Europa Central y Oriental

Business Environment in Serbia (2)

The challenge

The Serbian Government has received criticism in the past for neglecting the implementation of essential reforms.  Any reforms that have taken place have been slow, incomplete and resulting in minimal improvement of the economy. Furthermore the impact of the world economic crisis has contributed further pressure to the Serbian economy.

According to various domestic statistical indicators, Serbia is one of the five least developed countries in Europe. The informal economy grew from 27.5% to 43% of the GDP. This is a result of high rates of unemployment and archaic labor laws. Furthermore, failure to efficiently reform trade regulation caused unnecessary bureaucracy and significantly higher costs for doing business. From 2009 to 2012, retail trade turnover declined by almost one third.  New regulations adopted to conform to the EU accession process have also been a challenge.

How employers’ organizations dealt with it

The Serbian Association of Employers' (SAE) has analyzed the labor market, tax legislation and regulations related to trade and labor inspections.

The ILO EESE methodology was used to assist SAE in developing comprehensive proposals for change of the laws and by-laws. The activities undertaken within the EESE project were implemented with significant ILO support and advice. These were preceded by three focus group meetings held in October 2012 in Belgrade, Nis and Kragujevac. The focus groups discussed the different needs of companies based on sector, size and geographical position.  Approximately 40 different companies confirmed that these issues represent the main concerns of employers.  SAE's Board of Directors then approved the research into these areas.

CEFE Serbia was commissioned to design the questionnaire, determine the representative sample, survey 202 companies, conduct desk research, synthesize primary and secondary research and produce the report titled Employers' views concerning the business environment`. A one day validation workshop for 50 people was organized and both SAE members and non-members were invited to validate the findings of the report.

Representatives of other business organizations such as AmCham, the Serbian Chamber of Commerce, USAID Business Enhancement Project, and the Foreign Investors' Council were consulted during the process. This collaboration helped SAE to verify its findings in the broader base.  SAE then finalized the report, conducted separate stakeholder and external environment analysis and developed position papers for each of the three research areas.

The result

To present the EESE study and position papers, SAE first organized a two-day briefing session with 16 media representatives from television and radio. This helped to build strong and open communication channels with the media.

The report and position paper were then launched at the National Assembly of Serbia. The presentation was attended by high level members of government and industry.  Representatives of business organizations were also in attendance, such as the German Chamber of Commerce, Confindustria, USAID, AmCham, the Serbian Chamber of Commerce and the National Alliance for the Economic Development (NALED).

In an attempt to maintain strong media coverage SAE gave 13 statements to the printed media, 4 to the digital media and also made two national television appearances.

An additional two launch events were organized on the local level in the administrative centers of two Serbian districts, in the cities of Kragujevac and Zrenjanin at the end of August 2013. High level representatives of local government were in attendance, including the Deputy Mayor at Kragujevac and the Mayor at the Zrenjanin event.

The immediate/expected long term result

The Minister of Economy, Mr Radulovic, used the findings from SAE’s report as guidance for newly proposed economic measures aimed at boosting the Serbian economy, including decrease of taxes and contributions for wages.

SAE's report, findings and recommendations are still quoted and featured in the media.  Approximately 170 texts were written and 70 television statements were broadcast. This increased awareness has enhanced SAE's reputation and influence.

Recent reshuffling in the government has resulted has provided obstacles to reaching a consensus on employers’ proposals.  Ongoing advocacy efforts are needed to achieve concrete policy changes.

Media coverage

Below are links to relevant media coverage on this project.