IGOR MIROVIĆ, Prime Minister of Vojvodina: INVESTORS RECOGNIZE OUR POTENTIAL

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The provincial government will do everything in its power to attract more foreign direct investments to Vojvodina. Our province has to regain its old glory and occupy a rightful place, considering all the resources it disposes of, which is to be the most developed part of Serbia and the driving force behind the overall development of our country

A solid framework for a stable, predictable and firmly implemented macroeconomic policy that Serbia has been exercising in recent years has been the key contributor to the steady growth of investments in Vojvodina, as well as throughout the country.

What is Vojvodina’s share in this year’s robust GDP growth? Are you satisfied with this year’s economic indicators?

The share that our province has it the Republic of Serbia’s GDP is around 26-27 percent on average, which makes Vojvodina the second region in the country in terms of the GDP share. Vojvodina has an almost the same share in the growth of this year’s GDP. In terms of other indicators, in the first half of this year, the he industrial production growth in Vojvodina compared to the same period in 2017 stood at 3.1 percent, and the value of exports exceeded EUR 2.7 billion, which is a 9.5 percent hike. This export, however, accounts for almost 34 percent of total exports of the Republic of Serbia in the observed period. The growth was also registered in the agricultural sector, while the recovery of the construction sector is even more important and obvious. Only in June this year, 710 building permits were issued in Vojvodina, which is 40 percent more than in the same period last year. The value of construction works, which these permits cover, is 17.2 billion dinars, which is twice the value of the construction works, covered by building permits, in June 2017. Finally, it is particularly encouraging to note that Vojvodina had the fastest decline in active unemployment in the first six months of this year, which stood at 15.8 percent.

What do foreign investors recognize as the key features of Vojvodina as an investment destination?

There are several factors, with one of the most important being quality and qualified workforce, that is, the optimal ratio between its quality, productivity and costs. There is also a quick and easy access to global markets, which is due to the geographical location, the free trade agreements and the non-tariff approach that Serbia has with countries which markets comprise of an extremely large number of people. Additionally, the favourable tax system is an important factor, and the fact that tax rates in Serbia are among the lowest in Europe. The profit tax is the lowest in the region, while salary tax and social security contributions are among the most competitive in the central and eastern part of our continent. There are, of course, clearly defined and very stimulating programmes of direct support to investors at all three levels of government – state, provincial and local.

What is the average annual share that Vojvodina has in total FDI in Serbia?

It is growing, as evidenced by the fact that new factories or construction sites of future factories are being opened almost every day. Some of this factories will be industrial giants like the automobile tyre factory to be launched by the Chinese company Shandong Linglong in Zrenjanin. Once constructed, the factory will be worth over USD 940 million dollars. The contract stipulating construction of this factory was recently signed, and it gives me a great joy to say that I was present at the signing. Another significant foreign investment is that by Germany’s ZTF in Pančevo. Of course, we, as in the Provincial Government, respect the fact that it is very, very important to ensure a more balanced development of the entire Serbia, but we will do our best to bring as many direct foreign investments as possible to Vojvodina in the future. Our province has to regain its old glory and occupy a rightful place, considering all the resources it disposes of, which is to be the most developed part of Serbia and the driving force behind the overall development of our country. In the coming period, are especially going to focus on Sombor and West Bačka County.

How much does the provincial government invest in promoting the investment potential of Vojvodina? Which markets do you usually target?

We have allocated RSD 50 million to the Development Agency of Vojvodina, which we established last year with the purpose of attracting foreign direct investments, with the view of promoting Vojvodina’s investment potential abroad. We are currently focusing on the EU countries, China and Russia, but serious investors, regardless of their country of origin, are always welcome. These potentials are promoted through other provincial authorities too, and we have also bolstered the cooperation with the Chamber of Commerce of Vojvodina which plays a significant role in promoting Vojvodina’s investment potential. Furthermore, we have organized business forums in Vienna, Budapest, Timisoara, Szeged, Podgorica, Banja Luka, Frankfurt and Munich with the purpose of promoting our investment potentials.

Which municipalities in Vojvodina are currently most appealing to foreign investors?

Primarily those that have the relevant transport infrastructure, regulated industrial zones that meet the highest standards and can provide adequate wokforce. Our goal is, however, to help each municipality in Vojvodina in the next year or two, so that each one of them can have at least one industri- al zone that fulfills the biggest requirements of both foreign and domestic investors. The Provincial Government has been doing this since the very first day of its term in the office. In this way, we have provided support to the following local communities – Bač, Bački Petrovac, Kanjiža, Bela Crkva, Kovin, Kula, Indjija, Odžaci, Novi Bečej, Ruma, Šid, Sombor and Sremska Mitrovica.

What effects will the current investments in road and rail infrastructure going to have on more balanced development of the province and Vojvodina having better links with the European markets?

Extremely positive ones! New traffic corridors – both road and rail – will certainly enable faster and more efficient transport of goods and people, which is one of the key resources for faster economic development. This, in fact, is closely related. Earlier, and together with the Serbian Government, we have a plan to build a Novi Sad-Zrenjanin-Borča / Belgrade fast lane road, as one of the priorities. Now, considering the already mentioned project of the Chinese company Shandong Linglong building a production plant in Zreanjanin, this large-scale venture is even more important and urgent, and when it is completed, industrial zones in the municipalities through which this road would pass, would be incomparabaly more appealing to investors. This, of course, applies to all other road and rail corridors. I won’t even go into how important this is for tourism development, which is one of the significant potentials of Vojvodina, as tourism is bolstered by modernization of transport infrastructure, among other things. The best examples of this are the reconstruction of the Greben Road, a segment of the so-called old Belgrade road which goes through Banstol, in which we invested almost 600 million dinars. This road will make all the Fruška Gora attractions more accessible to both foreign and domestic tourists.

To which markets does Vojvodina export the most? What share do higher added value products have in this export?

Vojvodina mostly exports to the EU countries. Out of a total of 2.7 billion euro, which was the export’s value in the first half of this year, as much as 72.2 percent, or nearly three quarters, is export to the EU countries. The countries of the CEFTA region take up close to 15 percent, while all other countries have about a 13 percent share in Vojvodina’s exports. Individually, our companies export mostly to Germany. In 2016, the export to that country had a 11.8 percent share in overall Vojvodina’s export. Last year, the export to Germany jumped by 13.1 percent, and in the first six months of this year, its growth exceeded 14 index points. The share of exports to Italy and Romania in Vojvodina’s total exports is around 10 percent, while exports to Hungary account for about 6 per cent. In terms of the export of added value products, this is mostly attributed to the processing industry. This industry’s share in the overall structure of Vojvodina’s exports in 2017 was 83.5 percent, while in the first six months of this year, it jumped to 85.3 percent.

What expected effects will the development of high-tech capacities, where the province and the Government of Serbia are investing together, have on the development of Vojvodina? How much can the innovative Vojvodina contribute?

In my opinion, the development of high-tech capacities is one of the most important prerequisites for the further development of Vojvodina, and therefore our economy as a whole. The second prerequisite is, of course, more frequent cooperation between scientific research institutions and the economy and its improvement, especially in the context of incredibly rapid technological changes, the continous evolution of market conditions, and the demands of end customers. This is one of the reasons why we, in addition to other things, are building a science and technology park in Novi Sad which will be the place of direct cooperation between science and economy. Hence, we give our unequivocal support to the Biosens Institute, which, in the highest technology segment, is a worthy global competitor. We are confident that we will be report about even more similar examples in the near future too.

How strong is the start up community in the province?

At this moment, Vojvodina has the most important and most developed IT start up community, and the Provincial Government supports the start up companies through the establishment of two business incubators – in Novi Sad and Zrenjanin. The already mentioned science and technology park in Novi Sad, that spans 30,000 square meters, will have a very positive impact on the development of this community.

How would you rate the innovation capacities in the province?

Considering the know-how creativity of our people and the quality of our education system, these capacities go without saying. They are, according to the predominant assessment, the biggest the IT sector where they mostly utilized. I believe, however, that we can make serious steps in all other sectors, and the first step is to ensure continuous improvement of the cooperation between the scientific-research institutions and the economy, which I have mentioned earlier. Supporting this kind of cooperation is one of our most important priorities.

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