I am confident that the acceleration of economic integration through the implementation of the Open Balkans initiative will also contribute to a faster resolution of open issues in the Western Balkans.
After his visit to Germany in February this year, Marko Čadež, President of the Chamber of Commerce and Industry of Serbia (CCIS), said that the Western Balkans remains one of the priorities of the new German government. In this interview, the CCIS president speaks about the importance of Germany’s stance, the Open Balkans initiative and the results of cooperation with Germany.
Economic, trade and investment ties with Germany, as Serbia’s main economic partner, continued to grow stronger even during the pandemic. What is the current state of cooperation between the two countries?
During the pandemic, Germany remained Serbia’s number one external trade partner and the first export market for Serbian products. The growth in trading between the two countries continued, which, taking both goods and services into account, increased by almost a quarter last year compared to 2020, and approached the amount of 8 billion euros. For the first time in 2021, the value of trade exceeded 6.5 billion euros, and the export of Serbian products to the German market increased by 25 percent – to about 2.750 billion euros. If we continue at this pace, and if there are no major upheavals on the global economic scene, in a year or two at the most, the Serbian-German trade in goods and services could reach as much as 10 billion euros.
Last year, more than 11,500 companies from Serbia did business with German partners – exporting from Serbia and importing from Germany. Among them are German companies that operate and produce in Serbia and that give the greatest contribution not only to the growth of Serbian exports to Germany and the world but also to the diversification of the export offer to include industrial products of higher processing degree and high-tech products.
About a thousand companies and small businesses, founded with German capital, are registered in Serbia, and more than 800 companies are majority German-owned
About a thousand companies and small businesses, founded with German capital, are registered in Serbia, and more than 800 companies are majority German-owned. In addition to being our number one trading partner, Germany is one of the largest investors here with about 3 billion euros worth of investments, according to the Bundesbank, and the first among investors in terms of the number of implemented investment projects in Serbia. New German investors have come to Serbia and joined the group of German companies that already invested in the past period and have been expanding their business in the past two years. It is important for Serbia that high-tech German companies have been investing in our country in the past few years, which, in addition to factories, are also opening their own research and development centres here.
You went to Germany in February, and upon return, you said that the Western Balkans remained a priority for the new German government. How important is that for Serbia and the region?
In order to accelerate regional integration in the Western Balkans and the region’s integration into the single European market, we need to have the support of a large partner such as Germany, which is the strongest European economy. The confirmation that our region remains in the focus of the new German government, but also of German companies, i.e. potential investors, is all the more encouraging.
I spoke with the of state institutions – the Bundestag, the ministries of foreign affairs and economy, the Office of the Chancellor, business associations and companies, about ways and solutions to give these processes new momentum, the importance of the Open Balkans initiative and how to expand the initiative to include all six regional economies, but also how to bring the region’s economy closer to the single European market.
For Western Balkan companies to start to enjoy concrete benefits as soon as possible, it is important that the principles and agreements on building a common regional market, concluded under the auspices of the Berlin Process, are implemented
For Western Balkan companies to start to enjoy concrete benefits as soon as possible, it is important that the principles and agreements on building a common regional market, concluded under the auspices of the Berlin Process, in which a lot of time and energy was invested, are implemented in practice through the Open Balkans initiative. It also means a lot to us to remove obstacles in doing business with the European Union, to enable the Western Balkan companies and products to fully open the single market, to have full access to the European Economic Area, and receive the same treatment as EU companies in those segments in which we have met European standards and rules.
Why is the Open Balkans initiative important and how much will it contribute to bringing the whole region closer, both individually and together, to the EU’s common economic market?
The beginning of the implementation of the Open Balkans initiative is proof of the determination and readiness of Serbia, Albania and North Macedonia to expedite the economic integration of the region from within, but also with the EU. We have to encourage the formation of a regional market in practice, through the cooperation of institutions from three, at the moment, and soon I believe all six Western Balkan economies. Such a common, regional market without barriers will function on the same fundamental principles as the European Economic Area – as a zone of free movement of people, goods, services and capital, and will be our best preparation for entering the single European market.
The initiative will expand the business space for companies operating here, both domestic and foreign, significantly reduce costs and make business within the region more efficient, productive and competitive, as well as make the region even more attractive to the international business community. It will enable goods, accompanied by just one mutually harmonized document, to travel through the region, for trucks not to wait for hours at border crossings, to exchange workers and experts without bureaucratic procedures and to harmonize regulations and practices in all areas important for business with EU standards.
I am confident that the acceleration of economic integration through the implementation of the Open Balkans initiative will also contribute to a faster resolution of open issues in the Western Balkans, especially those between Belgrade and Priština, which will, in turn, bring greater political stability to the region, as a key prerequisite for further economic growth.
What else can contribute to the recovery and growth of the Western Balkan economies and a greater influx of foreign investments in Serbia?
There is nothing that can improve the business climate, facilitate business for local and foreign companies operating here, contribute to the growth and development of Western Balkan economies and increase the inflow of foreign investment in Serbia and the region like the regional economic integration.
In parallel with creating a common market and removing barriers to doing business among us and with the world, it is very important to connect our companies in value chains, consolidate supply, encourage the establishment of regional stakeholders that will be competitive in the international market and support the economy to boost its capacity to digitally transform, to automate production and to move to green sustainable business models. In the past few months, more than 2,000 companies from all six regional chambers of commerce and all production and service sectors have become part of the joint supply platform, and their profiles and offers are already available to interested suppliers from the Western Balkans.
There is no better reference for one economy, its companies and a country that is emerging as an investment and business destination than having Germany as the number one foreign trading partner
What is even more important is to provide the local economy and investors from around the world with an adequate young and educated workforce in line with their needs, for dual education to come to life in the entire region, to harmonize our education systems, to establish a common labour market, and for someone who is investing in Serbia to be able to hire workers and experts from across the region without bureaucratic procedures.
You have extensive experience in relations with Germany, and as the CCIS president, you have launched many initiatives. What do the good results in the cooperation between Serbia and the German economy, which has been growing year on year, mean to you?
There is no better reference for one economy, its companies and a country that is emerging as an investment and business destination than having Germany as the number one foreign trading partner, as well as exporting mostly to the German market, attracting mostly German investors, being included in German supply chains, rely on German technology and know-how, support the implementation of dual education, digital transformation of the economy and transition to doing business based on green economy principles. Serbia considers these kinds of references and that partnership a privilege and does everything in its power to nurture and strengthen it. In the spring, in cooperation with partner chambers from Germany, we will present very concrete investment and business opportunities to German companies, first in Stuttgart and then at a large-scale investment conference in Berlin in the context of the changing global market.
Serbia in five years
In five years, I see Serbia, first and foremost, as part of the common market of all six Western Balkan economies and part of the European Economic Area. I also see Serbia as a country with a competitive and modern economy and companies, well-positioned in the international market, one of the largest technological hubs in Europe and one of the most desirable European business destinations.