Finance minister seeks to keep Serbia in FDI spotlight

Q: Relative to its GDP, Serbia received the most greenfield foreign investment in the world in 2019. How did this come about? 

A: Serbia was a country on the brink of bankruptcy in 2013. We initiated very difficult fiscal consolidation measures: we reduced salaries in the public sector and pensions, etc. It was not popular. And still, we managed to win a majority in the next elections. Despite the slowing down of the world economy, Serbia’s growth rate hit 4.2% for 2019, thanks to exports. Look at the World Bank’s Doing Business index: we are now 44th best in the world. In 2013 we were 93rd. FDI is the cherry on the cake. It comes when you are stable. 

At the end of 2019, we announced ‘Serbia 2025’, the new investment programme whereby, on top of budgetary funds, we’re investing an additional €14bn in basic infrastructure. I expect this to be the backbone of the new investment cycle. Private investments will flow even more.

Serbia has a very skilled labour force; good infrastructure; operating costs that are lower than a lot of European countries; a very good taxation system; and government subsidies for certain investments, especially in manufacturing.

We are very firmly on our path [to EU membership]. However, not yet being an EU member gives us certain freedoms; the best of both worlds. It gives us an opportunity to have all those free-trade agreements with various countries such as Turkey; preferential status with the US; good contracts and agreements with China; the Central European Free Trade Agreement; and the Eurasian Economic Union, for example. 

Q: Can you be everyone's friend, so to speak, and maintain your current relationship with China and Russia if you join the EU?

A: We’re doing what we think is best for our people. We opened up Serbia’s economy and diversified its investor base in 2014, so as not to depend [solely] on the EU, Russia, China, the US, etc... And that is exactly what we managed to do, and it has been a success. It is not easy to balance, but this is the job I was elected to do, right? 

Q: In what sectors or projects would you like to see more FDI in 2020?

A: Automotives, logistics and tech. We’re excelling in all three. The IT industry is the fastest growing industry here. We’re beginning to promote tax incentives specifically for IT industries and [improved laws] on the treatment of intellectual property.

NCR, the tech company putting together ATMs, is building one of its biggest worldwide campuses in Belgrade. It shut down its call centres in India and other countries, transferring things to Serbia because it is pleased with our skills and knowledge of foreign languages.

We have lots of German investors coming in for automotives, and we are applying the German dual-education system. The fourth industrial revolution is something we don’t want to miss. In 2020 we're going to start with our 5G procurement process.

Real estate is another [fast-growing] sector – we have thousands of construction sites around Belgrade. 

Costs of this report were underwritten by the following sponsors: Ministry of Finance of Serbia, The Chamber of Commerce and Industry of Serbia, the Free Zones Administration of Serbia, Free Zone Subotica, Free Zone Svilajnac, Free Zone Uzice, Free Zone Priboj and Free Zone Smederevo. Reporting and editing were carried out independently by fDi Magazine.