Dutch investors require a stable and predictable business and legal environment which is the main prerequisite for strategic planning and serious investing. In Serbia, at the moment, the business environment is developing somewhat faster than the legal one. It would be much better if the two were to develop at the same, even more dynamic pace.
The Dutch Ministry of Foreign Affairs will host an investment conference in the Hague in June with the aim of connecting the Western Balkan countries to the Dutch ones. We are talking to Duško Krsmanović, the Senior Economic and Trade Advisor in the Dutch Embassy, about this event and the experiences of Dutch investors in Serbia.
What do you expect from this event?
The Western Balkan region, in which Serbia occupies a special place as its biggest economy, is becoming increasingly appealing to the companies from the Netherlands which, I think, is a great signal in a macroeconomic sense. I say this because it is a well-known fact that Dutch companies think strategically and long-term and that their interest is actually a good test of an economy and its competitiveness in terms of attracting foreign investors.
As far as the Balkan Day in the Hague goes, we have tried to get as many companies in the Netherlands to come and find out about the conditions for doing business in Serbia, especially in agriculture, water supply, energy, ICT and textile industry. They have shown interest, but that interest is still insufficient and, together with our peers from the region, we have been trying to reduce this gap. Sometimes our partners from Serbia help us with that, but the crucial thing, if you ask me, is the good experiences of the Dutch companies that are already operating in Serbia. Hence, we have Dutch companies, successfully operating in the region or in Serbia, representing each of the key sectors.
What do Dutch investors here think of the business climate in Serbia, and where lies the biggest potential for further growth of the cooperation?
Our Embassy is actively involved in helping, cooperating and maintaining contact with almost all Dutch companies in Serbia. Dutch investors require a stable and predictable business and legal environment which is the main prerequisite for strategic planning and serious investing. In Serbia, at the moment, the business environment is developing somewhat faster than the legal one. It would be much better if the two were to develop at the same, even more dynamic pace. Dutch companies that already operate here are, in principle, very satisfied with their business operations, especially with the quality of the workforce and managers who, in most cases, manage their complete operations. Many companies, especially the smaller ones, have been growing very quickly year-on-year, while other, bigger ones, are growing slowly but unstoppably which is a result of their organic growth, long-term planning and investing. After all, Dutch companies in Serbia have directly employed around 15,000 people, with Ahold-Delhaize alone having around 11,000 employees here.
Further growth of the cooperation between our two economies is most certainly going to be characterized by a stable growth of external trade with a possibility of Serbia increasing its export to the Netherlands which is partly a result of the relocation of production capacities from the Netherlands to Serbia, and partly because of the overall increase in competitiveness of domicile companies which are increasingly finding their own way to reach the Dutch market. We often help them with this through organizing sectoral visits to the Netherlands or particular B2B fairs.
In terms of external trade, the Netherlands is a relatively big partner of Serbia. Which goods and services should Serbian companies export to the Dutch market?
The Netherlands and Serbia are actually very important trade partners considering the size of the two economies, and especially the size of their respective population. However, I don’t think that opportunities have been exhausted and, with additional effort from both sides, the bilateral trade can exceed 1 billion in the next ten years which is by no means a small amount. In regard to exporting to the Netherlands, domestic producers should be focusing on quality, first and foremost, because the Dutch market is open to new products on condition that they are of high quality. This quality should be constant, and the delivery deadlines should be adhered to. In my opinion, these are the key things when it comes to exporting to the Netherlands. Serbian industry is certainly competitive in the wood processing, metal processing, textile and many other sectors that have a long tradition in Serbia. Furthermore, developing software could be an export trump card providing there is more available workforce in Serbia. Currently, Serbian ICT and software exports are limited only by the lack of sufficiently qualified workforce.
What sectors is the Department of Economy and Trade of the Embassy of the Netherlands mainly focusing on?
Apart from agriculture, which we have been focusing on for very apparent reasons, the other two sectors that we are going to strategically focus on in the following period are water technology and renewable energy resources. In regard to water, we are not limited only to flood control, but also want to get involved in water filtering technologies, managing water supply, creating software for early flood warning and similar. The Netherlands is the world leader in these segments and its experience and technology offer exceptionally good solutions both for public and private sector in Serbia. With this in mind, I have to underline that we have an excellent cooperation with the Public Investments Office and that, together, we have been devising ways in which to help and encourage municipalities located near rivers to join forces, which is what is being done in the Netherlands.
As far as energy goes, the Netherlands has a lot to offer in terms of energy efficiency, biomass and biogas technologies, wind and sun energy, geo-thermal technology and heat pumps. We are very proud of some of our companies like Philips which have participated, with their technology, in the implementation of the first public-private partnership street lighting project in Serbia with the achieved cost savings of up to 70%.
The Regional Water Supply and Energy Fair RENEXPO 2017 finished recently with the Netherlands as a partner country. A total of 23 Dutch companies presented themselves at the Fair. I think that this is the best testament to how hard we have been working on creating trust, exchanging opinions and brining new technologies to Serbia.