expected and could not resolve. We haven’t seen anything that does not happen in other countries as well”, says Banjai, answering the question of how he perceives the local business environment.He emphasizes that the legal framework concerning Ball Packaging is good and the environment they work in is sufficiently pre-dictable. However, he also notes that their situation is specific compared to other indu-stries because they market more than 85% of their products abroad. On the other hand, he is not welcoming the “improvements” of business environment through passing of laws in urgent procedures, without an adequ-ate public debate. “You are not happy when

the decisions are made suddenly without considering the consequences. It would be far better if businesses were involved in public debates. There is a need for under-standing that the state and businesses are not opponents. The companies must not see the state as a robber, and the state cannot per-ceive companies as users who avoid paying obligations. What we keep saying all the time is that we are on the same boat. It cannot be good for you if the whole environment is bad. You cannot be successful in an unsucce-ssful country” Banjai says.Asked about what change would the lacking systemic reforms bring, mostly in terms of amending the laws on labor, planning and construction, pension and tax reforms, Ba-njai readily responds that they would prima-rily assist the planning processes, as business plan managers could guarantee that they are at least 90% feasible and would not encoun-ter unpredicted obstacles. For Ball Packaging specifically, the amendments to Labor Law would not mean too much, because they

PERFECT CANFive Steps to a

For a long time, BPE factory in

Zemun was the only greenfield

investment in Serbia, today it

is the eight largest exporter

already have the human resources they need, but they would bring overall benefit to businesses, by introducing flexibility in the labor market, Banjai says, adding that he saw rhetorical willingness of the Government to do all of this. In terms of complicated administrative pro-cedures, Banjai agrees that there are many of them that are entirely unreasonable, but also reminds that all administrations have some unnecessary, double procedures that should simply be erased. This would help in preventing corruption in administrative processes. As he explains, corruption is present even in much more developed co-untries and Serbia is not more corrupt than the others. “This is why I always claim and repeat that our business environment is not as bad as one might think. We have simply been forced into a matrix where we believe we are the worst. When we came here in 2004 we expected that in 2013 we would be one of the hundreds of investors, and I don’t see why that did not happen. If we could be successful, the others can do it as well. Could things be better and faster here – of course they could. But to say it is bad is not true” Banjai claims.He believes the absence of a larger number of investors is caused by bad PR Serbia has had for years and that not enough work is done on presenting our country the way it actually is. “I mean primarily the smart, hard-working, educated people who work on improving themselves and wish to achieve something in their lives. We found 180 of such people here and we achieved excellent results” Banjai confirms.

Top three reforms – courts, labor market, public finance Asked about what should be the first three moves to take in order to improve the business environment, David Banjai states the first one needs to be regulation of judicial system, to ensure legal certainty for everyone and to know what to expect when you have a legal problem. The second move should be the improving and regulating the labor market. The third, but not the least important move would be introducing order in public finance sector.


BUSINESSES

Even though the companies cannot independently resolve fundamental problems of

the society, they invest resources and effort to assist in resolving the problems of communiti-es they work in, thus enabling the community, and society as a whole, to grow and prosper together with the company. Our community engagement is based on a thorough analysis of needs of all interested groups, as well as the community as a whole. We perform the analysis of community needs using various tools. We take pride in the fact that our company was one of the first members of Holcim Group in East Europe to establish an advisory body for communication and cooperation with the local community (Community Advisory Panel - CAP), that has been actively and successfully functioning for several years back. Additionally, we learn about the needs of local communities through Focus groups we organize at the end of every year.

PARTNERSHIP FOR THE FUTURE Since 2008, Holcim Serbia has been suppor-ting the realization of projects developed by non-profit organizations, institutions and citizens’ associations at the territory of Paraćin

municipality, through a competi-tion “Partnership for the future”. The project aims to support va-

rious initiatives and development programs in the fields of education, culture and sustainable development, to be realized at the territory of Paraćin. We particularly appreciate innovation in ideas and approach, inclusion of partner organizations and associations in the process of planning and realization, as well as the projects with sustainability and education po-tential. The projects are selected based on their relevance for the needs of local community, sustainability potential, as well as relevance to the topics Holcim supports in its corporate social responsibility strategy. Year by year, with their projects and ideas on the competition “Partnership for the future” non-government organizations and institutions from Paraćin prove that the NGO sector in this municipality has significant capacities and that truly is one of the most active NGO centers in Serbia.

SCHOLARSHIPS FOR THE BESTDuring 2012, the company Holcim Serbia initiated a program for assistance to talented and successful students from the territory of Paraćin. The students went through various ro-unds of selection. Holcim’s scholarships were

awarded to students of third year of faculty, or older students with a minimum average mark of 8.5. The advantage was given to students whose resumes involved extra-curricular acti-vities and interests. This way we want to help talented and successful students by neutrali-zing the influence of their material status to the quality of further education and achievement of good results.

VOLUNTEERING – TEAMWORK FOR COMMON BENEFITSince 2008, the employees of Holcim Serbia have been participating in various volunteering actions. Volunteering, individual or collective, is a way to strengthen and preserve the basic human values: community, care and helping the ones around you. At the same time, em-ployee volunteering is a manner for the com-pany to contribute to the development of local community, investing the expertise and time of their employees along with financial resources. We additionally confirmed our determination by adopting an internal Volunteering Policy. In a volunteering action with symbolic title “100 trees for 100 years” all of us together marked a significant anniversary – a century of Holcim existence, as well as 10 years of Holcim in Serbia. Within the action that started out in Paraćin and Popovac and continued on Tara

mountain, Holcim employees, in cooperation with the local government, students, NGO representatives and citizens, planted much more than 100 tree seedlings, thus once again expressing their commitment to preserve a healthy environment and showed care for the community they live in. The tree-planting action encourages the development of better-quality environment for our neighbors, and at the same time the seedlings have changed the appearance of Paraćin and Popovac. A total of approximately 600 seedlings were planted during the action, at nearly 15 locations. If they were all gathered at one spot, they would take up the space of almost 6.5 hectares.

TRAINING CENTER FOR SAFER WORKIn addition to continuous improvements of work conditions, an essential segment of achieving the highest standards in occupatio-nal health and safety is training of employees. Unlike the period before the cement plant was privatized, when the employees had to pass only one safety training before entering the production process, today Holcim has a training center for employees and third parties, that has been conducting education, organi-zing online exams and providing certificates of education passed, for several years. The required tests are performed once a year, and the obtained certificate is valid in all member companies of Holcim Group. The trainings are grouped in 3 main categories: trainings performed by external contractors, trainings conducted by the Occupational Health and Safety department in Holcim and special trainings for supervisors. In addition to general training, the company also conducts additional trainings for specific categories of employees. During the year, more than 2,000 hours of various trainings are held.

TRANSPARENTLY ON THE QUALITY OF AIRHolcim confirmed the transparency in relations with their neighbors by investing into and setting up of automatic monitoring system, measuring the level of air pollution in Popovac. The automatic monitoring system is

equipped with high-end automatized analyzers used everywhere in the world. The quality of air is measured in real time, 24 hours a day. The station collects the key parameters of air quality in Popovac, every 10 minutes. The station is located outside the factory grounds and the spot was determined by the responsi-

ble authorities and experts from the Ministry of Environment Protection, Mining and Spatial Planning, i.e. the Agency for Environmental Protection. Holcim invested EUR 120,000 in the installation of monitoring system, aiming to transparently inform their neighbors on the cement plant impact to the quality of air.

SUPPORT TO LOCAL ECONOMIC DEVELOPMENT – MICROLOANS“Good ideas for the future” or Microloans is the project Holcim Serbia initiated in late 2011 with Regional Agency for Local Economic De-velopment of Šumadija and Pomoravlje, muni-cipality of Paraćin and Societe Generale bank. The project provides loans for small and midd-le-sized enterprises at the territory of Paraćin, with the entire amount being EUR 50,000. The project aims to encourage individuals to start their own business endeavors, and to support the development of private sector. It was de-signed so as to provide users with main assets and raw materials. The total amount of loans is EUR 50,000 and the maximum amount of and individual microloan is EUR 10,000. This way, Holcim Serbia initiated a long-term cycle of assistance, since the paod-back money will be used for new loans in the years to come.

Local community support is the foundation of

SUSTAINABLE BUSINESS

Best CSR practice: Holcim Serbia

Swiss recipe successful in SerbiaHolcim Serbia is a part of Swiss group Holcim, which is one of the world’s largest producers of cement, ready-made concrete, aggregates and asphalt, operating in aro-und 70 countries in all continents. Holcim entered the Serbian market in 2002 by buying a major share in the cement factory in Popovac near Paraćin. In the previous 11 years, Holcim invested more than EUR 130 million in Serbia. As for investments in the local community, more than EUR 4.3 million were allocated to Popovac, where the cement factory is, and Paraćin. The company invests significant funds into occupational health and safety, employees’ professional deve-lopment and environment protection and has all the relevant certificates: ISO 9001, ISO 14001 and OHSAS 18001. For their approach to work and the local community, Holcim was one of the first winners of CSR Certificate for corporate social responsibility awarded by NALED. Today, Holcim Serbia also has two concrete factories, one in Krnjača and since recently, one in Dobanovci on the outskirts of Belgrade, as well as a company for extra-ction of sand and gravel from Danube. “By opening a new factory worth EUR 2 million we only confirm our commitment to stay in Serbia and continue our investments into sustainable development and business” said Holcim Serbia General Manager Claudiu Soare at the plant opening in Dobanovci in May this year. With 334 workers, the annu-al capacity of cement plant is 1,350,000 tons of cement and adhesives.

CSRDruštveno odgovorna kompanija

CSRDruštveno odgovorna kompanija


My Story: Olga Svodoba, Director of Gi Group HR Solutions in the region…BUSINESSES

Each new experience is highly valuable. All managers I’ve worked with have left a trace and shaped the way I work

today. Today, I tend to support my colleagues and associates share my principles with them. 1) Look for opportunities, because it is the only way they will find you. 2) Do the best you can in everything you do and always try to push the limits. 3) Trust people, and start from yourself.

How would you describe success?Success hides a lot of sacrifice and, tears and laughter, learning and work in a good envi-ronment, and the best part of my success is celebrating with colleagues, friends and family.

How did your career unfold before the foundation of Consulteam, today Gi Group HR Solutions?To be sure you are walking the right road, the

first and foremost rule is to know what you want and expect from that journey. I acquired my basic education in the field of Business Administration in USA and Hungary. The interesting thing is that the only books and articles I kept were the ones for the subjects Business communication, Organizational be-havior, Development and implementation of human resources strategy. It attracted me and it gradually emerged as the field of my interest, and I see the fact that I now work in the field I studied for as a privilege. Between 1996 and 2002, I was given the opportunity to advance in the field of human resources in large international companies and consulting offices. This period was the time of hunger for knowledge, of searching for people I trust, I can learn from, the ones I follow and they follow me. I became aware quite fast of what working in a big system means, what I learned and what were the

advantages, but I also learned that I can do more, better, faster. I decided to try my luck as an entrepreneur.

How did you come up with the idea to start you own business in the field of human resources? What is good for us finds its way to get us. The idea of starting a business came knocking at my door and I was just brave enough and curious to open the door and let the idea in.

My then-Director introduced me to Georg Parvanov, a colleague from Sofia, who offered me to work together and open an office in Belgrade. The previous 5 years of experience as a consultant and in HR department in the headquarters of a company that developed in all continents, gave me a foundation in terms of work standards and best practices. I recognized the same passion and desire for success in Georg and his team and took a new bold step in my life. We started in Serbia as a team of only two people, with pockets full of confidence and belief in the quality of service we provided. The clients recognized the commitment to each project, whether it was selection of production director, middle staff of workers in production facilities. Today, Gi Group HR Solutions is a company employing 35 people in the region and offering high quality consul-ting services in all fields of human resources.

Our goal is for our clients to have the right people with adequate skills and knowledge, on the right positions, to achieve their busi-ness objectives.

How hard was it to expand the business to the countries in the region and how did you manage to do it?The same as before, the right paths are opened all by themselves. This was exactly the case with our expansion into the region. When you have a good idea, why not share it with others. We shared our knowledge with a young entre-preneur in Montenegro and supported him in his development. Today, we closely cooperate and we are part of the same group. In Bosnia, Slovenia and Macedonia, we encountered associates led by the same desire and the expansion of business was a logical conti-nuation of company development. Now we successfully operate in the markets of Serbia,

Montenegro, Bosnia, Croatia and Slovenia and we are part of one of the leading companies in the field of human resources, Gi Group, involving approximately 2,000 employees in more than 20 countries of Europe, Asia and America.

What are the biggest challenges in modern business?The pace at which the world around us is changing requires constant adaptation, learning and development. Modern business motivates you to stay on the treadmill, but run faster. Being in good shape is nowadays nece-ssary for all who know their direction and tend to keep it. For us, being in shape means having a good team that continuously develops and sets new standards and good practices, keeping in line with technology and new gene-rations and developing new solutions.

What would be your message to young people who wish to start their own business or find a good job?My greatest fear in starting my own busine-ss was the thought that I would have to be someone who knows EVERYTHING, and I was aware that I did not. But don’t let fear determine your path, it is there to strengthen you. The concept of Consulteam is for us, as founders, to offer commitment, passion, acquired knowledge and show our desire for new one, to gain access to the latest trends, tools and skills through partnerships with the world’s leading companies. We were determi-ned and certain that we would not miss any opportunities.

What is the secret to your success?In achieving our goal, over the previous 12 years we’ve existed in the market, our main pillars were exchange of knowledge and trust. Exchange of knowledge strengthened the connection between all of us and it has always gone in both directions, to allow us to provide more for the client when we join forces. The trust I have in my team, and the trust my employees have in our joint success, is something that goes without saying. We trust our clients and they trust us.

My Story: When work becomes a

DREAM

1) Look for opportunities, because it is the only way they will find you

2) Do the best you can in everything you do and always try to push the limits

3) Trust people, and start from yourself

Principles of success

Gi Group, a leader in the field of human resources, today involves approximately 2,000 employees in more than 20 countries of Europe, Asia and America

Olga claims that exchange of knowledge and trust are the key pillars of success business lasting more than 12 years


LOCAL GOVERNMENT

Throughout history described as a pleasant and free settlement, and more widely known as the gateway

of Europe – doorstep of the Balkans, it is the capital of an imaginative kingdom, the place of birth of Danilo Kiš, Zvonko Bogdan and Dezső Kosztolányi, where the European charm and hedonism are the way of life, where the honey heart and the chimney sweep on negro candy bags come from. Throughout a 6-century long history, the city has changed its name 200 times, and today it is known as Szabadka or Subotica. At the very heart of Pannonian Plain, on the north of Serbia, the city of Subotica covers the area of 1,007 km², making it the second largest city in AP Vojvodina. The history, culture, economy and lifestyle in Serbia were largely determined by its geographic position, on the crossroad between Europe and Asia, in the area of frequent confron-tations of two great forces – Hungary and Turkey. Therefore, there were many nations passing through this area – Serbs, Hungari-ans, Germans, Croatians, Slovaks, Jewish, Bunjevci, Greeks and others. Hence, it is no wonder that Subotica is now the home to 20 nations. Out of a total of 141,554 citizens living in Subotica, there are 35.65% Hunga-rians, 27.02% Serbs, 10% Croatians, 9.57% Bunjevci and 17.76% of other nations. In an environment known for its inter-culturality, where calmness and tolerance are the most important human traits, it is not surprising that greetings are heard in three languages. In early 20th century, at the time when Subotica experienced economic growth, the changes arrived from Budapest deeply in-fluencing the architecture. Desiring to come closer to European cities such as Munich, Vienna or London, the builders in Subotica turned to Art Nouveau, known as the Hun-garian secession style. This period brought about some very important buildings, such

Reportage: City of Subotica

as the Town Hall (celebrated 100 years of existence in 2012), Synagogue, Reichl Palace and many others, whose architecture does not cease to amaze and astound. The romantic elements of Hungarian folklore, stylized flowers, curved lines and wavy featu-res, the ochre color of yellow facades are the first thing noticed upon arriving to Subotica. The city allocates funds for preservation and protection of these buildings with exceptio-nal cultural and historical value – currently ongoing is the renovation of Synagogue.

MECCA FOR INVESTORSSubotica is located on one of the main traffic crossroads of Europe, with pan-European Corridor X (international highway E-75) and extensive railroad network towards European countries. Two border crossings (Horgoš and Kelebija) a good connection with three international airports – Belgrade (165 km), Budapest (190 km) and Osijek (120 km) are a significant logistical advanta-ge for all investors wishing to establish their location in Subotica in order to export to the EU or countries of CEFTA region. The city on the north of Bačka District has 3,514 companies. The industry in Subotica is traditionally diversified. Along with food industry with various sub-sectors, there were intensive development of electrical machine complex, chemical industry, textile construction industry, as well as leather processing and production of footwear and stockings. Out of total area of Subotica, as much as 90% is agricultural land. Still, the most developed business sector is trade. The vision of Subotica is to be a city where people like to live, where businesses seek to locate and tourists wish to visit. And they are achieving their goal, which is confirmed with the fact that over the previous three years, with realized and ongoing foreign investments, they ensured 3,260 new jobs and developed the status of Mecca for in-vestments. According to the Mayor Modest Dulić, the wave of new investments was continued in 2013 as well. ContiTech Fluid Serbia, a part of German Contitental group manufacturing automotive components, opened a new factory. The investment value was EUR 10 million. Planned investments involve a new production facility of Italian Calzedonia to hire 1,000 people, and the factory of Austrian company Swarowski, to employ 600 people. To help investors obtain all required permits and appeals responses in time, in 2010 the City established an independent public enter-prise for provision of services to foreign investors. Business Technology Parks Subo-tica manages the land of total area of 230 ha. Industrial zone Mali Bajmok, commercial

The power of innovationAccording to 2012 researches, less than 20% of Serbian municipalities have offici-al profiles on social networks, and many of them do not have social network inte-grated with the official website. The City of Subotica is an exception. You may re-ceive all information and follow the news on business potentials, entertainment, life, vacation and leisure time in Subotica from the efficient staff in City Administra-tion, Local Economic Development Offi-ce, Tourist Organization of Subotica, but also on the official website www.subotica.rs, websites www.suboticainvest,com and www.visitsubotica.rs, Facebook profile: SUBOTICA.com – Grad na dlanu and Twitter accounts: @SuboticaGrad, @wwwsuboticacom, @suinfo, @visitsubotica.

A town favored by INVESTORS


zone Petar Drapšin and business zone Radanovac are completely infrastructurally equipped and ready for new investments. Additionally, one section of the land of 25 ha is a part of Free Trade zone regime allowing a more liberal regime of business with special customs and tax benefits, with highly simplifi-ed administrative procedures. The Free Trade Zone in Subotica currently involves an area of 40 ha with companies Siemens, Continental-Contitech Fluid, Norma Group, Amatek-Dun-

kermotoren, and more than 20 businesses in the fields of commerce, logistics and storage. In 2006, Subotica also founded Business Incubator, to provide support to the deve-lopment of small and medium enterprises and entrepreneurship. Business Incubator Subotica offers subsidized office space rent, administrative and accounting services, support in fair attendance, education and professional development in modern busi-ness areas.

The good conditions of doing business are best confirmed with the results of already present investors. In 10 years of work, Siemens factory in Subotica produced more than 15 thousand wind generators, a in Siemens they are proud to say that one in four wind turbines in Europe has a generator made in Subotica. This company will continue to invest and in the next three years, they will invest EUR 10 million into their factory in Subotica, for new production space, expansion of impregnation hall, and technological improvement of the current manufacturing process. Other foreign investors that recognized Subotica as an investment friendly envi-ronment include German companies Norma Group and Phiwa. We should also note the domestic companies such as Fidelinka, Mlekara Subotica (Dairy Factory Subotica), Alpack, Winery Zvonko Bogdan, Javornik, Yumol, Azohem, Masterplast Group.

160 YEARS OF TRADITION Festivals, events, concerts, culture, activities on Lake Palić, horse farms, ranches, forests and hunting grounds – these are the reasons for Subotica being an attractive touristic destination for 160 years already. Settlement Palić, located 8 km east from Subotica, with all of its Art Nouveau buildings, a lake, villas and churches and always new seasonal offer is a very attractive place for vacation. One of the city’s priorities for further development of tourism and local economy in 2013 will be the continuation of project Master Plan Palić, to involve four hotels, congress center, a golf course with villas and bungalows, aqua park, thermal spa, tennis and other sport fields and courts, and a whole range of re-staurants, cafes and the accompanying offer. The total planned investment for the first phase is EUR 116 million. The goal of this development project is for Palić to become recognizable as a spa and wellness destina-tion throughout the year, with a developed sports profile on an international level, with well-organized content for organizing busi-ness meetings and conferences. The Day of the City, with accompanying

Embassy of Israel, Tigar and SuboticaFor the purpose of municipal capacity building for successful dealing with local eco-nomic development, in July 2011 NALED launched the Ambassadorial initiative, with five ambassadorial teams being formed. The team for Subotica involved the company Tigar and the Embassy of Israel, which significantly contributed to the promotion of this city in Israeli and broader business community. One of the activities was a field visit of the Ambassador of Israel, H.E. Yossef Levy and 10 Israeli companies to Subo-tica, a tour of their industrial zones and Lake Palić. On this occasion, the Ambassador of Israel said “I cannot predict the future, but I see the present and potentials of Subotica, excellent locations and proximity to the European Union, the lovely people who live here, vast fields, Lake Palić. During my visit to Town Hall, I told the Mayor that the royal glamour of this building truly gives a feeling of great and stable future of this city and the region” .

manifestations and exhibitions, Ethnofest, Grape Picking Days, Wine festival, Trench-town festival, International Festival of Children’s Festival, European Film Festival, Dužijanca – ceremony marking the end of harvest and many others complete a rich festival offer, positioning Subotica as a unique cultural destination in the country and the region. European Film Festival is one of the most significant film festivals in

the region and one of the few in the world with 100% European content. Each July, the festival shows hundreds of films of European cinematography and gathers around plenty of authors from all across Europe. During these seven festival days, Palić and Subotica become the European capital of culture. Another reason to visit Subotica is the famous Gabrića bridge, symbolizing the centuries-old tendency of this city to overco-

A sound investment destinationIn 2009, Subotica entered NALED’s Business Friendly Certification program, and in 2010 it received the BFC Certificate – a proof of having an efficient and transparent city administration, ready to respond to investors’ demands on short notice. For a local government, the Certificate is an excellent reference for attracting domestic and foreign investors. In the list of top cities and municipalities to invest in 2012/13 published by Financial Times, Subotica found its way to top 10 investment destinati-ons among 253 European cities, in the category of best FDI strategy. A contribution to this result was certainly made by the investment promotion campaign at Belgrade airport that involved Subotica in 2010, with its slogan being Power of Innovation, with Siemens as a success story. Finally, the proactive approach of this local community is seen in the fact that Subotica was the first city in Serbia that successfully resolved the issue of military property and land conversion, today having 2 million m2 of attractive construction land, currently being infrastructurally equipped.

me and reconcile the differences. For more than two centuries, the people of Subotica have respected the custom to have the groom carry the bride over this bridge, so as to have a stable and long lasting marriage. Another specific attraction is the Subotica Flea Market, widely known for its affordable but quality goods of all kinds, as well as by the tradition of bargaining that persisted to this very day.

Siemens is proud to stress that one in four wind turbines in Europe use

generators made in Subotica

LOCAL GOVERNMENT Reportage: City of Subotica


Interviewing the Mayor: Bratislav Gašić, Vice President of NALED and the Mayor of KruševacLOCAL GOVERNMENT

“Kruševac has changed significantly over one year. First of all, the relation of local government and local administration em-ployees towards the citizens has changed. They are now at the service of citizens and private sector that is hiring 80% of the total number of local employees. We found the city with debts of more than RSD 627 million in terms of loans, liabilities to suppliers, contractors, electricity distribu-tors, transporters of children and retired persons. So far, we have managed to return RSD 450 million of this debt, and we have outstanding loan obligations that are due in

2015. And we would have managed to repay those as well, but there is no need, since they involve good interest rates and we pay the in-stallments regularly and in time. Today, Kru-ševac is the only city in Serbia with no debts for electricity and gas. No city can boast of financial balance like Kruševac. We managed to develop trust with foreign investors who have production facilities in Kruševac” – says the Vice President of NALED Managing Board and the Mayor of Kruševac, Bratislav Gašić, in his interview for Synergy.

Do you find your city to have a business friendly environment?We were the first in Serbia to open an Office for Rapis Response, where you can submit a request and the local government employees are in charge of completing all the procedures. You can receive the birth certificate in any village within three minutes. You may report all problems to a contact center, 24 hours a day. Kruševac is the only local government being fully electronically equipped. I think that, in terms of having city administration networked with

institutions and companies, we are among the best local governments. What we lack is the highway and connection with Corridors 10 and 11. This would place Kruševac, with all it has to offer in terms of brownfield and greenfield locations, among the most favora-ble places to invest in. You mentioned the Office for Rapid Response. In what way does it assist the investors?Together with the Local Economic Development Office, it published a list of all available locations – private, owned by com-panies in restructuring or with any different status – at the city’s website. All potential investors may come to use and present their

projects. The City is the one that takes over the completion of all admini-

strative procedures. As for in-centives, all investors that em-ploy at least 200 workers are exempted from all charges and entirely free of the land use fee, they receive fully equipped land and in this regard, they do not have to pay a single penny for the investment. For a smaller number of jobs, the exemptions are proportionally reduced. Also, to support entrepre-neurship, we have a good self-em-ployment program

funded from the local budget.

Which segments of local administration need to be

further improved? Primarily, the inspections. Their employees are used to a different system of work, to leave work as soon as 9:15a.m. complete one or two records and then be gone for the rest of the day. Now they have a problem because their every leave

Investment withoutPOLITICS

Ready for the highwayDo you know when the Pojate-Preljina highway will be constructed?The construction of the highway was supposed to start on 1st May. It was also the promise of the former Minister Kalanović but it did not happen. She claims to have had problems with Chinese investors. I expect that we shall start the construction early next year. Kruševac is the only city on Corridor E761 with resolve land property issues and developed projects. We could start building tomorrow. All other cities have still not completed their spatial plans.

One year is enough to turn things around in any city

No city can boast of financial balance and resolved debts like Kruševac

Many mayors do not work hard enough to create a business friendly environment

is recorded and they cannot act outside the law towards the citizens, which was the pra-ctice so far. This part of the city administra-tion was most burdened with heavy bribery and corruption. I believe that it is now being resolved in the best possible way, that they un-derstood the gravity of situation and that they need to act differently towards citizens, towar-ds all applicants, and everyone they need to visit. We had encountered many challenges in this sector, but it is going back to normal.

What is it that you expect the state to do in order to assist local governments in implementing their development plans?In the previous period, we had a situation where one of the ministers was distributing investors across Serbia. They would usually go to Niš or Kragujevac or Zaječar, at his choice. And instead of having SIEPA act as the agency to ensure a balanced deve-lopment, together with the Ministry of Regional Development, they were directing

investors to certain cities, at their own will. The local governments don’t need much. If neither of us enjoys special privileges and the best ones have investments because they offer the best conditions and service – it is more than enough.

Would you support the idea of descending some jurisdictions to the local level?First they need to return a large part of the funds the previous Government took away from local governments. Returning the pro-perty which is outside the jurisdiction of local governments or the state. Of course, we would need to obtain some funds through taxes for maintenance of these facilities. I believe that local governments have sufficient authority and jurisdiction, but the problem is finance to perform all activities required at the local level.

What is the investors’ interest in Kruševac?The interest is huge. With the assistance of Serbian Ambassador in Italy, Ana

High grade for NALED certificateKruševac and its surroundings have a population of 130,000 people and it is the admini-strative center of the Rasina District, in central part of Serbia. As stressed by the employees in this town, they used to be the fourth best city in former Yugoslavia regarding industrial production. The industry employed 45,000 people, and today, there are approximately 15,000 of them. Bad privatizations left many facilities in poor condition. Today, Kruševac is known, among other things, by its 7 companies in restructuring, involving some big ones such as “14. oktobar”, “Župa”, FAM and Oil factory. Entering Kruševac from the direction of Corridor 10, one first encounters the facilities of the U.S. investor Cooper Tires, which bought a part of Trayal. After that, you pass the factory of one of the most important inve-stors – German Henkel. The site of former Merima was taken by this giant’s second most efficient factory in the world, which makes people of Kruševac especially proud. Across the street from Henkel is the facility of Chemical industry Župa. Unfortunately, it may not be saved. As we were explained, there has been no real and serious production process since 2005, and for the facilities to work as they should, they would need at least EUR 4-5 million investments, which is a sum that no one can invest at the moment. The lack of recovery opportunities of Župa is a mystery for the people of Kruševac bearing in mind the demand for chlorine and the lack of other factories with a similar production program. The city focuses on saving the “14. oktobar”, and realizing the announced investments. Additionally, Henkel announces additional investment into production facilities in 2014, and Cooper Tires plans the construction of another factory with 200 jobs. In spite of investments it attracts, in a broader public Kruševac always remains in the shadow of Jagodina and Kragu-jevac. The citizens of Kruševac do not agree. They believe that the “competition” had help from the national authorities in attracting investors, but they are still not too far behind. The local population sees their chance not only in chemical industry that is the city’s economic pillar, but also agriculture and food production – meat and dairy. As their advantages, they stress two rivers – Morava and Rasina, and two mountains – Kopaonik and Jastrebac, as well as the Ribarska spa with a new spa center and hotels with 100% filled capacities.The City of Kruševac is the holder of Business Friendly Certificate awarded by National Alliance for Local Economic Development (NALED). Kruševac deserved this recognition by fulfilling 12 strict criteria with a high 96.5% mark, which is one of the best marks among 27 local governments certified so far.

64 SYNERGY 65oktobar 2013 |

Bratislav Gašić, Vice President of NALED and the Mayor of Kruševac Public utility company that serves as an example: Zelenilo BeogradLOCAL GOVERNMENT

Kruševac was first in Serbia

to open an Office for

Rapid Response, completing all procedures for

investors

Public utility company Zelenilo Beo-grad (The city’s greenery) has been taking care of green areas and parks

of Belgrade since the 1990. Over the last couple of years, the attention of citizens, and particularly young parents and children, was drawn to modern playgrounds emerging in parks all across the city. The idea for starting a new production pro-gram for playground props and replacing the old ones came from the management of Zelenilo Beograd, led by Acting General Manager, Vladimir Bogićević: “The idea was to have a playground with locally made props, which we achieved. I am also happy with the pace at which all of it was comple-ted, and significant savings have been made. Now we have a line of 10 standard props cer-tified at the Faculty of Machine Engineering. They all have Serbian names, for example, a swing for younger children is called “Milica”. This will be a true refreshment for Belgrade, and our wish is to position ourselves in the rest of Serbia as well, given that the produc-tion capacities of Zelenilo’s locksmith-carpentry workshop are at a high level”.Zelenilo has developed practically entire technology for producing playground props for children, starting from the idea, to desi-gn, production and installation – everything is performed “in house”. All props comply with highest safety standards regarding design, installa-tion and use of these toys. The path from idea to realization for a new prop may last

for several months. Waiting for permits and approvals of safe use and testing of new toys takes the most time. Each individual prop requires a static evaluation and the entire paperwork is sent to the Faculty of Machine Engineering which then issues a certificate

on product safety, guarantee-ing a long service life.

Zelenilo Beograd care-fully designs all their

parks and playing grounds, with atten-

Domestic playground equipment in the capital’s parks Zelenilo designs and produces

10 “toys” to the highest safety standards

tion to all of their users. Thus, their props are classified in groups based on age: 2-4 and 5-12, and there are also props adapted for children with special needs. There is the swing “Eagle’s nest”, a slide “Marko”, merry-go-rounds “Sanja” and “Jelena”, the already mentioned swing “Milica”, seesaws “Tanja” and “Rada” and new type of swing “Saša”. But this is not the end – Zelenilo annou-nces more innovation: they are introdu-cing software to allow monitoring each children playground. This practically means that each playground in the city will have their electronic “ID card”, each prop will be marked with an inventory number and equipment testing will be conducted quarterly, which is a standard applied in the European Union. Each new playgro-und will be immediately attested, and cer-tifying the existing ones will require some time because there are 1,080 of them, with a total of 6,000 various props.

Hrustanović, I visited Rome in August and had conversations with four companies. Turkish company Erste opened a wood-pro-cessing plant and a new facility for producing aluminum joinery. We have a Turkish com-pany interested in production of clothing. Belarus Ankodor is interested in buying the “14. oktobar”. Additionally, Jugoimport has started working with “14. oktobar” again, after a 10 year gap. We have Indonesians interested for one part of Trayal production facilities. We have an Italian company for pyrotechnics wishing to locate in Kruševac. We have Greek companies that want to buy dairy and meat products from Kruševac. An Israeli company wants to build greenhou-ses on 50 ha and we are also offering them an edible oil factory. We also expect much from FAM which after a bad privatization reassumed the leading position in the pro-duction of lubricants and motor oils. We are gradually shifting a part of shadow economy into the legal flows. It is not true that we have many unemployed people in Kruševac, it’s just that they work in the informal economy.

How will the business environment be affected by resolving the future of companies in restructuring, employing 2,500 people?Of this total number of employees, 1,520 of them are in “14. oktobar” and Župa has 320 employees who asked for social program and they all want to leave. Not having been paid 28 salaries, it is not realistic to expect these people can live normally. All of them do some work on their own and have some income. Russian partners are coming beca-use of “Crvena zvezda”, wishing to buy the industry and there are around 300 workers. The oil factory has 158 workers, a little more than 50 will go to the Israeli company and the rest want the social program. FAM got back at its feet, so I am not counting it into this group. The greatest threat is seen for Župa, as well as “Savremeni dom” that has 78 employees and 58 were offered to go work for a Turkish company, but they com-plained about harsh conditions and hard work. This work is paid. I believe that we will be able to stabilize all the others very soon.

What are your views on the engagement of mayors across Serbia in developing a better business environment and attracting investments?The mayors can no longer sit in their offices. They need to travel more, to be constantly in ministries and abroad, to talk with potential investors, promote the local potentials. I believe that many of my colleagues are happy with their positions, offices and privileges. I think many of them have lost touch with reality and minimized their efforts to create a good business climate and be at service for their citizens and investors. In the future period, there will certainly be major changes in these positions, because the people did not elect us, especially in such a critical

moment for Serbia, for us to be happy with high salaries and large offices, but to try to change something for the sake of our chil-dren and grandchildren.

Would you act as Mayor for one term or would you do it for a longer period?I was born and raised in Kruševac. I refused many offers to be able to stay in my home town. What comes depends on the citizens and elections, the quality of my work and the work of my colleagues.

Is one term enough to turn around the life in a city?Yes, even one year is enough to turn it all around.


Best practices: Municipality of Inđija developed an efficient system for attracting investorsLOCAL GOVERNMENT

A large investor can obtain a construction permit in Serbia in less than a month and a half, which is best shown with the

example of Inđija whose electronic system allows investors to obtain construction permits five times sooner than the national average. This is exactly the kind of efficiency encountered by the Danish company Grundfos when they started the realization of their investment in 2011. In Inđija, they say that their advantage compared to other local governments is that they were among the first to start working on accelerating the procedure for issuing con-struction permits, which make one of the key factors in making investment decisions. Inđija adopted all the necessary regulation plans and regulated the land property issues, which is an additional plus. As they point out, it is a work of at least 4-5 years, which is a signal for other

municipalities that they would not be able to achieve things over night, so they need to start as soon as possible, if they wish to be a favorable business location. The electronic system developed in Inđija in the previous years, allows companies to use the Internet to select a desired lot and see all construction rules on the location. They can also find the information on whether the land is in private or municipal ownership. After selecting the location, the investor turns to the Local Economic Development Agency. The number of people they have to talk to in this municipality is never more than 4 (including the representatives of public enterprises) while big cities require knocking on dozens of doors. The municipality takes over the procurement of the documentation and paperwork needed for obtaining a permit.

From that point until the end of the process, the investor may monitor the case status via municipal software, and check which clerk has it, which usually accelerates the verification. The same goes for the Mayor, who does not need to call the municipal employees by phone in order to learn about the progress. Danish Grundfos, producing pumps for various applications (heating, water management, pres-sure...) constructed a production-storage facility of around 27,000 m2 in Inđija, investing EUR 22.5 million.The investment process started in June 2011 when they concluded an agreement with the municipality and the Urban and Spatial Planning Institute of Vojvodina, to develop a detailed regulation plan for the location they se-lected. In four and a half months, the draft plan was completed and in early December it went through public debate and was published in the Official Gazette of Srem region. In the mean-time, a request was filed for Location informa-tion (issued in one day). During November, the issue of required Environmental impact study was resolved. At that point, Grundfos was able to submit the formal request for issuing the permit. The first step, filing a request for location permit was

done on 1st December 2011. The location per-mit was issued in 15 days (on 16th December). Some days before New Year (28th December) they also filed a request for the issuance of con-struction permit. In spite of holidays, the Dan-ish company obtained the construction permit in another two weeks (16th January 2012). Not counting the days off (state holidays) for munic-ipal administration, we come up with a fact that Grundfos completed the two most important steps in 39 days. The commencement of work was recorded on 13th February 2012. Upon completing the construction, a request for Usage permit was submitted on 26th November the same year, and the permit was approved already on 7th Decem-ber. This opened the door to employment and salaries of 350 workers.Even though Inđija managed to develop and arrange the permit issuance system within its jurisdiction, a good part of the decision-making process is still in the power of national institu-tions and companies. Each of these institutions can slow down the process, or even stop it. In some situations, the slow process of permit issuance is caused by regula-tions because, for example, Vojvodina vode (Vojvodina water management company) needs to take 3 to 4 months to issue an approval if they strictly follow the procedure prescribed in the Law on Water Resources. Also, one can spend up to 3 months waiting for a decision from the Institute for Nature Conservation of Serbia, often stating that there is no need for ensuring additional infrastructure require-ments. On the other hand, the root of problem sometimes lies with public enterprises – for example, Electric Power Industry of Serbia may prescribe standard additional requirements for facilities of certain size, and in practice they do this for each individual facility. The employees in Inđija municipal administra-tion say that the investors often do not under-stand the legal terminology they encounter in Serbia, nor some of the procedures. For example, they are not clear on why they need an approval from Srbija vode (Serbian water management company) when their factory is located 500 m from the nearest river, or why

Grundfos had a construction permit in less than 40 daysThe electronic system in Inđija lets investors use the internet to select a location, see the building conditions, submit a request at one counter and finish all procedures five times faster than the national average

they need consent from Srbija šume (state enterprise for forest management) if they are building in an industrial zone with no trees at all.According to the World Bank’s “Doing busi-ness” report for 2013, Serbia is ranked very low, as 179th out of 185 countries regarding the efficiency of construction permitting, which is one position lower than in 2012. Because of such poor ranking, NALED has proposed ame-ndments or adoption of a new Law on Planning and Construction that would stipulate several important steps for accelerating the constru-ction permit issuance process. It would primarily imply that municipalities should receive greater powers and become a one-stop shop for the

investors to complete all procedures and pa-perwork. The authorities of public enterprises would be reduced by assigning them to ensure the necessary technical conditions are met, but depriving them of the power to decide against these requests. In this regard, there is a need for harmonizing the Law on Planning and Constru-ction with the sector laws regulating jurisdictions of public enterprises. It was also suggested that the work on developing spatial plans needs to be intensified, so as to remove the unnecessary details and create them only for the zones where intensive construction is expected. It would be necessary that all institutions participating in the permitting process, introduce a flow chart of process stages, the possibility of case tracking, to prescribe deadlines and adequate penalties for non-compliance. Finally, the number of fees paid by investors also needs to be rationalized.

Grundfos headquarters in Denmark

Factory in Inđija


Howard Ockman, Director of USAID Sustainable Local Development Project (USAID SLDP)LOCAL GOVERNMENT

Municipal administrations can do much to enhance their commu-nities' business environment and

help their private sector firms become more competitive. First, formal, hard steps should be taken, such as streamlining regulatory procedures and decreasing administrative burdens on business operations. Also, the establishment and maturation of a professio-nal, non-politicized local office of economic development is a formal requirement for a business-friendly municipality. Such offices customarily have jurisdiction for execution of economic plans, responsibility for coope-ration with the private sector, and obligati-ons for monitoring the economic growth of their communities. But following the formal recipe for creating business friendliness in a community, while vital, is not in and of itself sufficient to dis-tinguish a municipality as business-friendly. Additional to the formal and concrete steps for building a business-friendly community, there must exist an administrative spirit and culture that imbues municipal government with the necessary chemistry to be truly business-friendly. It is that spirit and cul-ture to which I’d like to dedicate this short commentary. Trust between the business community and the executive government of a community is critical for true business-friendliness, and it is a community characteristic that rests more on administrative culture than on the establishment of formal institutions and practices. The reasons that trust between business and government is so important are clear: businesses need certainty in their surrounding environment in order to plan and operate strategically. They must trust

local administration not to arbitrarily change the rules of the game in the regulatory envi-ronment, or to become too meddlesome in the operations of private business, or to allow corruption to create situations where poli-tical issues or the private interests of public officials make competition a matter of con-tacts and association rather than meritorious market efficiency. If businesses do not trust local authorities to behave as a neutral entity, sensitive to the needs of business for certa-inty, stability and fair regulation, they will not take the risk of fully investing themselves in the open, non-shadow economy. They will always hedge their bets against expan-sion and commitment of the type that can optimize a community's economy. Formal rules and procedures help to create trust, but ultimately, businesses must trust and believe that those formal rules and procedures will not be ignored or altered when the go-vernment finds it convenient to do so.The need for trust, however, is not a one-way street. Administrations must also trust the private sector not to act in a way that will undermine the interests of the community, and indeed, instead to act like a responsible community member. Without such trust, an administration will be agonizing over many issues that should not really be in question. For instance, will a company leave

the community or stay, or will the company expand or downsize? If the administration does not trust that a company has an honest intention to stay in the community or to upgrade its capabilities, it will not invest in the very types of workforce or infrastructu-re inputs that the company may need for expansion. No one wins in such a stalema-te, and the entire community may lose. A similarly destructive relationship would grow if an administration cannot trust its private sector to pay local taxes, obey local laws (including environmental), or honor commitments to employees. In the tough battles for the local budget, the needs of the private sector will be ignored if the private sector is not trusted to perform in a fort-hright manner. This issue of mutual trust between the public and private sectors is not an idle concern; it is the defining ingredient to a healthy or decayed relationship between the two major sectors critical to sustaining and growing a community's environment. It underpins the entire concept of business-friendliness as an instrument of economic vitality. Such trust is also not a product of good luck; it takes deliberate effort, the goal of which is to cre-ate a culture that makes trust a permanent feature of the business climate.How is this done? It's not simply a matter

of establishing rules, report cards, and boxes to be checked and monitored. Rather it is a matter of relationship-building, where both the public and private sectors come to perceive that the relationships built do not flow from obligation, but from mutual understanding and desire for achievement of a common goal. Think about building trust in personal relationships, and you’ll quickly understand that time is a critical factor, not because it takes a long time to build trust (which is often the case), but because both sides to a trust relationship need to spend quality time building trust. Mayors and their economic teams must reserve time to talk to firms and understand how firms think. There is no fixed rule, but good mayors, who would like the private sector to trust what they say and believe that they are concerned partners, spend as much as 50% of their work week

talking to businesspeople, not necessarily in the mayor's office, but in the very place where business is done, and not randomly but purposively; it must be more than a handshake and photo opportunity, it must be a real discussion about the firms, their businesses and products, and their hopes. A mayor of course cannot talk with every business, but a mayor must talk with many businesses. His team must be tasked with, and clever at, canvassing the private sector so as to know whom a mayor should meet to learn the most he can about business in his city, and to build a trust that will spread most readily to other firms. And those firms and sectors that a mayor cannot himself visit must be the subject of the attention of his staff, responsible for knowing, under-standing and communicating with them. Conceptually it is an exercise as simple as knocking on doors and asking, can we come

THE TRUST

talk to you about who you are and who we are, and how we can collaborate to make the community have the best economy of any city in Serbia. But in reality, this plentiful and free dialogue requires careful organizati-on, concerted preparation and enthusiastic, tireless execution. Is it that easy to build trust between the pu-blic and private sectors; is it just a matter of dialogue, expenditure of time and showing of concern? Of course not: promises must be made and honored, compromises must be made, and decisions must be mutually taken. But quality, non-grudging and purposeful dialogue creates a culture that allows these other characteristics of trust to evolve more naturally. At the end of the day, intentional and honest dialogue between the public and private sectors is necessary to create the trust-based business-friendliness for which communities should strive.

The concept of cooperation is quite simple, you need to knock at the door, talk about the needs of both sides, to develop the best possible economy in a local community

is the key

A half of working hours devoted to businessesThere is no fixed rule, but good mayors, who would like the private sector to trust what they say and believe that they are concerned partners, spend as much as 50% of their work week talking to business people, not necessarily in the mayor's office, but in the very place where business is done, and not randomly but purposively; it must be more than a handshake and photo opportunity, it must be a real discussion about the firms, their businesses and products, and their hopes.

between public and private sector


Economically by far the strongest country in Europe, located between the North and Baltic Sea in the

North and the Alps in the South, Germany is the fourth largest economic power in the world, following USA, Japan and China. The economy is based on strong service, indu-strial and trade sectors. Germany is a leader in engineering, automotive and chemical industry, and is also taking over a leading role in many other perspective areas, such as laser, nano- and medical technologies. German brands such as Volkswagen, BMW, Mercedes, Siemens, Henkel, Bayer, MAN have become a global synonym for quality. 99.3% of all companies in Germany are the so-called Mittelstand – small and medium en-terprises, which are the backbone of German economy. Around 4 million SMEs employ 79% of working population, and they achieve annual turnover of approximately EUR 2 trillion, making up for 37% of total revenues. The Mittelstand have excelled at seeking out unglamorous but profitable niches, and then

focusing relentlessly on being the best. These are mostly stable family businesses with long and firm tradition, such as Miele (household appliances) or Beckhoff (automatization), annually reaching turnovers of hundreds of millions of euros. They are not oriented on short-term profits but long-term growth, supported by their own funds because they wish to preserve the tradition and pass it on to future generations. “Family is very impor-tant for Miele as it brings stability in business. All of our inve-stments are long-term orien-ted and we only spend as much as we earn ourselves, which makes us double cautious” says Markus Miele, one of the company owners and managers and grand-grandson of its founder Carl.Along with tradition, the reason of success for these enterprises is also good and well-trained education force, that is, the dual education system enabling young people to gain practical training in line with their education profiles in SMEs, and to do it quite early. Around one half of high school students in Germany go through the so-called dual system of training and specialize in one of 344 crafts – from tanner to dental technician. High school students aged 15-16 spend more time learning in companies then in school, and after three to four years they have a quite guaranteed job in their field. In general, there is a lot less stigma in Germany regarding vocational schools and crafts than in most other countries. The com-panies provide the workplace, State and local governments the schools where apprentices get their theory and Chambers of commerce and industry run the exams. For these reasons, the youth unemployment in Germany is 8.2%, which is significantly lower than in other European countries, such as Spain with youth unemployment rate of 50.5%.

RESISTANT TO CRISISAbove all things, Germany’s success was significantly driven by exports: unlike many big and rich countries, it has maintained its share in global exports over the previous decade, even after China became the main exporter. German companies simply produce precisely what China wants, from luxury cars to machines allowing Chinese companies to produce the goods for the entire world. Most economists would agree that euro also largely contributed to this – by establishing a common currency with less developed countries of South and East Europe, Germany accepted the currency which is far weaker than the famous Deutschmark would now be, which made German products more competi-tive in foreign markets and stimulated German exports. In the period 2003-2008, the exports grew at an annual rate of 8%, making Germany surpass the USA and be world’s export champion for six years in a row Germany was very quick to overcome the economic collapse in 2009, which confirms the fact that its economy is highly stable and flexible. In spite of economic crisis and global

decline in international trade, it recorded a 3.7% increase in GDP. Already in 2011, the trade exchange with the world reached the highest level in the country history, while the value of exports went up to more than EUR 1 trillion. In 2012 there was a slight slowdown in GDP growth rate that fell from 3% to 0.7%. The greatest demand is for products from chemical, automotive and machine industry. 71% of exports go to European countries, 15% to Asia and 10% to America. Along with exports, the resilience of German economy also lies in relatively low level of indebtedness. While the rest of Europe was frantically taking loans during the 90s and 2000s, German companies and citizens refused to spend more than their limits. The cultural differences played a big role. Germans do not prefer to borrow money and more than anything they love to live in line with their po-ssibilities, as the old saying (but not doing) in Serbia – stretch only your length! “Schulden” (to borrow) in German also means sin. This trait proved to be very useful during the crisis, as consumers and businesses in Germany did not have to reduce their expenses and consumption in order to reduce the debt, when banks stopped borrowing money during the recession. Even in combating unemployment, Germany emerged victorious. Together with dual system of education we already mentioned, in early 2000s German Chancellor Gerhard Schröder initiated a thorough reform and set the foundation for stable and flexible labor market, so Germany was not caught up in the

The seat office of European Central Bank is in Frankfurt am Main. As the successor of European Monetary Institute, the ECB was founded in June 1998. Starting from January 1, 1999 it assumed all responsibi-lities for the implementation of Europe-an monetary policy. The goal of ECB is to maintain the purchasing power and inflation at less than 2%, and to perform monitoring of money in the market.

the greatest power of Europe’s locomotiveEDUCATION SYSTEM as

Territory 357,002 km²Population 82 millionNumber of employed 41.5 millionGDP EUR 2.6 trillion GDP per capita EUR 32,281 GDP structure services 52%, industry 31%, trade 16%, agriculture 1%GDP growth rate 0.7%Inflation rate 2.0%Export EUR 1,097 billion Import EUR 909 billion

Parallel with school education, one half of high-school students take practice classes in small and medium enterprises, for 344 crafts. Germans do not prefer to take loans, the word to borrow also has the meaning of sin

Presenting the country - GermanyPARTNERS FOR SUCCESS

Source: GTAI (German Trade and Invest)


large wave of unemployment that flooded the USA and a large part of Europe during the cri-sis. Schröder reduced the unemployment be-nefits and liberalized temporary employment and definite-period employment. German workers showed willingness to work less hours because they knew they would keep their jobs that way. And they did.

INVESTMENTSIn addition to excellent innovation climate, Germany offers a very favorable business environment, positioning itself as one of the world’s most attractive destinations for foreign investors. Having implemented systematic reform and by developing good business conditions, Germany significantly strengthened the competitiveness of its

economy and managed to go hand-by-hand with the developing markets, primarily China, which attracts international investors with cheap labor and high profit margins. Almost 4% of world’s foreign direct inves-tments go to Germany, and in 2008 only there were more than EUR 12 billion worth investments. Approximately 45,000 foreign companies employ around 3 million people in Germany. The country’s international competitiveness is not accidental. Primarily first-class infrastructure, investing in resear-ch, development and innovation, efficient capital market, high level of legal certainty and highly qualified and motivated work force are the main advantages of Germany as investment destination. Additionally, Germany is a cosmopolitan country with

a reputation of a global partner. Internati-onally recognized seal of quality “made in Germany” testifies to this fact.

ECONOMIC COOPERATION OF GERMANY AND SERBIAGermany, along with Italy, is Serbia’s largest trade partner and export market. This trend is constantly on the rise. One of the reasons is that, over the previous years, there has been a growing number of German companies in Serbia, closely cooperating with their home country. Out of top ten exporters in Serbia, five are owned by German companies. According to the data from Serbian Chamber of Commerce, the largest exporters from Serbia to Germany are Siemens, Draxlmaier, Leoni, Hemofarm, Impol Seval, Fiat, Fresenius Medical Care, IGB Automotive Comp. The greatest impo-rters to Serbia from Germany are Siemens, Porsche SCG, Ball Packaging, Tarkett, Tetra Pak, Mercedes-Benz, TENT doo, Farmalogist, IGB Automotive Comp, Henkel Serbia. As for investments, in 2011 only there were 12 German companies that came to Serbia. In 2012, several investors launched their pro-duction, including Mühlbauer in Stara Pazova, Falke in Leskovac, while ContiTech started the construction of a plant in Subotica,

as well as Bosch in Pećinci. Total value of German investments in Serbia from 2000 is estimated at about EUR 1.7 billion. Around 370 companies from Germany invested in Serbia, and the structure of companies comes in a very wide range, from pharmaceutical and chemical industry, to production of medi-cal equipment, trade, construction, textile, automotive industry and electronics. Still, the most prominent ones are pharmaceutical and chemical industry, bearing in mind that the largest investments come from these fields. The highest individual investment was made by pharmaceutical company Stada-Hemofarm in Vršac and Šabac, worth EUR 510 million, and among top companies there are also Henkel with 130 and Messer Tehnogas AD with EUR 120 million. An interesting fact is that the Henkel factory in Serbia is second most efficient in the entire Henkel system in the world, which testifies to the quality of do-

mestic labor force, particularly in traditional

sectors such as chemical industry in Kruševac. The best known investors are the retail chain Metro Cash & Carry which invested EUR 165 million, Siemens, whose investment of EUR 35 million in Subotica had great regional significance, and Falke which invested EUR 10 million in Leskovac.

GERMAN DEVELOPMENT ASSISTANCEGermany is the largest bilateral donor in Serbia. Since 2000, the Federal Government supported Serbia with more than EUR 1.5 billion through development projects, of which EUR 210 million were allocated in 2013. The funds are intended for infrastru-cture, sustainable economic development, as well as strengthening of democracy, state administration and civil society. The largest projects supported with these funds are the modernization of thermal power plant in 20 cities with around EUR 60

million, reconstruction of hydro power plant Zvornik with EUR 70 million, coal quality management in mine Kolubara with EUR 74 million, the project for reconstruction of water supply and sewerage system in 15 cities with around EUR 137 million, financing agriculture with EUR 60 million, as well as the project for utilizing renewable energy in Kosto-

lac, with allocated EUR 60 million of loan and EUR 1 million for assistance. Cooperation with Serbian authorities goes through specialized institutions and organiza-tions of the German Government. Thus, the development bank Kf W finances projects and consulting services, organization for interna-tional cooperation GIZ implements several projects directed at improving the business environment. With the support of GIZ Open Regional Fund for Modernization of Munici-pal Services, NALED implements the project Business Friendly Certification in South East Europe – BFC SEE.

Giraffe and pianoŽirafa, veš, torta, štrudla, šti-mung, špajz, snizla, šlampav, šine, senf, rostfraj, pumpa, peh, papir, majstor, maher, lampa, lak, krem, klavir, kič, kafa pauza, hausmaj-stor, glokenšpil, frajla, frajer, farba, cajger, blic, bleh, beštek, bademantil, aparat: Serbian language knows a lot of words which are very similar or identical to German. This is only a small selection. All those similar words make it a little bit easier to understand German for a Serb or Serbian for a German, but only a very small little bit. Do not let yourself be misguided: the key for success is practice, practice, practice (or üben, üben, üben)!

Presenting the country - GermanyPARTNERS FOR SUCCESS


H.E. Heinz Georg Wilhelm, the Ambassador of the Republic of Germany to SerbiaPARTNERS FOR SUCCESS

currently more important to implement the agreement with Kosovo, in order to receive a precise date for the beginning of negotiations.

How many German companies in Serbia have unresolved issues, either due to burea-ucratic procedures or due to problems with the institutions or state-owned enterprises?These are no huge problems. We only hear about them when they get big and when they are raised to a higher level. What we do hear from German investors is that they are mostly satisfied. There is the problem with the claim of Hemofarm towards Galenika. I also recei-ved a letter regarding a problem with taxes from one German company, but it cannot be eferred to as large problems. Messer complained about the price of electricity, but companies always complain about the electricity price in Germany as well.

You said our administration is good, but many would disagree because they have problems with slow procedures. It is certainly not the best of all bureaucracies, but it is not bad either, it functions. On the other hand, the courts are slow and the proce-sses can last up to several years before an issue is resolved. Of course there are complaints, but it is nothing excessive. For this reason, I don’t see administration as a bad thing. It takes time to change things, and we see serious efforts in speeding up the processes. German companies here certainly have some problems. However, I would not state the situation is too bad.

We know that they have a problem with la-bor legislation and slow process of issuing construction permits.That is correct. They also have problems with land purchase. We have the example of Lidl that still hasn’t arrived and has been trying to purchase 15 parcels of land all across the country, for two years already. Without it, they will not be able to start working, and this is a problem because they face situations requiring restitution or there are unresolved property issues. This might be the greatest problem.

From our perspective, many procedures, including those for land purchase, take very long. Does it seem the same to you? For example, in Lidl they told me that they had not faced such situations in other countri-es. Purchasing land is always hard. Bosch was very quick with it. It depends on where you want to buy. Lidl wants to be present in cities, which is a bit harder. A large part also depends on local governments. Some of them are more helpful to the investor, some are less. SIEPA and VIP are doing a good work and they assist companies in the course of land purchase.

What were the results of German companies in Serbia during the first five years of crisis? Have their production volumes increased or declined, and more importantly, have they raised or decreased the number of employees?They are certainly affected by the crisis becau-se they operate in the global market, but the crisis here was not felt as in some other coun-tries, due to low economy level. Therefore the German companies in Serbia were not too affected. Many of them came here during the crisis. The pressure is increased, you need to produce more but cheaper, so you need to

A great comparative advantage of Serbia in attracting investments is motivated and educated work force, and the still

low level of average salary. It is now approxima-tely EUR 350 while in Croatia the amount is around EUR 1,000. You also have a good-wor-king administration. It is a highly attractive set of conditions. Of course, it can always be improved. There are around 400 German com-panies operating in Serbia, and most of them have their production facilities here. They are mostly companies in automotive industry, as well Siemens, producing wind generators, and pharmaceutical company Stada. There are ongoing negotiations between Mercedes and Ikarbus to initiate production of buses. All of these companies have great confidence in this system – says the Ambassador of Germany to Serbia Heinz Georg Wilhelm.

Is the interest among German companies to invest bigger than last year?It is hard to say. I recently attended an amba-ssadorial conference in Berlin and there were ten companies that asked for a meeting with me, because they are interested in investing in Serbia. They are currently exploring their options, meaning that they would certainly make the investment, but they are interested. Among these ten, there are no companies from automotive industry, but there are those producing fire prevention systems, which is much needed as there were big problems with fires last year. Serbia has improved its

political framework, particularly by reaching an agreement with Kosovo. This is also helpful as German companies now have better trust. This agreement and the forming of new Go-vernment have led to an improved image.

Serbia is expecting the start of negotiations on EU membership. How can this process influence the conditions of doing business?This will create better conditions because the companies can be confident that the legal system will be improved. Before you become a member you need to adopt all European Union regulations. This also brings positive psychological impact to investors.

Our country now wants to change certain parts of the Stabilization and Association Agreement, particularly to delay land purchase by foreigners. Is this feasible?

Everything is possible, all that it takes is an agreement, which depends on the willingness of EU members and European Commission. Poland had a 10-year period before they allowed foreigners to purchase land. It is hard to say whether the 4-year deadline Serbia cu-rrently has can be changed. I understand such attitude, because the land price is currently quite low. The companies can buy hectares for small amount of money, and this may not be in the country's interest. On the other hand, there is something called free trade and free-dom of investing, and Serbia as a country sho-uld think twice whether you wish to extend the deadline. I will also remind that there is no exact date for the beginning of membership negotiation, and they can last for quite a long time. In Croatia's case they took 10 years. I can understand the logic behind the request for extension of deadline, but for Serbia it is

Ten more German companies are interested in coming to Serbia Serbian bureaucracy is not the best of all bureaucracies,

but it is not bad either, it functions. On the other hand,

the courts are slow and the processes can last up to

several years until the subjects are resolved

look for better locations. Serbia is well positio-ned in this sense. In Czech Republic the labor price is high, closer to the price we can see in Germany or France, and Serbia's position is more favorable.

Which successful examples from Germany can we look up to, to stimulate the development of small and middle-sized enterprises?It is an important development issue, because the Serbian government focuses too much on attracting foreign investments. They need to improve the opportunities for Serbian entre-preneurs and companies, to invest and gain access to bank loans. It is now quite complica-ted to for a Serbian company to start working. One of the problems is the initial capital. In Germany, there is an established system where they can take “soft” loans from the state bank Kf W. These are loans with very low interest rate. There are mechanisms for stimulating domestic investments that are lacking in Serbia. Perhaps the mentality is not compati-ble and focused on business start-ups, and the environment is not that favorable. It seems to me that the Government understands this and they are trying to change things.

NALED strengthens the regional cooperationNALED and GIZ Open Regional Fund are implementing the project “Business Friendly Certification in South East Europe – BFC SEE”. What is your opinion on NALED efforts to expand the successful certification model to countries in the region?It is a very good project and it is excellent that you want to expand it to the regional countries, thus making a contribution to strengthen regional cooperation, which is an important EU policy. Also, I have noticed NALED's large posters at the Airport promoting certified municipalities, which is also something I approve.

H.E. Heinz Georg Wilhelm


Delegation of German Industry and Commerce in Serbia

Commerce in Serbia, which initiated the founding of DSW in 2002, as an individual legal entity, deals with numerous business activities. The main mission of both instituti-ons in Serbia is to improve economic bilateral cooperation. This includes information for German companies about Serbia as a potential investment destination. When it comes to specific questions in relation to a certain industry, the Delegation even suggests which local governments represent the best suitable investment location to German companies. Therefore, it was not by chance that some important German companies (such as Bosch, Falke, Leoni, Grammer, Continental and others) opted for the municipalities they now have large production facilities in.For it is important for local governments to communicate with the Delegation of German Industry and Commerce more frequently and submit information about the local econo-mic development plans, industrial and free trade zones, local benefits for foreign direct investors… The Delegation representatives are happy to respond to invitations of local governments, so as to present to local go-vernments, chambers and associations the ac-tivities and project for direct support to small and medium enterprises, business associations and local governments. A good example was set a couple of years ago by the municipality of Inđija that organized a one-day presentation for local businesses involving several foreign trade representative offices and departments in our country. This way, the participants could receive on one spot the information about support projects and economic cooperation with numerous busine-ss partners from the region, Europe and USA.

When a national economic institutions such as the Association of German Chambers of Commerce and Industry (DIHK) has such a long and successful tradition, it is not difficult to understand why its economy is one of the global leaders.If your journey leads you to the German capital, be sure to visit the “House of German Economy”. Upon entering the central atrium, involving a respectable complex of buildings at the banks of Berlin river Spree, you become aware of the powerful institution you arrived to. The history of German chambers of commerce is tied to the tradition of business association among merchants and producers in this part of Europe back in the XII century. DIHK celebrates 13th May 1861 as the official date of its founding, when a large gathering of German merchants was held in Heidelberg. Today, the DIHK involves a whole network of 80 local chambers, as well as the German Chamber of Commerce Abroad (AHK) now represented by 120 offices in 80 countries of the world (in our country it has been acting through Delegation of German Industry and Commerce in Serbia since 2001). For this reason, DIHK is the most important advocate and representative of German industry, trade and crafts on the national, European and global level. The importance of this institution is best seen in frequent visits by the German Chan-cellor Angela Merkel, who is the best promo-ter of its activities. The important economic information about the national and global economic development the Chancellor rece-ives first-hand assist her in creating a global

economic policy of her country. Advocating for the interest of German co-mpanies, that are obliged to pay a membership fee, is a task performed by the local chambers (IHK). However, it is important to note that its greatest funders are large German compa-nies recognized worldwide, seeing this as their social responsibility. In addition to Germany, such “continental” model of association was also adopted by some other European coun-tries, such as France and Italy. On the other hand, the so-called Anglo-Saxon model of association is based more on services for indi-vidual interests of the largest members. What they have in common is that both systems operate on a commercial basis that is, they offer a wide range of services, from legal and tax consultation, to mediation and research of

new markets and competition. At a recently held Career fair in Belgrade, orga-nized by the Delegation of German Industry and Commerce in Serbia and German-Serbian Business Association (DSW), that currently involves more than 260 members, the focus of both days of the fair were the conference and a forum dedicated to dual system of education in Germany that Serbia could learn a lot from: namely, the education system in Germany is formed primarily by the businesses in coope-ration with the Federal Ministry of Education, and not vice-versa. Educational function of the German chamber is based on dual education of company staff, with dominantly practical work and with special focus on crafts, which is less and less present in Serbia.The Delegation of German Industry and

The municipalities should deliver information about local economic development plans, industrial zones and incentives to the Delegation of German Industry and Commerce

For a German investor, knock at OUR door

The largest German investments in SerbiaStada-Hemofarm Pharmaceutical Vršac, Šabac 510Metro Cash & Carry Trade Beograd, Subotica, Novi

Sad, Niš, Kragujevac,165

Messer Tehnogas AD Chemical Beograd, Bor, Smederevo 120Henkel Chemical, Cosmetic Kruševac, Indjija 130Siemens Electronics Subotica 35Knauf Insulation Construction material Surdulica 31Fresenius Med. Care Pharmaceutical Vršac 25Leoni Automotive Prokuplje 15Dräxlmaier DAD Automotive Zrenjanin 12Norma Group Automotive Subotica 11Falke Textile Leskovac 10Geze Construction, automotive Zrenjanin 7Bauerhin-IGB Automotive Automotive Indjija 7Harder Digital Sova Electronics Niš 6Grammer Automotive Aleksinac 5Wacker Neuson Construction machines Kragujevac, Lapovo 5Meggle Milk and dairy industry Kragujevac 5Gruner Electronics Vlasotince 4Dunkermotoren Electronics Subotica 3Vossloh-Schwabe (Panasonic) Electronics Svilajnac 2Vossloh-Schwabe (Panasonic) Elektronika Svilajnac 2

The author Milan Vučković is an associate in Delegation of German Industry and Commerce in Serbia, in charge of public relations

If you are wondering why the German economy has the interest to support the host country businesses, the answer is clear: at all times, German economy has great interest in seeing local and national economy of the host country developing rapidly and in a balanced manner. The foreign production companies may operate well only with healthy compe-tition and cooperation with good domestic suppliers, to ensure that the final product

is always competitive on the international market. A very important fact is that Ger-man companies always bring technology innovations. The current German Minister of Economy (Philipp Rösler) gave a simple answer to a journalists’ question of why Ger-man economy is so successful on the global level: “The strength of companies lies in their wide production range, traditionally based on high-quality and innovative products. Therefo-re the partners of German companies in the world often state three main characteristics of German companies and their employees: hard work, reliability and accuracy.”The same as people, the two countries’ econo-mies may learn a lot from one another. A true opportunity for a relaxed dialogue in this sense, with a large mug of beer in hands, is Okto-berfest in Belgrade that has been traditionally organized by the German-Serbian Business Association for more than 1,200 of its members and their business partners in Belgrade.

Angela Merkel as a frequent guestThe importance of this institution is best seen in frequent visits by the German Chancellor Angela Merkel, who is the best promoter of its activities. The important economic information about the national and global economic development the Chancellor receives first-hand assist her in creating a global economic policy of her country.

Interested in investingIf you are wondering why the German eco-nomy has the interest to support the host country businesses, the answer is clear: at all times, German economy has great inte-rest in seeing local and national economy of the host country developing rapidly and in a balanced manner, because foreign pro-duction companies may operate well only with healthy competition and cooperation with good domestic suppliers, to ensure that the final product is always competitive on the international market.

Source: SIEPA and Delegation of German Industry and Commerce



Cross-border cooperation for investment promotionPARTNERS FOR SUCCESS

What are your expectations of the EU CBC IP project?The project involves activities to build and raise capacities of municipal employees

for investment promotion, through professi-onal development with prominent experts in this field, as well as concrete activities for municipal promotion, through direct contact with potential investors. This will be realized through three investment missions abroad, a visit of foreign investors to our municipality and presentation at the investment fair in Hannover. Additionally, two sector and two sub-sector studies are to be developed, in the field of agriculture and chemical industry. Another document will be a very impor-tant investment strategy with a three-year action plan, to provide clear guidelines for our approach to potential investors. The mix of activities within the IP CBC project will assist in developing a systemic approach towards investment promotion in the Muni-cipality of Odžaci and I am proud to stress that not many municipalities in Serbia and the region work this way.

What are your municipality's investment promotion potentials?

CROATIA AND SERBIA TOGETHER ATTRACTING INVESTMENTS

The cross-border cooperation project involves three municipalities from Croatia and two from Serbia

All local governments will develop sector and sub-sector studies of investment potential

Target sectors: agriculture and chemical industry

In summer 2012, with the support of the European Union, NALED started the implementation of a two-year project EU Cross Border Cooperation for Investment Promotion. The project is implemented in cooperation

with partner organization from Croatia – Office for international cooperation TINTL, as well as five local governments from both sides of the border, that is, municipalities from Vukovar-Srijem County (Gradište, Lovas, Ilok) and West Bačka District (Odžaci and Kula). Total project value is EUR 594,600, the sha-re funded by the European Union being EUR 505,420. Within the project,

What are your expecta-tions from the EU CBC IP project?We expect that, thanks to this project, our munici-pality would significantly improve its institutional

and technical capacities and be entirely prepared to attract new foreign and domestic investments. We also expect that the entire West Bačka District will be more visible and competitive on the global investment map. Given that new jobs are the priority of municipal sustainable development, the investment promotion project is of key importance to us.

What specifically does the municipality offer to investors? What would you like to promote?The municipality has had its industrial zone since 2012, entirely ready for investments and construction of facilities. The most attractive zone is the one between Kula and Vrbas, with a 20 ha area being continuously equipped. The municipality offers the opportunity to adapt the locations to the investors’ needs by performing land division. In addition to selected location benefits and special incenti-ves offered to investors, the municipality also gives priority and assists the investors in the

I think that, above all things, human potential is what can make our municipality stand out from the competition. Certainly important things are the highway, river or developed working zone that we own, but essentially, the business is created and developed by the people, and we have highly qualified and competitive labor force in the production sector within metal-processing, chemical and textile industries.

Why did you opt for chemical industry as the most important for further economic development of the municipality?We selected the chemical industry because we have chemical industry Hipol producing polypropylene, Greiner Packaging manu-facturing packaging for dairy industry (they process polypropylene) and another twenty small companies using the raw material from Hipol. Our goal is to find a partner for this company in order to increase the production capacities, for which we have developed stu-dies, and in the meantime we wish to attract more companies basing their production on polypropylene products, thus ensuring that 30% of Hipol production is processed in Odžaci. With this approach, we will ensure that Hipol becomes much stronger, and have more companies to employ people from our municipality.

What are the problems and obstacles to economic development of Odžaci?The first obstacle is the reluctance of public sector to change. Another thing is the lack of enthusiasm among citizens to undergo trai-ning and professional development. I already stated that qualified and competitive labor force was our competitive advantage, but there is a problem with people who should be in charge of middle or top management in companies. Many young people leave the municipality to go to the University and never come back – this is an irreparable loss. Certainly, one of the biggest problems is finance. During this year, the municipalities have experienced a shock with the amend-ments to Law on Tax System, and specifically, our municipality has lost around RSD 70 million of revenues. This amount would be sufficient to entirely equip a 20 ha industrial zone, to stimulate the investors by paying training for employees or implementing active employment measures as means of supporting entrepreneurs to reduce unem-ployment. Now we hear new announcements of reducing some part of wage taxes, and it is a huge threat to the local governments. Personally, I believe that Serbia’s develo-pment starts bottom up meaning that mu-nicipalities should have an entirely different position compared to today.

process of obtaining necessary permits and by accelerating the bureaucratic procedures. Additionally, we offer the available brownfi-eld locations, the opportunities to invest into renewable energy sources through public-pri-vate partnership projects, as well as strategic partnerships with local companies that have clearly defined plans for expanding their capacities and increasing their exports.

Why did you opt for agriculture sector as the most important for further economic development of your municipality?Once known for its developed industrial pro-duction, with several large companies in the field of metal-processing, leather and textile industry, the municipality of Kula is now mo-re dominated by agriculture production. This statement is confirmed by the fact that 94% of municipal territory is arable land, which is approximately 41,000 hа. Additionally, a large part of our population is mainly enga-ged in agricultural activities. Together with available land, this makes up for an excellent production foundation for further sale and processing. For these reasons, and because of its connection and impact on other business sectors, agriculture is highly significant for further growth. Within the project Cross Border Cooperation for Investment Promo-tion (EU CBC IP) we implement together

with NALED, a sector study will be develo-ped for agriculture. Upon its development we expect to gain expertise and additional in-formation to assist us in being well prepared for using IPA funds for agriculture and rural development, to be available as of next year.

What are the problems and obstacles to economic development of Odžaci?Kula is probably one of the few local governments that initiated the process of industrial zone construction and equipping, entirely on our own. This is a very demanding process, mostly in terms of finance. Along with ongoing development of this zone, the biggest problem for the municipality is resolving the environmental issues. The con-struction of Central Waste Water Treatment plant in Vrbas is currently ongoing. On the other hand, the construction of sewerage system from Crvenka to Kula will be the final solution for the waste water problem and the Great Bačka Canal. Even though the muni-cipality already has the projects and entire paperwork for this huge problem, the funds for its realization have still not been ensured (EUR 2 million). We expect and hope that the national authorities will recognize the importance of resolving these issues, so that our municipality can grow and develop fast and smooth.

Miloš Pejčić, President of Municipal Assembly and EU CBC IP Project Coordinator of Municipality of Odžaci Milić Vulović, Information and Protocol Associate and EU CBC IP Project Coordinator of the Municipality of Kula

municipalities will receive their virtual one-stop shops for investors and databa-ses, sector and sub-sector studies of investment potentials for targeted indu-stries – food and chemical industry, an investment strategy with action plans, promotional materials and technical assistance in the process of investment promotion. Additionally, the municipalities will participate in investment missions and meetings with potential investors and business partners in the country and abroad, and they will visit the largest industrial fair in the world – Hannover Messe. Here is what beneficiaries say about the initiative.


NALED new membersPARTNERS FOR SUCCESS

Welcome to NALED

36v Jurija Gagarina street, 11070 Novi Beograd+381 11 310 55 00

[email protected], www.dhl.rs

DHLDHL is the global leader in transport and logistics. In addition to international express courier shipment of parcels “from door to door”, DHL also offers road, marine and railroad transport of robe. DHL implements the latest logistic solutions for businesses, offering services of storage, customs procedures and distribution in international and domestic traffic. We perform export shipments each working day from Belgrade, by a plane type “Antonov 26”, on the relation Belgrade - Budapest – Leipzig, and the imported materials arrive to Belgrade via the same route, early in the morning, every working day. They have been active in Serbia since 1983. So far, they have invested more than EUR 20 million and performed more than 6 million shipments weighing more than 12 million tons.

5/III/8 Francuska street, 11000 Belgrade+381 11 32 86 368, +381 11 32 88 661

[email protected], www.hd-ecg.com

European Consulting Group (ECG)European Consulting Group is an international consulting company founded in 2001 with seat office in Belgrade, which has been successfully implementing technical assistance pro-jects in public sector in Serbia and countries of South East Europe. The fields of our activi-ties include Education and employment, Finance and economy, Information and commu-nication technologies and innovation, Health care, Justice system, Public administration and civic society. Our key partners are the European Union, World Bank, U.S. Agency for International Development and the national Governments and their institutions.

Beogradski put bb, 26300 Vršac +381 13 803100

[email protected], www.hemofarm.com

www.facebook.com/SvakodobroHemofarmTwitter @SvakoDobroHF

HemofarmHemofarm was founded in 1960 in Vršac. Along with Vršac, where it is the largest pro-duction complex, Hemofarm Group has high-end factories in Dubovac, Podgorica, Šabac and Banja Luka. Hemofarm produces high-quality, efficient, safe and affordable generic pharmaceutical products of the latest generation, using most advanced technologies and production processes. It is the leader in domestic pharmaceutical market, the largest expor-ter of medications in the country, and since 2006 a member of German STADA Group. Hemofarm produces 11 out of a total of 14 pharmacy and therapy categories according to ATS classification. Hemofarm's rich portfolio has more than 140 INN products with approximately 280 forms and dosages. Medicaments issued without doctor's prescription (OTC) have the leading position in Serbian pharmaceutical market.

115e Bulevar Mihajla Pupina street, 11070 Novi Beograd

+381 11 3539 539, 3539 555, 381 11 3539 599 (fax)

[email protected], www.mkgroup.rs

MK GroupMK Group is one of the largest and most successful holding companies in Serbia with more than 30 years of tradition, involving more than 36 companies. It employs more than 5,000 workers in Serbia and Ukraine. The company performs strategic business operati-ons and corporate management in the fields of agriculture, agro-industry, sugar industry, meat-processing industry, tourism, renewable energy sources, IT technologies, finance and real estate management. The most successful companies include MK Commerce, Sunoko, Carnex, MK Mountain Resort, Agro Invest Ukraine. MK Group is currently the largest vertically integrated agriculture company in the whole Europe, with serious plans for expansion to new markets.

30A Dr Agostina Neta street, 11070 Novi Beograd+ 381 11 61 28 071, + 381 60 444 01 21

[email protected], www.spos.info

Beekeeping Association of SerbiaBeekeeping Association of Serbia was founded 116 years ago (1897). It gathers around 208 municipal beekeeping organizations, with 8765 members. It publishes a magazine Beekeeper, organizes professional conferences and has a registered business activity. The organization is currently involved in the EU project "River of honey" (BAS share is 24%), financing the creation of a special honey jar only for BAS members, and establishment of private quality standard which does not exist in such form anywhere in the world and guarantees absolute quality for consumers.

7b Jurija Gagarina street, 11070 Belgrade+381 11 71 55 275, +381 11 71 55 276

[email protected], www.sgs.rs

SGSSGS Belgrade was founded in 2001 as a full member of SGS group, the world's largest organization for inspection, certification, testing and monitoring. Thanks to professional experience, compliance with ethical standards and global network support, SGS Belgrade has become the leading international company in Serbia in the field of audit and certifica-tion. It also involves a modern laboratory in Novi Sad, accredited by the SRPS ISO/IEC 17025 standard and an office in Bar. SGS Belgrade Education center provides education opportunities and acquiring of various diplomas, acknowledged in at least 180 countries in which SGS group operates.

103 Alekse Markišića street, Soko Banja 18230+ 381 18 88 48 58, +381 63 47 07 11

[email protected], www.stefkom.rs

StefkomStefkom LLC has been operating since 1962, as a family business with long tradition in the fields of trade and service provision. It operates in sales and installation service of final ma-terial in construction works. The head of company, Dragoslav Stefanović, is working with a team of sales managers and expert consultants. The primary field of activity of Stefkom is provision of logistical support, financial and technical issues. Stefkom LLC is always at ser-vice for its customers, to assist them in resolving problems and making the right selection of products from its wide product range.

56/5 Svetozara Markovića street, Belgrade+381 11 26 56 419, +381 63 30 90 11

[email protected], www.reciklerisrbije.com

Serbian Recycling AssociationSerbian Recycling Association was established on 5th March 2013, aiming to protect and develop the recycling industry in Serbia and the companies operating in the area of waste management and treatment, appreciating the three basic principles of sustainable development: economic growth, environment protection and respect for socio-economic interests of the community we work in. Today, our industry employs approximately 5,000 people in 2,200 companies working in various areas of waste management, and indirectly, through a network of cooperant collectors, there are additional 10,000 people making a living in recycling industry.

18-20/VII Obilicev venac, 11000 Belgrade+381 11 328 35 27, 381 11 630 15 27 (fax)

www.windvision.com

WindVisionWindvision is Belgian-Dutch company developing a wind farm project in Serbia, at the territory of Alibunar municipality, of total capacity of 174 MWh. The realization of this project of total value of approximately EUR 290 million will enable increase of renewable energy capacities and create conditions for long-term economic growth on the local level. As a producer of green energy, Windvision is also present in Belgium, France, Cyprus, Spain and Morocco.

TEST SOLUTIONS: What is your knowledge on investment promotion: 1-b, 2-c, 3-a, 4-c, 5-a, 6-b, 7-c, 8-b, 9-f, c, d, a, e, b

82 SYNERGY


Airport Belgrade www.beg.aeroAgri Business Partner www.abp.rsAsseco SEE www.asseco-see.comBall Packaging www.ball-europe.comBambi www.bambi.rsBanca Intesa www.bancaintesabeograd.comBelgrade Wholesale Market www.veletrznica.co.rsBeohemija Inhem www.beohemija.comCIM Group www.cimgrupa.euCoca Cola HBC www.coca-colahellenic.rsComtrade www.comtradegroup.comConfluence Property Management www.confluence.rsContinental Wind Serbia www.continentalwind.rsCopper Mill Sevojno www.coppersev.comDeloitte www.deloitte.comDelta Agrar www.deltaagrar.rsDelta Generali osiguranje www.deltagenerali.rsDelta Real Estate www.deltarealestate.rsDHL International Beograd www.dhl.rsEcovis Confidas www.ecovis.comEnergoprojekt www.energoprojekt.rsErste bank Novi Sad www.erstebank.rsEurobank www.eurobank.rsGi Group HR Solutions www.gigroup.rs Gomex www.gomex.rsGrant Thornton www.gt.co.rsGrupa Zastava Vozila www.zastavakvalitet.comHalifax Consulting www.halifaxconsulting.com

HD European Consulting Group www.hd-ecg.comHemofarm www.hemofarm.rsHolcim www.holcim.rsHyatt Regency Belgrade www.hyatt.comHypo Alpe-Adria-Bank www.hypo-alpe-adria.rsImlek www.imlek.rsIndustrijske nekretnine www.industrijskenekretnine.rsITM www.itm.rsIvančić i sinovi www.ivancic.comJP PTT Srbija www.ptt.rsJTI www.jti.comJUBMES banka www.jubmes.rsJugo-Impex www.ereciklaza.comKaranović/Nikolić www.karanovic-nikolic.comKnjaz Miloš www.knjaz.co.rsKomercijalna Banka www.kombank.comKonsing Group www.konsing.comLaw Office Kosić www.kosiclaw.co.rsLuka Beograd www.lukabeograd.comMedija Centar www.mc.rs Messer Tehnogas AD www.messer.rsMicrosoft Software www.microsoft.comMK Group www.mkgroup.rsMSD Merck Sharp & Dohme www.merck.comNimax www.nimax.rsNovi Sad Fair www.sajam.netOMV Serbia www.omv.comPejak handel www.pejak-handel.net

Petite Geneve Petrović www.petitegeneve.comPFB www.pfb.rsPhilip Morris Operations www.pmi.comPhoenix Pharma www.phoenixpharma.rsPorr Werner Weber www.porr.rsPricewaterhouseCoopers www.pwc.rsPrivredna Banka Beograd www.pbb-banka.comProCredit Bank www.procreditbank.rsRepresent Communications www.represent.rsRudnik AD - Beograd www.contango.rsSAGA www.saga.rsSava Osiguranje www.sava-osiguranje.rsSchneider Electric Srbija www.schneider-electric.rsSGS www.sgs.comSiemens www.siemens.rsSojaprotein www.sojaprotein.rsStefkom Telekom Srbija www.telekom.rsTelenor www.telenor.rsTigar www.tigar.comTitan Cementara Kosjerić www.titan.rsTPA Horwath www.tpa-horwath.comSerbian Recycling Association www.reciklerisrbije.comURBIS design www.urbisinc.comVIP mobile www.vipmobile.rsWindVision Operations www.windvision.comZdravlje Actavis company www.actavis.rs

COMPANIES

City of Belgrade www.beograd.rsCity of Čačak www.cacak.org.rsCity of Kragujevac www.kragujevac.rsCity of Kraljevo www.kraljevo.orgCity of Kruševac www.krusevac.rsCity of Leskovac www.gradleskovac.orgCity of Loznica www.loznica.rsCity of Niš www.ni.rsCity of Novi Sad www.novisad.rsCity of Pančevo www.pancevo.rsCity of Požarevac www.pozarevac.rsCity of Sombor www.sombor.rsCity of Sremska Mitrovica www.sremskamitrovica.org.rsCity of Subotica www.subotica.rsCity of Šabac www.sabac.orgCity of Užice www.graduzice.orgCity of Valjevo www.valjevo.org.rsCity of Vranje www.vranje.org.rsCity of Zaječar www.zajecar.infoCity of Zrenjanin www.zrenjanin.org.rsMunicipality of Aleksinac www.aleksinac.orgMunicipality of Alibunar www.alibunar.rsMunicipality of Apatin www.soapatin.orgMunicipality of Aranđelovac www.arandjelovac.rsMunicipality of Arilje www.arilje.org.rsMunicipality of Bač www.bac.rsMunicipality of Bačka Palanka www.backapalanka.rs

Municipality of Bečej www.becej.rsMunicipality of Bela Palanka www.belapalanka.org.rsMunicipality of Boljevac www.boljevac.org.rsMunicipality of Bor www.opstinabor.rsMunicipality of Bujanovac www.bujanovacin.rsMunicipality of Ćuprija www.cuprija.rsMunicipality of Dimitrovgrad www.dimitrovgrad.rsMunicipality of Golubac www.golubac.org.rsMunicipality of Gornji Milanovac www.gornjimilanovac.rsMunicipality of Inđija www.indjija.netMunicipality of Ivanjica www.ivanjica.rsMunicipality of Kanjiža www.kanjiza.rsMunicipality of Kikinda www.kikinda.rsMunicipality of Kladovo www.kladovo.org.rsMunicipality of Knjaževac www.knjazevac.rsMunicipality of Kosjerić www.kosjeric.rsMunicipality of Kovačica www.kovacica.orgMunicipality of Kovin www.kovin.org.rsMunicipality of Kula www.kula.rsMunicipality of Lajkovac www.lajkovac.org.rsMunicipality of Lapovo www.lapovo.orgMunicipality of Lazarevac www.lazarevac.rsMunicipality of Merošina www.merosina.org.rsMunicipality of Mladenovac www.mladenovac.rsMunicipality of Negotin www.negotin.rsMunicipality of Nova Varoš www.novavaros.rsMunicipality of Novi Bečej www.novibecej.rs

Municipality of Novi Beograd www.novibeograd.rsMunicipality of Obrenovac www.obrenovac.rsMunicipality of Odžaci www.odzaci.rsMunicipality of Osečina www.osecina.comMunicipality of Palilula www.palilula.org.rsMunicipality of Pećinci www.pecinci.orgMunicipality of Pirot www.pirot.rsMunicipality of Plandište www.plandiste-opstina.rsMunicipality of Požega www.pozega.org .rsMunicipality of Prokuplje www.prokuplje.org.rsMunicipality of Rača www.raca.rsMunicipality of Rakovica www.rakovica.rsMunicipality of Ražanj www.razanj.orgMunicipality of Ruma www.ruma.rsMunicipality of Senta www.zenta-senta.co.rsMunicipality of Stara Pazova www.starapazova.euMunicipality of Svilajnac www.svilajnac.rsMunicipality of Šid www.opstinasid.orgMunicipality of Trstenik www.trstenik.rsMunicipality of Tutin www.tutin.rsMunicipality of Ub www.opstinaub.org.rsMunicipality of Veliko Gradište www.velikogradiste.org.rsMunicipality of Vračar www.vracar.org.rsMunicipality of Vrbas www.vrbas.netMunicipality of Vrnjačka Banja www.opstinavrnjackabanja.comMunicipality of Vršac www.vrsac.comMunicipality of Zvezdara www.zvezdara.com

ACES www.aces.rsAssociation URAN www.uran.rsAssociation UVRA www.uvra.netBeekeeping Association of Serbia www.spos.infoBIRN Srbija www.birn.eu.comCivic initiatives www.gradjanske.org

Ecoist www.ecoist.rsEthno Network www.ethnonetwork.comFoundation Ana i Vlade Divac www.fondacijadivac.orgGroup 484 www.grupa484.org.rsInitiatives www.theinitiatives.orgJunior Achievement www.ja-serbia.org

Pexim foundation www.peximfoundation.orgSerbian Film Commission www.filminserbia.comSmart Kolektiv www.smartkolektiv.orgTeleskop Trag foundation www.tragfondacija.org

LOCAL GOVERNMENTS

CIVIL SOCIETY ORGANIZATIONS

The project Introducing Telemedicine in Eastern Serbia is implemented by the National Alliance for Local Economic Development (NALED) with the support of Merck Sharp & Dohme Foundation (MSD) and in cooperation with Primary care center Boljevac, Health center Zaječar and Clinical center Niš

TELEMEDICINE

PILOT PROJECT – INTRODUCING TELEMEDICINE

IN EASTERN SERBIA

MODERN DIAGNOSTICS AND SPECIALIST MEDICAL

EXAMINATIONS VIA VIDEO LINK

THE FIRST TELEMEDICINE CENTERS: BOLJEVAC,

ZAJEČAR AND NIŠ

Long-Distance Health Care

NALED members

Date post:	07-May-2015
Category:	Business
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