DRAGAN KOSTIĆ, Director of Pirot Free Zone: We are a Good Example to Other Free Zones

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Pirot Free Zone was opened in 1998 when it spanned a total of 17 hectares of land. In 2019, the Zone covers 122 hectares and is preparing for yet another extension of additional 30 hectares. A total of 23 production and 100 trading companies operate in Pirot Free Zone including large and small and medium-sized companies that have close to 6,500 employees. In 2018, the Zone’s users recorded a total turnover of nearly a billion euro. Automotive and rubber companies here generate the highest turnover. For the sixth consecutive time, Pirot Free Zone was declared Top 50 Best Free Zones in the World by fDi magazine, published by the Financial Times. Last year, the Zone was declared the best in Europe and the third best in the world.

The company that manages Pirot Free Zone offers a range of services to the Zone’s users which facilitate their business and help them to execute their core activities. In addition to the basic benefits that free zones offer to their customers, namely operating in custom-duty and tax-free environment, our free zone also provides a range of benefits for its users including customs brokerage services, domestic and international transport, transshipment and storage services at the very favourable and competitive terms and prices,” says Dragan Kostić, Director of Pirot Free Zone.

We have also developed software tools that facilitate user operations by keeping electronic records and completely archiving all documents in all procedures related to freight forwarding and customs in terms of inward processing and other customs procedures in the zone,” he adds. As of recently, Pirot Free Zone has represents and performs the duties of the Regional Office of the World Free Zone Organization (WFZO) for South East Europe.

What are your expectations from the summit of the Free Zones of Europe in Skopje? What is your role in co- organizing the conference as the WFSR’s Regional Office?

— In order to prepare the Free Zones of Europe Summit in Skopje, which will take place from 2nd to 4th May, the Republic of Northern Macedonia will hold several meetings with the co-organizers of the summit, the Directorate of Technological Industrial Development Zones (DTIDZ) and the Free Zone Pirot as Regional Offices of the World Organization of Free Zones (WFZO). The summit will bring together leaders and stakeholders of the most influential free zones in the world with the view of presenting the latest concepts, models and achievements of free zones in terms of attracting investments, supporting their customers, and their impact on economic and technological development. At the meeting, we have agreed on the organizational plan and prepared the Summit’s agenda which is taking place in a Western Balkan country for the first time ever. In addition to our experience with the participation and organization of the international conferences, we are going to invite all representatives of free zones and other stakeholders from the neighbouring countries, with whom we can jointly contribute to accomplishment of the Summit’s goals.

This is the first time that such a gathering is organized in the Western Balkans. What kind of potential do we have in this region and do we market ourselves in the right way? Have we joined forces with other countries or the regional countries are in competition with each other?

— There are over 10,000 free zones in the world. 80 of them are in Europe and 39 in the Western Balkans. In Europe, or the EU, to be more precise, the special economic zones in Poland are definitely ahead of the rest in terms of efficiency. In the Balkans, the best free zones are in Serbia (14) and the Technological-Industrial Development Zones in Macedonia (15). Our common goal is to create a modern concept of free zones that will attract as many investments in production as possible and provide users with the best conditions for doing business. The modern concept of free zones is reflected in simplified administrative procedures, efficient processes and ensuring high security of goods and persons, along with trading and manufacturing in line with the highest global standards. The huge potential of free zones lies in their geographical location and transport network. Pirot Free Zone is located on the crossroad of three Pan-European corridors – Xc, VIII and IV, which connect our users to the Danube river, Bulgaria, Turkey, Italy, Greece and Romania. Since we are located on the main transport corridors, this establishes good links to the ports of Thessaloniki, Burgas, Varna, Bar and Constanta. Via the Free Zones Group at the Chamber of Commerce and Industry of Serbia, the free zones in our countries are members of the biggest international free zone association – World Free Zone Organisation (WFZO). Pirot Free Zone has represents and performs the duties of the Regional Office of the World Free Zone Organization (WFZO) for South East Europe. Together with the WFZO, we have launched the Safe Zone project, which aims to certify procedures in free zones with the goal of better monitoring the flow of goods and the complete eradication of illegal trade. There is no trafficking in our zones which means that our experiences could be very beneficial to other zones in dealing with daily challenges, especially when it comes to illegal tobacco trade. The second large-scale project that we are jointly implementing with the regional free zones is the introduction of the Izdihar Index that aims at improving the performances of all free zones and is based on 3 support pillars: Best in Class (knowledge, safety and technical integrity), Innovation (entrepreneurship, SME development and innovation) and Sustainability (environmental protection, favourable living and business environment and social responsibility). By implementing and monitoring these parameters, free zones increase their capacities and work as partners rather than competitors.

Some people think that the zones that are focusing on just one industry, as opposed to a few of them, are becoming dominant today. What can you tell us from your experience and from research done in this field?

— There are different concepts in the world, and different types of free, specialized and economic zones that carry different names and provide different conditions for doing business. The name is not important. What is important is that they provide the best possible conditions for doing business. Only by having more favorable conditions for doing business we can attract investments and new technologies that are the key to job creation, the growth of living standard in our country, foreign currency balance and overall prosperity. Our concept zone is very modern and has been recording excellent results. In the last ten years, free zones in Serbia have attracted 2.5 billion euro and created 35,000 new jobs, while the annual turnover of their users is close to 5 billion euro, half of which is export value. For the sixth consecutive time, Pirot Free Zone was declared Top 50 Best Free Zones in the World by fDi magazine, published by the Financial Times. Last year, the Zone was declared the best in Europe and the third best in the world.

WORKER TRAINING PROGRAMMES

Yes, there is a temporary lack of qualified workforce, and yes, we are working together with the city of Pirot to resolving this issue. We believe that through providing more job trainings in the next period we are going to qualitatively improve the workforce in Pirot County.
Pirot Free Zone is cooperating with the Pirot Chamber of Commerce, the Pirot administration and Pirot Office of the National Employment Service on eliminating this problem. In 2018, we organized together 21 business events, two scientific conferences and 6 workshops, offering training and education.
The City of Pirot has adopted the Local Employment Action Plan for 2019, which envisages the implementation of 4 employment programmes: a public works programme, work practice programme, self-employment programme and training program for deficient professions. The City of Pirot has allocated 19 million dinars for the implementation of these programmes. Following their implementation, a 70 new jobs should be created. In cooperation with HELP, the City of Pirot has funded 450 people the last few years through stimulating entrepreneurship. The ZIP Centre, the Local Economic Development Office, the Jug Regional Development Agency and many others that contribute to curbing unemployment are working on eliminating this problem.

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