SYNERGY - QUARTERLY MAGAZINE OF THE NATIONAL ALLIANCE FOR LOCAL ECONOMIC DEVELOPMENT

Leaders of reforms
Israel and Serbia
Sir Paul Judge
6
The Alliance Assembly elected
the new Managing Board
consisting of nine members
on 18th April
Ambassador Yossef Levy: You
have a lot of advantages but
also a complicated bureaucracy
Chairman of British-Serbian
Chamber of Commerce:
British investors are intere-
sted more than ever
page
News fROm NaleD
NO. 1 | JUNe 2013
IN FOCUS
paRTNeRs fOR sUCCess
NaleD INTeRvIew
Local economic
development in Serbia36
17page
page
QUARTERLY MAGAZINE OF THE NATIONAL ALLIANCE FOR LOCAL ECONOMIC DEVELOPMENT fRee COpY
www.NaleD-seRbIa.ORg
ISSN2334-8593
Regulatory Index of Serbia
hOw we gRaDe whaT
The gOveRNmeNT Is DOINg
3D Interview
we all shaRe
The same pROblems
Municipality of Golubac
CITY-fORTRess
ON The DaNUbe

3june 2013 |
PUBLISHER
National Alliance for Local Economic
Development (NALED)
30/VII Makedonska street,
11000 Belgrade, Serbia
t: +381 11 33 73 063, f: +381 11 33 73 061,
e: naled@naled-serbia.org
www.naled-serbia.org
DIRECTOR
Violeta Jovanović
violeta_jovanovic@naled-serbia.org
EDITOR IN-CHIEF
Milica Stefanović
milica_stefanovic@naled-serbia.org
EXECUTIVE EDITOR
Ivan Radak
ivan_radak@naled-serbia.org
DESIGN AND PRE-PRESS
Dizajn biro Beograd
CONTRIBUTORS
Jelena Bojović, Tom Thorogood,
Dušan Vasiljević, Aleksandra Galić,
Milica Mandić, Jovana Ćirić
ADVERTISING
Dubravka Tomić
dubravka_tomic@naled-serbia.org
PRINT
Cicero
CIRCULATION 300
FRONT PAGE
Titan cement factory Kosjerić
Dear friends of NALED and local economic development.
We are pleased to present the first issue of our new magazine
Synergy. From now on, every three months the magazine
will bring you interesting stories, expert analyses and comments,
reports and service information in the field of regulatory reform,
investment promotion and local administration. The topic of the first
issue concerns all of us – citizens, businesses and municipalities. It is
in everyone’s interest, but still it is truly comprehended and supported
only by the best. When a new bridge or road surprises us, when our
neighborhood, park or street shines in new light, when a factory opens
up and brings new jobs, when a company we work in expands its
operations, when businesses take care of their local community and
local community of their businesses, when regulations are clear and
the citizens are happy... All of this is life at its best. And it’s all local
economic development, our topic.
ImpRessUm wORD fROm The eDITOR
inTRoDUCToRY
5 Vladan Atanasijević, President of NALED MB
neWs
6 News from NALED
10 Service info
in sYneRGY
12 Jelena Bojović, NALED: Local economic
development in Serbia
14 Tom Thorogood, UNDP: Direction of local
development
16 Test: How much do you really know about LED?
inTeRVieW WiTH...
17 Sir Paul Judge, Chairman of British-Serbian
Chamber of Commerce
20 Ramon Weidinger, General Manager of
Coca-Cola Hellenic Serbia
22 3D interview: Vršac, Bambi and Group 484
BUsinesses
24 Visiting Imlek
26 Success story: Titan cement factory Kosjerić
LeGisLaTion
28 Report on regulatory reform
30 Ask WHEN: Payment of wage taxes
and contributions
LoCaL GoVeRnmenT
32 Meet the municipality of Golubac
paRTneRs FoR sUCCess
34 Presenting the country: Israel
37 Yossef Levy, Ambassador of Israel to Serbia
38 Presenting the project: Regulatory Index of Serbia
39 NALED members
Milica Stefanović,
Editor in chief
8
32
20
Contents
The contents of this publication may
be used only when quoting the source
of information “SYNERGY – NALED’s
Quarterly Magazine”
If you wish to receive the printed edition
of the SYNERGY magazine please subs-
cribe at www.naled-serbia.org/magazine
CIP - Каталогизација у публикацији
Народна библиотека Србије, Београд
33
SYNERGY : quarterly Magazine of National
Alliance for Local Economic Development /
editor in chief Milica Stefanović. - 2013,
no. 1 (june)- . - Belgrade (30/VII
Makedonska street) : National Alliance for
Local Economic Development (NALED), 2013-
([Belgrade] : Cicero). - 27 cm
Tromesečno. - Ima izdanje na drugom jeziku:
Sinergija = ISSN 2334-8402
ISSN 2334-8593
COBISS.SR-ID 199587084

LEADERS OF THE NATIONAL ALLIANCE FOR LOCAL ECONOMIC DEVELOPMENT
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5june 2013 |
No matter what we do, we all live and
work in a certain place. And we all
want that place – municipality to
provide us with adequate conditions for doing
business and high quality of life. Unfortu-
nately, not all municipalities have favorable
geographic location, natural resources, nor
they were lucky enough to serve as admini-
strative center of certain regions in Serbia, and
have revenues from fees and taxes filling-up
the local budget on their own...
But for this reason, all local governments
should be aware of and find answers to the
following questions: What are the specific
characteristics and comparative advantages of
our municipality? What can we do to improve
the quality of life and doing business in our
community? How can we establish a local eco-
nomic development plan and program? How
can we reach new investments and jobs?
One of NALED roles is to use the certificati-
on process in assisting local governments to
understand better their position and the ways
for improving it, recognize their uniqueness
and build their future upon this foundation,
improve their business environment in the
best interest of their citizens and businesses.
This role is not always pleasant and sometimes
faces lack of understanding, both on the natio-
nal and the local level. The latest example was
the NALED analysis on para-fiscal charges,
whose sole purpose was to ease the businesses
from unnecessary fees in order for them to
grow and develop, bringing new jobs and tax
revenues to local governments. In this and all
other cases, NALED does not take the stand
for individual interests of one group or ano-
ther. NALED is on the side of local economic
development in Serbia, which can be stimu-
lated only if businesses, municipalities and
citizens work together and respect each other
in order to reach compromise and sustainable
solutions, leading to long-term prosperity.
Our goal is to understand the real situation
when it comes to doing business in Serbia, and
offer solutions for improving it. We are trying
to make things better not just to look good.
This is the only way forward.
INTRODUCTORY Vladan Atanasijević, President of NALED MB

6 Synergy
news
New Managing Board
To future battles for better business environ-
ment and local economic development, NALED
will go armed with new forces. On April 18 in
the Ministry of Finance and Economy, the
Alliance held its Assembly electing the new
Managing Board, which will as of this year
involve nine members – 5 from companies,
3 from local governments and one from the
NGO sector. In the following two years, NALED
will be led by Vladan Atanasijević, Director of
Asseco SEE, as the President of MB, Ramon
Weidinger, General Manager of Coca-Cola
Hellenic, Bratislav Gašić, Mayor of Kruševac
and Ana Brnabić, Executive Director of Pexim
foundation, as Vice-Presidents. The other mem-
bers will be: Mihailo Janković, CEO of Knjaz
Miloš, Miroslav Miletić, General Manager of
Bambi, Ernst Bode, General Manager of Messer
Tehnogas, Nemanja Delić, Mayor of Sombor,
Vladan Vasić, Mayor of Pirot. The ceremony of
announcing the new members of MB gathered
around prominent guests - Minister of Finance
and Economy Mlađan Dinkić, Head of EU
Delegation to Serbia Vincent Degert, USAID
Mission Director in Serbia Susan Fritz and
Secretary for Economic Cooperation of the
Embassy of Germany, Christophe Eichen. The
Assembly also appointed the new Supervisory
Board, with members from the previous term -
Dragan Đuričin, President of Deloitte, Borislav
Miljanović, CEO of Represent Communications
and Vladimir Milovanović, General Manager
of Energoprojekt holding, and new members
- Svetlana Tolmacheva, President of Executive
Board of ProCredit bank and Mayor of Niš
Zoran Perišić. NALED Executive Director Violeta
Jovanović awarded plaques of gratitude to
members of previous MB for their contribution
to Alliance development over the previous years
– Vladimir Čupić, Toplica Spasojević and Vladan
Maksić. The same recognitions were earned by
Ivana Veselinović and Neven Marinović.
Two proposals to amend the Labor Law
One of the biggest reforms we can certainly expect in 2013 is the amendments to the Labor
Law. Since the current regulation has not brought about the expected effects but, on the
contrary, it even contributed to reduction of employment in Serbia, NALED became actively
engaged in proposing the necessary reforms. Our association is a member of a working
group considering the changes that need to be made. In this sense, NALED prepared two
expert analyses with proposals for changing the severance pay system and definite-period
employment. Regarding the severance pay, we propose to limit the payments only to the
period of time spent with the current company that declared an employee redundant, and
not for all the years of service. The second proposal is to limit the definite-period emplo-
yment to a maximum of 36 months and to change the tax policy in a way that additionally
destimulates definite-period employment. The obstacles set by the current Labor Law have
caused several problems: employers are constantly extending the definite-period emplo-
yment contract, without even considering hiring experienced workers from the National
Employment Service records, fearing that they would have to pay high severance pays if
these workers become redundant. Thus, a large number of citizens are either in a
challen-ging and uncertain employment position or they cannot even find a job, so
they find themselves in the grey zone, with little rights.
Nova Varoš, Kula and Odžaci pass for a Certificate
In the first quarter of 2013, another three local governments obtained the business-friendly
status – Nova Varoš, Odžaci and Kula. This way the number of certified municipalities went up
to 27, and some of them have already become candidates for recertification – such as Loznica or
Kragujevac, which were the first ones to successfully pass this repeated test! Nova Varoš achieved
a very high result in fulfilling the required criteria – 92.1%. In Kula, this result was 83.9%, and
84.6% in Odžaci. The success of these three local governments which are not located on an
important corridor or in the proximity of large cities, should serve as a best practice example for
other similar municipalities, showing they should work on improving the business environment
and administrative procedures regardless of their geographic location. The results in attracting
investments so far show that the location of a municipality is not crucial for the decision. It’s the
commitment and hard work of municipal management, the efficiency of local administration and
the proactive search for investors that make a difference.

7june 2013 |
How we grade what the Government is doing
From now on, no Government of Serbia will be left alone to interpret its performance in
developing a better business environment; there is a new eye watching on them – the Regulatory
Index of Serbia (RIS), a new tool for impartial assessment of the Government’s work, developed
by NALED and USAID Business Enabling Project. It was presented in January at a press co-
nference in Danas Conference Center. According to RIS, the work of both governments in 2012
earned only 31.7 points out of 100. In order to re-confirm the validity of RIS „on the ground”,
NALED in cooperation with Ipsos Strategic Marketing performs a quarterly survey among the
businesses throughout Serbia regarding their views on regulatory environment. The correlation
between business opinions and RIS results is very high (85%), showing we have achieved one of
the organization’s most important tasks – that is to ensure the efficient control of what the
executive authorities are doing. According to the survey, businesses think that the Government
is not improving in the first quarter of this year since most of the ministers received lower
grades or kept the same level. Deputy Prime Minister Aleksandar Vučić (average grade 4.3)
and Minister Mlađan Dinkić (average grade 3) were the only ones to receive better ratings for
responsibility in their work.
PPP as the key of
sustainable development
In the previous two decades, the European Union invested more than EUR 250
billion into infrastructure and development of utility services through public-
private partnerships, proving this is the right and proper way to raise the co-
mpetitiveness and employment on the local level and ensure adequate living and
working conditions for the citizens and businesses. Serbia finally received a mo-
dern Law on PPP in 2011 providing the right framework for developing projects
in this field. However, the interest among local governments is still modest. For
this reason, in cooperation with USAID Sustainable Local Development Project,
NALED initiated the project „Public-private partnerships – key of sustainable
development” involving 32 local governments. The project aims to motivate local
administration in identifying the projects they could realize through PPP and
participate at the competition for the best PPP idea. The best eight municipali-
ties will receive technical assistance from NALED to establish local teams for
realization of PPPs and develop action plans for project implementation. In No-
vember, NALED and USAID will organize an investors’ conference providing the
opportunity for local governments to connect with interested private partners.
News from NALED
The study on para-fiscal charges prepared
last year by NALED made a significant
impact reducing the burden to businesses
seen in numerous fees and charges. Apart
from accepting our recommendations and
eliminating 138 para-fiscal charges and
fees shortly upon its establishment, the
Government of Serbia obliged at the same
time to regulate the issue of fees through
a single law. In the first quarter, the Draft
Law on Fees for Use of Public Goods was
published. As a follow up, in cooperation
with the Ministry of Finance and Economy
and USAID Business Enabling Project,
NALED organized the first round table
within the public discussion on this Draft
Law in Belgrade Hyatt Hotel. Representa-
tives of companies, municipalities and
NGOs from NALED membership had
the opportunity to engage in an open
dialogue with Milica Bisić, Advisor at
the Ministry of Finance and Economy, in
order to identify the challenging aspects
of the Draft Law and to offer alternative
solutions. After the discussion, all co-
mments and suggestions were submitted
to the Ministry in writing. NALED will
continue to monitor the process of fur-
ther content development of the Law and
influence the adoption of proposals that
will benefit local economic development.
All fees in one place

8 Synergy
Electronic tax returns
On the working
luncheon with
NALED members,
the Director of
Tax Administra-
tion Ivan Simič
announced that
starting from
July 1st 2014 all
taxpayers will
be obliged to
submit tax reports in electronic form. In his
words, since the beginning of this year, there
have been around 110,000 tax returns, out
of which only 2.7% were submitted electroni-
cally – all the rest was done via the counter.
Introduction of the digital certificate would
significantly simplify tax reporting procedure,
so Simič appealed to all businesses to start
using this type of signatures, if they hadn’t
already started – especially since the law does
not require the use of stamps anymore. Simič
stressed that transition from counters to
electronic tax reporting would not lead to
less jobs in Tax Administration offices across
Serbia. Finally, he announced about NALED
Grey Book recommendation to be adopted
early next year – to have wage taxes and con-
tributions paid to one account, which would
bring much relief to the business community.
Next investment
destination: Serbia
For the third year in a row, Belgrade
Airport has been promoting the best from
Serbia – business friendly cities and munici-
palities. This unique investment promotion
campaign was initiated by NALED and
Nikola Tesla Airport back in 2010 and
so far, 23 local governments received the
opportunity to present their business po-
tentials in this spot, in front of more than
6 million passengers! In February 2013,
the third campaign cycle was launched,
under the title „Next investment destinati-
on: Serbia“. For a one-year period, seven
certified cities and municipalities – Paraćin,
Užice, Kruševac, Vršac, Zrenjanin, Novi Sad
and Sombor – will promote food, chemical,
metal-processing, construction and phar-
maceutical industries, with the support of
seven large companies operating with great
success on the local level – Holcim, Copper
Mill Sevojno (East Point), Henkel, Fresenius
Medical Care, Dijamant, United Brewe-
ries of Serbia (Heineken) and Somboled
(Lactalis). At the launching of the campai-
gn, Minister of Regional Development and
Local Government Verica Kalanović and
the Provincial Secretary for Interregional
Cooperation Branislav Bugarski signed Me-
morandums of Understanding with NALED
on further promotion of business-friendly
municipalities.
Even though our country has attracted a significant amount of investments since the democratic
changes in 2000, no comprehensive record of investments has been made so far by the state
institutions. The methodology of keeping investment records often varies from one institution to
another. We decided to do the pioneer work – after collecting and classifying extensive data rece-
ived from various sources, the first database of foreign investments was created and published on
NALED website. For the start, the database contains information about the 200 most important
international companies that invested almost EUR 16 billion into our country over the previous
13 years. The largest part of investments was seen in automotive industry (21), food industry
(19), banking and insurance (15) and construction industry (14). Among the top 10 cities and
municipalities by the number of investments, there are seven holders of NALED business friendly
certificate (Inđija, Novi Sad, Subotica, Stara Pazova, Niš, Zrenjanin and Pirot). Since it was
published in February, the database has attracted much public attention and NALED updates it
regularly with new information on foreign investments.
The first database of foreign investments
news News from NALED

9june 2013 |
ConStruCtion Work(S)!
Overview of most important foreign investments in 2013
According to the National Bank of Serbia, during the 1st quarter of
2013 net flow of foreign direct investments (FDI) in our country rea-
ched EUR 155.3 mil. Most investments arrived in the field of financial
services – 29.5%, wholesale – 27.1%, beverage production – 14.6%
and construction – 12.9%.
Holcim Serbia opened a concrete factory in Dobanovci. Investment
value: EUR 2 mil
Danish Grundfos opened a factory in Inđija. Investment value: EUR
50 mil
Sloboda launched a new production facility for artillery ammunition
in Čačak. Investment value: EUR 5.5 mil
Company Continental Wind Partners CWP obtained the permit
for constructing the first wind farm in the municipality of Kovin.
Investment value: EUR 300 mil
Fresenius Medical Care launched its third production line of medical
equipment in Vršac, providing new jobs for 112 people
Thanks to company U.A. Aribolt which opened a new women’s
stockings production facility in Kruševac, new jobs were created for
100 workers. Investment value: more than EUR 5 mil
Slovenian company Gorenje opened a new air-conditioning systems
factory in Valjevo. Investment value: more than EUR 21 mil
Gorenje and Panasonic are jointly opening a company for producing
cooling devices in Zaječar. Investment value: EUR 70 mil
New factory of confectionery company Benlian foods in Niš brought
jobs for 100 workers
Italian company for synthetic fiber production - Fulgar invested EUR 2
mil into construction of a new production hall to increase the existing
capacities by 40% and employ 100 workers
Construction material producer Domino opened its sales center in
Kikinda. Investment value: EUR 800.000
Expected investments in 2013
Company Messer Tehnogas will invest more than EUR 20 mil into its
new factory of oxygen in Bor
In the next three years, Siemens will invest EUR 10 mil in its factory in
Subotica, providing jobs for 230 workers
In June 2013, Swarovski starts constructing a factory to bring new
jobs for 550 workers
Company Gucci invests EUR 6 mil into its leather garments producti-
on facility in Ruma, to employ 120 workers
Petroleum Industry of Serbia (Naftna industrija Srbije - NIS) starts
constructing a thermo power plant / gas power plant in Pančevo.
Investment value: EUR 182 mil
By the end of 2013, new production facilities of Golden Lady in Lozni-
ca will employ 200 new workers
Around 1,100 jobs to be created in Stara Pazova, in five companies
starting their business operations in this municipality - Milšped,
EyeMaxx, Streit Group, Sika, Quattro houses
By 2016, Turkish company Teknotes will invest USD 700 mil into the
construction of a thermo power plant in Despotovac
By September 2013, Elixir Group will invest EUR 30 mil into fertilizers
factory in Šabac
Panonka from Sombor is investing EUR 1.5 mil into its new food-pro-
cessing facility
With the launching of production of Chipsy Way in Čačak, new jobs
will be created for 130 people
German company MC Bauchemie will invest several millions of EUR in
Sremska Mitrovica, into the construction of concrete-additives factory

10 Synergy
use beneficial terms to purchase quality products and services or nominate your offer for NALED
market and enjoy the promotion in Serbian professional community
www.naled-serbia.org/berza
naleD market – (dis)count on good things
Event organization in Hyatt Regency
DISCOUNT: 10% SUPER DISCOUNT FOR THE FIRST 5 NALED MEMBERS: 15% Valid through 31st December 2013
Hyatt Regency Belgrade, the finest ***** star hotel in Belgrade, located only five minutes by car from the Belgrade city center. In addition to
luxury rooms and suites and lavish content it also provides services of organizing business meetings and conferences, as well as personalized
catering services. Event management packages come in three categories: express, half-day and full-day package. The express package involves
meeting set-up, two-hour coffee break, standard AV equipment and cable internet by the price of EUR 25 per person (minimum 15 partici-
pants/2 hours). The half-day package of EUR 35 per person (minimum 15 participants) includes meeting set up, one morning or afternoon
coffee break, lunch, standard AV equipment and cable internet. The third, daily package involves a price of EUR 45 per person (minimum 15
participants), including meeting set up, morning and afternoon coffee break, lunch, standard AV equipment and cable internet.
Advertising and PR space
DISCOUNT: 10% Valid through 31st July 2013
Daily newspaper Danas, corporate member of South East Europe Media Organization (SEEMO) and Association of newspapers
Project Syndicate, offers a discount for all NALED members and partners for advertising and PR space. Danas, daily newspaper with
national coverage, is one of the rare newspapers not using tabloid methods to increase its circulation. It is famous for providing strong
support to Serbian non-government organizations, promoting EU accession and the rights of minorities.
Trainings and education in the field of human resources
DISCOUNT: 10% SUPER DISCOUNT FOR THE FIRST 5 NALED MEMBERS: 20% Valid through 31st December 2013
Within its Training and Development sector, Gi Group, now OD&M Consulting, offers to all NALED members and partners a discount
for trainings in the field of personal and team development, HR management, as well as sales and negotiations, project and change ma-
nagement. Gi Group was founded in Serbia in April 2002 with the mission to support clients in accomplishing their business strategies,
offering broad knowledge of the local market, vast experience of consultants and tested international practice of their partners. Services
offered by Gi Group include: employee training and development, HR consulting, search and selection, staffing solutions – outsourcing
services. Leader in the region, one of the most successful companies in the field of labor market, Gi Group can offer comprehensive
solutions in all areas of human resources.
News
marketing@danas.rs
www.danas.rs
T: +381 11 344-11-86
F: +381 11 344-11-86
Daily newspaper Danas
19 Alekse Nenadovića Street, Belgrade
T: +381 11 308 73 27, +381 62 80 33 479
F: +381 11 308 73 71
tijana.raicevic@odmconsulting.com
www.odmconsulting.rs
OD&M Consulting
52 Prote Mateje Street, Belgrade
T: +381 11 301 1139
F: /
belgrade.regency@hyatt.com
www.belgrade.regency.hyatt.com
Hotel Hyatt Regency Belgrade
5 Milentija Popovića Street,
11070 Belgrade, Serbia

11june 2013 |
www.naled-serbia.org/compendium
www.naled-serbia.org/training
Scholarships and trainings
Service information
SUPPORT TO CSO PROJECTS
Deadline for applications: N/A
Donor: Royal Norwegian Embassy
Beneficiaries: NGO
Purpose: strengthening the rule of law, good governance
and anticorruption, defense and security sector reform,
strengthening human rights, economic development and
entrepreneurship, environment protection
Maximum amount of funds: EUR 100,000.00
EXCHANGE 4 – SUPPORT TO MUNICIPALITIES
Deadline for applications: 4th July 2013
Donor: EU Delegation to Serbia
Beneficiaries: local governments
Purpose: municipal projects in the fields of environment protection,
local economic development, social protection on the local level
Maximum amount of funds: EUR 200,000.00
INCENTIVES FOR NEW JOBS CREATED
Deadline for applications: N/A
Donor: National Employment Service
Beneficiaries: businesses, local governments
Purpose: Supporting employment in local government units and companies
Maximum amount of funds: RSD 400,000.00
SUPPORT TO EU INTEGRATION
Deadline for applications: 31st December 2013
Donor: Fund for an Open Society
Beneficiaries: state and provincial institutions, municipalities, NGO,
associations
Purpose: actualization of the education reform issue and its placing on the
political agenda, acceleration of Serbia’s EU accession process, judicial reform
and establishing full guarantees for its independence, harmonization of regional
development of Serbia and strengthening of cross-border cooperation etc.
Maximum amount of funds: N/A
Database of funds – Compendium
Training for SMEs: improving the
investment readiness
Deadline for applications: 28th June 2013
Organizer: National Agency for Regional Development NARR, Ministry
of Finance and Economy, Ministry of Education, Science and Techno-
logical Development
Participants: Small and medium enterprises
Venue and date: Belgrade, Novi Sad, Niš, Kragujevac (Serbia), July 2013
This type of program was developed aiming to assist companies, in
particular innovative enterprises with large growth potential, to attract
investment capital and understand the needs and requests of the inves-
tors. The Program for improving the investment readiness will involve
training, advisory support, mentoring and technical assistance, to
support enterprises in Serbia in improving those segments of work and
influencing their investment readiness.
Practice in German Parliament
(International Parliamentary Scholarships)
Deadline for applications: 30st June 2013
Organizer: German Bundestag, Free University, Humbolt University and
Technical University in Berlin
Participants: Youth under 30, with knowledge of German language,
interested in public administration work
Venue and date: Berlin (German), July 2013
German Parliament offers young people an opportunity to learn about
the German parliamentary system and political decision-making pro-
cesses and to obtain practical experience in the work of the Parliament.
The program is intended for young people interested and wishing to have
an active role in the democratic shaping of their countries. The partici-
pants receive a EUR 450 scholarship, paid accommodation, insurance, as
well as covered travel expenses.
Money prizes for special achievements
in investigative journalism
Deadline for applications: 20th July 2013
Organizer: Central European Initiative (CEI), South East Europe Media
Organization (SEEMO), Konrad Adenauer Stiftung (KAS)
Participants: Journalists from Serbia (press, TV, online, agencies)
Venue and date: /
For the category Professional journalists, candidates who had success in in-
vestigative journalism and are still actively involved in journalism may apply.
For the category Young journalists, candidates who are active in the field of
investigative journalism and who published an investigative article meeting the
professional standards may apply. Potential candidates may be nominated by
individuals, organizations, media companies. Self-nominations are not allowed.

12 Synergy
Success and competitiveness of a local
government depend on whether a
municipality sees itself exclusively as
a service for citizens and relies on assistance
from the state when it comes to investments,
or it is ready to take local economic develo-
p-ment into its own hands. Even though the
role of the state is crucial for the creation of
overall business environment and attracting
large-scale investors such as FIAT, cities
and municipalities can do a lot in terms of
developing local economy and attracting
investments of smaller (but not negligible)
scale. This is exactly the essence of local
economic development (LED), as
a process where municipalities
and businesses work together on
improving the overall economic
strength of the local community.
In these efforts, some municipali-
ties have more success than others.
The less successful will say that the
others had better legacy, more help from the
state, better geographic location... However,
the most common factor that contributed to
having one municipality stand out from the
others was a shared idea and persistence of
several people to make the idea come to life.
Pioneers of local economic development,
like Inđija or Zrenjanin, appeared at the
beginning of the previous decade, and these
were the first municipalities that under-
stood and took over this new assignment
to themselves, primarily thanks to strong
leadership. At that time, the biggest obstacle
was the “lack” of construction land that
in Synergy
could be given to a potential investor for
use or ownership. Not only were cities and
municipalities unable to sell or rent their
resources (land, buildings, office space), but
they could not obtain any property without
the consent of republic organs either. The
extent to which this hindered local economic
development is needless to stress – particu-
larly threatened were business incubators,
industrial parks, brownfields and similar
projects, since they involved management
and disposal of real estate. A large number of
municipalities lamented over their faith for
years, but some of them used old coo-
perative land, adapted its purpose,
developed infrastructure and ga-
ined advantage over the others.
Other municipalities attracted
foreign investors by partnering
with private land owners. Some
acquired ownership of the land or
facilities by purchase and conversion of
military property.
When municipalities partially resolved the
problem of land, there was a new challenge
– infrastructure. The cost of infrastructure
and connections for one industrial location
of around 30 ha is approximately EUR 4
million. Bearing in mind that total budget of
a mid-developed municipality with 50,000
inhabitants was approximately EUR 5 million
in 2005, it is easy to conclude the money for
infrastructure was lacking. They dealt with
this problem in various manners, using vari-
ous funding sources, loans, donations, state
aid and often private equity (partnership
Inđija and Zrenjanin are the first municipalities that understood the importance
of having a consolidated vision for development and more importantly, they had
the persistence and determination to go about its implementation
with the private sector). At the same time,
the appetites had to be reduced, so the first
industrial locations that were equipped were
not bigger than 5 ha. This way the industrial
zones started emerging and the municipa-
lities could offer locations to new investors
for construction of factories, shopping malls
or office space. This new „Serbian land“, that
appeared at investment and real estate fairs,
had the task to distinguish itself from compe-
tition and earn trust of investors.
The most efficient manner of gaining
credibility before new investors was based
on upgrading the cooperation with existing
businesses, which turned out to be the best
promoters of a municipality provided they
are satisfied with local business conditions.
On the other hand, the rate of employment
at the local level, living standard and munici-
pal budget depend primarily on the existing
businesses, so more progressive munici-
palities soon recognized that cooperation
with local companies is the key to successful
economic development.
This meant not only the introduction of new
services for businesses, but also a change
in the approach and manner of completing
day-to-day administration with the busine-
sses. The first reforms in this field involved
establishment of municipal service centers
and utility centers, as well as one-stop-shops
for registration of businesses and issuing of
permits. Maybe the most significant reform
of this type was the forming of municipal
Local Economic Development offices,
starting from 2006 onwards. These were the
key to municipal development
Good leaders are the
USAID
research indicated
that 63% of foreign
investors chose Serbia
thanks to previously
established business
contacts

13june 2013 |
first departments in municipal administrati-
on that replaced the old administrative role
for a development function. Their form and
manner of establishment can vary (servi-
ce, department, agency, team within the
Mayor’s office), but regardless of their posi-
tion within municipal structures, they deal
with strategic planning, investment promo-
tion, identification of problems faced by the
businesses, preparation and implementation
of economic development projects, etc. The
office role is to serve as a mediator between
the businesses and the state (public sector)
and ease and accelerate communication of
businesses and public service providers.
Finally, along with bringing institutional
framework, in 2007 the new Law on Local
Government also established the lacking
legal framework for dealing with LED,
due to which investment promotion and
development of existing businesses were
officially placed under the authority of cities
and municipalities. The same year, NALED
Local economic development in Serbia
initiated the Business-Friendly Certification
program in order to assist the local govern-
ments in jumping into this role in the most
efficient manner. Today, almost one third
of all municipalities in Serbia recognize the
importance of local economic development
and are improving their business enviro-
nment through NALED certification pro-
gram. The most successful ones found their
way to the list of Top investment destinati-
ons in South East Europe 2012/13, prepared
by the renowned Financial Times.
Finally, it should be noted that local econo-
mic development does not provide answers
to all the questions. There are many things
that are still decided upon by the state. The
state determines taxes and regulates the
financing of local governments so it has the
main mechanism of control, as well as sti-
mulation of development, in its own hands.
The state decides on the construction of in-
ternational road network and inter-munici-
pal infrastructure, investments into railroad
and air traffic. Hence, investing into traffic
infrastructure on local level can be futile for
those municipalities that are located on the
main road intersections. However, the local
government and local policies influence
the supply of water, sewerage, gas, degree
of land development. Local governments
also create the processes and procedures
the businesses need to go through within
the local administration, availability of work
force or public transport, price of utility
services and amounts of utility fees. The
results of actions taken by local officials
(or lack thereof) make the key difference
among municipalities located at similar
geographic positions, with the same legacy.
In successful municipalities, a team of
people took the responsibility and initiative
to identify problems, develop solutions and
work persistently and efficiently on their
implementation. These people make all the
difference between more and less successful
municipalities in Serbia.
Jelena Bojović, NALED Policy DirectorJelena Bojović, NALED Policy Director
In successful municipalities, a team of
local officials took the responsibility
and initiative to identify problems,
develop solutions and work consistently
and efficiently on their implementation.
These people make all the difference
between successful and less effective
municipalities in Serbia

14 Synergy
Implementing reforms is
focus area for
development are local economic development
and regional development. These are not mu-
tually exclusive and in fact the final activities
are similar if not the same; however for the
sake of clarity a brief explanation of each will
now be provided.
Local economic development seeks to build up
the economic capacity of an area to improve
its economic future and to improve the quality
of life for all. It is a process by which public,
business and the non-government sectors
work collectively to create better conditions for
economic growth. The process is invariably led
by the Local Governments who seek to build
up the economic capacity of a local area and to
improve its economic future and the quality of
life for all. For those wanting a more compre-
hensive review on LED regarding the theory,
background and practical guidance on how
it should be implemented, please refer to the
excellent World Bank publication Local Eco-
nomic Development Quick Reference Guide.
Regional development is encapsulated by the
EU regional policy that aims to reduce the
significant economic, social and territorial
disparities that exist between Europe’s regions.
The objectives of this policy are convergence
solidarity among regions, regional com-
petitiveness and employment and European
territorial cooperation. European regions are
standardized according to the NUTS clas-
sification which is a hierarchical system for
dividing up the economic territory of the EU
in Synergy
Cutting the red tape is a key focus area for local
development. It is the municipal leadership who
are best placed to implement such actions
Tom Thorogood,
local and regional
development
initiatives expert
In the course of the last 10 years Serbia has
experienced a difficult transition process as
it seeks to implement democratic reforms,
enter the EU and restructure its economy. This
transition coupled with the global economic
crisis has had a marked impact on the country
and its economy. The problems faced include
high unemployment, poor infrastructure,
an aging population and migration from the
poorer regions to the main centers leading to a
self-perpetuating spiral of underdevelopment
in certain parts of the country.
The two approaches widely adopted for local

15june 2013 |
a key
local development
for the purpose of the collection, development
and harmonization of EU regional statistics
and socio-economic analyses of the regions.
NUTS 1 are major socio-economic regions,
NUTS 2 are basic regions for the applications
of regional policies, and NUTS 3 are small
regions for specific diagnoses.
This article focuses on the NUTs 3 level that
in Serbia translates approximately into two
Districts.
In practice, all the different actors are aiming
to do very similar things that can best be
described as influencing the factors that affect
the economy of a geographical area, whether
it is a region or a municipality or both, such as
the quality of the public sector management;
policies affecting the availability or commu-
nal infrastructure; and factors affecting labor
productivity in the local economy including
housing, health, education services, skills avail-
ability, training opportunities and transport.
All these hard and soft infrastructure factors
are key determinants of an area’s comparative
advantage and form the backbone for a
successful local economy.
In terms of the specific activities and results
that these various interventions have achieved,
they can roughly be consolidated under certain
specific themes.
Strategy Development: There is now a plethora
of strategies developed at the local level with
the majority of municipalities having at least
one strategy and many having several address-
ing specific issues. Despite the coordination
between the donors there is still a tendency for
individual projects to insist upon new strate-
gies that will be developed according to their
guidelines and that will address the needs of
that specific project. While the aim has always
been to coordinate this strategic planning with
one third of municipalities believe naleD’s solution
The evidence would suggest that municipal leaders are realizing the need for action on this issue and
are taking concrete steps. Examples of this include the fact that more than 60 local governments
in Serbia embraced NALED’s certification program as a mechanism for improving capacity of local
administration and creating an environment favorable to economic development and investments.
Local development direction
the municipal budgeting process, this has rarely
actually occurred. Therefore, in the majority of
cases the strategies have little or no connection
with the municipal investment planning, which
thus reduces their real value.
Infrastructure Investment: This has generally
taken the form of a grant with some match-
ing funding that addresses key issues such as
water, sewage, educational infrastructure and
economic infrastructure. In many cases different
donors have combined their funding to support
one intervention. The majority of these
projects are the product of a strategic planning
process and in recent years there has been a
move to support larger projects relying on a
number of funding sources including borrowing.
Administrative Reform: A number of different
approaches have been adopted here includ-
ing activities such as capacity development of
municipal staff, the establishment of Citizen
Assistance Centers and lobbying and advocacy
around specific issues at the local and central
level such as “building permits” and “register-
ing a business”.
Evaluating all these different interventions and
the impact they have had is well beyond the re-
mit of this article. However, what is clear is that
Serbia has significant regional disparities with
certain parts of the country being significantly
less developed than others. Furthermore it is
clear that the majority of bilateral donors are
gradually phasing out their support to Serbia.
So the question is what the focus should be for
municipal development in the future.
The answer is: clear administrative reform. This
can mean a number of things as highlighted
earlier; however in this article it refers to creat-
ing an enabling environment and eradicating
the red tape and bureaucracy which businesses
face at every level. Through publications such
as The World Bank’s Doing Business Report
it is clear Serbia has fundamental problems in
this respect, many of which can only be ad-
dressed at the central level. However, anecdotal
evidence such as the success of Inđija Munici-
pality, suggest there is much that can be done
at the local level with the key ingredients being
strong leadership and political will.
The evidence would suggest that municipal
leaders are realizing the need for action on this
issue and taking concrete steps. Examples of
this include the fact that eight municipalities
have now been certified as investor friendly by
NALED, having passed through a process that
in the majority of cases involves the implemen-
tation of reforms to the manner in which they
provide services.
To conclude, implementing reforms that make
doing business easier is a key focus area for local
development. It is the municipal leadership who
are best placed to implement such actions and
it would appear that this message is now being
taken up and acted upon. That being said there
is still much to be done in this sector if Serbian
municipalities hope to compete with other loca-
tions for foreign and domestic investment.

16 Synergy
How much do you really know about LeD?
1. What is the definition of the term „local
economic development (LED)”?
a. Local economic development is a process
managed by the state in order to encourage
balanced regional development of the whole
country.
b. Local economic development is a process
managed by cities and municipalities, in co-
operation with partners from private, public
and civil sector, with the goal of strengthe-
ning the existing businesses, promotion of
new investments and increased employment
in local communities.
c. Local economic development is a process
managed by businesses in order to raise their
productivity and profitability at the local
level.
2. Which of the following LED tools generates
potentially the largest number of new jobs?
a. Business incubator.
b. Business Improvement District - BID.
c. Industrial zone / park.
3. What is the difference between the
greenfield and brownfield investments?
a. Greenfield investments refer to investing
into construction of new production facili-
ties, and brownfields involve purchase and
adaptation of existing ones.
b. Greenfield investments mean investing in-
to clean technologies and brownfields mean
dirty technologies.
c. There is no difference.
4. What is the difference between an
industrial zone and industrial park?
a. There is no difference; these are different
terms defining the same concept.
b. Industrial zone is a location of up to 100
ha, and an industrial park covers a larger area.
c. Industrial park is a broader term than
the industrial zone, since in addition to
construction land it also involves relevant
infrastructure and professional management
of the park.
5. Which tax generates most revenues for
budgets of local governments in Serbia?
a. Income tax.
b. Property tax.
c. Local taxes and fees.
6. Which institutions fall under the
jurisdiction of local governments?
a. Cadaster.
b. Public utility companies.
c. National Employment Agency offices at
the local level.
7. How can municipalities improve the
competitiveness of local labor force?
a. By introducing new educational profiles in
high schools and faculties.
b. By partnering with businesses to orga-
nize trainings and internship programs for
students and unemployed.
c. By reforming the educational system.
8. Employment rates and revenues in local
governments primarily depend on…?
a. Local businesses.
b. New foreign investments.
c. State subsidies.
9. What are public-private partnerships
(PPP)?
a. Providing tax incentives to the private
sector.
b. Cooperation between businesses and
municipalities in the field of corporate social
responsibility.
c. Cooperation and joint effort of public and
private sector in producing public goods or
providing public services.
aNsweRs:
(1–b,2–c,3–a,4–c,5–a,6–b,7–b,8–a,9–c)
TEST

17june 2013 |
British companies will always choose an
investment destination with maximum
return on investment and a minimum
risk. Serbia has a lot of characteristics promo-
ting itself: an excellent location, a large number
of talented workers and EU perspective, which
will encourage the Government to further
economic reforms. However, companies will
not invest if they are not confident in the rule
of law and lack of corruption – says Sir Paul
Judge, Chairman of British-Serbian Chamber of
Commerce.
Do you have any special strategy to improve
foreign investment to Serbia and are British
investors expressing more interest to invest
in our country recently?
The Chamber wants to enhance networks and
communication between the two economies.
Serbia remains very much on the radar of UK
business. Trade missions over the past six
months have significantly increased with recent
visits to Serbia by delegations from the British
security, railway and business training industries.
During the year, UK Trade and Industry, the
Commercial Section of the British Embassy in
Belgrade, has had its busiest-ever year in terms
of enquiries, trade missions and other initiatives.
British companies will choose, from a global mar-
ketplace, an investment destination where returns
are maximized and risks are minimized. Serbia
has a lot of characteristics to recommend it:
british investors are
interested in Serbia
more than ever
Reduced bureaucracy and lower administration costs place your country in a high position compared
to the surrounding markets, and there are also other competitive advantages, such as the benefits of
trade treaties and investment potential in key industries, such as agriculture
INTeRvIew Sir Paul Judge, Chairman of British-Serbian Chamber of Commerce
In order to attract capital from London,
Serbia needs to offer large-scale projects
–investments of at least EUR 20 million
a great geographic location, a talented pool of wo-
rkers, and an EU perspective which will encourage
government’s drive for further economic reform.
The Chamber and its leading members like the
international audit firm KPMG want to help
UK companies become assured that Serbia
is firmly committed to an ambitious path
of labor, capital and market reforms, sound
fiscal management, and improvements in the
investment environment. If it can do this –
along the lines of those proposed by foreign
investors’ bodies in Serbia and by respected
global comparisons such as the Doing Business
Guide and Global Competitiveness Report –
Serbia will find itself especially well-placed to
take advantage of resurging British investment.
Recently you said “Serbia has significant and
growing investment potential“. How can
Serbia enhance its potential for economic
development?
I believe that following its very difficult recent
history, Serbia can now hope to enjoy a much
improved economy.

18 Synergy
The EU’s positive decision on candidate status
is very important for the investment climate in
Serbia. Reduced bureaucracy and lower admi-
nistration costs place the country in a strong
position when compared with its surrounding
markets. In addition, Serbia can further impro-
ve its opportunities by enhancing business and
investment-friendly policies and by building on
its strengths with its strategic position in South
East Europe, attractive benefits coming out of
tax and other treaties and its potential in impor-
tant industries such as agriculture. Investments
from other countries, such as the Fiat car plant
in Kragujevac and the potential of the South
Stream gas pipeline, will generate interest from
British investors in allied industry sectors.
As liquidity returns to the financial markets the-
re will be much competition for debt and equity
capital which means that Serbian businesses
must work hard to improve the attractiveness
of their enterprises. Undertaking the necessary
financial and operational restructuring cannot
be avoided if Serbian companies are to secure
inward investment and strategic partnerships
successfully. The Chamber will work hard to
support Serbian companies seeking financial
investors, strategic partners and new markets
in the United Kingdom while leveraging the
benefits of EU candidacy, as well as the EU
Stabilization and Accession Agreement which
remains to be ratified only by Lithuania.
Why do we have such a poor record of
British investment to Serbia up to now?
During last year, Serbia exported about € 110
million to the UK and imported € 130 million
from the UK so there is already a reasonable
flow of trade. In terms of investment however
the official British record is perhaps misleading.
London remains Europe’s primary equity and
debt capital market and a lot of investment and
restructuring for Serbia and Serbian companies
is done through London. Many British-funded
investment vehicles operate outside the UK for
tax reasons through holdings in, for example,
Switzerland, the Netherlands or Cyprus and
their investments are recorded in Serbia as
being from those countries even though the
money has come from the UK.
Serbian businesses seeking Western capital
must recognize that they must meet the requi-
rements for enhanced financial disclosure and
compliance which are commonplace in interna-
tional markets like London. Also, investments
must normally be of a significant size to attract
London capital, for example a minimum of
EUR 20 million.
Investors need to have as much certainty and
confidence as possible when deploying capital
into Serbia and a lot more can be done by
Serbian business leaders to restructure their
enterprises and make themselves investor-ready
interview
Legal and financial systems need reform
Resistance to transparent presentation of data may be an obstacle for British investors in
networking with Serbian businesses, in particular since many local financial institutions have
not conducted an in-depth financial analysis of the organizations they support. This points out
a necessity for changes and improvements of current legal and financial systems in Serbia, so
that the investors can get a fair insight into the business performance and management.
and fit-for-purpose in order to secure internati-
onal investment.
As a part of the celebrations for Serbian Month
in Great Britain 2012, you hosted the evening
business reception at your home in Central
London. What did you speak about, and what
are your impressions of Serbian people?
I firstly emphasized the close historical relation-
ships between the UK and Serbia. This year is
the 175th Anniversary of diplomatic relations
between the two countries. In addition, in 2013
the world is celebrating the 1700th Anniversary
of the decision by the Emperor Constantine
in 313 to legalize Christianity in the Roman
Empire, one of the most important proclamati-
ons in history. This brings together Serbia and
Britain as Constantine was born in Nis in Serbia
and became Emperor while he was in the city of
York in Britain.
I also talked about the potential for building
upon the progress that Serbia has made in the
last decade, culminating in its becoming an
EU candidate country. It is clear that many
other countries which had a long period of
communist rule and then a difficult period of

19june 2013 |
Sir Paul Judge, Chairman of British-Serbian Chamber of Commerce
studying and working here. In particular I noted
the excellent connection which has grown
up between the University of Cambridge and
Serbia with the Pexim Foundation generously
providing scholarships for Serbian students
to study at Cambridge, including three ladies
who are currently doing their MBA at the Judge
Business School.
The biggest British investment made in Serbia
thus far has been the acquisition of the Vranje
Tobacco Industry by British American Tobacco
in 2003. Recently, it was announced in our
media that our spas (‘wellness centers’) are very
interesting for investors.
I do know of forthcoming investments from
the UK in the renewable energy, mining and
healthcare sectors although I cannot comment
on their behalf. Interest from British strategic
partners will grow given the favorable EU
candidacy status Serbia now enjoys and the
Chamber will support Serbian companies in
efforts to access the City of London investment
community. We must remember though that
decisions to invest are not taken overnight
and in many cases can take many months to
develop. I would expect to see a greater level
of British strategic partnerships with Serbian
enterprises and financial investments. This
is especially so as Serbian companies and
institutions understand the benefits of the
new EU-compliant legislation now enacted in
Serbia, for example the Laws on Companies,
Capital Markets and Public Private Partners-
hips. However the experiences of British and
other investors in recent years have been mixed,
not least the disappointment of the mooted UK
investment at Vrnjačka Banja.
You are the chairman of Greenhouse Capital,
with an office in Belgrade. How much have
you invested so far in Serbia?
Greenhouse secured € 22.5 million three years
ago to consolidate the SE Europe telecoms
sector which was deployed in the creation of
Orion Telekom. Orion is the consolidation of
SezamPro, Mediaworks and Novi Sad internet
services provider Neobee, and is now Serbia’s
leading fixed line operator after Telekom Serbia.
That transaction took 18 months to develop
meaning that Greenhouse has been present in
Serbia since 2007. The European Bank for Re-
construction and Development and the Royal
Bank of Scotland were also key investors.
Late last year, Greenhouse developed and
introduced an Alternative Fixed Income
Strategies (AFIS) product to enable various
Western financial institutions with emerging
market capital to have an alternative source of
investment in SE Europe. AFIS is aimed at the
countries of the former Yugoslavia, Albania,
Bulgaria, Moldova, Romania and Ukraine whe-
re individual corporate bond-like transactions
are not of a sufficient scale or transparency to
enable direct investments. Initially AFIS will
support Serbian, Croatian and Montenegrin
markets as part of a regional strategy aimed
at deploying over EUR 1.5 billion of hybrid
capital with Belgrade as the headquarters of
Greenhouse’s SE Europe operations. Our
goal therefore is to create a positive climate
for further investment alongside developing
a strong locally-based international corporate
finance advisory team. There are also several
new transactions in the pipeline and we hope
to make announcements very soon.
There is a huge demand for agricultural
products throughout the world. Serbia has
great potential within agricultural produce.
Why are potential investors not investing
in producing food in Serbia and then
exporting abroad?
It is true that food security is of global interest
with Serbia’s strengths in producing agricultural
commodities especially organic products, fruit
and meat processing potentially in very high
demand. However, the smallholder structure of
many Serbian farms means it can be difficult to
attract investors which would seek larger scale
production. Serbia’s own companies, for exam-
ple Victoria Group and MK Group, are leading
their field across the SE European region, and
have access to markets and capital in Serbia
which means that they may not necessarily need
external investment at this stage. However, as
they seek to expand and modernize producti-
on possibly outside of Serbia, for example via
funding investments and possibly acquisitions,
they may well seek to utilize London’s capital
market. It is in this area where I believe the
future cooperation lies which the Chamber, and
indeed Greenhouse, would support.
About Sir Paul Judge
Sir Paul Judge is an English business and
political figure. He was educated at school
in London and then at Trinity College,
Cambridge, and at the Wharton School of
the University of Pennsylvania as a Thouron
Fellow. His early career was with Cadbury
Schweppes where he undertook a number of
international postings and projects and whe-
re he led the buyout of their food compani-
es. In the 1990s he was Chairman of Food
from Britain, Director General of Britain’s
Conservative Party and a Ministerial Adviser
at the United Kingdom Cabinet Office. In
the 2000s he was Chairman of the Royal
Society of Arts and President of the Charte-
red Management Institute. As well as being
Chairman of the British-Serbian Chamber
of Commerce and of Greenhouse Capital
Group which operates in Belgrade, his ap-
pointments currently include: UK chairman
of the British-North American Committee,
a special adviser to the Royal Institute of In-
ternational Affairs, a member of the Russian
Presidential Academy of National Economy
and Public Administration. He is married to
Lady Barbara Judge, Chairman of the United
Kingdom Pension Protection Fund, former
Chairman of the UK Atomic Energy Autho-
rity, current Business Ambassador for UK
Trade and Industry; and has two sons.
adjustment have now become places of stability
and transparency. Serbia deserves to achieve
the same transformation which should allow it
to achieve growth rates well above those of We-
stern Europe as Adam Smith’s “invisible hand”
of market forces takes investment to a place
where many businesses can be competitive.
I also commented on the strong Serbian
presence in London with many of its people

20 Synergy
As the General Manager of Coca-
Cola, you had the opportunity to
work in countries in the region. How
would you rate the business environment in
Serbia compared to other countries?
I may say that all countries in the region, and
beyond, are facing the same challenges. These
are certainly influencing the business envi-
ronment, but they are all the more reason for
us to be more creative and innovative in our
work and always go one step further. Serbian
market is no exception, and for this reason we
find particular satisfaction in the fact that it is
one of the fastest developing markets in Eu-
rope for our company. We’ve invested much
effort, time and funds here in order to deve-
lop a large business system contributing to
the country’s economy and society, not only
with business operations, but also continuous
years of success
in Serbia
investments in the local community.
You were recently appointed as Vice-Presi-
dent of NALED Managing Board. In your opi-
nion, which steps should be taken by the state
and which by the local governments in order
to accelerate local economic development?
Multi-sector cooperation is crucial and
necessary. It is highly important that we work
together with partners from public, private and
civil sectors on improving the business envi-
ronment. Our experience on various projects
indicates that such cooperation and combina-
tion of different expertise produce best results.
It is therefore essential that we listen to each
other’s needs in order to identify important
topics and improve our efficiency. We need to
advise each other, learn from each other and be
true partners in the business process.
INTeRvIew
This year, one of the largest
business systems and leaders
of social responsibility in Serbia
is celebrating 45 years since
they produced the first bottle of
favorite beverage in our country.
General Manager of Coca-Cola
Hellenic Serbia, Ramon
Weidinger, speaks for Synergy
about the celebration of this
anniversary and the perspective
of foreign investors regarding
local business conditions

21june 2013 |
Ramon Weidinger, General Manager of Coca-Cola Hellenic Serbia
How would you rate Coca-Cola’s coopera-
tion with the local governments?
For each market we operate, we find it
significant to invest into local community,
be the initiators, and in cooperation with
partners stimulate activism that would bring
about some changes. Improving the lives of
citizens is a priority for us, as we believe that
a business system is as sustainable as the local
community in which it operates. We find this
to be our task – to make a contribution. In
this regard, we are very dedicated to creating
real partnership with the local governments,
in order to define the most important issues
to address and jointly work for changes.
Which advantages of Serbia would you
stress the most when presenting our
country to a potential investor?
The importance of this market is seen in
the fact that this year we are celebrating an
important anniversary – 45 years of doing
business. The fact that we have been present
in Serbia for four and a half decades, the
period in which we’ve grown into one of the
largest business systems in the country, is
sufficient recommendation. Having achieved
significant success here, we are committed
to celebrating many more anniversaries in
Serbia.
Your company is one of the first five hol-
ders of Corporate Social Responsibility
Certificate awarded by NALED. What are
the manners of Coca-Cola’s contribution
to the local community?
We are very pleased to be among the first
five companies that received this re-
nowned certificate. For us, social res-
ponsibility is a priority, and the prin-
ciple of sustainability is embedded
in our entire business process. The
Contribution of Coca-Cola system to the economy and society
Coca-Cola has been present in Serbia since 1967, when the first bottle of this bevera-
ge was produced in local facilities. Over the previous decade only, the company inve-
sted EUR 200 million in this market, and Coca-Cola has grown into one of the most
significant business systems in the country. This was also shown in last year’s study
on socio-economic impact of Coca-Cola in Serbia, developed by consulting company
Steward Redqueen, which is the first research of such type in our country. The results
showed that Coca-Cola system in Serbia pays EUR 3 million in taxes into the budget,
and supports additional EUR 107 million of tax revenues for the state. Adding up the
profit of suppliers and retailers who work with the company, as well as taxes and con-
tributions they pay, total value added to Serbian economy by Coca-Cola system reaches
EUR 345 million or 1.18% of GDP. Similarly, 1,300 of Coca-Cola’s direct employees
support approximately 18,500 additional jobs, or 0.62% of entire work force of Serbian
economy, which is a 1:13 ratio. Basically, each direct employee in Coca-Cola assists in
creation of additional 13 jobs in Serbian economy.
key areas for us are environment protection,
support to vulnerable groups, investing in
youth and talented people and promotion
of active and healthy lifestyle. This certi-
ficate is another confirmation that we are
on the right track and we will certainly be
looking to continue the traditional support
projects, but also new initiatives, such as the
construction of 45 open-air gyms across the
country.
Celebrating 45 years of production in
Serbia, in cooperation with NALED and
Ministry of Regional Development and
Local Government, Coca-Cola is awarding
45 open-air gyms to cities and municipali-
ties across Serbia. Why did you choose to
celebrate the anniversary in this manner?
Celebrating 45 years since the first produ-
ced Coca-Cola in Serbia is more than just
a corporate anniversary for us. This is why
we decided to launch something big that
will raise the quality of life in municipalities
all over Serbia. Promotion of active and
health lifestyle is one of the pillars of our
corporate social responsibility. Through
the platform “Active healthy living” we
implement numerous projects, trying to
inspire and activate people to adopt good
habits, find a sport that suits them and do
it either professionally or as recreation. In
addition to pointing out
the importance of active
life and recreation, we
also wish to raise aware-
ness on the importance
of balanced nutrition and
healthy habits.
Corporate anniversary
celebration
Celebrating 45 years from the beginning of
production in Serbia, in cooperation with
National Alliance for Local Economic De-
velopment (NALED) and with the support
of Ministry of Regional Development and
Local Government, Coca-Cola system has
initiated a project to provide the citizens
with 45 open-air gyms. The citizens will vote
to determine where these Coca-Cola active
zones would be built. The project involves
all municipalities, divided into three cate-
gories based on their population – small,
medium-sized and large.
By the end of July, via website
www.45godinausrbiji.rs you may vote for
your preferred municipality; 15 municipa-
lities with the highest number of votes in
each category will be awarded.
The first open-air gym is scheduled to be ope-
ned in September, another nine by the end of
this year and the remaining 35 by May 2014.
The project for constructing 45 open-air
gyms is only one step further in
this direction. We are certain that
Coca-Cola active zones will be the place
where many citizens will spend their
time in a more quality way, exercising
in open air and doing something good
for their health.
What is life and doing business like in Serbia,
what is it that you find the most appealing?
I am very glad to have the opportunity to
work in Serbia, because along with the very
dynamic work I perform in this important
regional market, my leisure time is also very
pleasant. The people are open and friendly
and this is certainly an important factor for
feeling at home.

22 Synergy
What is your interpretation
of the term ‘business-friendly
environment’?
Čedomir Živković: When speaking of Vršac,
as one of the most developed local governme-
nts in Serbia, for me the term business friendly
environment involves the supportive climate
for the existing businesses, both international
and domestic, we have been cooperating in
the previous years. For years Vršac has been
successful in maintaining and improving the
business-friendly approach, enabling the
investor to work with more ease in Vršac and
to feel better than anywhere else. This is also
confirmed by NALED’s Business-Friendly
Certificate we acquired in 2012. The Muni-
cipality of Vršac, primarily thanks to its LED
Office, has managed to position itself and
improve its image of a reliable partner in the
eyes of private sector. We’ve also achieved the
unique, fourth level of e-government in Serbia,
showing we are a transparent local gover-
nment, working for the benefit of its citizens.
Miroslav Miletić: Business-friendly envi-
ronment in macroeconomic sense is probably
the dream of most managers in Serbia, bearing
in mind that in the last 20 years we haven’t had
a single year with stable business conditions.
These certainly include:
- Clearly defined and enforceable strategies
3D interview
as the backbone of a country’s main econo-
mic policies (development, export)
- Business environment with low inflation
rate, affordable loans, stable consumption
and stable foreign exchange rate,
- Liberal, European-standards market in
terms of protection of competition, consu-
mers and national brands,
- Depoliticized and efficient management wi-
th developed tax system and other fiscal rules,
- State consensus on economic priorities.
At the local level, this is certainly different
than in the times when I was the Secretary
of Municipal Assembly in Požarevac, but
under stable business environment I mean
efficient performance of all tasks under the
jurisdiction of local governments, as well as
the functions that the central government
performs throughout the country, prima-
rily through its regions. Many of the above
stated elements could also be applied to
the local government level, as can be seen
in some municipalities that adhere to these
standards in their day-to-day operations.
Gordan Velev: Civil society in Serbia works
in very difficult circumstances. It is mostly
financed by international donors, while the
support from public funds and private sector is
not satisfying. On the other hand, one should
understand the fact that Serbian economy is in
deep crisis and without new investments the
overall economic stability may be questioned.
Hence the cooperation of all stakeholders is
the answer, and tax subsidies and incentives to
businesses supporting civil society is the way
to go. Viable solutions come as a result of dia-
logue among key actors from all three sectors.
I believe that in Serbia we still lack broader
dialogue on the need of balance among the
three pillars of every modern society (public,
private and civil).
What would be your message
to foreign investors – whether
and why they should invest in
Serbia?
Čedomir Živković: My message to foreign
investors is that they shouldn’t have any
dilemmas - we will be able to answer any qu-
estion regarding investment conditions and
incentives at any time, at least a few minutes
faster than our competitors, other cities and
municipalities in Serbia. Vršac introduced
corporate approach to resolving problems
and provision of public services, motivating
Čedomir Živković, Mayor of Vršac
There is no success without
cooperation of all three
sectors of the society
Miroslav Miletić, Bambi Banat CEO /
member of NALED MB
We all share the same
local problems
From the perspective of private,
public and civil sector

23june 2013 |
us to always be unique and one step ahead of
others. So far we’ve managed to do that, and
we achieved exceptional success in pharma-
ceutical industry.
Miroslav Miletić: I would most certainly
advise foreign investors to invest in my co-
untry, not only for patriotic reasons, but also
because of firm and tested belief that Serbia
has significant competitive advantages in
relation to the region. This primarily refers
to the environment, potentials and people,
and also the proverbial vitality of our people,
especially in the times of difficulties and
crisis, that can be witnessed nowadays or in
the nineties, when many other economies
and communities would not endure what we
went through.
Gordan Velev: I believe that in Serbia they
can find hard-working and educated people,
ready to respond to the most-demanding
requirements of employers and investors.
The Government is even ready to offer
incentives to new investors who decide
to locate in Serbia. I firmly believe in the
European perspective of Serbia, which also
means stability, sought by every investor. At
the same time, my message to all investors
would be to develop a socially responsible
program, since people would respect and
appreciate such a business more than those
solely marching towards profit.
In what manner could mu-
nicipalities, businesses and
CSOs improve their coopera-
tion in order to encourage the
growth of local economy?
Čedomir Živković: I believe the answer is
in thinking in a completely different and new
manner, seeing each other as local partners,
understanding that success comes only if we
work together. The three sectors should per-
ceive that they are the pillars of sustainable
development that can significantly contribute
to overall development of local community in
the long run. New times in the global market
require a shift in thinking and completely
new approach to resolving problems.
Miroslav Miletić: Improving cooperation
among municipalities, businesses and CSOs
is reflected primarily in strengthening the
awareness in local environments that they
all belong to the same community, sharing
the same local, primarily utility problems
and issues. Their belonging to one of the
three sectors should come as secondary
important. Raising awareness leads to more
efficient execution of specific goals in each
area. And better execution of plans and goals
strengthens the trust and satisfaction with
personal and business environment.
Gordan Velev: My answer here leans onto
the previous question. Economic and overall
social progress is not possible without the
dialogue and agreement of all three sectors
in our society. Civil society in Serbia can
offer its expertise and experience in resol-
ving many issues seen in local communities
throughout the country. For example, the
new Law on Social Protection gives an
opportunity for civil society organizations to
be involved in the process of social service
provision, which cannot be provided by
the existing state institutions in an efficient
manner. Public-private partnerships and
involvement of civil society organizations
would bring efficient services to citizens,
which is much cheaper than having the state
start its own service or department, and civil
society organization would be much closer
to the sustainable financing model... On the
other hand, CSOs often collect funds and
use them for grants to assist starting of busi-
ness for the poorest citizens or to encourage
them to establish clusters and associations.
This is an area where private sector can
also recognize a window of opportunity. In
partnership with the civil society, businesses
can multiply the effects of awarded grants,
and get reliable partners. At the same time,
CSOs are a hub of innovative ideas in the
field of public administration reform and
multi-sector partnerships. These ideas can
help the state become more efficient, but al-
so motivate private sector to develop socially
responsible perspective in its operations.
What is your message to
other triangle interviewees
(representatives of private and
civil sector)?
Čedomir Živković: As stated before, partner-
ship is definitely the key to success. It is important
to make the first step, and we must be ready and
willing to listen to the other side and understand
their needs. In Vršac we are developing the image
of a proactive local government, which is comple-
tely opposite to how citizens of Serbia have seen
the local officials and administration employees
so far. I would also state that they would find
a long-term and reliable partner in Vršac. Our
slogan – now widely accepted even though it was
initially conceived as the promotional slogan of
the first Industrial Technological Park in Serbia:
Innovation, Teamwork, Partnership – only con-
firms this attitude.
Miroslav Miletić: All other participants
should follow the stated triangle selflessly,
free of egoism and vanity. Vanity is a noto-
rious trait of Serbian character and a major
constraint of our development. It is no
wonder our people often say that the hardest
growing seed in Serbia is SUCCESS!
Gordan Velev: I wish them all the success
in their work.
Gordan Velev,
GRoup 484
We should help
each other more
Čedomir Živković, Miroslav Miletić and Gordan Velev

24 Synergy
Although we walked up and down the
whole factory, the milk, in its raw
form, freshly arrived from the farms,
was nowhere to be seen. When you are visiting
the largest factory of milk and dairy products in
Serbia, you would expect to see it all around.
„But where is the milk?” was the first question
we asked the employees in Imlek production
facilities.
„In order to get adequate product quality, it
is crucial that during the entire production
process, starting from primary production of
raw milk, through transport from the farms and
until it gets to the final consumer, the so-called
“cold chain” never gets interrupted. This is
why one cannot see the raw milk. Once it is
milked out of cows, until it gets into the final
packaging, the milk practically never leaves the
machines. This way we ensure premium quality
of the final product” explained Srđan Popović,
Marketing Director in Imlek. For this reason,
Imlek provides retail facilities with cooling
cabinets where their products are stored and
displayed.
Since the cows are milked on farms in the
morning and evening, the milk factory also
performs morning and evening receipt of
milk. Raw milk is transported from the
farms in special thermo stable tanks and
immediately analyzed. Some of the analyses
performed refer to the temperature, pre-
venting further development of microorga-
nisms in milk, presence of antibiotics as an
important factor of production process, milk
fat content, acidity of milk and finally total
number of bacteria. Each round of delivered
Dairy plant where no milk
can be seen After it is milked out of cows, until it gets into final
packaging, the milk does not leave the machines. This
ensures premium quality of the final product.
businesses Visiting Imlek

25june 2013 |
Present throughout the region
Imlek is a group operating through a network of affiliates throughout the
region, including AD Imlek Beograd, Imlek Boka in Montenegro, AD IMB
dairy in Bitola, Macedonia, and Mljekoprodukt operating in Kozarska Dubica
in Bosnia and Herzegovina. In line with their regional expansion policy, the
company is proud of its highly-educated workforce, investing its knowledge
and modern technology into continuous improvement of the production pro-
cess, thus setting new standards and challenges for their competitors.
Favorite domestic brand
Imlek’s brand “Moja kravica” (“My little cow”) has received a number of
prestigious awards, the most important certainly being – “Favorite domestic
brand”. The title, awarded by the consumers within the competition entitled
“Moj izbor” (“My choice”) organized by association “Moja Srbija” (“My
Serbia”), went to Imlek brand in 2010 and 2012. Moreover, for three years
in a row, Imlek was top ranking in the category “milk and dairy products”.
milk comes with a quality certificate, guara-
nteeing that all products are safe.
The majority of company employees work
in production. The company operates in
three shifts, 24 hours a day, 365 days a year.
In one shift, we saw nearly 70 workers. They
worked quickly and skillfully. It was obvious
at a glance that they are a well-trained team.
In more than one decade, the many of them
have been working for the company, they
learnt the job, gained routine and now they
can easily “shoot out” several thousand
product items in only one shift.
Still, all of this could not be possible without
Imlek’s farmers. They are one of the most
important links in the chain, keeping this
company on top in the area of milk producti-
on and processing. Imlek invested more than
EUR 50 million into farm development and
improvement of raw milk quality and capacity.
Investments into production facilities, tran-
sport and logistics also reached tens of millions
EUR. Imlek also continuously imports heifers
for farmers.

26 Synergy
All eyes in Kosjerić are turned to Titan,
with the entire local economy and
standard of citizens depending on
their operations. Fortunately, this company
has never ceased developing and investing
into local community, ever since it was
founded in 1976. Kosjerić cement factory was
among the first in Serbia to successfully pass
the privatization process and since 2002 it has
been operating within Titan Group, interna-
tional cement producer. So far, Titan Group
invested more than EUR 50 million into envi-
ronmental protection, occupational health
and safety, production technology and local
community. Current production capacities of
750,000 tons of cement a year are sufficient
to supply a significant part of Serbian and
Montenegrin market.
In spite of lower sales of cement due to the
crisis, Kosjerić plant still invests significant
funds in improving the production process
and into its employees, since, as they like
to say in Titan, employees are their most
important resource. Occupational health and
safety has been set as a priority and preco-
ndition of employment. Socially responsible
approach has earned Titan the OHSAS 18001
certificate. Commitment to the community
and business success was recognized in the
professional circles – in 2009, they were
awarded the Business Leader of the Year prize
by Ekonom:east media group.
In 2011, the plant invested more than EUR
615,000 in the local community, 85% of this
amount going to the municipal budget, and
the rest to local clubs, schools, cultural institu-
tions and for other activities contributing to
higher living standard. Also, in 2011 Titan
decided to transfer to the local government
one of its properties – the sports-recreational
According to the Statistical
Office of the Republic of Serbia,
over the previous years Kosjerić
has been among the top five
municipalities with highest
average salaries. This high-
ranking position is certainly
thanks to the local giant – Titan
cement plant, absorbing almost
a quarter of available work force
in this little town in West Serbia
Driving power of kosjerić
bUsINesses
E 75
E 75
E 75
E 70

27june 2013 |
the ﬁrst ones to obtain
an integrated permit
Cement plant in Kosjerić was the first company in Serbia to receive the integrated permit
(IPPC), proving that they use the best technology and that their products are made by the
highest ecology standards applying both to Serbia and the European Union. The permit re-
gulates the work conditions in the plant and prescribes maximum levels of harmful ma-
terial they can reach in the production process without endangering the environment.
The main principles of integrated pollution prevention and control are stopping or
reducing the emission at the very source of pollution, cutting the use of non-renewable
natural resources and energy, reducing the waste and minimizing the risk to health, envi-
ronment and material goods. The certificate means additional investments into reconstructi-
on of existing facilities, and since 2002, Titan has allocated EUR 15 million for this purpose. In
Serbia, there are 177 companies in total that need to obtain the integrated permit.
center involving two soccer fields, indoor
sports hall and olympic pool.
And what do citizens think about all of this?
Thanks to Titan, Kosjerić is among the econo-
mically most developed municipalities of We-
stern Serbia. Unfortunately, the benefits
of high salaries are only enjoyed by
those who are fortunate enough to
be hired by Titan. Undeveloped
SME sector and other industries le-
ave three quarters (75%) of working
population with no alternative for
employment. Local government is there-
fore expected to find new ways to encourage
local economic growth, through well
planned socially responsible work in
cooperation with Titan. This area is famous for
its domestic rakija (brandy) with denominati-
on of origin, as well as plums and raspberries
representing the primary or additional source
of income for all unemployed or low income
families. Likewise, there is a lot of potential for
rural development, country tourism, handi-
crafts and healthy food. It is exactly Titan that
locals perceive as a strong pillar of further
development that can and in their mind,
should, support all that is good, unique and
authentically branded by Kosjerić. Locals will
also tell it could be little Norway down there,
although they suspect it would take a lot of
hard work, just like some of them already do
in the cement plant.
Titan cement plant: responsible to local community
the ﬁrst ones to obtain
an integrated permit
Cement plant in Kosjerić was the first company in Serbia to receive the integrated permit
(IPPC), proving that they use the best technology and that their products are made by the
highest ecology standards applying both to Serbia and the European Union. The permit re-
gulates the work conditions in the plant and prescribes maximum levels of harmful ma-
terial they can reach in the production process without endangering the environment.
The main principles of integrated pollution prevention and control are stopping or
reducing the emission at the very source of pollution, cutting the use of non-renewable
natural resources and energy, reducing the waste and minimizing the risk to health, envi-
ronment and material goods. The certificate means additional investments into reconstructi-
on of existing facilities, and since 2002, Titan has allocated EUR 15 million for this purpose. In
Serbia, there are 177 companies in total that need to obtain the integrated permit.
stern Serbia. Unfortunately, the benefits
of high salaries are only enjoyed by
those who are fortunate enough to
be hired by Titan. Undeveloped
SME sector and other industries le-
ave three quarters (75%) of working
population with no alternative for
employment. Local government is there-
fore expected to find new ways to encourage
local economic growth, through well
planned socially responsible work in
E 75
E 75
E 70
E 75
E 75
E 70
kOsJeRIĆ
750
thousand tons of
cement a year supplies
a significant part of
markets in Serbia and
Montenegro

The beginning of 2013 was marked
by the lack of reform results the
Government of Serbia has been
promising during the last two quarters of the
previous year. These reforms were supposed
to simplify the procedures, lower the cost of
doing business and increase the legal certainty,
so businesses and citizens are eager to see them
come to life. While some of the adopted laws
are waiting to come into force, and others are
in the draft phase, most important reforms de-
pend on regulations which are still in the initial
phase of preparation. We hope that the Serbian
Government will realize at least a part of the
promises in the following quarter of this year.
The Government slowed down the activities
on elimination of para-fiscal charges, as well
as the work on implementing recommenda-
tions from the Grey Book and CRR. „De-
agencification” stopped upon dissolution of
several widely-known authorities that even
had some relevant work to do. This reform was
supposed to be comprehensive. For start, a list
of all companies founded directly or indirectly
by the State should have been prepared and
presented to the public. We are certain that
the Government itself would spot on the list a
lot of companies who could be closed down,
bringing major effects on the budget without
the risks of legal gaps.
In short, regulatory activity in the first quarter
included the following:
Starting from April 1st the new Law on Public
Procurement has come into force. The Law
should increase the efficiency of the public
procurement procedures, and ensure transpa-
rency of public procurements through efficient
use of public procurement portal.
The amount of fees needs to be proporti-
onal to the costs of public service provision
– in February 2013 a new Regulation on
methodology and manner of determining
expenses of public service provision was
adopted, aiming to reduce the amount of
fees to the real cost of service provided. Full
No results
of promised
reforms
The Government has slowed
down the activities on elimi-
nation of para-fiscal charges,
as well as the work on imple-
menting the initiatives from
the Grey Book and CRR
(Comprehensive Regulatory
Reform) recommendations.
„De-agencification” stopped
upon dissolution of several
widely-known authorities
legislative framework Report on the status of reforms
Grey Book
As for the Grey Book recommendations for cutting the red tape, since
the year beginning, the most active was the Ministry of Energy and
Environment Protection that adopted or proposed to the Government
a larger number of by-laws. Some of the adopted by-laws concern
the conditions and procedures for acquiring the status of privileged
electricity producer, and regulate the incentives for production of elec-
tricity from renewable energy sources, as well as the amount of special
incentive for 2013. By amending the Law on Corporate Income Tax,
the Ministry of Finance and Economy eliminated the obligation of
submitting annual financial report to several different places. By
amending the Regulation on the form and content of registration
form for VAT taxpayers, this Ministry also partially resolved the pro-
blem of inconsistent practice of submitting the VAT form.
Ministries and other responsible institutions haven’t made any pro-
gress regarding 56 initiatives for improving the regulations. Respon-
sible ministries did not even consider two very important, systemic
initiatives from the Grey Book V – to eliminate employment record
books and health insurance cards. The Ministry of Health has not
taken any steps to resolve the huge problem of complicated proce-
dure for verification of health insurance card. Additionally, no steps
were made to ease the procedure of registration and deregistration
of entrepreneurs to RHIF in case they move the head office to a
different municipality.
A commendable fact is that in this quarter a short, but important
amendment to the Trade Law was adopted. Erasing Article 45 of the
Law eliminated unnecessary administrative obstacle for new large
retail chains to enter our market, thus enabling improvement of the
market competition.
28 Synergy

implementation of the Regulation should
have started on April 30, 2013 so we will
evaluate the effects of these new measures in
the future.
Some simple recommendations of the busi-
nesses are still waiting to be adopted:
• Ministry of Finance has not abolished the ad-
ministrative fees in procedures with Republic
Geodetic Authority (GDA), so the parties are
still paying two fees for the same procedure
(fee to RGA and republic administrative fee).
• Ministry of Health has not taken any steps to
resolve the huge problem of complicated pro-
cedure for verification of health insurance card,
that makes 50% of businesses fail to verify
health insurance cards for their employees on
the first attempt.
• Tax Administration did not react to the initia-
tive to harmonize their working hours with the
needs of clients.
Draft Law on Fees for Use of Public Resources
has sparked strong reactions among businesses
and local governments, so the Ministry of
Finance will have to carefully review the basis,
rates and distribution of these fees.
In spite of numerous objections and initiatives
businesses have made to amend the Labor
Law, it has remained unchanged since 2005 –
for full eight years. For this reason, employers
avoid hiring workers who “bear the burden of
severance pay” – older unemployed workers.
After the termination of the Law on Environ-
mental Protection Fund in September 2012,
the manner of awarding incentives for environ-
ment protection and jurisdiction over this
matter was left unregulated, so the regulatory
oversight fell at the burden of businesses.
Whether the Law on Deadlines for Settling
Financial Obligations in Commercial Transa-
ctions will have positive effects on the liquidity
of Serbian businesses, remains to be deter-
mined in the following period, bearing in
mind that this regulation has come into force
recently (in April).
We have no doubt that the Government of RS
is conducting reforms with the best intention
to ease the operations of businesses and to
attract new investments into Serbia. What
Serbia certainly needs is acceleration of esse-
ntial reforms and synchronization of their
implementation. However, the pace of these
reforms must not negatively affect their qua-
lity. The implementation of reforms should
take into account previously accepted RIA
methodology which involves public debates
and considers the reasonable suggestions
made by the businesses, in order to reduce
unpleasant reform surprises to a minimum.
Additionally, practicing changed regulation is
of crucial importance for the reform success.
Shorter procedures are not always easier to
implement. Unless the reform is implemented
Helped the pregnant
women, no assistance
for new mothers
NALED initiative to simplify the procedure
for exercising the right to pregnancy reimbur-
sement fee resulted in simplification of this
procedure in practice (the number of requi-
red documents was cut down by 2/3) so the
Ministry of Health can take pride in acting
upon this initiative. However, the Ministry of
Labor, Employment and Social Policy has not
taken any steps to ease the procedure for the
same pregnant woman when she delivers the
baby, to exercise her right for reimbursement
during maternity leave.
Key recommendations
are still out of
Government’s focus
Resolving some of the key problems hinde-
ring business is still out of Government’s
focus, probably due to their estimated
effects on the republic budget (e.g. redu-
ction of contributions for compulsory social
security). Simplifying the procedures with
republic authorities such as Republic Health
Insurance Fund (RHIF) and Republic Geode-
tic Authority (RGA) has still not contributed
to acceleration of individual procedures...
29june 2013 |
by some new authority, the changed proce-
dures are conducted by the same people, so
the expected reform effects are often not there
due to its bad implementation.

30
Whether and to what extent can a
certain law be implemented in
practice often depends on the
adoption of required accompanying regula-
tions (decrees, decisions or rulebooks). In
order to stimulate the responsible institu-
tions to action and make their work more
transparent, NALED developed the By-Law
Barometer – the first online system for mo-
nitoring the dynamics of adopting by-laws
relevant for economic development.
The Barometer monitors the progress that
the Government of Serbia, ministries and
independent regulatory authorities make in
adopting 362 by-laws related to 27 systemic
laws which regulate business environment
in Serbia and directly influence the compe-
titiveness of domestic businesses. Unlike
the data on execution of Government’s
Legislation Program, which is mostly
classified, the Barometer is available to
the broader public via the Internet at the
address barometar.naled-serbia.org.
According to the Barometer, average delay
in adopting by-laws compared to the de-
adline given by the Law reaches 615 days.
This means that on average, regulations or
rulebooks in Serbia are one year and eight
months late!
DYNamICs Of bY-law aDOpTION NUmbeR Of DaYs
Average delay for non-adopted 615
The greatest delay 1,120
Fastest adopted 10 (after the adoption of Law)
Slowest adopted 861 (after deadline)
Average delay for adopted 175
barometar.naled-serbia.org
legIslaTIve fRamewORk
Why some prosaic activity such as
paying income tax and contri-
butions is worth full attention of
both local governments and businesses?
Income tax is paid at a 10% rate while the
first RSD 11,000 is tax-exempted. Cities and
municipalities are entitled to 80% of collected
funds and the remaining 20% goes to the state
budget. Tax revenues are not filling the budget
of the local government where the compa-
ny operates, but where the employees have
residence. The obligation of distributing wage
taxes to the accounts of individual municipa-
lities where the employees reside falls at the
burden of the employer. The bigger a compa-
ny, the more chance is that the employees are
residents of a larger number of municipalities.
To make it even more complicated, the health
insurance contributions are paid to the regio-
nal health centers, and pension contributions
according to the seat office of the company.
Payment of wage taxes and contributions is
a nightmare for businesses, repeating itself
month by month, even when they have the
funds for payment. According to the analysis
of Foundation for the Advancement of Econo-
mics (FREN) which used the Standard Cost
Model, the distribution of taxes and contri-
butions to separate accounts costs more than
RSD 440 million per year. The research also
showed that businesses would save more than
RSD 570 million a year if there was a possibi-
lity of submitting a joint form for wage taxes
and contributions via the Internet. Either way
of delayed regulations
days615
30
the data on execution of Government’s
In the next issue: find out who is most efficient in
adopting by-laws and who hits the bottom of the list
among the ministries, as well as what by-laws are
recorders in delay and who is in charge for that.
missing regulations cost
us millions of euros
The Cinema Law, which was adopted in
January 2012, prescribed adoption of four
by-laws, including the Regulation on the
film industry incentives. In early 2013,
these regulations were running late for
more than 170 days. The implications of
this delay are shown in the analysis of the
Serbian Film Commission – the delay in
adopting the regulation on encouraging
foreign cinematographic works in Serbia
led to a situation where our country lost
EUR 100 million of direct investments in
the past three years!
Synergy

SYNERGY - QUARTERLY MAGAZINE OF THE NATIONAL ALLIANCE FOR LOCAL ECONOMIC DEVELOPMENT

SYNERGY - QUARTERLY MAGAZINE OF THE NATIONAL ALLIANCE FOR LOCAL ECONOMIC DEVELOPMENT

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