Improving Serbia’s business environment for more foreign and domestic investment

Penev, Slavica and Rojec, Matija (2013) Improving Serbia’s business environment for more foreign and domestic investment. In: Strukturne promene u Srbiji : dosadašnji rezultati i perspektive. Institut ekonomskih nauka, Beograd, pp. 347-359. ISBN 978-86-89465-10-5

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Abstract

Serbia’s strong economic growth from the pre-crisis period, interrupted when the global financial crisis was transmitted to the country, is expected to be slower in the coming years than in the precrisis period, as the growth model based on high domestic consumption and foreign savings' financing is no longer possible. Creation of a favourable business environment is one of the key preconditions for attracting foreign and domestic investment, necessary for structural changes, economic recovery, and sustainable growth of Serbian economy. According to the several key international databases and surveys, Serbian business environment has a number of weaknesses. Its quality is lagging in a number of indicators not only behind the EU-10 region, but also behind the Western Balkans. The most prominent weaknesses of Serbian business environment, which inhibit the foreign and domestic in Serbia are: slow progress in structural and institutional reforms, poor implementation of laws, inefficient government bureaucracy, high level of corruption, and high administrative barriers in the area of construction permits, paying taxes and closing a business. The papaer concludes that the best way for Serbia to improve the quality of its business environment, is to speed up the reform process and to strengthen the structural and institutional reforms. Further progress with the EU accession process is also of great importance for the improvement of the business environment, improving the attractiveness of the country for domestic and foreign investment.

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