Marko Čadež, President of the Serbian Chamber of Commerce: Friends and partners

Bilateral relations between Serbia and Austria are picking up pace both politically and economically. The improved results in trading between the two countries are accompanied by an interminable arrival of Austrian investors to Serbia. The Serbian Chamber of Commerce wants to see even more investments in production, export-orientated, high-tech sectors.

Austria is one of the leading economic partners of Serbia. This can been seen from the data that shows that, in the last decade and a half, Austria has made around 3-billion-worth of investments and set up 450 companies here – says Marko Čadež, president of the Serbian Chamber of Commerce.

What influence do close political relations between Serbia and Austria have on solidifying the economic ties between the two countries?

Bilateral relations between Austria and Serbia are picking up pace, both politically and economically. Frequent meetings between our officials, Austria’s understanding of the situation in Serbia and the Balkans, and its strong support for Serbia’s EU accession efforts, on top of our businesses having a mutual interest in cooperation, are the strongest impetus to strengthening of our economic ties within a well-regulated intergovernmental framework.

What kind of practical impact does this have on the statistical data in regard to trading between the two countries and the influx of Austrian investments?

The total trading between the two economies grew by 8.8% last year relative to 2015, and it amounted to 867 million EUR. Both export and import were the highest in the last ten years. Serbia exported 339-million-EUR worth of its products to Austria, while we imported 528-million-EUR worth of goods from Austria. Austria is among the top ten countries that we import from. Although the country is also among the 15 biggest export partners of Serbia, and considering that Serbian export has grown several times in the last ten years with an improved export structure in favour of finished products, the growing trade between the two countries is still burdened by the deficit on the Serbian side worth 189 million EUR, and a low export to import ratio of 64.2%. It is in the best interest of the Serbian economy to reduce this deficit and make the trade more balanced.

Unlike the overall trade in which Serbia is recording deficit, when it comes to trading in agricultural and food products and services with Austria, Serbia has been recording a surplus worth several dozen millions of euros.

How much did the arrival of Austrian companies affect the instigation of the re-industrialization process in Serbia?

Apart from capital, Austrian companies have also brought their know-how, and boosted our technological development, production volume and export potential. For instance, the branch of the Austrian company Swarovski in Serbia was the biggest exporter to Austria last year.

The first investments that Austria made were in banking and insurance, not only because of the profitability of these sectors but also as a logical precursor to other investors. After banks and insurance companies, it was time to invest in big construction companies that were involved in building infrastructure facilities, followed by participation in privatization of civil engineering and high rise construction companies, and after that investments in production. Today, we have companies like Rauch, Knauf, Tondach, Kronospan, Swarovski, and Gierlinger operating in Serbia. We are thankful for each invested euro, and we appreciate Austrian investments in banking, telecommunications, transport, tourism and other sectors. We are also highly appreciative of their great contribution to the Serbian economy. Apart from further investments in the said sectors, we would also like to see more investments in production, export-orientated, high-tech sectors in the near future. This year started with the best possible news of Zumtobel Group, one of the leading global manufacturers of LED lighting, opening a 30-million-EUR factory in the town of Niš, after establishing their design office and regional branch office in Belgrade. This speaks volumes about Serbia’s advantages as an investment and business destination, and its capacity to attract investments from high-tech companies.

In which areas can the two countries increase their cooperation?

During the talks we have had with Austrian business people, they expressed a strong interest in expanding their businesses in the segments like infrastructure, industry, energy (especially renewable energy resources), and implementation of environmental projects like collecting, processing and recycling utility waste and water purification.

We would like to see more Austrian investments in production sector in the next period, namely metal processing, food, automobile industry, and furniture industry, which would contribute to higher trade between the two economies and boost our export. There is still untapped potential in terms of investing in agriculture and in cooperation through the transfer of the Austrian know-how and technology in food production and processing, especially in organic production where the Austrian experiences and their development models would be of highly valuable.

A great potential for strengthening our economic ties also lies in the service sector, namely in investments in tourism (especially in spas), hiring our construction workers to work in Austria which would also create an opportunity for a higher export of our construction materials, and, of course, IT.

What do Austrian and other investors consider the biggest challenges in regard to our business environment?

One of the best indicators of the progress made in improving our business climate and creating opportunities for successful operations in Serbia is the results of a survey conducted by the Commercial Section of the Austrian Embassy in Serbia late last year. The survey was conducted among Austrian companies operating in our market, for the fifth consecutive time. 88.6% of the surveyed companies said they would invest in Serbia again, 2/3 expect higher turnover and business volume this year, and 40% plans to increase the number of their employees and investments here.

According to the survey, Austrian companies think that Serbia would be even more attractive for doing business and investing if it increased legal security and efficiency of its administration, cut down on red tape, and improved financial discipline among all market participants. The surveyed companies also said that improved infrastructure and higher purchasing power would facilitate more investments.

After conducting a reform in line with the Austrian format, what services provided by the Chamber are now the most appealing to businesses?

The aim of the reform and modernization that we have been implementing in line with the Austrian model and with the strong support from the Austrian Chamber of Commerce, is to build the capacity and efficiency of the chamber system to represent our businesses on national and international level, and to support companies to boost their capacity, grow, develop, produce and export more, and become more competitive. I would like to reiterate that the Austrian Chamber of Commerce and the Austrian chamber system are more than just ordinary partners to the Serbian Chamber of Commerce – they are our role models and our mentors in improving all segments of our operations. We have set up a new, unique and more functional chamber system in Serbia, modeled after the Austrian one, and we are continuing with improving our organization and services. We have also established a Legal Political Department as a central place for gathering, processing, fine tuning and representing balanced interests of businesses before the state authorities. We are also in the process of implementing dual education and we are going to develop the concept for representing our economy abroad in collaboration with the relevant state bodies.

Our goal is to be a support to Serbian businesses, and also to make the Austrian companies coming to Serbia feel at home, as well as that for the Serbian Chamber of Commerce to provide the support and services similar to those they receive from the Austrian chambers of commerce.

What are going to be the Chamber’s main activities in the following period?

We are aware that we still have a lot of work to do, primarily on further improving our existing services, develop and create new ones that would be of even more use to businesses, and digitalizing them. So far, we have digitalized 18 of our services which makes us regional leader, while we have also transferred public licensing services to regional chambers of commerce which are distance-wise the closest to individual businesses. The reformed Serbian Chamber of Commerce supports businesses with their breaking into new markets and better positioning themselves on existing markets, and by connecting our companies with international corporations with the aim of including them in their supply chains. Education and constant training of business people and implementation of dual education to suit labour market needs are some of the Chamber’s key priorities. The Chamber also plays an important role in the accession negotiations between Serbia and the EU. It is of vital importance for businesses to have as many expert teams involved in monitoring the accession talks in order get the information about changes that lie ahead of us, to more efficiently use the benefits of the European integration process, and to better prepare for the tough competition that awaits them in the single European market.

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