Investors are focusing on Vojvodina because of competitive operating costs, quality workforce, financial and tax benefits, as well as access to a market of a billion people thanks to free trade agreements
The Vojvodina Development Agency encourages the influx of foreign and domestic investments and provides professional services to companies that want to invest. In this interview, the director of the Vojvodina Development Agency, Nikola Žeželj talks about the economic potentials and existing resources, as well as the proposed measures to support economic development.
In the two years since the establishment of the Vojvodina Development Agency, over one billion dinars have been invested in the development of the economy and new jobs. What are your plans and projects?
— The Vojvodina Development Agency (RAV) conducts tenders for the purchase of equipment and job creation together with the Provincial Secretariat for Regional Development, Interregional Cooperation and Local Self-Government. The funds allocated for the aforementioned competitions were provided by the decisions made by the Provincial Assembly, through the Budgetary Fund for the Implementation of the Development Policies of the Autonomous Province of Vojvodina. Since the RAV’s establishment, there have been six competitions: two for the purchase of equipment and four for job creation. The total value of appropriations amounts to about one billion dinars and the result is that 1,774 new jobs will be created in the coming period. In addition to employment, these competitions aim to help our companies cope with open market conditions and strong competition, modernize production and introduce new technologies with one of the more important goals is certainly a balanced regional development. Regarding the plans for the next period, we expect that a call for tenders will be for the procurement of equipment solely for cooperatives to be launched, while other plans depend on the provincial budget, and we’ll talk about that when we get concrete information. Emphasis is also placed on employing people in less developed local self-government units so they will stay there to live.
What is the current situation like, i.e. how many people are employed and how much more is waiting for work?
— Yes, we are trying to help the least developed municipalities in Vojvodina; those that are classified categories 3 and 4, with a level of development of 60% to 80% of the national average, or below 60% of the national average. One way to do this is through the aforementioned competitions. As much as 60% of the total allocated funds following the competition for the creation of new jobs are intended exclusively for municipalities in categories 3 and 4. Regarding statistics, I can only tell you that there are about 100,000 unemployed persons in Vojvodina (as this figure varies daily). According to the data collated by the National Employment Service from July this year, 27.3% of the unemployed persons come from local self-government units that belong to the groups 3 and 4 considering their development level.
Based on what was happening on your Suppliers Day, and this tender for the acquisition of equipment that could be launched in the coming period, it seems that you have been focusing on cooperatives as well.
— I can’t talk about the competition until it is launched, but I can say the following: yes, of course, the RAV is also there for cooperatives. They are an important model of social entrepreneurship that plays a significant role in creating a stable social economy, helping small businesses to expand and improve production, and to find a market, especially internationally. Their advantage is that they appear in the market together, and at the same time, they have reduced costs and can influence price formation, which is especially important in the agricultural sector, which is characterized by fluctuating prices. After the state started giving grants to agricultural cooperatives last year, it was perfectly logical for new cooperatives to emerge as a result. If I’m not mistaken, more than 300 new cooperatives were founded in Serbia last year, and we will see how many of them will exist until the year-end; the forecasts show that the number could go up to 500. However, for them to accomplish business results and enter the domestic and
foreign markets, they must be visible, they must offer and negotiate, have a continuous product, and they have to be proactive in the same way clusters or companies are. We called almost all of them to participate in the Suppliers Day – Agribusiness, but the response was poor. Hopefully, more of them will come next time.
The influx of foreign capital and foreign direct investments are also important for having a stable economy. How many foreign companies operate in Vojvodina today? How many new ones have launched a business this year?
— Today, 368 foreign companies are operating in Vojvodina, which, according to our information, have invested just over 9 billion euro and employed about 85,000 people. This year, 142 million euro worth of FDI has been made and close to 500 new jobs have been created, but some of these investments have yet to be realized. We are also counting on re-investments, such as those of JT International in Senta or Schneider Electric DMS, but also of new companies. ZF Friedrichshafen AG coming to Pančevo is also considered a significant investment. The company has opened a factory that will produce electric motors, switches and generators for electric vehicles. This is an important investment because it brings state-of-the-art manufacturing, as well as a scientific development centre, which will help with alleviating brain drain. What we certainly need is more high-tech investments, and this again requires a special environment, which Vojvodina is quickly becoming. We have excellent universities and research centres; the University of Novi Sad offers special programmes tailored to the needs of investors; we have a Business Incubator in Novi Sad and an ICT cluster, while the construction of science and technology park is near completion.
In the past, RAV has taken representatives of domestic companies to trade fairs abroad. What are the results and how many deals have been made at these fairs?
— We are really very pleased with all the trade fair performances that we have had since the Agreement on Joint Appearance at International Fairs was signed between the Provincial Government, RAV, Novi Sad, Subotica, Zrenjanin, Pančevo, Sombor, Sremska Mitrovica, Vršac, Kikinda, Pećinci and the Chamber of Commerce of Vojvodina. In 2018, we attended the following expos – the China Tourism Fair, Automechanika, EXPO REAL and Fruit Logistica. This year we went to the Berlin Tourism Fair, the first food and beverage fair in Moscow, and again EXPO REAL and Fruit Logistica, at which we exhibit frequently because these are prestigious global fairs in their respective domains. Our goal is to showcase Vojvodinian towns and companies that come from them with their specific projects and potential. I cannot speak about the impressions on behalf of those companies, but I can tell you that results have been achieved. For instance, the international fair of fresh and frozen fruits and vegetables in Berlin, Fruit Logistica has proven to be a particularly good trade show for our companies. Following the fair, some of the companies immediately started exporting while some are planning to export to Germany, Hungary, Romania, Bulgaria, Qatar and other countries. In September, we will attend a food and beverage fair in Moscow and will bring with us producers of fresh and frozen fruits, high-quality virgin oils, honey, aromatic and medicinal herbs, bean and chickpea spreads, etc. Good companies, good booth and good preparation will hopefully bring good results.
Vojvodina is located on the border with the EU, so it is profitable for foreign companies to distribute products to the region from here and gain quick access to the global market. What are the other reasons for investing in the province?
— In addition to what you mentioned, investors have been focusing on Vojvodina because of competitive operating costs, quality workforce, financial and tax benefits, as well as access to one billion people through Serbia’s free trade agreements with CEFTA, EFTA, Turkey, Belarus, Kazakhstan and Russia, a transitional trade agreement with the EU and a preferential agreement with the US. At the risk of sounding braggadocious, I think it’s important that there are institutions like the RAV – not in the sense that we are the reason why they choose to invest, but because we do everything in our power to direct them to here and highlight all these benefits.