Thomas Lubeck, Regional Manager at International Finance Corporation (IFC) – We are improving the business environment in Serbia, micro, small and medium companies to benefit the most

The three-year Project for Improvement of Investment Climate in Serbia, carried out by the International Finance Corporation (IFC), a member of the World Bank Group, in cooperation with the Embassy of Great Britain in Serbia and the Government of Serbia, aims to contribute to the improvement of the business environment in the country. This entails the reduction of the administration, digitization and improving healthy competition. Thomas Lubeck, Regional Manager for Central and South-East Europe at the IFC, talks about this in his interview with eKapija.

eKapija: The Project for Improvement of Investment Climate in Serbia is being implemented since this January. What has been your main impression so far? Have you been pleasantly surprised by anything or disappointed with something? Is there progress?

– I can honestly say that the project's progress has exceeded my expectations. We have full support from the Government of Serbia, the Secretariat for Public Policies and the Office for IT and eGovernment, the competent ministries, agencies and other organs, with which we have been working together for eight months now on the process of reducing the administrative burden of the Serbian economy.

Considering that the project aims to simplify as many as 1,750 administrative procedures for obtaining various licenses, permits and authorizations the economy needs every day, as well as to enable the electronic issuing of as many as 100 permits, micro, small and medium companies, which make up 99.5% of the total number of companies, and of course, the citizens of Serbia and the state budget, stand to benefit the most.

Because of that, the project entails consultations with the economy, sector associations and other business organizations and experts to the end of finding applicable and optimal solutions in terms of efficiency. In cooperation with the Chamber of Commerce of Serbia, the NALED and the Association of Business Women in Serbia, a range of focus groups have been organized within the project, where we talked to around 250 companies, micro, small and medium enterprises, about the ways of simplifying the procedures they encounter every day in their operations.

We are in the final phase of analyzing and preparing the recommendations for the simplification of 600 permits, licenses and authorizations, and their issuing will have been accelerated by mid-2019.

eKapija: Would you highlight any state institution or professional association in Serbia as especially successful in making results in the digitization, in the simplification of administrative procedures and in the facilitation of the business conditions?

– In several months, our project will come out with concrete propositions for simplifying the procedures and amending the regulations, as well as for choosing the procedures for the digitization, which we are very close to.

However, there are already some good examples that should be commended. There's company registration at the Business Registers Agency (all services in one place), the issuing of building permits, but also the “Welcome to the World” project, which enables the electronic registration of the baby's name, the place of residence, health insurance and citizenship at the hospital.

In any case, in the next month and a half, we will have a list of simplified procedures, as well as 100 procedures to be digitized.

eKapija: One of the project's goals is to remove the practices which negatively impact the development of competition. Which practices of this kind have you noticed in Serbia? To what extent is there healthy competition in the local market? Would you emphasize any industry positively or negatively in this respect?

– We are currently in the stage of a detailed analysis of sectors, the kind of which has not been done yet. We are, of course, working in cooperation with the Commission for Protection of Competition and the relevant ministries. In a few months, the analyses will be ready and we will have agreed on the sectors in which the existing barriers will be removed.

eKapija: What kind of effects from this project can companies in Serbia expect? Will they have more money for investments?

– Precisely! The simplification of administrative procedures and their digitization certainly save time and money for entrepreneurs in Serbia. Our analysis of 1,750 administrative procedures includes a calculation of the costs of their execution and we will soon know how much these savings will amount to exactly. Another factor that will influence the choice of the procedures is which procedures the economy of Serbia spends the most resources on, and their optimization will be the priority.

eKapija: What kind of information do you get from Serbian companies? What do they complain of?

– If I need to emphasize the biggest problem for the economy in this field, it is that it often needs to take the role of a messenger between state organs, going from office to office with papers that the state organs in the service of citizens and the economy should, without any doubt, provide themselves.

eKapija: Would you agree with the thesis that increasing the efficiency could be the driving engine of the development and the economic growth of Serbia?

– Absolutely! The efficiency of state institutions and a predictable and stable business environment are crucial to attracting domestic and foreign investments. With the ongoing administration reform, Serbia is well on its way to becoming even more attractive, which means more investments, more employees and a higher standard for citizens in Serbia.

eKapija: Digitization, which includes the presented goal of electronic issuing of 100 permits, is without a doubt important to the improvement of the business environment. Everybody is talking about the digitization, but do you recognize any other factors of the business environment that need to be improved, more precisely, the terms of financing, the legal framework, the state of the infrastructure (roads, railways, waterways), telecommunications, tax policy etc? Is digitization the top priority of Serbian developmental policy with good reason?

– In Serbia, the digitization is without a doubt the biggest opportunity for the country to become more competitive and efficient and to have a faster and more sustainable economic growth. At the same time, the digitization and eGovernment are powerful tools in countering corruption. Without any doubt, then, digitization is one of the Government's top priorities.

On the other hand, there is still room for improving the business environment through the said regulatory reform, the regulation of parafiscal charges, public procurement procedures, relaxing foreign exchange regulations, investments in infrastructure, so that the further growth of the economy and the creation of new jobs would be stimulated.

eKapija: As the Regional Manager for Central and South-East Europe at the IFC, could you compare the business environment in Serbia with the business environment in other countries of the region?

– There is no doubt that Serbia is recording a positive trend and I am optimistic that, as you progress in the process of accession tot he EU, the situation in various fields will be getting better and better. This includes the conditions for the development of the economy and, most importantly, in the everyday standard of living, which each citizen of Serbia can feel.

That my optimism is justified is shown by the progress made on the Doing Business List of the World Bank Group. Let me remind that, according to the latest report, from 2017, Serbia is 43rd in the ease of doing business, compared to the 47th spot from a year before, whereas, at the same time, it jumped to the 10th spot among 190 countries on the list when it comes to the issuing of building permits.

As the project moves forward, I believe that there will be more good news for local and foreign investors in Serbia.

Mirko Radonjic

IFC

International Finance Corporation USA

Svetska Banka-WB Beograd

Ambasada Velike Britanije Beograd

Vlada Republike Srbije

Republički sekretarijat za javne politike

Kancelarija za informacione tehnologije i elektronsku upravu

Agencija za privredne registre

Privredna komora Srbije

NALED

Thomas Lubeck

IFC

World Bank Group

Business Registers Agency

Chamber of Commerce of Serbia

Welcome to the World project

Commission for Protection of Competition

digitization

Doing Business list

Project for Improvement of Investment Climate in Serbia