di Vlatko Sekulovic
05.02.2024 – 12:00 – Serbia, in the last 30 years, has experienced a drama and an economic rebirth. Due to the disintegration of Yugoslavia, wars over territories and economic sanctions, the Serbian economy in the last decade of the 20th century was devastated. Some data are indicative to illustrate the disaster: GDP has halved, with a drop in industrial production over 60%, and in agricultural production of about 40% from 1991 to 1993. Exports and imports of products virtually non-existent. The inflation had reached the staggering 313 million percentages in two years, that is 113% per day. Salary decreased during the day, in the morning 10 German marks – the reference currency at the time – worth 15.000 dinars, in the evening 20.000 dinars. The socio-psychological consequences of that period had a very negative effect on the demography of the country, which recorded over 10% population loss. A country that wasn’t a member of United Nations at the time, had paid a very high price for a policy that was condemned by over 30 resolution of the United Nations Security Council.
At the time, only countries like Mugabe’s Zimbabwe were not against Milosevic’s regime. The members of the European Community, the United States and even Russia were lined up against a regime that had completely isolated Serbia from the world. Even China, remained neutral. The change came with the forced resignation of Milosevic, who had refused to give up the electoral defeat to the newly elected Kostunica, on 5th October 2000. In a short time, Serbia normalised relations with the neighbouring countries and was accepted into the United Nations together with Montenegro. In the following years important progress were made in the integration into the European and world economic system. Membership of CEFTA in 2006 and the EU candidate status in 2012 scored some key points.
The country obtained a financial support from European and world institutions, starting with the cancellation of foreign debit of 66%. Serbia quickly established itself as one of the most attractive destinations for investment, with a series of economic and fiscal reforms. Compared to others, for example, the Serbian corporate tax system is very simple and transparent, with a tax on profits that was 9% and gradually increased to 15% by now more than 10 years, without growth trend. Societies do not need accountants or other figures for dialogue with competent bodies, given the simplicity of the exercise.
The data confirm the validity of the reforms undertaken based on the idea of the integration of Serbia. GDP per capita grew from 915 USD in 2000 to about 9000 in 2022 – from 6 billion to 63 billion – recording the highest growth in the region from 2017 to 2021, by 46%. The average salary has increased from 90 euro in 2000 (value to be considering in German marks) to over 700 in January 2023. For a completely destroyed economy, it is a significant result. In particular, foreign investment grew from USD 396 million per year in 2002 to over USD 2 billion only in the first 6 months of 2023. Serbia had focused a lot on agricultural innovation industry, not having a “natural” towing like tourism.
Important names as Fiat, Golden Lady, Ferrero regarding the production or Unicredit, Intesa, Generali Insurance and Unipol have become part of the economic fabric of Serbia. Italy ranks second as partner in commercial exchanges – and not only from the point of view of investments – enjoying the proximity of the territory and the quality of the products. In the future because of the global context that has changed due to tectonic phenomena such as the Covid-19 pandemic and the war in Ukraine, Serbia, thanks to its productive mentality, it has further opportunities for growth. The natural inclination of the younger generations to engineering and languages, has made Serbia a hub for the IT industry, not only with giants like Microsoft, Oracle or NCR that have formed their campus development operations, but also thanks to local companies that have conquered important niche slices of the computer world; as the institute Biosense at the forefront of the use of AI and big data in agro-industrial sector.
Serbia, today, is completely integrate into the EU economy, with more than 60% of foreign exchange equal to a value of 39 billion euros, compared to 6 billion with the Balkan countries (CEFTA), 4 billion with Russia or 5 billion with China.
The stability of the region and of Europe, is indispensable for a peaceful future of Serbia and of its citizens. Serbia is a country whose experience of the last 30 years shows all the fragility of a society driven by atavistic emotions, irrational speeches, without freedom of thought and suppression of human rights and democracy. Contrary, a present and a dignified future require what the Nobel Prize winner Kahneman defined slow thinking or slow, deliberate and logical reasoning. Manage rationally the fears that can trigger the spark that leads the disintegration of the democratic order and of respect for the dignity of the human being, looking at the Serbian experience, it imposes itself as an imperative of any responsible policy.
[k.d.]
