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21st World Congress of the IEA

SERBIA 2026

Contents

IMPRESSUM

07 RETHINKING ECONOMIES IN UNCERTAIN TIMES Aleksandar Vlahović, President of the Serbian Association of Economists 09 CLEAR VISION FOR SERBIA’S FUTURE Đuro Macut, Prime Minister of the Republic of Serbia 12 AIMING TO GROW EVEN WHEN OTHERS SLOW DOWN Siniša Mali, First Deputy Prime Minister and Minister of Finance of the Republic of Serbia 16 PREPAREDNESS MATTERS IN TIMES OF CRISIS Jorgovanka Tabaković, Governor of the National Bank of Serbia 20 SPECIAL REPORT: Serbia in Global Repositioning THE NEW SOURCES OF ADVANTAGE 21 PROSPERITY CANNOT BE SEPARATED FROM SECURITY H.E. Edward Ferguson, UK Ambassador to Serbia 22 PEOPLE ARE THE RESOURCE THAT CREATES NEW RESOURCES H.E. Florence Ferrari, French Ambassador to Serbia 24 TALENT TURNS RESOURCES INTO VALUE H.E. Luca Gori, Italian Ambassador to Serbia 25 ADVANTAGE COMES FROM BRINGING STRENGTHS TOGETHER H.E. Ms. Kristin Melsom, Ambassador of Norway to Serbia 26 FINDING ANCHOR AMONG HEADWINDS H.E. Abhishek Shukla, Ambassador of India to Serbia

EDITOR IN CHIEF: Neda Lukić n.lukic@aim.rs DESIGN: Branislav Ninković design@aim.rs TRANSLATION & EDITING: Pullen Editorial

27 PARTNERS IN PROGRESS 28 SUCCESS THAT ENDURES Milka Vojvodić, President of the Executive Board, CEO, Delta Holding 32 HOW IS AIKBANK TRANSFORMING THE CULTURE OF SAVINGS IN SERBIA? AikBank 34 ECONOMICS IN AN AGE OF FRAGMENTATION Natalia Lechmanova, Chief Economist, Europe, Mastercard Economics Institute 36 SERBIA IS BUILDING THE ECONOMY OF THE FUTURE Marko Čadež, President of the Serbian Chamber of Commerce 38 BALANCING TRADITION AND MODERNISATION Bojan Kekić, President of the Executive Board of Postal Savings Bank 40 DRIVING DIGITAL TRANSFORMATION AND SUSTAINABLE GROWTH OTP banka Srbija 42 FINANCING THE NEXT PHASE OF GROWTH Nikola Vuletić, Chairman of the Management Board, UniCredit Bank Serbia 44 COMPETITIVENESS AS STRATEGY Jasna Terzić, CEO of Erste Bank Serbia 46 GROWTH OF SERBIA’S INSURANCE MARKET Duško Jovanović, Secretary General of the Serbian Association of Insurers 47 THE POWER OF NUMBERS AND THE BEAUTY OF TRUST Nataša Marjanović, CFA Member of the Executive Board, Sava Insurance 48 THE NEW ECONOMICS OF RISK Zoran Blagojević, President of the Executive Board of Wiener Städtische Insurance

50 THE LEXUS AND THE OLIVE TREE Darko Popović, President of Banca Intesa Executive Board 52 TRUST AS THE NEW CURRENCY OF BANKING Vladimir Bošković, CMO, NLB Komercijalna banka 54 WE ARE RESHAPING THE MARKET Suzana Dubajić, General Manager of Kärcher Serbia 56 CAPITAL THRIVES ON DISCIPLINE, NOT PREDICTIONS Stanislava Petković, Executive Director, Vista Rica 57 RAISING THE STANDARD OF CARE Prof. Miloš Bjelović, MD, FEBS(hon) 58 INDUSTRY, INFRASTRUCTURE AND LONGTERM GROWTH Roman Kratochvil, Business Partner at CE Industries and CEO of Beohemija 60 GLOBAL STANDARDS FROM SERBIA Darko Budeč, Founder and Director of BUCK 61 BUILDING INDUSTRIAL RESILIENCE Valjaonica bakra Sevojno 62 VRNJAČKA BANJA 365 Boban Đurović, President of the Municipality of Vrnjačka Banja 63 GLOBAL ECONOMIC THOUGHT 64 AMERICA’S NEW AGE OF EMPIRE Joseph E. Stiglitz A Nobel laureate in economics

CONTRIBUTORS: Mirjana Jovanović Rob Dugdale Steve MacKenzie Miloš Belčević

SALES MANAGERS: Biljana Dević b.devic@aim.rs

CEO: Ana Novčić a.novcic@cordmagazine.com

Vesna Vukajlović v.vukajlovic@aim.rs

Special Thanks to the Serbian Economists Association

SUBSCRIPTIONS: office@aim.rs

COO: Ivana Jovanović i.jovanovic@aim.rs

21st World Congress of the IEA

FINANCE: finance@aim.rs

PUBLISHER: Ivan Novčić i.novcic@aim.rs

66 DEVELOPMENT FINANCE MUST SHIFT AWAY FROM AID Justin Yifu Lin Former Chief Economist and Senior Vice President of the World Bank Yan Wang Senior Academic Researcher at Boston University’s Global Development Policy Center 68 TWO MODELS FOR AGENTIC AI Daron Acemoglu A 2024 Nobel laureate in economics and Institute Professor of Economics at MIT 70 THE IMPACT OF TRUMP’S TARIFFS ON LATIN AMERICA Eugenia Andreasen Assistant Professor of Economics at the University of Chile 72 INDIA’S MIDDLE-POWER DILEMMA Ajay Shah Co-Founder of XKDR Forum, a non-profit research organization in Mumbai 74 THE OUTLOOK FOR THE US ECONOMY IN 2026 Nouriel Roubini Professor Emeritus at NYU’s Stern School of Business 76 PENICILLIN AND AMERICAN POWER Paolo Surico Professor of Economics at London Business School 78 THE COST OF CONCENTRATED POWER Pavle Petrović Member of the Serbian Academy of Sciences and Arts (SASA), Former Chairman of Serbia’s Fiscal Council, and Professor of Economics at the University of Belgrade 81 HOW TO FEED TEN BILLION PEOPLE Yurdi Yasmi Director of the Plant Production and Protection Division at the Food and Agriculture Organization of the United Nations (FAO)

PRINTING: Zlatna knjiga, Jagodina CorD is published by: alliance international media d.o.o. Resavska 1/III, 11111 Belgrade 17, PAK 125806, Serbia Phone: +(381 11) 2450 508

SERBIA 2026

INTRODUCTION

Rethinking Economies in Uncertain Times Aleksandar Vlahović,

President of the Serbian Association of Economists In an era marked by geopolitical shifts, technological disruption, climate pressures, and reconfigured global value chains, the need for open and forward-looking economic dialogue has rarely been greater.

he XXI World Congress of the International Economic Association (IEA), taking place in Belgrade from 22 to 26 June 2026, convenes at a moment of profound global economic and geopolitical transition. Bringing together leading economists, policymakers, and scholars from across the world, the Congress will serve as a major platform for debating ideas and shaping policy responses to the defining challenges of our time. This year’s Congress carries particular significance. It marks the return of the IEA World Congress to Europe after nearly two decades and, for the first time, its convening in Southeast Europe. Belgrade’s role as host city reflects both the region’s growing relevance in global economic dialogue and its ability to connect diverse perspectives and experiences.

21st World Congress of the IEA

Held under the auspices of the Government of the Republic of Serbia, the Congress also highlights the country’s commitment to international cooperation, knowledge exchange, and long-term economic development. Serbia today represents a stable and evolving economic environment, increasingly integrated into regional and global economic trends. Its geographic position and ongoing transformation continue to strengthen its role as an important meeting point for dialogue, investment, and cooperation. At a time shaped by geopolitical fragmentation, technological disruption, climate challenges, and shifting global supply chains, the need for credible economic dialogue has become increasingly urgent. The IEA World Congress provides a space where ideas are tested, perspectives challenged, and solutions developed — bridging academia, public policy, and the real economy. It is precisely this intersection that gives the Congress its relevance and strategic importance. The programme brings together some of the most influential voices in modern economics, including Nobel laureates Jean Tirole, Joseph Stiglitz, Eric Maskin, and Esther Duflo, alongside many of the world’s leading scholars and policymakers. Through keynote and ple-

nary lectures, high-level policy discussions, and an extensive academic agenda, participants will engage directly with the major economic issues shaping today’s world. Under the central theme “Contrasting World Visions: Globalism vs. Nationalism, Multilateralism vs. Bilateralism, and Democracy vs. Autocracy,” the Congress will gather more than 1,000 economists

exceptional depth, relevance, and international reach. This Congress is also made possible through the strong support of partners and the business community, whose engagement reflects a shared understanding that dialogue, innovation, and international cooperation remain essential to sustainable growth and long-term resilience. Their contribution has been

This year’s Congress carries particular significance: it returns to Europe after nearly two decades and comes to Belgrade for its first-ever convening in Southeast Europe. from around the globe. With hundreds of papers presented across plenary, invited, and contributed sessions, the Congress will serve as a dynamic forum for advancing research and strengthening the connection between academic insight and real-world policymaking. The Congress is organised under the leadership of Professor Elhanan Helpman, President of the International Economic Association, and Professor Eric Maskin, President-Elect and Chair of the Programme Committee. Their vision and leadership, together with the work of the Programme Committee, have shaped an agenda of

instrumental not only in delivering a world-class event, but also in strengthening the link between academic excellence and the realities of global markets and investment. Belgrade offers an appropriate setting for a Congress devoted to dialogue across contrasting world visions — a city shaped by history, transformation, and openness to new ideas. At a time of growing global uncertainty, the importance of international economic cooperation and intellectual exchange has rarely been greater. Welcome to Belgrade, and welcome to the XXI IEA World Congress. SERBIA 2026

INTERVIEW

Clear Vision for Serbia’s Future Đuro Macut,

Prime Minister of the Republic of Serbia In such times of global uncertainty and structural change, developing a clear national development strategy has become increasingly important. Major international events hosted in Belgrade serve to fortify Serbia’s position as a regional hub of investment, innovation and international cooperation

elgrade will soon welcome some of the world’s leading economists, policymakers and researchers, making the city a focal point for discussions on the ideas and policies that are shaping the global economy in this period of profound transformation. The Congress will also serve as a prelude to Expo 2027, through which Serbia aims to reinforce its image as a modern, innovative and internationally connected country. We discussed these issues with Serbian Prime Minister Đuro Macut. elgrade will host one of the world’s most imporB tant gatherings of economists this June. What does such an event mean for Serbia? Hosting an event of such importance is both a great honour and confirmation of Serbia’s growing international standing. It demonstrates that Serbia is recognised as a stable country that’s open to dialogue and is implementing serious economic reform. During this time of major global challenges, it is particularly important that leading economists, pol-

21st World Congress of the IEA

icymakers and representatives of international institutions are gathering in Belgrade to discuss the future of the global economy. This is an opportunity to not only present Serbia’s economic achievements, but also to exchange ideas and experiences that can support our future development. Events of this kind further position Serbia as a regional hub of investment, innovation and international cooperation. he Congress’s central theme T focuses on contrasting world visions and the political, economic and social tensions shaping today’s global environment. How is Serbia building its development model under such conditions? Serbia is building its development model on the principles of stability, resilience and long-term planning. In a rapidly changing world shaped by geopolitical tension, energy challenges and shifting global markets, it is essential to maintain a clear strategic direction. Our objective is to build a modern, technologically advanced and competitive economy, while preserving social stability and security. That’s why we’re simultaneously investing in infrastructure, energy, digitalisation, education, science and innovation. Our view is that the ability to adapt to changing global conditions is today one of Serbia’s key advantages. hat are the benefits of SerW bia maintaining strong relations with the EU, neighbouring countries, Türkiye, Russia, China and other international

partners? Is this strategic balancing, economic necessity, or a long-term foreign policy model that Serbia intends to pursue? Serbia pursues a policy of open cooperation because economic connectivity has become one of the key foundations of stability and development. The European Union remains our largest trading partner and investor, while at the same time we continue to develop important projects with China, Türkiye, the United States and regional economies, as well as other international partners. Such an approach strengthens Serbia’s economic resilience through new investment, infrastructure de-

Energy security became a major strategic topic for Serbia recently. What specific measures are being implemented by the state to diversify supply sources and reduce exposure to geopolitical risks? Energy security represents one of today’s key issues of national stability and economic development. Accordingly, Serbia is exerting significant efforts to diversify supply sources and strengthen the country’s energy resilience. We are developing new gas and electricity interconnections with neighbouring countries, modernising existing infrastructure and expanding storage capacities. At the

In a rapidly changing geopolitical and economic environment, Serbia seeks to pursue a policy based on flexibility, dialogue and the identifying of shared interests. velopment, knowledge transfers and job creation. Our policy is based on the principle that Serbia should maintain dialogue and cooperation with all partners who respect our country and seek constructive relations. We believe that such an approach contributes to long-term stability and sustainable development. In a world of rapidly evolving political and economic relations, flexibility and the ability to respond rationally and responsibly are increasingly important. That’s why Serbia seeks, wherever possible, to pursue a policy based on connectivity, dialogue and the identifying of shared interests.

same time, we are placing a particular emphasis on renewable energy, particularly solar and wind projects, as well as strengthening domestic production capacities. Our objective is to build a stable, secure and sustainable energy system that is more resilient against global disruptions and crises. Public debate is often focused on macroeconomic stability, inflation control and GDP growth. But, looking ahead, what should Serbia’s next major development step be? Which sectors should drive the country’s future growth model? SERBIA 2026

INTERVIEW Macroeconomic stability remains an essential foundation, but Serbia’s next major development phase must be built around knowledge-based industries, innovation and advanced technologies. I believe that information and communication technologies, artificial intelligence, biotechnology, energy, advanced manufacturing and scientific research will play a central role in the next stage of development. Moreover, Serbia has considerable potential when it comes to higher value-added agriculture, logistics and the creative industries. Our aim isn’t merely to achieve economic growth, but the creation of a society in which young people see their future in Serbia through high-quality employment opportu-

21st World Congress of the IEA

nities, better education and stronger links between science and industry. It is also important to emphasise that Serbia’s future development will depend not only on major infrastructure projects, but also on stronger cooperation between business, academia and public institutions. When combined with stability, investment and education, such cooperation can accelerate growth and create a more sustainable and resilient development model. Expo 2027 Belgrade has been conceived as a catalyst for Serbia’s economic, infrastructure and technological development. What would you define as the project’s greatest longterm success?

The greatest success of Expo 2027 will be achieved if the project delivers a long-term development transformation that benefits future generations. Expo isn’t only an international event, but also an opportunity to improve infrastructure, transport, digital capacities, tourism and the country’s overall investment attractiveness. Even more importantly perhaps, Expo has the potential to reshape international perceptions of Serbia — presenting the country as modern, innovative, open and capable of hosting major global events while serving as a meeting point for ideas, people and emerging technologies. I believe that will ultimately become Expo 2027’s most important legacy for Serbia.

SERBIA 2026

INTERVIEW

Aiming to Grow Even When Others Slow Down Siniša Mali,

First Deputy Prime Minister and Minister of Finance of the Republic of Serbia In a rapidly changing world, our priorities remain clear: macroeconomic stability, sustainable public debt, energy security, strong investment levels, digital transformation and the development of human capital

Photo Boško Bunuševac

T 12

21st World Congress of the IEA

he world is entering a period in which economic cycles are increasingly shaped not only by market forces, but also by geopolitical developments, energy flows, trade policies and security concerns. What was once considered exceptional has become the new normal, says Siniša Mali, First Deputy Prime Minister and Minister of Finance of the Republic of Serbia, with whom we discussed the fiscal risks facing the Serbian economy and the country’s capacity to respond to growing global uncertainty. “The greatest risk for Serbia is not recession, inflation or energy prices individually, but a world in which all these risks emerge simultaneously,” he notes.

What will Serbia need to focus on most over the next decade if it is to sustain and accelerate economic growth? Will fiscal policy need to concentrate more on the quality of growth rather than its pace? If the previous phase of development was focused on stability, infrastructure and attracting investment, the next must be centred on productivity. In the decade ahead, countries won’t only compete for capital, but also for productivity, technology and talent. Simply growing will no longer be enough; what will matter is the source of that growth. Innovation, research and development, artificial intelligence, the digital economy, modern education and investment in human capital will therefore become increasingly important. As labour force growth slows, the only sustainable way to maintain economic expansion is for each employee to generate greater value. Serbia today enjoys an advantage it didn’t have ten or 15 years ago. Much of the basic infrastructure transformation is behind us, allowing us to direct more resources towards productivity, technological modernisation and higher value-added sectors. Fiscal policy will thus increasingly emphasise the structure of growth. Our objective isn’t growth at any cost, but growth that enhances competitiveness, boosts exports, raises productivity and creates higher-quality jobs. How realistic is it to expect a continued strong investment cycle if the international environment remains unstable and borrowing costs rise again? The international environment undoubtedly influences investment activity, particularly when it comes to ma-

jor infrastructure projects that require long-term financing. However, Serbia has become significantly more resilient to external shocks over recent years. Public finances are stable, while both the level and structure of public debt compare favourably not only with the past, but also with many more developed economies and EU member states. At the same time, access to funding sources has become increasingly diversified. We don’t rely on a single source of capital today, but rather combine domestic markets, international investors, foreign financial institutions, commercial banks and export credit agencies, alongside instruments ranging from green and ESG bonds to export financing. That’s precisely why I believe the investment cycle can continue even amid heightened global uncertain-

ital even when global conditions are unfavourable. Serbia today possesses exactly these advantages: stable public finances, diversified funding sources and a clear development agenda. Thanks to these strengths, we have sufficient fiscal space to absorb somewhat higher financing costs in the case that international market conditions tighten further. International institutions continue to warn of external risks and the vulnerability of countries that are dependent on imported energy and external financing. How prepared is Serbia for another external shock? No open economy can be completely immune to external shocks. The real question is not whether a shock will occur, but how prepared a country is to absorb it.

The previous decade was defined by stabilisation and construction. The next must be defined by productivity, resilience and new sources of growth. ty. Naturally, the pace and priorities of investment must adapt to market conditions, but key projects that contribute to economic growth, energy security and technological advancement remain strategic state priorities, as outlined in Serbia’s National Development Strategy to 2035. What matters most is investing wisely. In a world of increasingly expensive capital, the greatest advantage is no longer access to money, but credibility. Countries with stable public finances, clear development priorities and predictable economic policies are better positioned to attract cap-

The pandemic highlighted the importance of supply chains and the energy crisis underscored the need for diversification, while the period of elevated interest rates demonstrated the value of fiscal discipline. These lessons have shaped Serbia’s current economic policy. Serbia currently holds €28.2 billion in foreign exchange reserves, sufficient to cover approximately 6.5 months of imports. Monetary gold reserves have reached 54 tonnes, while the share of non-performing loans has fallen to just 2.1 per cent. These are not merely statistical indicators; they are protective SERBIA 2026

INTERVIEW

International forums frequently discuss the importance of economic resilience. How useful are events like the World Congress of Economists, which Belgrade is this year hosting, when it comes to helping shape responses to current challenges? Today, when no country has all the answers to global challenges, the greatest value of international forums lies not in confirming what we already know, but in enabling us to learn from the experiences of others before facing similar challenges ourselves. The focus of economic debate has changed. Whereas efficiency and growth once dominated discussions, equal attention is now given to resilience, energy security, geoeconomics, technological transformation, demographics and institutional quality. 14

21st World Congress of the IEA

Photo Boško Bunuševac

mechanisms built precisely for periods of global uncertainty. At the same time, it is important to recognise where vulnerabilities remain. As an open economy, Serbia continues to be exposed to external disruptions, particularly in the energy sector. That’s why energy diversification, investment in domestic capacity and improved energy efficiency remain among our key priorities. A message increasingly heard within international institutions is that resilience matters, but so does restraint. Excessive dependence can create vulnerability, while excessive fragmentation can undermine the benefits of international cooperation. The challenge is therefore to strike the right balance: diversify where necessary, cooperate where possible and build institutions that make economic relationships more predictable.

Our objective isn’t growth at any cost, but growth that enhances competitiveness, boosts exports, raises productivity and creates higher-quality jobs. It is important for Serbia to not only participate in these discussions, but to contribute actively to them. Hosting the World Congress of Economists confirms that our country has become a relevant voice in international economic debates. Perhaps the most important lesson of recent years is that economic resilience isn’t built during crises, but during periods of stability. Its true value becomes visible only when adverse shocks occur. That’s why responsible public finances, strong institutions,

diversified growth drivers and continuous investment remain the best insurance for the future. Good times aren’t for complacency; they are for preparing for the challenges ahead. In a rapidly changing world, a country’s greatest advantage isn’t the absence of risk, but its ability to respond to risk faster and more effectively than others. Our goal isn’t only for Serbia to be a fast-growing economy, but to be an economy capable of growing even when others slow down.

SERBIA 2026

INTERVIEW

Preparedness Matters in Times of Crisis

n a world where one crisis follows another – from geopolitical tensions and volatile energy prices to slower growth across Europe – inflation, exchange rate stability, foreign exchange reserves and confidence have once again returned to the centre of economic policymaking. The recent downward revision of GDP growth forecasts has further raised the question of how well prepared the Serbian economy is for a prolonged period of adverse international conditions. We spoke with Jorgovanka Tabaković, governor of the National Bank of Serbia, about these challenges and the role the country’s central bank plays in safeguarding stability.

Jorgovanka Tabaković,

Governor of the National Bank of Serbia

Even if global instability persists longer than expected, Serbia’s track record suggests it has the policy tools, institutional capacity and financial buffers required to preserve price and financial stability 16

21st World Congress of the IEA

How would you define Serbia’s greatest monetary challenge today: keeping inflation under control, preserving exchange rate stability, or maintaining the confidence of citizens and businesses in the country’s long-term economic outlook? Price stability, exchange rate stability and consumer and investor confidence are closely interconnected and together form the foundation of macroeconomic stability and sustainable growth. The National Bank of Serbia pursues a monetary policy that’s consistent, transparent and predictable, while retaining the flexibility needed to respond to external shocks and limit their impact on our small and open economy. Price stability remains our statutory mandate and the primary focus of our policy actions. Supported by strong foreign exchange reserves accumulated over the course of more favourable periods, we have preserved the relative stability of the dinar against the euro, maintained a liquid and resilient financial sector, and safeguarded confidence in the measures we take. That credibility is perhaps the most effective instrument available to a central bank in its efforts to contain inflation.

Following the latest IMF mission to Belgrade, how would you evaluate the resilience of the Serbian economy compared to previous crises – from the pandemic to the energy shock and inflationary wave? During our recent discussions with the IMF mission, a constructive exchange of views led to the IMF’s updated macroeconomic framework for Serbia moving closer to our own revised projections. We regard this convergence as validation of our assessment that Serbia remains well positioned to navigate the current period of uncertainty. The IMF, alongside other major international financial institutions, continues to view Serbia as an economy capable of weathering the effects of the global energy shock, supported by strong foreign exchange reserves, an appropriate monetary policy stance, a stable banking sector and responsible public finances. The World Bank, like the IMF, has lowered its growth forecasts for the region slightly, while warning of persistent inflation and global uncertainty. Does the NBS interpret these signals as a temporary slowdown, or as a warning that Serbia should prepare for a longer period of more expensive capital, weaker European demand and more cautious investment? These forecasts reinforce the view that the global economy is entering a period of prolonged uncertainty characterised by slower growth, inflationary pressures, tighter financing conditions and weaker external demand.

As always, we are monitoring all relevant signals and projections closely, including the assessments of international institutions. We recognise that the external environment may remain challenging for longer than previously anticipated. At the same time, it’s important to stress that Serbia has preserved both price and financial stability despite an exceptionally difficult global backdrop and demonstrated considerable resilience to external shocks. This reflects the consistency of monetary policy and the coordinated im-

mate of global uncertainty, when economies across the world face significant challenges, it would be unrealistic to expect a rating upgrade – although Serbia has long deserved one – before global conditions become more stable. At the same time, we do not anticipate any negative rating actions. The NBS has pointed out repeatedly that Serbian government bonds trade at levels more typical of countries with higher composite credit ratings than Serbia’s current rating. Markets often provide an earlier assessment of risk than for-

We believe that Serbia’s current credit profile remains resilient to potential spillovers from adverse developments in the external environment plementation of broader economic policies. It provides a solid basis for confidence that stability can be maintained in the period ahead. To what extent could this influence the evaluations of international credit rating agencies and Serbia’s sovereign credit profile? Over the past six years, which have been marked by overlapping crises, Serbia has demonstrated an ability to preserve stability and resilience by thinking ahead and acting proactively, building up its reserves during favourable periods and deploying them prudently during times of stress. This has been recognised by international investors, financial institutions and credit rating agencies alike. Under the current cli-

mal rating decisions. We therefore believe that Serbia’s credit profile remains resilient against potential spillovers from adverse developments abroad. Inflation has returned to the target range, but external price pressures – including energy, food and transport costs – have not disappeared. In your view, what will be the most important factor in keeping inflation within the projected range? Given that global oil prices can have significant impacts on a broad range of primary commodities and production inputs, and can subsequently feed through into prices of industrial goods and services domestically, limiting these impacts remains essential. SERBIA 2026

INTERVIEW Alongside the gradual easing of the global energy shock, the key domestic challenge is to keep inflation expectations firmly anchored and prevent stronger second-round effects from spreading through the economy. Inflation expectations in Serbia remain relatively stable, and we will continue to pursue a prudent monetary policy while remaining ready to use all available instruments to preserve price stability over the medium term. It is also important that the government has absorbed part of the burden, helping to prevent a sharper increase in domestic fuel prices. Dinar stability and Serbia’s substantial foreign exchange reserves are often cited as key pillars of the country’s economic policy. In an environment of heightened geopolitical and financial risk, have reserves become even more important than before? In periods of heightened geopolitical tension, strong foreign exchange reserves provide central banks with greater flexibility in responding to external shocks, serving as a critical safeguard for financial stability, exchange rate stability and investor confidence. During episodes of market stress, avoiding excessive fluctuations in the dinar plays a particularly important stabilising role. This has been made possible because the NBS has spent years building reserves during periods of appreciation pressure. Between 2017 and year’s end 2024, the NBS made net purchas18

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nificantly increasing foreign exchange reserves, which currently stand at around €30 billion.

During episodes of market stress, avoiding excessive fluctuations in the dinar plays a particularly important stabilising role es of €11.9 billion on the domestic foreign exchange market. Only around 15 per cent of that amount – €1.7 billion – has been used over the past eighteen months to address somewhat stronger depreciation pressures. In cumulative terms, we have therefore purchased more than €10 billion net over the past nine and a half years. This strategy has prevented excessive structural appreciation of the domestic currency, while sig-

Belgrade will soon host a major international economic congress examining the future of globalisation, multilateralism and prevailing models of economic governance. At a time when old frameworks are fading and new ones are emerging, do the instruments for maintaining monetar y and financial stability remain fundamentally unchanged, or does this new era require central banks to develop new responses? Even the central banks of the world’s most advanced economies have learned that excessive departures from conventional monetary policy approaches – such as quantitative easing – can contribute to years of impaired price stability. At the same time, relying exclusively on traditional economic theory can reduce the effectiveness of monetary policy and increase macroeconomic instability. This congress comes at a time when many of the assumptions underpinning the global economic order are being reassessed. Research that challenges established assumptions, applies contemporary analytical methods and offers new policy frameworks is particularly valuable in periods of structural change. We look forward to hearing findings that may confirm or challenge existing economic doctrines and contribute to the development of new ideas and policy responses.

SERBIA 2026

SPECIAL REPORT: Serbia in Global Repositioning

THE NEW SOURCES OF ADVANTAGE In an emerging economic order shaped by resilience, technology and trust, Serbia may find a new role through partnerships that support knowledge, connectivity and long-term growth.

In a world where economic power is being reshaped by geopolitical uncertainty, disrupted supply chains, energy transition and rapid technological change, the old certainties of globalisation no longer offer a sufficient guide to the future. A new hierarchy of economic value is emerging, one in which size, resources and market access still matter, but are increasingly weighed alongside trust, adaptability, resilience, technological capacity and the ability to operate across borders in a more uncertain international environment. For Serbia, this changing landscape raises a timely question about the country’s evolving place in international economic relations. Long viewed through the lens of market access, investment potential and regional geography, Serbia is now also being considered in terms of its capacity to participate in more knowledge-based, technology-oriented and strategically connected forms of cooperation. In this special feature, representatives of the United Kingdom, France, Norway, Italy and India reflect on the sources of advantage in the emerging global economy from the perspective of their own countries’ experience, strategic priorities and cooperation with Serbia. Together they offer a diplomatic map of how Serbia might be positioned within a changing economic order. 20

21st World Congress of the IEA

CONTRIBUTORS

H.E. Edward Ferguson, UK Ambassador to Serbia H.E. Florence Ferrari, French Ambassador to Serbia H.E. Luca Gori, Italian Ambassador to Serbia H.E. Ms. Kristin Melsom, Ambassador of Norway to Serbia H.E. Abhishek Shukla, Ambassador of India to Serbia

Prosperity Cannot be Separated from Security For the UK, free trade remains essential, but in a world of chokepoints and weaponised geography, openness must be protected by resilience and diversification.

upply-chain risks, export controls, tariffs: the now familiar vocabulary of a global economy in which ‘free trade’ no longer feels quite as free as it once did. Add to those, straits, chokepoints, bottlenecks: reminders that the hard contours of geography are being weaponised to threaten our collective prosperity. We need no more evidence to conclude that the world has entered a new geoeconomic era. The shocks of recent years, from the Covid-19 pandemic to Russia’s illegal invasion of Ukraine and the Middle East crisis, have shown that prosperity cannot be separated from security. For decades, many countries assumed that open markets, ever more complex global supply chains and expanding trade would, by themselves, deliver stability. Openness remains essential. For the UK, free trade is in our national DNA, and we remain an outward-looking, global trading nation. But recent crises have exposed the risks of excessive dependence: on a single supplier, a narrow transit route, one energy source, or on technologies controlled elsewhere. What were once commercial questions are now strategic ones. The United Kingdom is leading this discussion. As Foreign Secretary Yvette Cooper MP wrote in the Economist earlier this year, ‘instability and volatility are the new normal.’ However regrettable that is, we must prepare for this new reality. For all countries, this means strengthening economic resilience. It means a smarter openness: diversifying supply chains, protecting critical infrastructure, investing in trusted partner-

H.E. Edward Ferguson, UK Ambassador to Serbia

ships, and ensuring that the benefits of growth are felt by all. For a fast-growing country such as Serbia, located at the intersection of major transport and energy corridors, and on the doorstep of the world’s largest trade bloc, building resilience should not only be a national priority. It should be considered a regional and European one. This means making faster progress on energy diversification through connectivity with neighbours – both for gas and electricity. It means taking a hard-headed look at the undeveloped critical mineral potential of the country, and balancing risk against opportunity. And it means upgrading cyber-security to safeguard the future of an economy which is expanding quickly into technology and digital services. The UK is committed to being a reliable partner in that effort. We are working with Serbia to support economic reform, attract responsible investment, strengthen the business environment, and encourage innovation. We see major opportunities in the clean-energy transition, and major risks to being shackled to Russian hydrocarbons for longer than necessary. The UK’s own approach is clear: we will remain open to the world, but we will work harder and smarter to manage the risks we face as an island, trading nation. For Serbia, with the EU on the doorstep, the case has never been more compelling for faster integration with the European Single Market and to de-risk from unreliable energy dependency on Russia. Together, we will continue building the practical cooperation needed to make our economies stronger, safer and more resilient.

For Serbia, resilience is both a national and a regional priority, requiring energy diversification, stronger cyber security and trusted partners such as the UK. SERBIA 2026

SPECIAL REPORT: Serbia in Global Repositioning

People are the Resource that Creates New Resources

H.E. Florence Ferrari,

French Ambassador to Serbia

For France, future advantage lies in combining energy, technology and talent, supported by low-carbon electricity, skilled people and a strong innovation ecosystem.

he debate about who holds the advantage in the new global economy—those who control energy resources, those who develop technology, or those who attract and retain talent—often assumes that these factors compete with one another. In reality, sustainable competitiveness emerges where all three converge. Energy remains strategic because it guarantees stability and sovereignty. Technology determines productivity, speed, and competitiveness. But talent is the force that gives meaning to both. A country rich in energy but poor in knowledge risks stagnation. A country with technology but without skilled people cannot innovate for long. In the end, people are the only resource that continuously creates new resources. In that context, Serbia has an important opportunity to serve as a bridge — a key link within emerging European and regional value chains. Indeed, Serbia already possesses several important advantages: strong engineering and technical education, a globally connected diaspora, competitive innovation sectors, and a strategic position in Southeast Europe. The next step is to transform these advantages into long-term partnerships in science, digital infrastructure, energy transition, artificial intelligence, logistics,

and regional connectivity, particularly in transport and energy. France, which for the seventh consecutive year has ranked as Europe’s leading destination for international investment projects, thanks to its skilled workforce, high-quality infrastructure, competitive low-carbon electricity, diversified industrial base, access to the European market and dynamic innovation ecosystem, is a trusted and reliable partner in these areas. The French Agency for development and French enterprises are already mobilized in Serbia on some of these structural issues, which are essential for Serbia’s economical development and the well-being of the population. The countries that will succeed in the coming decade will not necessarily be the largest! They will be the ones capable of building ecosystems of trust — where talent wants to stay, international partners want to cooperate, and innovation can move quickly across borders. For Serbia, this means that the future opportunity is not simply to export products, but to be able to co-create knowledge, technology, and regional stability together with international partners. France remains fully committed to supporting Serbia on this path.

Serbia’s opportunity lies not only in attracting investment, but in co-creating knowledge, technology and regional stability with partners such as France. 22

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SPECIAL REPORT: Serbia in Global Repositioning

Talent Turns Resources into Value For Italy, competitiveness rests on the convergence of technology, energy and talent, creating value through innovation, industry and people.

he debate about who holds the advantage in the new global economy—those who control energy resources, those who develop technology, or those who attract and retain talent—often assumes that these factors compete with one another. In reality, sustainable competitiveness emerges where all three converge. Technology can accelerate growth, and energy, as well as access to critical raw materials, remain essential to economic security. Yet neither can generate lasting prosperity without people capable of creating, adapting and innovating. Talent is therefore the multiplier that transforms resources into development and technology into progress. From this perspective, Serbia is increasingly emerging as an important partner in Southeast Europe and the Western Balkans. The country is evolving from a model based primarily on competitive production costs towards one that places greater emphasis on knowledge, innovation and high-value-added sectors. Its growing technology ecosystem, strong engineering tradition, expanding network of science and technology parks, and strategic location at the crossroads of European markets create significant opportunities for international cooperation. Italy views Serbia not only as a trusted economic partner, but also as a platform for joint innovation. Our bilateral rela-

H.E. Luca Gori,

Italian Ambassador to Serbia

tionship, supported by more than €5 billion in annual trade and a strong presence of Italian companies, is increasingly expanding into areas such as artificial intelligence, agritech, advanced manufacturing, sustainability and digital transformation. This commitment has recently been reinforced by the signing of a Memorandum of Understanding between Italy and Serbia in the fields of supercomputing, artificial intelligence, big data and quantum computing. The agreement promotes joint research, advanced training and stronger links among universities, research centres, businesses and public institutions, reflecting our shared ambition to build a competitive and future-oriented innovation ecosystem. The same vision underpins the Innovation Forum “Human-Centred Innovation”, one of the flagship events of the Festival of Italian Creativity “Play with IT”, recently launched by the Embassy of Italy in Serbia in the run-up to EXPO 2027 Belgrade. Bringing together institutions, companies, students, investors, universities, technology parks and start-ups from both countries, the Forum promotes a simple but crucial idea: innovation delivers its greatest value when it remains centred on people. Preparations for EXPO 2027 Belgrade offer a further opportunity to accelerate these trends, fostering new connections between business, research and society.

For Italy, Serbia is becoming a platform for joint innovation, where talent, technology and industry converge in AI, agritech, advanced manufacturing and sustainability, with EXPO 2027 providing additional momentum. 24

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Advantage Comes from Bringing Strengths Together

H.E. Ms. Kristin Melsom, Ambassador of Norway to Serbia

Norway’s experience suggests that natural wealth becomes real economic advantage only when managed responsibly and linked to innovation, sustainability and strong institutions.

n today’s unpredictable global economy, the question of who holds the decisive advantage cannot be answered by pointing to a single factor. Energy resources, technological innovation and human capital are no longer competing sources of power—they are deeply interconnected. The most resilient and forward-looking societies are those that manage to align all three, creating systems where each reinforces the other. Energy, of course, remains fundamental. Recent years have demonstrated how access to reliable and sustainable energy shapes not only economic stability but also geopolitical influence. Norway’s own experience shows that natural resources can be a strong foundation—but only when managed responsibly and paired with long-term investments in innovation and governance. In the global transition toward greener economies, access to energy is increasingly linked not to abundance alone, but to sustainability and efficiency. At the same time, technology has become a defining driver of competitiveness. Countries that lead in digitalisation, green technologies, and advanced industries are setting the pace of global development. Yet, technology itself does not emerge in a vacuum. It depends on institutions that foster innovation, protect knowledge, and encourage collaboration across borders.

Ultimately, however, it is human talent that ties everything together. Skilled, adaptable, and creative people are the true catalysts of progress. The ability to attract, develop, and retain talent is what enables countries to transform resources into value and ideas into tangible solutions. This is where education, openness, and international cooperation play a crucial role. Seen from this perspective, Serbia holds significant and often underappreciated potential. It is not only a growing market or an attractive investment destination—it is a country with strong human capital, a dynamic IT sector, and a tradition of engineering and scientific excellence. Increasingly, Serbia is increasingly emerging as a partner in knowledge-based development, contributing to regional innovation and connectivity. At the same time, Serbia’s long-term potential could be further strengthened through increased progress in its EU integration process. For many international investors, including Norwegian companies, developments related to regulatory alignment, rule of law, and market predictability are important factors when assessing risk and opportunity. Advancements in these areas would not only reinforce investor confidence but also help unlock even greater economic cooperation.

Serbia’s human capital, IT sector and engineering tradition give it strong potential, but deeper cooperation also depends on EU alignment and predictability. SERBIA 2026

SPECIAL REPORT: Serbia in Global Repositioning

Finding Anchor Among Headwinds India’s answer to global uncertainty lies in resilience at scale: stable institutions, decentralised growth, digital public infrastructure and the ability to deliver through turbulence. 7.8%, 7.7% and 7.1%. It is only fitting that an article in this special edition of CorD Magazine, dedicated to the 21st World Congress of the International Economic Association, begins with such statistics. These are the respective figures for India’s GDP growth rates in the last quarter (Q4 – January to March 2026) and the previous two financial years (2025–26 and 2024–25). These results have been achieved in the face of significant geo-economic turbulence and geopolitical uncertainty. Or, simply put, strong headwinds. These figures, which cement India’s position as the world’s fastest-growing major economy, also reflect the strength of its economic fundamentals, reinforced by a series of extensive institutional reforms undertaken over the past several years, alongside the inherent strength of the country’s primary growth drivers. Furthermore, this growth is underpinned by stable governance, a thriving democracy and committed leadership, all deeply rooted in India’s civilisational ethos. It is therefore the resilience not only of the economy, but also of the underlying foundations that support it, which forms an equally important part of the equation when considering the central question of this debate: who holds the advantage in the new global economy? New dynamics are now confronting us.

H.E. Abhishek Shukla,

Ambassador of India to Serbia

While it is for each country to choose its own path to progress, based on its unique national circumstances, the common denominator among all aspiring nations remains the need for a stable and peaceful environment in which to grow, and reliable, trusted partnerships through which to thrive. Thus, factors such as stability, both internal and external, systemic resilience driven by decentralised growth engines, the capacity to deliver at scale and speed, a demographic profile aligned with contemporary demands, a technological vision that prioritises inclusive development alongside commercial innovation, and, above all, the ability to withstand turbulence, are becoming key determinants of competitive advantage. Equally, technological resilience, as well as supply-chain resilience and diversification, must now be factored into the broader long-term economic and national security calculus. Grounded in traditional friendship, mutual trust and respect, India–Serbia relations are currently entering a new phase of growth. This spans a wide range of areas, including economics, commerce, technology, innovation and people-to-people ties. At a time when resilience and trustworthiness reign supreme in global affairs, deep-rooted bilateral relationships such as that between India and Serbia are becoming more than merely advantageous — they are becoming essential.

India sees relations with Serbia entering a new phase of growth, grounded in traditional friendship and expanding across economics, commerce, technology, innovation and people-to-people ties. 26

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PARTNERS IN PROGRESS Companies Supporting Growth, Investment and Economic Transformation

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Success that Endures Milka Vojvodić, President of the Executive Board, CEO, Delta Holding

Photo Nebojša Babić

As Delta Holding embarks on a new investment cycle exceeding €1 billion, Milka Vojvodić discusses strategic capital allocation, technological transformation and the role of large business systems in shaping future growth.

ver more than three decades, Delta Holding has repeatedly reinvented its business model, evolving from retail, banking and insurance into agriculture, real estate, logistics and digital platforms, while maintaining a consistent focus on long-term value creation. In this interview with CorD, Milka Vojvodić, Senior Vice President for Economics and Finance, discusses the company’s investment priorities, the impact of artificial intelligence on business, sustainability as a framework for development and the responsibilities of large organisations in an increasingly uncertain global environment. Delta Holding is currently investing across agriculture, real estate, e-commerce and logistics. What does it mean to lead a company that must balance sustainability objectives with long-term investment decisions in a period of global uncertainty? 28

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The diversity of our portfolio is, in itself, one of the key sources of the Group’s long-term stability. Geographic diversification, the breadth of sectors in which we operate and a long-term perspective have enabled us to continue growing, investing and developing new businesses across different market cycles. The strength of that approach is reflected in our results. In 2025, Delta Holding generated revenues of nearly €1.1 billion, representing growth of 16 per cent, while EBITDA reached €136 million. At the same time, we contributed €240 million to the Serbian state budget. What is particularly encouraging is that we have launched a major new investment cycle focused on agriculture, real estate, the expansion of our hospitality portfolio and emerging technologies. Investments exceeding €1 billion over the coming years are important not only for Delta’s future growth, but also for the development of the domestic economy, the creation of new jobs and the strengthening of Serbia’s and the region’s competitiveness. Sustainability is an equally important pillar of our longterm strategy. This year, we are publishing our seventeenth Sustainability Report, while our 2030 targets include a 50 per cent reduction in greenhouse gas emissions and an increase in the share of renewable energy to 60 per cent. I believe that the development of any organisation ultimately depends on people and on investing in the next generation of talent. Today, we employ almost 6,000 people, of whom 1,700 are under the age of 35. Our Young Leaders Programme, which marks its fifteenth anniversary this year, is one of the best examples of that commitment. Young professionals who begin their careers through the programme bring fresh knowledge, new ideas and different perspectives, and many of them now hold senior positions across the Group. That is why we regard the development of young talent as one of our most important longterm investments.

Over the past three and a half decades, Delta has developed several companies that later became part of major international groups. Is the ability to recognise the right moment for transformation and reinvestment now more important than the size of a company itself? Our greatest achievement lies not only in building successful companies, but in creating market leaders and opening the door for some of the world’s largest corporations to enter our market. Delta Banka became what is today Banca Intesa, one of the leading banks in Serbia. Delta Osiguranje evolved into what is now Generali, while Delta Maxi became part of the Delhaize Group. Through this approach, we have reinvested €2.3 billion in Serbia and the wider region into new business sectors. So yes, the ability to recognise the right moment and act on it makes a tangible difference. Scale matters, but it is not decisive.

tificial intelligence an integral part of how we work, make decisions and develop the business. We believe that change must begin with leadership, because no technological transformation succeeds without a corresponding shift in culture and mindset. The regional business systems that thrive over the next decade will not necessarily be the largest. They will be the ones most capable of learning, adapting and using new technologies to create additional value for customers, employees and partners.

The success of large companies should be measured not only by what they create for themselves, but also by what they leave to future generations. Transformation does not mean abandoning what you have built. On the contrary, it means recognising when a particular business model has reached its full potential and redirecting capital, expertise and experience towards new opportunities for growth and development.

Delta District

In recent years, Delta Holding has invested heavily in real estate, logistics and digital platforms such as Ananas. How do you see the future of regional business groups in an era of artificial intelligence and changing consumer behaviour? Ananas is a good example of how consumer expectations are evolving. Today, it is no longer enough to offer a quality product or service. Customers expect speed, personalisation and a seamless experience. Digital transformation is therefore no longer a source of competitive advantage; it has become a prerequisite for growth. I believe, however, that artificial intelligence will have an even greater impact on the way organisations operate internally. Technology itself is not the greatest challenge. Far more important is how an organisation embraces change, how quickly it learns and how willing its leaders are to rethink established ways of thinking and decision-making. That is precisely why we launched our AI Shift initiative. Our objective is not simply to introduce new tools, but to make ar-

Delta Agrar is often cited as an example of the modernisation of Serbian agriculture. Can Serbia, through new technologies and sustainable production models, become a major European player in the food and agritech sectors? I believe Serbia has the potential to become a far more significant player in both the food industry and agritech. The potential is there. The key is our ability to keep pace with global trends, invest in knowledge and deploy the most advanced technologies and production models available. That is precisely why agriculture remains one of our longterm strategic priorities. In recent years, we have invested heavily in precision farming, irrigation systems, the development of new crops and the digitalisation of production. Success ultimately depends on our willingness to learn and adapt as quickly as the business environment itself is changing. Although we operate in a region with favourable agricultural conditions, the effects of climate change have become increasingly apparent in recent years. This requires a different approach, greater investment in innovation and a strongSERBIA 2026

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er focus on long-term planning. That is one of the reasons why we are investing significantly in new crops, such as hazelnuts, which we see as an important part of the future of our production portfolio. The results of this approach are already visible. Delta Agrar now cultivates more than 10,000 hectares of farmland, while its products are present in demanding international markets. At the same time, through cooperation with contract farmers and the transfer of knowledge, we contribute to raising standards across the wider agricultural sector. The question, therefore, is not whether Serbia can become a serious European player, but how quickly and consistently we are prepared to continue investing in knowledge, innovation and development. After 35 years of growth and transformation, what do you see today as the primary responsibility of large regional business groups: profitability, resilience, technological transformation or broader social responsibility? After 35 years of building the company, I would say that the most important challenge for large business systems is not choosing between profitability, resilience, technological transformation and social responsibility. The real objective is to bring all of these elements together and create value that endures. When I look at Delta today, I believe our greatest achievement is not measured solely by business results. It is reflected in what we leave behind: the companies we have built, the people who have developed their careers within them, the markets we have helped shape and the projects that will remain part of community life for decades to come. The renewed Sava Centre is once again bringing together new generations of artists, audiences and the business com-

Delta Land

munity. We are particularly proud that it will host the 21st World Congress of the International Economic Association this June, one of the most important global gatherings of economists, bringing leading experts and decision-makers from around the world to Belgrade. Delta District and the future InterContinental are creating new value for the city while setting benchmarks for the next generation of urban development. Through its concept of contemporary Belgrade classicism, carefully considered architecture and extensive green spaces, Delta Land is bringing new energy to an important part of the city and helping to redefine its future. Through the Our Village initiative, we support the preservation and development of small family farms, while the Delta Foundation has spent the past 18 years investing in education, culture, entrepreneurship and inclusion. That is why I believe the success of large companies should be measured not only by what they create for themselves, but also by what they leave to future generations.

Sava Centar

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How is AikBank Transforming the Culture of Savings in Serbia? AikBank Building a stronger culture of saving will be essential to sustaining financial stability and supporting future growth. AikBank, as the largest domestic, privately owned bank and the #1 bank in volume of retail term deposits in Serbia*, stands as a key player in maintaining the country's financial stability.

hile European markets have spent years navigating cycles of deposit rate volatility, the banking sector in Serbia faces a specific structural challenge: how to transition informal savings into the formal banking system, even as deposit rates rise. In this critical process, AikBank, as the largest domestic, privately owned bank and the #1 bank by volume of retail term deposits in Serbia*, stands as a key player in maintaining the country's financial stability.

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Despite the recent growth in deposit rates, the share of total deposits relative to Serbia’s GDP stands at approximately 19%. This remains at least twice as low as the average within the European Union and regional markets. However, viewed from another perspective, this represents massive untapped potential. AikBank views this gap as a growth opportunity for the entire market. The bank’s focus is on dismantling

long-standing myths about keeping cash at home and educating citizens on the advantages of institutional wealth preservation. This shift is vital for maintaining liquidity across the banking ecosystem and mitigating systemic financial risks. With €1.36 billion in retail term deposits, AikBank has proven that trust is built through decades of experience and continuous adaptation. Precisely because it understands that individual habits and financial capacities vary, the bank has developed a personalised approach to savings. By analysing the needs of individual savers – and those yet to become savers – AikBank creates tailored models that match clients’ needs and capabilities. Available options range from classic term and demand savings products to hybrid models that combine the best of both worlds, offering flexibility across currencies, deposit amounts, maturities and service channels. The strategic objective of AikBank can be defined as the democratisation of savings. Contrary to the misconception that entering the world of savings requires substantial capital, the bank promotes models that prioritise regular saving habits and financial discipline over the amount saved. AikBank’s calculations demonstrate the power of consistency: by setting aside €100 per month at a current interest rate of 3%, a saver would accumulate €13,816 after 10 years, a figure that rises to an impressive €52,248 after 30 years.

In the race for numbers that currently dominates the banking market, AikBank has chosen the path of stability and personalisation. In finance, truly understanding the client means delivering a level of security that extends far beyond a simple interest rate.

With €1.36 billion in retail term deposits, AikBank has shown that trust is built through decades of experience, continuous adaptation and a personalised approach to savings. In today’s environment, where competition is increasingly driven by numbers, AikBank is redefining industry standards by combining competitive interest rates with a highly personalised approach to wealth accumulation. Visit www. aikbank.rs today and discover a savings strategy tailored precisely to your needs and possibilities.

Source: PwC Commercial Performance Benchmarking Study of Banks, conducted on the basis of an analysis of official financial statements of banks, publicly available data from the National Bank of Serbia, and data provided by the banks. Results as of 31 December 2025.

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Economics in an Age of Fragmentation Natalia Lechmanova, Chief Economist, Europe, Mastercard Economics Institute As geopolitical tensions, shifting supply chains and changing consumer priorities reshape the global economy, Natalia Lechmanova of the Mastercard Economics Institute explains why resilience, adaptability and deeper cooperation will define the next phase of growth.

of the economics profession to come together and share ideas on how best to understand and analyse the global economy, which is undergoing a major geopolitical and technological transformation while responding to “once in a lifetime” shocks that are now occurring more frequently. I look forward to hearing ideas on the best ways to navigate these changes while delivering growth and prosperity. I hope to bring a private-sector perspective on the challenges and opportunities that today’s economic environment presents.

he global economy is entering a new era in which security, resilience and strategic autonomy increasingly influence economic decision-making. Drawing on unique insights from consumer spending data and years of experience across leading international institutions, Natalia Lechmanova discusses how businesses, governments and households are adapting to a world marked by greater uncertainty, evolving trade patterns and profound technological change.

The XXI World Congress of the International Economic Association will bring to Belgrade more than a thousand of the world’s most influential economists. What does it mean to you personally to be invited into this dialogue, and what message do you wish to bring? I am honoured and delighted to be part of this gathering, and I agree with you that it is an important time for all corners 34

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This year’s central theme – “Contesting Visions of the World: Globalism vs. Nationalism, Multilateralism vs. Bilateralism, Democracy vs. Autocracy” – frames perhaps the defining tension of our economic moment. Where do you see these tensions most clearly reshaping privateand public-sector decisions in Europe? This year’s theme summarises the tension between how we used to characterise the forces shaping the global economy and how we view these forces today. It describes a fragmenting world where public- and private-sector decisions are driven less by collective action and the quest for efficiency, and more by risk management. The goal is to maximise economic security, namely access to energy, natural resources, technology and markets. Europe is slowly adapting to this new environment. European countries and companies are investing more at home, diversifying supply chains and stockpiling. We have seen significant shifts on the policy front – a more growth-oriented fiscal framework, led by Germany, new free trade agreements and early initiatives to address competitiveness challenges and strengthen the Single Market. There is a great deal of work to do, but the upside potential is real.

Looking at the data you work with every day at the Mastercard Economics Institute, where do you see these tensions most clearly reshaping consumer behaviour in Europe? Our data gives us a glimpse into how consumers interpret these forces through their day-to-day spending behaviour. Economic uncertainty certainly weighs on consumer sentiment, which, in many countries, remains below historical averages. However, what we have also observed is that the relationship between consumer sentiment and consumer spending has decoupled in recent years. Low or deteriorating consumer sentiment does not necessarily translate into weaker spending, but consumers do tend to recalibrate how they spend. At times of acute uncertainty, they tend to focus on essentials, such as food and energy, while pulling back on discretionary spending. Within discretionary categories, they prioritise smaller purchases and spending on “experiences” rather than “things”. Services spending tends to be more resilient during downturns because it can be more easily dialed down. People may reduce the frequency of eating at restaurants, but they do not eliminate that spending altogether. However, they may have to delay or cancel a new sofa purchase. You will appear on the panel “Fiscal Policy and Financing Sustainable Development”, alongside Serbia’s Minister of Finance and the IMF’s regional representative for the Western Balkans. What can the perspective of the private sector bring to a conversation that has traditionally been shaped by governments and multilateral institutions? Sustainable development used to refer to balancing growth with environmental and social responsibility. Today, that definition has broadened to encompass the building of an economic model that can deliver growth and prosperity in a more fragmented, shock-prone world. It is a model that focuses on resilience against supply-chain disruptions, energy shocks, loss of technological access and military threats. In that vein, fiscal policy is no longer just a countercyclical stabiliser; it is used proactively as a strategic tool for shaping the economy’s productive capacity, supply chains and security architecture. In this model, there is a greater role for the state in the economy, which represents a departure from the neoliberal era and may make it more difficult for firms to navigate and make investment decisions. It is also more costly when redundancy is prioritised over economies of scale and efficiency. However, governments can benefit from the private sector’s ability to diagnose problems, iden-

tify vulnerabilities in supply chains, estimate the costs of potential interventions and help design solutions. Such collaboration would also increase policy transparency, helping companies make investments and, in turn, benefiting fiscally constrained governments. Serbia and the wider Western Balkans are increasingly part of the European economic conversation. What signals do you read from the region’s data, and what should local businesses and policymakers be paying closer attention to as the region continues to converge with the EU? Indeed, the Western Balkans are becoming increasingly integrated into the EU’s systems and supply chains, while also benefiting from the EU’s nearshoring trend. The EU remains the largest investor in the region.

Fiscal policy is no longer just a countercyclical stabiliser; it is used proactively as a strategic tool for shaping the economy's productive capacity, supply chains and security architecture. Local businesses should take advantage of these deepening links, while policymakers should focus on making further progress on reforms that align their countries with EU standards. This will boost trade, investment and the continued convergence of per capita incomes towards the EU average. Your career has taken you from the OECD in Paris through NERA in New York, Standard Chartered, Goldman Sachs in London and now the Mastercard Economics Institute – institutions with very different lenses on the global economy. What has that journey taught you about how economic insight is best produced and translated into decisions, and what would you say to the next generation of economists who want to work at the intersection of data, policy and business? What I have learned is that the best economic insights are produced when we combine rich datasets with cutting-edge analytics and apply the results in the right context. This means combining data science and econometrics with an understanding of economic principles and economic history. I encourage young economists to build skills across all of these areas. SERBIA 2026

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Serbia Is Building the Economy of the Future Marko Čadež, President of the Serbian Chamber of Commerce

Photo Miša Obradović

Serbia is developing its own AI value chain, attracting technology investments and laying the foundations for the next phase of economic transformation.

s artificial intelligence, technological innovation and geopolitical shifts reshape the global economy, Serbia is investing in the infrastructure, capabilities and partnerships needed to compete in a rapidly changing world. Marko Čadež, President of the Serbian Chamber of Commerce, discusses how AI, industrial transformation and EXPO 2027 can help drive the country’s next phase of growth.

Serbia has emerged as a regional technology and AI hub in recent years. How could this transformation reshape the country’s economic structure and international position in the long term? The strengthening of sovereign computing capacities— something only a handful of countries of Serbia’s size can currently claim—together with a national AI development platform, large language models for the Serbian language, and initiatives such as the region’s first Sovereign AI Factory and a standalone 5G network, is creating the infrastructure needed to accelerate the transformation of our economy. 36

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This transition towards a knowledge-based economy driven by innovation and advanced technologies is already underway. It is being fuelled by the rapid growth of Serbia’s ICT sector, which today includes more than 40,000 companies and entrepreneurs, employs nearly 120,000 people and generates exports exceeding five billion dollars annually. The impact is already visible in Serbia’s GDP. ICT now contributes more than construction and even more than agriculture and the food industry combined. Our export profile is also evolving, with services and high-value-added products accounting for a growing share. Software has become Serbia’s leading export product, while Serbia is also the only country in the region producing both electric and hybrid vehicles. Soon, it will become the first country in continental Europe to manufacture AI-powered humanoid robots. What we are doing today to build and control our own AI value chain and develop solutions on domestic infrastructure goes far beyond technology or the ICT sector alone. The real impact will come when AI becomes deeply integrated across industries—from manufacturing and energy to agriculture, logistics, finance and healthcare. Only then will we see its full effect on productivity, competitiveness and economic transformation. How extensively are Serbian companies using AI today, and are they adopting these technologies quickly enough? Where do you see the greatest potential for improving productivity and competitiveness? Although Serbia ranks among the world’s most AI-ready countries, adoption varies significantly by company size and sector. Large corporations and digitally native businesses in IT, telecommunications, finance and e-commerce already make extensive use of AI, from generative assistants such as ChatGPT and Claude to predictive analytics and process automation. Among SMEs, as elsewhere in the world, adoption remains below its potential. Encouragingly, however, the number of

smaller businesses experimenting with AI solutions is growing rapidly. This segment offers the greatest opportunity for productivity gains and competitiveness, particularly in agriculture, manufacturing and traditional service industries. To address the key barriers to broader AI adoption—which are not technological but relate to language, skills and trust— the Serbian Chamber of Commerce, in partnership with Orion Telekom, has launched the development of a Serbian business language model based on NVIDIA technology. More precisely, this is a family of AI models designed to understand Serbian, in both Cyrillic and Latin scripts, as well as local business terminology, regulations and industry-specific requirements. Our goal is to enable companies to use AI in their native language, without major investments or specialised teams, and to make digital transformation accessible to the entire economy.

search and development centres here. Nearly 30 global hightech companies have already set up R&D operations in Serbia, relying on local engineering talent to develop innovations for global markets. EXPO 2027 is increasingly being described as a turning point for Serbia’s investment profile and international image. Can this event help position the country as a regional business and innovation hub in the long term? EXPO 2027 represents a once-in-a-generation opportunity for Serbia to strengthen its position on the global business, investment and technology map. More than an exhibition, it is

At a time of geopolitical uncertainty, economic fragmentation and shifting supply chains, can Serbia become a more important manufacturing and logistics hub for the European market? Nearshoring and friendshoring trends are creating new opportunities for economies such as Serbia’s, which can offer a combination of geographic proximity, industrial capabilities, skilled talent, competitive costs and a stable business environment. Countries that can serve as bridges between different regions and business communities are gaining strategic importance, and Serbia is well positioned to play that role. European companies are increasingly diversifying suppliers and bringing production closer to home. At the same time, businesses from more distant markets seeking access to European customers require production bases within Europe. Serbia is ideally positioned to serve both. Located at the intersection of major European transport corridors, Serbia has developed into a regional logistics hub. The country benefits from a competitive industrial base with strong expertise in the automotive, engineering, electrical and food-processing industries, as well as a broad network of free trade agreements providing duty-free access to markets encompassing 2.7 billion consumers worldwide. Investors increasingly recognise Serbia not only as a manufacturing destination but also as a technology hub. In addition to factories, international companies are establishing re-

Photo Miša Obradović

EXPO 2027 represents a once-in-a-generation opportunity for Serbia to strengthen its position on the global business, investment and technology map.

a long-term development project and an investment in infrastructure, business growth and international visibility. The real value of EXPO lies in the partnerships, investments and business opportunities it will generate long after the event ends. Those who come to Belgrade to discover Serbia’s investment potential and innovation ecosystem are likely to return as investors, entrepreneurs and long-term partners. Importantly, EXPO 2027 has been conceived not as a threemonth event but as a lasting development platform. Its legacy will include modern infrastructure, new business facilities and a state-of-the-art exhibition complex—the largest in Southeast Europe. This will enable Belgrade and Serbia to attract major international events and further strengthen their position as a regional and global destination for trade fairs and congresses. One example is GITEX AI Serbia. Belgrade will host the event for the next decade, with its inaugural edition taking place next May as part of EXPO 2027. As an extension of GITEX Global, the world’s largest technology exhibition, it will further reinforce Serbia’s growing reputation as a centre of innovation and technological excellence. SERBIA 2026

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Balancing Tradition and Modernisation By Bojan Kekić, President of the Executive Board of Postal Savings Bank As financial institutions adapt to technological change, new sustainability requirements and shifting customer expectations, Banka Poštanska štedionica is combining digital transformation with the long-term stability expected of a national banking institution.

hen we look back at the development of Postal Savings Bank over the past decade, we have many reasons for pride. Our dedication, commitment and determination to achieve the best possible results proved to be stronger than all the challenges we had. We succeeded to be support and backing both to individuals and businesses and to stay recognizible as a domestic, strong and stable state-owned bank by following economic policies implemented by the Ministry of Finance, the National Bank of Serbia, and the Republic of Serbia headed by the president Mr Aleksandar Vučić. The results speak for themselves. At the end of 2025, the Bank’s total assets reached RSD 602 billion and increased by 4.5 times compared to 2016. Also, a long-standing positive and extraordinarily dynamic upward trend of profit that was more than tripled compared to 2021 when it amounted 38

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to RSD 2,2 billion, was continued during the last year. At the same time, both lending and deposit activities in both segments of the market increased. Although we have been traditionally recognised as a retail bank, the retail lending in 2025 was 8.7 times higher compared to 2016, whereas the corporate lending increased by 12 times at the same time. The deposits from retail clients increased by 3.5 times, whereas the deposits from corporate clients increased by 7.2 times over the same period. Electronic payments that have become a dominant method of payment in Serbia were another generator of profitability. At the beginning of 2025, when the Bank migrated to a new information system, 175,000 retail users of e-banking and m-banking were registered. Today, the Bank has more than 300,000 active users of these services. We have a similar trend also in corporate operations. In February 2025, we successfully implemented the new information system. The project was delivered without any disruption to client services. Following modern Data Governance principle, our team worked closely with the vendor to properly integrate, verify and migrate the data from multiple systems onto a unified platform while following the timelines and using the data for uninterreptued operational processes and regulatory reporting. The data management and migration were successfully carried out thanks to the cross-functional cooperation between IT and other departments laying thus foundations for faster and safer processing of data and reporting, enhanced risk management, and the development of advanced analytics and AI in the Bank’s operations. A special effort was made by the well organized and maintained business network that, while carrying out regular operations, simultaneously learned how to use new tools introduced by the new information system. Expo 2027 is an important project for us. It will also be one

of the most significant projects in Serbia’s recent economic history, the effects of which will extend well beyond the duration of the exhibition itself. Postal Savings Bank will participate in the project not only as a financial partner but also as an exhibitor with its own pavilion where it will in a dignified and modern way present not only the Bank but also Serbia as the country with stable financial system, reliable institutions and responsible development. At the same time, the Bank’s participation in financing Expo 2027 should be viewed as a part of the broader development framework in which a state-owned bank plays the role of a reliable partner. The acquisition of Komercijalna banka Banja Luka in December 2021 marked an important step in realising our goal to expand our regional presence. We entered the region where we recognized our greatest market interest and where we are sure to be welcome. While organic expansion remains our immediate priority, we will carefully consider opportunities for broader acquisitions in the region which may generate synergies and chances for growth and added value.

based on finding the right balance between digital and human resources. The fact is that our clients increasingly use our digital channels, including older generations and pensioners, for whom we have both a particular responsibility and deep respect. On the other hand, we are aware that personal interaction remains essential in circumstances when clients have dilemmas, when professionalism and concrete advice is required in order to create trust and partner relationship with them. Our strategic commitment is to simultaneously invest in both resources, improving thus the total process. We shall continue to develop the processes of advanced configurations and AI tools, that have already been started, mainly for simple and fast transactions in the business network, but we shall simultaneously strengthen trainings of the current staff in our branch offices in search of the optimal ratio of technology and human factor.

The future of banking will not be shaped by technology alone. It will depend on how effectively institutions combine technological innovation with trust, expertise and human relationships. The Bank’s transformation has also been recognised by the representatives of the IMF and the World Bank. In October 2022, Mr Andrew Lovegrove from the World Bank described the Bank as a key example of how a state-owned bank can be successfully restructured. In June 2023, Ms Jane Hwang also from the World Bank highlighted an excellent cooperation between the Bank and that institution, noting that the results achieved could serve as a model for similar projects in other countries. Looking ahead, our ambition remains clear: to combine traditional values of our bank through innovations along with the values and standards dictated by the practices of modern commercial banking industry. We have to be aware that everything that was created so far should be viewed as a beautiful historical heritage, and the capability to adapt to the present moment should be viewed as a valuable virtue that we should nurture. The successful implementation of our new information system demonstrated our readiness to embrace digital transformation and we intend to accelerate this process further. However, we are not toying with the idea that soon our avatars are going to do our jobs instead of us. Our approach is

As we are aware that the demand for ESG solutions of our clients will continue to grow, we are developing our own green agenda. We are planning to do more than plant several trees and put solar panels on the the Bank’s building. Despite the fact that our mission is not only commercial but also a social one, we are aware of the developments in EU and movements of the ECB that concern us very much. Postal Savings Bank will continue to grow responsibly, with the aim to remain a trusted partner to the state, businesses and citizens and to remain a symbol of stability, confidence and long-term security as we are often described by Serbian president Mr Aleksandar Vučić. That is our mission and also our obligation since we are a state-owned bank. We will continue to develop ourselves based on the unity and in synergy with state-owned institutions by uniting efficient and market-oriented business while being responsible and taking care of people and community whose essential partner we have been for 105 years. SERBIA 2026

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Driving Digital Transformation and Sustainable Growth OTP banka Srbija Combining financial strength, technological innovation and responsible banking, OTP banka Srbija supports clients, businesses and communities in navigating an increasingly digital and sustainability-driven economy. Care” award. OTP banka Srbija remains the only bank in Serbia to be a signatory to the UN Principles for Responsible Banking.

s a member of OTP Group, one of the leading and fastest-growing banking groups in Central and Eastern Europe, OTP banka Srbija has built its position on the foundations of modern banking: stability, innovation, client focus and a strong commitment to sustainable development. The strength of its parent Group, operating in 11 countries and serving more than 17 million clients, was reaffirmed in 2025 through strong financial results, including a net profit of €2.88 billion, a return on equity of 21.6% and a CET1 capital ratio of 18.1%. This strong foundation of trust underpins OTP banka Srbija’s relationships with clients every day. THE BEST DIGITAL AND ESG BANK IN SERBIA The renowned magazine The Banker ranked OTP Group among the top banks in Central and Eastern Europe for the third consecutive year, while Global Finance named it the Best Bank in the region for 2025. At the national level, OTP banka Srbija received the Euromoney Awards for Excellence in two categories – Best Bank for ESG in Serbia and Best Digital Bank in Serbia – for the second consecutive year. These recognitions reflect the essence of the Bank’s approach: using digital technologies to enhance the customer experience, optimise operations and deliver simpler, more personalised services, while consistently integrating ESG principles throughout its business activities. PwC Serbia also recognised OTP banka Srbija as an ESG Leader in 2025 for responsible management and employee development, while the Bank also received the “Employee 40

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A PIONEER IN ECONOMIC DIGITALISATION The Bank’s operations are built around a strategic Digital First approach, providing clients with greater control, improved accessibility and a simpler user experience. Innovation is not treated as a series of isolated projects, but as part of a carefully designed ecosystem that delivers tangible value and positions the Bank among the leaders of digital transformation in the Serbian market. This commitment is reflected in a range of practical solutions. Accounts can be opened entirely online, while foreign-currency payments with full fee transparency are available through the Bank’s digital channels. With Serbia’s accession to the SEPA area, OTP banka Srbija ensured full compliance with the new standards from day one, demonstrating its readiness to support systemic developments of importance to the wider economy. This process relied on an advanced digital architecture and years of investment in modern payment infrastructure and core banking systems. It has facilitated the internationalisation of domestic businesses and opened the way for a new generation of digital financial services. At the same time, the Bank has maintained a strong nationwide presence – with more than 150 branches across over 90 cities and six Business Centres – demonstrating that digital leadership goes hand in hand with reliable inperson support. OTP CONNECT – A HUB FOR STARTUPS, TECHNOLOGY COMPANIES AND THE BANK The OTP Connect innovation ecosystem enables startups and technology companies to develop, test and implement

solutions in partnership with the Bank, creating new opportunities for clients and the wider market. Through this platform, startups can present their products and services and develop tailored solutions to specific business challenges through dedicated Business, R&D and Support Zones. FINANCIAL LITERACY FOR NEW GENERATIONS The Bank places particular emphasis on financial education for children and young people. The unique OTP Junior debit card, designed for young people aged 11 to 18, together with the OTP Junior mobile banking app, was the first solution of its kind on the Serbian market. It enables young users to develop practical financialmanagement skills, while giving parents transparent insight into spending habits and financial behaviour.

Through dedicated credit lines, the Bank supports small and medium-sized enterprises in improving energy efficiency and strengthening competitiveness in both the Serbian and EU markets, while also providing project financing across a wide range of sectors. COMMITMENT TO THE COMMUNITY Through long-term partnerships and targeted initiatives, OTP Bank continues to demonstrate its commitment to the communities in which it operates. For 25 years, the Bank has served as the official bank of the Serbian Olympic Team, reflecting its long-standing support for sport and national values.

Digital transformation creates lasting value when it is combined with responsible finance, innovation and long-term investment in people and businesses. Generator EDU, the Bank’s most award-winning initiative, brought together educators, startups and civil society organisations around the theme of financial literacy last year and received the 2025 Campaign with Purpose Award. GREEN FINANCING AS A STRATEGIC AMBITION FOR THE REAL ECONOMY Sustainability has long been one of the Bank’s strategic priorities and is embedded across all business processes – from risk management and lending to product development and stakeholder engagement. The Bank carefully assesses its environmental impact and operates on the principle that economic growth must be accompanied by the responsible use of resources and long-term environmental stewardship. OTP Bank’s ambition is to become a market leader in green financing, supporting both economic decarbonisation and national development priorities. Building on OTP Group’s expertise, the Bank has developed a portfolio of green financing solutions and transition-support instruments that contribute to the reduction of financed emissions.

The Bank has also supported the Belgrade City Library in developing the first audiobook application on the Serbian market. Together with the publishing house Booka, it has organised a competition for the best unpublished novel for the past four years, providing emerging authors with an opportunity to gain recognition. In partnership with UNICEF, OTP Bank supports maternity wards, premature babies and home-care services, while its unique initiative, Together for a More Solidary Society, encourages charitable giving and community engagement. By combining reliability, expertise and responsibility with the opportunities created by digitalisation and innovation, OTP banka Srbija today stands as a trusted partner for clients, businesses and the wider community – ready to support the ambitions of those shaping the future. SERBIA 2026

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Financing the Next Phase of Growth Nikola Vuletić, Chairman of the Management Board, UniCredit Bank Serbia In a world shaped by geopolitical uncertainty, technological change and new economic priorities, long-term growth depends on the ability to strengthen investment, markets and trust simultaneously.

he global economy is undergoing profound transformation. The energy transition, digitalisation, artificial intelligence and shifting geopolitical dynamics are reshaping the business landscape, while countries around the world seek more sustainable growth models and greater economic resilience. In this environment, the role of financial institutions extends beyond traditional lending to include support for investment, capital market development and economic transformation. We spoke with Nikola Vuletić, Chairman of the Management Board of UniCredit Bank Serbia and President of the Association of Serbian Banks, about his vision for Serbia’s next phase of development. Financial institutions today are expected to support growth, stability and economic transformation simultaneously. What do you regard as the strongest confirmation of UniCredit Bank’s success, and what are the most significant challenges facing Serbia’s banking sector? I believe that the strongest measure of a bank’s success is its ability to remain a stable and reliable partner to its clients, even during periods of significant change and uncertain42

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ty. This year, as UniCredit Bank marks 25 years of operations in Serbia, we can proudly point to strong organic growth, improved efficiency and continued investment in digitalisation, people and new client services. We are particularly proud to have achieved this while maintaining strong capital and liquidity positions, key foundations of trust in the banking sector. At the same time, I believe banks today play a far broader role than that of traditional lenders. They are partners in business transformation, the energy transition, digitalisation and the development of capital markets. The sector’s greatest challenge is the pace of change and the need to respond simultaneously to regulatory, technological and market expectations. We are entering a period in which profitability will depend less on interest rates and more on client relationships, innovation and a bank’s ability to remain relevant in the daily lives of individuals and businesses. You have been leading UniCredit Bank Serbia since 2021, following many years within UniCredit Group and experience across corporate banking, retail banking and risk management. How has this combination of experience shaped your approach to leading the bank through a period of changing economic conditions? Working across different areas of banking has taught me the importance of balancing growth, responsibility and longterm sustainability. My experience in risk management taught me the importance of discipline, resilience and long-term decision-making, while working with both corporate and retail clients helped me better understand their needs and expectations. In periods of economic uncertainty, it is particularly important to remain focused, transparent and close to both cli-

ents and employees. My leadership approach is based on the belief that stability and ambition must go hand in hand, enabling a bank to remain both secure and agile enough to seize new opportunities. Above all, I believe that people are at the heart of every transformation. That is why we have invested heavily in talent development, collaboration and organisational agility. At the end of 2025, UniCredit Bank completed its first issuance of long-term dinar-denominated bonds worth RSD 6 billion, attracting strong interest from professional investors. How important was this step for the development of Serbia’s capital market and the country’s broader financial resilience? It was an important milestone not only for UniCredit Bank, but also for the development of Serbia’s financial market as a whole. Strong investor demand demonstrated confidence in Serbia’s banking sector and growing appetite for long-term dinar-denominated instruments. The development of capital markets is essential to the long-term resilience of any econ-

bia’s economic stability, reform potential and capacity to contribute to discussions on the future of the global economy. For financial institutions, events such as this are particularly valuable because they create space for the exchange of ideas and experience at a time when the global economy is undergoing profound change, from geopolitical tensions and energy challenges to rapid digitalisation and the rise of artificial intelligence. Today, more than ever, banks should not simply observe these changes but actively participate in shaping future economic models. Sustainable long-term solutions emerge through dialogue between academia, business and the financial sector. As President of the Association of Serbian Banks and the head of one of the country’s leading banks, how do you see the role of the banking sector in Serbia’s next phase of development, particularly in terms of investment, digitalisation, sustainable finance and strengthening public trust?

Long-term economic resilience depends not only on access to capital, but also on strong institutions, deep markets and lasting public trust. omy, as it diversifies sources of financing and reduces dependence on traditional funding models. This is particularly important in times of global uncertainty and changing international market conditions. I believe Serbia now has a significant opportunity to further develop its domestic capital market, especially following the achievement of investment-grade status, which opens the door to new investors and more sophisticated financial instruments. Banks have an important role to play in this process, not only as financiers, but also as partners in developing market infrastructure and new investment opportunities. Belgrade will host the 21st World Congress of the International Economic Association in 2026, bringing together the global economic community around the theme of contrasting world visions. What does hosting such an event mean for Serbia, and for financial institutions seeking to contribute to the debate on the future of the economy? Hosting such a major global economic gathering is a significant recognition for Serbia and further confirms that the region is increasingly viewed as a relevant participant in international economic developments. It is an opportunity to showcase Ser-

I believe the banking sector will play an increasingly important role in Serbia’s next stage of development. Banks will remain key drivers of investment and growth while helping to accelerate digital transformation and sustainable development. Digitalisation is no longer a competitive advantage; it has become an expected standard. Clients expect simple, fast and personalised solutions, and banks must strike the right balance between technological innovation and the human approach that builds trust. At the same time, sustainable finance is becoming a defining theme for the sector. As more companies embark on their green transition, financial institutions will play a critical role in supporting that process. Ultimately, trust remains the banking sector’s most valuable currency. In an era of rapid change, responsibility, transparency and long-term stability remain the foundation of relationships with both businesses and citizens. Those principles will continue to guide the sector’s development and its contribution to Serbia’s future. SERBIA 2026

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Competitiveness as Strategy Jasna Terzić, CEO of Erste Bank Serbia At a time of geopolitical uncertainty, technological disruption and shifting development priorities, productivity, innovation and sustainable investment are becoming the defining drivers of long-term economic success.

urope’s economy is facing a complex set of challenges, ranging from the energy transition and technological transformation to the need to strengthen its competitiveness vis-à-vis the United States and China. At the same time, countries across Central and South-Eastern Europe are seeking new growth models based on innovation, sustainability and regional integration. We spoke with Jasna Terzić, CEO of Erste Bank Serbia, about how Serbia and the wider region can capitalise on these changes, the role financial institutions have to play in this process and the foundations on which future growth should be built. Erste Bank is part of one of the leading financial groups in Central and Eastern Europe. How do you assess the potential for further strengthening economic and financial ties between Serbia and Austria, particularly within the context of the European market? Although Austria has long been among Serbia’s largest investors, I believe there is still considerable scope to deepen economic and financial cooperation. As Serbia continues to align with EU rules and standards, the business environment becomes more predictable, which is essential for long-term investment and further strengthens the confidence of international companies, including Austrian investors. The banking sector plays an important role in this process. Groups such as Erste connect markets not only through financing, but also through the transfer of knowledge, technology, standards and best practices from the European Union to the region. Our role is to serve as a bridge between Serbian companies and European markets, while helping EUbased clients better understand the opportunities offered by the Western Balkans.

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Against the backdrop of increasingly complex global challenges, from the energy transition to digital transformation, which sectors do you see as the main drivers of growth in Serbia and the region, and how is Erste positioning its support? In the years ahead, the main drivers of growth in Serbia and the region will be sectors linked to the energy transition, the digital economy and higher-value-added industries. We are already seeing strong investment growth, both from EU funds and private capital, in green projects, renewable energy and business digitalisation. We believe that banks with the capacity and a clear strategy to finance these areas will play a key role in the region’s economic transformation. The Western Balkans also have significant potential in industries such as automotive, electronics and technology, particularly in segments that generate higher value and foster innovation. At the same time, small and medium-sized enterprises remain the backbone of the economy, which is why they continue to be a key focus for Erste Bank. Our commitment to ESG principles remains strong despite global challenges and geopolitical uncertainty. Erste Group is recognised for its strong commitment to sustainable finance. How is this approach reflected in Serbia, and how is the business community responding to ESG and green initiatives? We are among the leaders in Serbia when it comes to financing sustainable business projects and were pioneers in supporting renewable energy and energy-efficiency investments. Although more banks have become actively involved in financing the green transition in recent years, we have maintained our leading position and continue to develop this area together with our clients. Equally important is the growing awareness among businesses of the importance of ESG principles and sustainable operations. We have actively contributed to this through ongoing dialogue with clients, advisory support and educational initiatives focused on ESG and the green transition. Initially, these topics were primarily relevant to large international companies, but today we are seeing increasing interest among small and medium-sized enterprises, as well as the micro-business segment. This demonstrates that ESG and sustainability are no longer simply part of long-term strategies; they are becoming an integral part of day-to-day business and an increasingly important factor of competitiveness. Our ambition is to support companies throughout this transformation by providing both financial solutions and expertise.

The financial sector is undergoing rapid transformation driven by new technologies and changing customer expectations. How is Erste Bank responding to these changes, and what do you see as the foundation of longterm trust in a digital environment? Digital transformation is no longer a matter of choice; it is essential for maintaining relevance and building strong client relationships. The financial sector is evolving rapidly, while customer expectations continue to rise. Clients want services that are simple, fast, accessible and secure. That is why we continue to invest in digitalisation, technological innovation and the enhancement of the customer experience. Our focus is not simply on introducing new technologies, but on using them in ways that create tangible value and make everyday life easier for our clients. At the same time, regardless of the pace of digitalisation, trust remains the most important currency in banking. Security, transparency and the responsi-

In an era of growing geopolitical uncertainty, competitiveness is no longer merely an economic issue – it is becoming a strategic choice. ble handling of customer data are therefore absolute priorities. Long-term trust is built through a combination of technological innovation and a human-centred approach that enables us to deliver modern solutions while remaining a reliable partner. When it comes to regional cooperation, how important are strong banking groups operating across multiple markets and supporting clients through different stages of growth and international expansion? Companies across Serbia and the wider Balkans are increasingly operating on a regional basis, which I see as a natural and positive direction for our economies. In such an environment, strong banking groups with a presence across multiple markets provide valuable continuity and support throughout different stages of growth and internationalisation. Their regional footprint enables them to accompany clients as they expand, offering consistent standards, efficient processes and stronger risk management. Our ambition is to support clients throughout their entire development journey, from entering new markets and securing initial financing to expansion, growth and long-term consolidation. In that process, the international experience, established standards and financial strength of a group such as Erste provide an important foundation for sustainable business success. SERBIA 2026

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Growth of Serbia’s Insurance Market By Duško Jovanović, Secretary General of the Serbian Association of Insurers Serbia’s insurance market continues to expand, although significant structural challenges remain that are still not aligned with European Union standards. The sector has recorded stable growth in total assets, capital, and gross written premium, while at the same time facing long-term sustainability concerns, particularly due to the relatively low share of life insurance within the overall market structure.

ver the past decade, business performance has improved across almost all insurance segments. More effective risk selection and assessment, combined with improved claims management, have contributed to growth in total assets, technical reserves, capital, and insurance premiums. Premium per capita has increased from €83 to more than €200, while total premium volume has risen from RSD 69.4 billion in 2014 to more than RSD 200 billion today. During the same period, the value of settled claims has more than doubled. Particularly significant has been the growth of technical reserves, which have now exceeded €2 billion. In addition to representing a key guarantee of security for policyholders, these reserves also play an important investment role, as the funds are allocated into secure and profitable asset classes. This further strengthens insurers’ ability to meet obligations towards clients while also generating more stable returns and dividends for shareholders. The sector’s positive performance has also been supported by inflation remaining within target levels and the absence of major claims events during the past year. As a result, nearly all insurance companies generated positive results not only

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through investment activities, but also within their core underwriting business. Nevertheless, the market continues to face challenges arising from slower economic activity and declining foreign direct investment inflows. This directly affects expected premium growth, particularly in accident, property, and liability insurance segments. One of the key structural challenges remains the low share of life insurance within total premium volume. At approximately 16 per cent, Serbia’s market remains significantly below European standards, where life insurance typically accounts for around 30 per cent of total premiums. For this reason, stronger public awareness and financial education regarding the importance of life insurance and

One of the key challenges remains increasing the share of life insurance, which currently accounts for only 16 per cent of total premiums, while European standards are almost twice as high. voluntary pension insurance will be essential for preserving long-term living standards. An additional challenge is the low level of insurance coverage in agriculture, despite the fact that the sector represents one of Serbia’s most strategically important industries. Despite these challenges, there are reasons for optimism. Citizens are increasingly recognising the importance of insurance and becoming more aware that, in an environment shaped by growing risks and uncertainty, remaining uninsured represents an increasingly irresponsible approach to protecting personal assets, business operations, and future financial stability.

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The Power of Numbers and the Beauty of Trust Nataša Marjanović, CFA Member of the Executive Board, Sava Insurance Within a system measured in billions, true value is not in the numbers themselves, but in the trust we build and the stability we provide — the kind people recognize, remember and rely on.

hen business success is cleaned of dry spreadsheets and reduced to the most important, what remains are the people, their trust and the stability we provide them. Launching a new development strategy for Sava Insurance is not just an administrative step forward; it is our conscious step forward into a future where technology serves man, not the other way around. This strategy has a strong cover. At the Sava Insurance Group level, we achieved a total premium of approximately 1.2 billion euros. Within that great system, Serbia shines with a special glow. With a revenue of around 70 million euros, we are today the fastest growing market within the entire Group. At the very heart of that success are our two pillars - life and non-life insurance - which today function as one. We build long-term trust and take care of the most valuable experiencing strong growth and serious transformation. It is precisely through digital innovations in non-life insurance that we have become a market leader - recognizable by the fact that we react extremely quickly, reliably and accurately. When we do something, we do it right, and this commitment to quality provides our clients with a foundation they can unconditionally count on. This year we celebrate our jubilee - 20 years of business in Serbia. Twenty years is a serious epoch, behind which are millions of decisions made and kilometers traveled. Each two-decade anniversary carries different stages. For us, the last five years have been a key turning point. In that period, through a clear vision, agility and new energy of the management and the team, we made a serious ascent and trans-

formed the business into what it is today. We are proud of that strong momentum that dictates our present, and our task for the future is to maintain that stability and freedom of creation. Trust is not built in silence. That is why we continuously improve the quality and frequency of communication with our policyholders. We are aware that each client has his own rhythm and needs. That's why we combine the best of both worlds: the speed and efficiency of digital channels for everyday accessibility, but also the irreplaceable warmth of traditional, personal contact. Our goal is that communication is a useful and pleasant dialogue adapted to everyone. None of this would exist without the people behind the scenes of this success. Our strategy of developing a team with character lives among our people. We are building an environ-

After 20 years, our biggest challenge is not change itself, but how to make every change meaningful for our clients. ment of high responsibility and team spirit in which there is no room for a lukewarm approach to work. When you create a space where employees make bold decisions and leave a personal mark, you naturally position yourself as the first choice for those who want more. Our team is our greatest strength. We have shown that we can do a lot, and with this strategy we know we can do even more. Let's move on, with the same inspiration. SERBIA 2026

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The New Economics of Risk Zoran Blagojević, President of the Executive Board of Wiener Städtische Insurance Sustainable growth in insurance increasingly depends on disciplined risk management, climate resilience and the ability to deliver long-term value, rather than competing on price alone.

ncertainty is no longer an exception but a permanent feature of the business environment. Rising claims costs, inflation and climate-related risks are challenging traditional growth models and increasing the need for stronger risk management and prevention. Zoran Blagojević discusses how insurers can balance growth, profitability and long-term sustainability.

Which business models can remain sustainable amid rising claims costs and inflation, and where should the balance be struck between growth and profitability? We no longer live in a world where periods of stability are occasionally interrupted by crises. Uncertainty has become a permanent feature of the business landscape, reshaping how the insurance industry approaches growth, profitability and risk management. Inflation, rising claims costs, climate change and increasingly pronounced geopolitical risks require a far greater degree of underwriting discipline than in the past. I believe that only those business models capable of balancing growth with long-term profitability will remain sustainable. Growth at any cost is not viable, particularly in an industry where risk carries a real price. Companies that attempt to sustain growth through underestimating risk or aggressive price competition are unlikely to preserve profitability over the long term. This is why operational efficiency, digitalisation, high-quality risk assessment and loss prevention will become increasingly important. Organizations that make better use of data can assess risks more accurately, detect fraud earlier, manage claims more efficiently, and optimize their pricing policies. 48

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How can property and agricultural insurance remain sustainable in Serbia amid climate change and more frequent risks, while keeping premiums affordable? Climate change is fundamentally reshaping the risk landscape, particularly in property and agricultural insurance. What was once considered exceptional is rapidly becoming the norm. Floods, storms – including increasingly frequent supercell storms – and other natural disasters are occurring with greater frequency and intensity, challenging some of the traditional assumptions of insurance. At the same time, the protection gap between actual losses and insured losses remains significant. The sustainability of property and agricultural insurance is therefore no longer solely a matter for the insurance industry; it is also a challenge for government, business and society as a whole. Better risk assessment models, greater investment in prevention and a broader understanding that risk has a cost will all be required. Equally important is preserving accessibility and finding the right balance between market principles and social responsibility. How can the non-life insurance market move beyond price competition towards competition based on the value of coverage? Our non-life insurance market remains strongly price-driven, especially in the motor insurance segment. However, I believe clients are increasingly recognising that the lowest price does not necessarily provide the best protection. Over the long term, the market will need to evolve towards a model in which the quality of coverage, speed of service, customer support and risk-management capabilities carry greater weight than the price of a policy alone. Achieving this shift will require continuous market education, stronger financial literacy and greater public trust in insurance as a mechanism of financial security rather than merely a legal obligation. Most clients can easily understand a difference of 20 or 30 euros in the premium, but they often find it difficult to understand differences in the scope of coverage. Therefore, it is important to simplify product communication, clearly explain what is and is not covered, and use practical claim scenarios instead of technical terminology.

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The Lexus and the Olive Tree Darko Popović, President of Banca Intesa Executive Board In an increasingly interconnected world, true progress does not lie in choosing between global reach and local relevance, but in combining both to create meaningful and lasting value where people live, businesses grow and communities evolve.

ver a quarter of a century ago, Thomas Friedman famously captured one of the defining tensions of globalisation through the image of “the Lexus and the olive tree”: the drive for progress, technology and global integration on one hand, and the need for roots, identity and belonging on the other. This powerful image speaks to a question that remains deeply relevant today: does becoming more connected have to mean becoming less ourselves? I do not believe it does. The global and the local are too often treated as opposites. In reality, their relationship is far more complex than a simple contest between the two. The most meaningful progress often happens where they meet. Yet that meeting point is not always easy to navigate, as it requires a genuine understanding of priorities and context. Anyone who has tried to apply a solution that worked perfectly elsewhere to a market with its own history and logic understands this well. It either adapts or it fails. Banking offers one of the clearest examples of this dynamic. Few industries are more deeply connected to international flows of capital, regulation, technology and expertise. Yet for clients, the value of a bank is never abstract. It is not measured by the size of the system behind it, but by the quality, relevance and reliability of the support it provides where people live and businesses grow. A business owner in Niš seeking to expand production does not need a global banking philosophy. What he needs is a relevant product, a convenient channel and focused support. For him, a bank is not a piece of global infrastructure; it is a partner in a decision that may shape the next decade of his business. For Banca Intesa, this is not an abstract idea. It is the way we operate. As the long-standing leader in the Serbian market and part of Intesa Sanpaolo, one of Europe’s leading bank50

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ing groups, we draw on international knowledge, technology, innovation, standards and experience. Our role, however, is not simply to transfer global solutions into the local market, but to make them relevant and meaningful in Serbia. In practice, this means building a digital platform that saves clients time during loan applications and approvals, developing SME financial solutions that reflect the realities of Serbian businesses, committing capital to sustainable projects at a time when many companies are still assessing the implications of the green transition. International scale matters because it allows

International scale matters because it allows us to deliver more locally: with greater stability, stronger capabilities and a longer-term perspective than would otherwise be possible. us to deliver more locally: with greater stability, stronger capabilities and a longer-term perspective than would otherwise not be possible. Perhaps it is time to view globalisation less through the lens of what might be lost and more through the value it can create. In banking, that value is tangible. It is reflected in faster decisions for companies seeking to grow, in products that genuinely fit the way families manage their finances, in greater confidence when planning for the future. Seen this way, the global is not where the local disappears; it is one of the ways the local becomes stronger. Both the Lexus and the olive tree.

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Trust as the New Currency of Banking Vladimir Bošković, CMO, NLB Komercijalna banka Sustainable banking growth will increasingly depend on customer trust, digital excellence, AI adoption, and resilient business models. itive pricing. That is why we measure not only customer satisfaction, but also process speed, the number of steps required to complete a service, and the way digital functionalities are used. Digital experience has become a key driver of trust.

e spoke with Vladimir Bošković, CMO and Member of the Executive Board of NLB Komercijalna banka, about digitalisation, AI, Generation Z, SEPA integration, and the future of banking.

The banking sector is entering a new phase of development. What will define sustainable growth in a period of normalising interest rates? Banks are already adapting their business models so that growth no longer depends solely on interest rates, but increasingly on service quality, digital capabilities, and customer trust. Sustainable models can grow in both high and low interest-rate environments. The key factors will be product diversification, service personalisation, strong risk management, and superior customer experience. The resilience of a business model in changing market conditions, including interest-rate volatility, is becoming a major competitive advantage. Mobile banking has become the primary communication channel with customers. How is this changing product development and client relationships? Today, we primarily design products for mobile devices, which have become the main point of interaction between banks and customers. Clients now expect not only fast and simple digital experiences, but also high-quality service, relevant products, and compet52

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How can a traditional bank remain relevant to Generation Z? Generation Z expects speed, transparency, and personalised experiences, but in finance, trust remains the core value. When making important financial decisions, clients still seek security and expertise. Banks must communicate clearly through the channels younger generations use, while offering strong mobile applications and smart financial tools. The winners will be institutions capable of combining the simplicity of digital services with the security of traditional banking. Where do you see the boundary between automation and human judgement in the use of artificial intelligence? Artificial intelligence enables faster decisions, lower costs, and greater efficiency, which makes automation increasingly necessary. However, when decisions affect a client’s status or a bank’s reputation, human oversight and accountability remain essential. AI used solely to accelerate processes leads to commoditisation, while AI that improves decision-making becomes the foundation of long-term growth and sustainable competitive advantage. What will Serbia’s accession to the SEPA system bring to citizens and businesses? SEPA will deliver lower costs and faster cross-border euro transactions, while improving transparency and efficiency within the payments system. At the same time, service standardisation will intensify competition among banks, shifting the focus towards service quality, customer experience, and additional value for clients. SEPA represents an important step towards Serbia’s deeper integration into the European financial space.

240 mil.€

INVESTMENT IN TOURISM DEVELOPMENT

ASSOCIATED LEGAL ENTITIES

RELIABLE CONSTRUCTION PARTNER 2,500+

15 mil.€

EMPLOYEES

ALLOCATED FOR SOCIALLY RESPONSIBLE PROJECTS

550+

800+

ENGINEERS

w w w. m i l l e n n i u m t e a m . r s

UNITS OF MECHANIZATION 53 SERBIA 2026

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We Are Reshaping the Market Suzana Dubajić, General Manager of Kärcher Serbia Companies today increasingly seek technologies that deliver efficiency, sustainability, and resource savings. Kärcher Serbia is therefore investing in expanding its network, strengthening customer support, and developing solutions tailored to modern market demands.

y reinforcing its local presence and continuously investing in service, training, and digitalisation, Kärcher is building long-term partnerships with clients. The company’s focus is increasingly directed towards technologies that combine performance, sustainability, and operational efficiency.

Kärcher has been rapidly expanding its network across Serbia while strengthening its local presence. How important have investments in customer experience, service support, and market education become compared to product sales alone? In today’s business environment, delivering a machine is only the beginning of the relationship with the client. Longterm trust is built through reliable support, expert advice, and efficient service. That is why Kärcher’s expansion strategy is focused not on traditional retail spaces, but on regional hubs where customers receive comprehensive solutions, professional training, and consulting. Today, whether in industry or households, customers are no longer looking only for equipment, but for complete and sustainable hygiene systems. This includes expertise, spareparts availability, and fast service response. Investing in these areas is a strategic priority because it directly supports operational continuity and long-term partnerships. Sustainability, efficiency, and smart solutions are increasingly central to your strategy. How are the demands of companies and consumers in Serbia evolving? The Serbian market is undergoing a major shift in business thinking. Energy efficiency and resource management are no 54

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longer viewed solely as environmental concerns, while companies are increasingly aligning operations with global ESG standards. At the same time, management focus is shifting from initial purchase costs to total cost of ownership and long-term value. Clients today expect technologies that deliver measurable savings. Our eco!efficiency line significantly reduces the consumption of water, electricity, and cleaning chemicals while maintaining maximum performance. Through automation and digitalisation – including autonomous machines and fleet-management software – we optimise what is most valuable in business today: time. The market has recognised that smart and environmentally responsible solutions are no longer a luxury, but an economic necessity. Kärcher is a company with a long tradition and strong global presence. How challenging is it to preserve the identity of an established brand while responding to rapid technological change? This is probably the greatest challenge facing every global leader, but at Kärcher we see it as a major advantage. Our identity is defined not only by the distinctive yellow colour of our machines, but by a long-standing commitment to quality, engineering precision, and reliability. Remaining faithful to these values does not mean standing still. Kärcher continuously invests in research and development, digitalisation, autonomous systems, and artificial intelligence wherever it creates real value for customers. The key is adapting global innovations to the specific needs of local markets. Tradition gives us stability and expertise, while innovation drives future growth.

SERBIA 2026

BUSINESS

Capital Thrives on Discipline, Not Predictions Stanislava Petković, Executive Director, Vista Rica As competing economic narratives reshape global markets, investors are placing greater emphasis on resilience, diversification and disciplined capital allocation than on predicting a single path for the future. For investors, the challenge is not determining which vision will prevail, but recognising that several scenarios may unfold simultaneously. Asset managers therefore need to build portfolios capable of performing under different conditions. The focus is shifting from predicting the future to preparing for a range of possible outcomes.

s global markets navigate competing economic narratives, investors are increasingly forced to balance the pursuit of returns with the need for resilience. According to Stanislava Petković, Executive Director of Vista Rica, the most effective investment strategies are no longer built around a single vision of the future, but around the ability to allocate capital across different outcomes, manage risk and remain agile in an increasingly uncertain world. The CWV theme explores competing visions of the future. How does this translate into today's investment environment? The global investment landscape is shaped by multiple and often conflicting views of economic development. Some investors continue to believe in the long-term benefits of globalisation, technological innovation and open markets. Others are increasingly focused on geopolitical risks, supply-chain fragmentation and strategic autonomy.

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Has this changed the way investors think about returns? Absolutely. Returns can no longer be viewed in isolation from resilience. The ability to preserve capital during periods of volatility has become just as important as generating growth. Investors are paying greater attention to diversification, risk management and capital allocation. In uncertain markets, resilience becomes a source of competitive advantage. Longterm success depends not only on identifying opportunities, but also on protecting portfolios against unexpected shocks and adapting quickly to changing conditions. One of today's major debates concerns globalisation versus regionalisation. How does Vista Rica approach this dilemma? We do not see it as an either-or choice. Investors will continue to seek opportunities in large global markets, particularly in sectors driven by innovation and scale. At the same time, regional markets are becoming increasingly important due to geopolitical developments, energy security concerns and evolving trade relationships. Our view is that successful capital allocation requires exposure to both trends. Through diversification and active portfolio management, investors can benefit from opportunities emerging at both global and regional levels. In today's environment, flexibility and discipline are often more valuable than making a single directional bet on the future.

BUSINESS

Raising the Standard of Care By Prof. Miloš Bjelović, MD, FEBS(hon) Executive Board Member, European Association for Endoscopic Surgery (EAES). Medical Director for Quality Assurance, Process Improvement, and Standardization. Euromedik System

Over two decades, Euromedik has combined medical expertise, technological investment and organisational excellence to become Serbia’s largest private healthcare system.

ince its establishment in 2002, Euromedik has grown into the largest private healthcare system in Serbia and the wider region, guided by a clear mission: to provide modern, reliable and accessible healthcare supported by the highest professional standards. Over more than two decades, the company has expanded its network, invested in advanced medical technologies and brought together leading healthcare professionals from across Serbia and the region. Today, Euromedik employs more than 1,500 professionals, including over 550 doctors and specialists covering virtually every field of medicine. The system operates through 21 healthcare institutions, with 16 facilities in Belgrade and additional centres in Novi Sad, Subotica, Pančevo, Kruševac and Kragujevac. This expansion reflects not only business growth, but also a long-term commitment to improving access to quality healthcare throughout Serbia. A major milestone came with the opening of the new Euromedik Hospital in Belgrade in December 2025. Covering more than 10,000 square metres, the facility represents one of Southeast Europe’s most advanced private healthcare investments and an important step forward for modern medicine in Serbia. Designed as an integrated medical centre, the hospital brings together key medical disciplines within a technologically advanced environment. Equipped with state-of-the-art diagnostic systems, modern operating theatres and intensive care facilities, it provides comprehensive diagnostics, interventional proce-

dures and a broad range of surgical services, with a strong focus on minimally invasive medicine and contemporary patient care. Yet technology and infrastructure are only part of the story. Euromedik’s reputation has been built on the expertise and dedication of its medical professionals, including leading physicians, professors, academicians and internationally recognised experts, many of whom hold senior positions in European professional associations. At the heart of the organisation is a commitment to continuous improvement. Through clearly defined clinical and operational procedures, rigorous patient safety standards, ongoing professional education and sustained investment in innovation, Euromedik works to ensure safe, efficient and high-quality care across its network. Standards are regularly reviewed and aligned with international best practice.

In modern healthcare, competitiveness is increasingly defined not by size alone, but by the ability to deliver consistent standards, advanced treatment and accessible care at scale. Euromedik also plays an important role within Serbia’s broader healthcare ecosystem. Through cooperation with public institutions and the introduction of modern organisational and medical standards, the company contributes to strengthening healthcare capacity and improving service delivery. As healthcare systems worldwide face growing pressures, effective collaboration between public and private providers is becoming increasingly important. Looking ahead, Euromedik remains focused on expanding access to high-quality healthcare while maintaining a responsible approach towards patients, employees and the wider community. Professionalism, excellence and continuous improvement remain the principles guiding its future development. SERBIA 2026

BUSINESS

Industry, Infrastructure and Long-Term Growth Roman Kratochvil, Business Partner at CE Industries and CEO of Beohemija As European supply chains are redrawn and industrial competitiveness returns to the forefront of policy debates, Southeast Europe is emerging as an increasingly important logistics and manufacturing corridor. Roman Kratochvil discusses investment, industrial transformation and the region's long-term potential. cus is on developing modern industrial systems, strengthening logistics infrastructure and positioning companies for sustainable long-term growth. CE Industries, headquartered in the Czech Republic, was founded by Jaroslav Strnad, one of Europe’s leading industrial investors and entrepreneurs. The Group operates across Europe and the United States in sectors ranging from manufacturing and logistics to rail transportation, infrastructure and strategic development projects. Our approach is based on long-term investment, modernisation and the development of businesses with sustainable growth potential.

oman Kratochvil discusses CE Industries’ expansion across Southeast Europe, the transformation of Beohemija, the growing importance of logistics infrastructure and the role of advanced distribution platforms in strengthening regional competitiveness. Mr. Kratochvil, tell us about your professional journey and your role within the CE Industries Group today. I come from the Czech Republic and have spent many years working on international projects focused on industrial development, logistics and strategic investment. As Business Partner at CE Industries and CEO of Beohemija, my fo-

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How important is Southeast Europe to CE Industries today? Southeast Europe is becoming increasingly important to the future of European industry and logistics. As supply chains evolve and industrial investment patterns shift, the region is strengthening its position as a bridge between Central Europe, the Adriatic and wider international markets. This is why we continue to invest in projects that connect industry, transport and infrastructure. Alongside Beohemija, our investments include the Port of Rijeka and the restructuring of Đuro Đaković, both of which contribute to the development of a more integrated regional industrial ecosystem. Our ownership of the Port of Rijeka and two additional ports further strengthens CE Industries’ position within European logistics networks, enabling more efficient connectivity, improved bulk transport capabilities and greater resilience across key trade corridors. At the same time, we continue to invest in industrial transformation. The Nová hut' steelworks project in Ostrava is a

strong example of our approach to revitalising large-scale industrial assets, improving competitiveness and creating the conditions for long-term growth. CE Industries has extensive experience in the railway industry. Do you see opportunities for further development of this sector in Serbia? Absolutely. Serbia occupies a strategically important position at the intersection of major European transport corridors connecting the Adriatic, Central Europe, Southeast Europe and the Middle East. With decades of experience in rail transportation, railway manufacturing and logistics infrastructure, we believe Serbia has considerable potential to further develop this sector. The country is well placed to benefit from the application of advanced technologies, modern operating models and European standards that have already proven successful elsewhere. We therefore see meaningful opportunities to contribute our expertise to the modernisation and long-term development of Serbia’s railway industry. When did you first recognise Beohemija’s potential? From the outset, Beohemija demonstrated strong fundamentals: talented people, established brands and significant market potential. When we acquired the company in 2021, annual revenue stood at approximately EUR 21 million. By the end of 2025, turnover had exceeded EUR 42 million, effectively doubling the size of the business. At the same time, we have continued investing in production capacity, automation and digitalisation to ensure that brands such as Duel, Selection, Spin and Pompa remain competitive in increasingly demanding international markets. How important is Kaumy SEE to your strategy? Kaumy SEE is one of CE Industries’ most significant strategic initiatives in Serbia. Rather than functioning solely as a distribution company, it represents an integrated operating platform that combines sales, logistics, data management and market analytics. Together with our partner JUSDA Europe, we are developing infrastructure designed to improve efficiency, transparency and responsiveness across the supply chain while

delivering stronger support to customers and partners. Its distinctive value lies in introducing to the Serbian market a European distribution model built around advanced analytics, Big Data management, price optimisation and real-time decision-making. These capabilities are increasingly becoming prerequisites for competitiveness in modern supply chains. Our objective is to make such technologies and operating models more accessible to the Serbian market, creating value both for Beohemija’s existing brands and for future partners seeking long-term growth opportunities in the region. How do you view life in Serbia and the wider region today? Over the years, I have had the opportunity to experience many countries and cultures, but Southeast Europe holds a special place for me. What impressed me most is the authenticity of the people, the

Southeast Europe is evolving from a peripheral market into an increasingly important industrial and logistics corridor within the European economy. character of the region, the energy present in everyday life and business, and a level of hospitality that is increasingly rare. Business, the sea and wine have a unique ability to bring people together, creating friendships and connections that transcend borders and cultures. Through these experiences, I developed a strong personal connection to this part of Europe. Serbia won me over through its people and its wine regions, particularly Fruška Gora, whose wines reflect a distinctive local terroir and remarkable minerality. I have also come to appreciate the beauty of the Adriatic coast, from Croatia to Montenegro, which I consider one of Europe’s most extraordinary natural landscapes. Over time, this region has become an important part of both my professional journey and personal identity. Its combination of entrepreneurial energy, cultural diversity and strategic position continues to create opportunities for long-term growth and cooperation. SERBIA 2026

BUSINESS

Global Standards from Serbia Darko Budeč, Founder and Director of BUCK For more than three decades, BUCK has been developing specialised industrial and tunnel lighting solutions based on in-house development, international standards, and technological innovation.

rigorously on international market, and quality control remains an integral part of our business today.

odern lighting systems today involve far more than manufacturing luminaires — from intelligent control systems to specialised solutions for highly demanding infrastructure projects. It is precisely in this segment that BUCK has successfully positioned Serbian expertise and technology on international markets. We spoke with Darko Budeč, Founder and Director of the company, about exports, innovation, and the future of smart lighting solutions. UCK operates in dozens of international markets B and cooperates with leading global partners. How difficult was it to build a company in Serbia capable of meeting the highest standards of the European lighting industry? It was not difficult in terms of knowledge or technology, but it certainly took longer than it would have for a company from Western Europe. We entered international markets very early and gradually developed our own know-how, laboratory, and internationally trained teams. From the very beginning, we focused on quality, certification, and continuous product control. At the same time, high-tech products with strong added value are not typically expected from Serbia, while we develop specialised lighting systems for highly demanding working environments. This meant we had to prove ourselves more

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Smart and energy-efficient lighting systems are becoming increasingly important. How will these technologies change industrial and public spaces? Intelligent control systems have effectively become the standard for high-quality lighting. We cooperate with leading global companies, but over the past decade we have also developed our own solutions, particularly for projects where commercial systems could not meet highly specific technical requirements. This is especially relevant in tunnel lighting and complex retrofit projects. We are increasingly evolving towards the

We are increasingly moving towards the role of a systems integrator, with in-house development capabilities and solutions for the most demanding projects. role of a systems integrator capable of delivering complete intelligent lighting solutions, not just products. Which project would you currently highlight as the most important for BUCK? We are currently working on a highly complex railway tunnel lighting project for the Austrian railways, which is expected to become operational this year. It is an extremely demanding project, and we believe that only a small number of European companies are capable of delivering similar solutions. We believe our product is technologically the most advanced in this field, and that is where we see our key competitive advantage.

BUSINESS

Building Industrial Resilience Valjaonica bakra Sevojno Through continued investment in production modernisation, energy efficiency, and export growth, Valjaonica bakra Sevojno continues to reinforce the strategic importance of domestic industry in a period of global economic transformation.

aljaonica bakra Sevojno today represents one of the strongest examples of industrial continuity and export competitiveness within Serbia’s manufacturing sector, with production closely integrated into European markets and international industrial supply chains. Last year, the company marked 75 years of operations, during which it grew into one of the region’s most significant producers of copper products and copper alloys. A substantial share of production is export-oriented, positioning the company among the important exporters within Serbia’s processing industry. In recent years, the company has intensified investment in production modernisation, energy efficiency, and technological upgrading in order to strengthen competitiveness and respond to increasingly demanding industrial standards. Particular emphasis has been placed on production flexibility, higher value-added products, and expanding presence in international markets. The importance of industrial systems of this scale extends well beyond manufacturing itself. At a time of accelerated

global change, companies capable of maintaining export stability, strengthening domestic industrial capacity, and continuing to invest in modernisation play an increasingly important role in broader economic resilience. This is reflected in the company’s growing participation in major economic and investment forums in Serbia, where industrial policy, domestic production, and long-term investment strategies are receiving renewed attention. At this year’s Kopaonik Business Forum, particular emphasis was placed on the importance of domestic investment and industrial development as key drivers of sustainable economic growth. The company’s strategic relevance was further underscored by the recent visit of the Prime Minister of Serbia and the Minister of Defence to the production facilities in Sevojno, during which the importance of the copper industry for the national economy, exports, and technological development was highlighted.

Maintaining strong domestic industry and export competitiveness is becoming one of the key foundations of Serbia’s long-term economic resilience. As the global economy enters a new phase of industrial and energy transition, copper is becoming one of the strategically most important raw materials of the modern economy — from energy infrastructure and transport to electromobility and advanced technologies. Companies with long-standing industrial expertise, developed production capacity, and strong international market integration are therefore likely to play an increasingly important role in the future industrial development of the region. SERBIA 2026

BUSINESS

Vrnjačka Banja 365 Boban Đurović, President of the Municipality of Vrnjačka Banja From a traditional spa resort to a modern regional destination, Vrnjačka Banja is now building its development strategy around luxury tourism, investment, and a year-round hospitality model. Maintaining a balance between investment-driven growth and preserving the authentic spirit of the royal spa remains our highest priority. All projects are carefully planned through strict urban regulations and strategic planning documents, while our parks and natural springs are protected as the destination’s most valuable heritage assets. At the same time, we continue investing in environmental innovation and digital services that improve both the visitor experience and the daily lives of local residents. The economic benefits of tourism are directly reflected in the community through new jobs and investments in infrastructure, schools, and kindergartens.

ntensive investment activity, the expansion of luxury hotels, and new projects on Mount Goč have significantly reshaped Vrnjačka Banja’s position on the regional tourism map in recent years. Boban Đurović, President of the Municipality of Vrnjačka Banja, discusses the destination’s strategic development, sustainability ambitions, and future investment plans. rnjačka Banja has undergone a strong investment V and infrastructure cycle in recent years. How much has its position on the regional tourism map changed, and what do you see as the next major development step? Vrnjačka Banja has successfully completed its transition from a traditional spa resort into a regional destination attracting renowned hotel brands and major investments. Today, we are recognised as a destination associated with luxury wellness and year-round tourism. An important part of this development is Mount Goč, which will soon be connected to the town centre by a modern gondola system, opening an entirely new dimension of our tourism offer. Our next strategic step is to position Vrnjačka Banja as a “smart and green” destination by fully activating its natural, sports, and cultural potential throughout all 365 days of the year. ow do you balance rapid development with preserving H the destination’s identity and the quality of life of the local community?

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V rnjačka Banja increasingly combines tourism, investment, sport, wellness, and the congress industry. How important is strategic planning for long-term competitiveness? Long-term strategic planning is no longer an advantage — it is a prerequisite for remaining competitive. Local governments must act not merely as administrators, but as active creators

Our next strategic step is to position Vrnjačka Banja as a ‘smart and green’ destination with attractions and activities available throughout all 365 days of the year. of the business environment and drivers of destination development. We recognised early on that combining congress tourism, sports, wellness, and cultural events would strengthen stability and reduce seasonality. When local authorities provide a stable infrastructure and development framework, investors respond with far greater confidence. Only through an integrated approach can we maintain a leading position among regional tourism destinations over the long term.

GLOBAL ECONOMIC THOUGHT Ideas. Perspectives. Solutions Shaping a More Prosperous Future.

SERBIA 2026

OPINION

America’s New Age of Empire By Joseph E. Stiglitz NEW YORK – US President Donald Trump has drawn a wave of criticism for his actions

in Venezuela, violations of international law, disdain for longstanding norms, and threats against other countries – not least allies like Denmark and Canada. Around the world, there

is a palpable sense of uncertainty and foreboding. But it should already be obvious that things will not end well, neither for the United States nor the rest of the world.

one of this comes as a surprise to many on the left. We still remember US President Dwight Eisenhower’s valedictory warning about the industrial-military complex that had emerged from World War II. It was inevitable that a country whose military spending matched that of the rest of the world combined would eventually use its arms to try to dominate others. To be sure, military interventions became increasingly unpopular following the American misadventures in Vietnam, Iraq, Afghanistan, and elsewhere. But Trump has never shown much concern for the will of the American people. Since he entered politics (and no doubt earlier), he has considered himself above the law, boasting that he could shoot someone on New York’s Fifth Avenue without losing a vote. The January 6, 2021, insurrection at the US Capitol – whose anniversary we have just “celebrated” – showed that he was right. The 2024 election reinforced Trump’s hold on the Republican Party, ensuring that it will do nothing to hold him accountable. The capture of Venezuela’s dictator, Nicolás Maduro, was brazenly illegal and unconstitutional. As a military intervention, it required congressional notification, if not approval. And even if one stipulates that this was a case of “law enforcement,” international law still requires that such actions be pursued through extradition. One country cannot violate another’s sovereignty or snatch foreign nationals – let alone heads of 64

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state – from their home countries. Israeli Prime Minister Benjamin Netanyahu, Russian President Vladimir Putin, and others have been indicted for war crimes, but no one has proposed deploying soldiers to seize them wherever they happen to be. Even more brazen are Trump’s subsequent remarks. He claims that his administration will “run” Venezuela and take its oil, implying that the country will not be permitted to sell to the highest bidder. Given these designs, it would appear that a new era of imperialism is upon us. Might makes right, and nothing else matters. Moral questions – such as whether killing dozens of alleged drug smugglers without any pretense of due process – and the rule of law have been shunted aside, with barely a whimper from Republicans who once proudly touted American “values.” Many commentators have already addressed the implications for global peace and stability. If the US claims the Western Hemisphere as its sphere of influence (the “Donroe Doctrine”) and bars China from accessing Venezuelan oil, why shouldn’t China claim East Asia and bar the US from accessing Taiwanese chips? Doing so would not require it to “run” Taiwan, only to control its policies, particularly those allowing exports to the US. It is worth remembering that the great imperial power of the 19th century, the United Kingdom, did not fare well in the 20th. If most other countries co-

operate in the face of this new American imperialism – as they should – the long-term prospects for the US could be even worse. After all, the UK at least tried to export salutary governing principles to its colonies, introducing some modicum of the rule of law and other “good” institutions. By contrast, Trumpian imperialism, lacking any coherent ideology, is openly unprincipled – an expression solely of greed and the will to power. It will attract the most avaricious and mendacious reprobates that American society can churn up. Such characters do not create wealth. They direct their energy to rent-seeking: plundering others through the exercise of market power, deception, or outright exploitation. Countries dominated by rent-seekers may produce a few wealthy individuals, but they do not end up prosperous. Prosperity requires the rule of law. Without it, there is ever-present uncertainty. Will the government seize my assets? Will officials demand a bribe to overlook some minor peccadillo? Will the economy be a level playing field, or will those in power always give the upper hand to their cronies? Lord Acton famously observed that, “Power corrupts, and absolute power corrupts absolutely.” But Trump has shown that one does not need absolute power to engage in unprecedented corruption. Once the system of checks and balances starts to fall apart – as indeed it has in the US – the powerful can operate with impunity. The costs will be borne by the rest of society, because corruption is always bad for the economy. One hopes that we have reached “peak Trump,” that this dystopian era of kakistocracy will end with the 2026 and 2028 elections. But Europe, China, and the rest of the world cannot rely on hope alone. They should be devising contingency plans which recognize that the world does not need the US. What does America offer that the world cannot do without? It is possible to imagine a world without the Silicon Valley giants, because the basic technologies they offer are now widely available. Others would rush in, and they may well establish much stronger safeguards. It is also possible to imagine a world without US universities and scientific leadership, because Trump has already done his utmost to ensure that these institutions struggle to remain among the world’s best. And it is possible to imagine a world where others no longer depend on the US market. Trade brings benefits, but less so if an imperial power seeks to grab a disproportionate share for itself. Filling the “demand gap”

Joseph E. Stiglitz

A Nobel laureate in economics

posed by the US’s persistent trade deficits will be a lot easier for the rest of the world than the challenge facing the US of dealing with the supply side. A hegemon that abuses its power and bullies others must be left in its own corner. Resisting this new imperialism is essential for everyone else’s peace and prosperity. While the rest of the world should hope for the best, it must plan for the worst; and in planning for the worst, there may be no alternative to economic and social ostracism – no recourse but a policy of containment. Joseph E. Stiglitz, a Nobel laureate in economics, is a former chief economist of the World Bank, a former chair of the US President’s Council of Economic Advisers, University Copyright: Project Syndicate, 2026. www.project-syndicate.org SERBIA 2026

OPINION

Development Finance Must Shift Away from Aid By Justin Yifu Lin and Yan Wang

BEIJING – Traditional donors have sharply scaled back their aid commitments to developing countries over the past year. Some, like the United States, have virtually eliminated their

aid programs. According to the Organisation for Economic Co-operation and Development (OECD), official development assistance (ODA) from member countries declined by 7.1% in 2024, its first annual drop in six years.

his trend was not limited to a few major donors. Of the 33 members of the OECD’s Development Assistance Committee (DAC), 22 slashed their aid budgets, and only four countries met the United Nations’ target of allocating 0.7% of gross national income to ODA. The outlook for the coming year offers little hope for improvement, as major DAC donors have announced additional cuts. Most notably, US President Donald Trump’s administration has suspended most foreign aid and dismantled the Agency for International Development (USAID), which dispersed most US government aid dollars. Meanwhile, the United Kingdom plans to reduce aid spending from 0.5% of GNI to 0.3% by 2027. Similar retrenchment across Europe and North America is reshaping international assistance, disrupting humanitarian and climate-related programs, and creating financing gaps in critical sectors such as health, education, and clean energy. In our 2017 book Going Beyond Aid, we urged developing-country governments to reduce their dependence on foreign aid, not only because it was becoming an unreliable source of funding, but also because other, 66

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better ways of financing development were becoming more available. That message is more urgent than ever. As reliance on aid becomes untenable, the international community must mobilize a broader array of financing sources to advance green and sustainable growth. This includes national development banks, industrial investment funds, sovereign wealth funds, and institutional investment in public markets, as well as innovative mechanisms such as debt swaps and public-private partnerships (PPPs). These tools can unlock domestic resources, attract long-term investors, and create synergies between public goals and private capital. Equity investment offers a promising avenue for engaging non-traditional development partners while reducing developing countries’ dependence on debt. Government investment funds, public and private financial institutions, and other private actors can participate by taking equity stakes in public enterprises, financing infrastructure projects, or joining PPPs. Such participation not only alleviates debt burdens but also improves the performance and management of public assets. As government-funded, mission-driven institutions, public development banks (PDBs) have the po-

tential to provide patient capital for green and sustainable investment in emerging and developing economies (EMDEs). Building on the pioneering database of public development and financial institutions created by the Institute of New Structural Economics at Peking University, future research can identify effective ways to harness these institutions to fuel low-carbon growth. Responding to growing demand from the economies of the Global South, development partners have increasingly adopted an “entire value chain” approach to the green transition in recent years. This strategy facilitates transfers of low-carbon technologies, diffusion of digital innovations (including trade in services), and industrial modernization, enabling countries included in China’s Belt and Road Initiative (BRI) to accelerate their shift toward sustainable development. Empirical research supports this approach. An analysis covering 139 countries finds that, following policy directives to incorporate green and low-carbon principles into the BRI, carbon intensity (CO₂ emissions per unit of GDP) among participating countries declined significantly between 2013 and 2022. These findings are consistent with another recent study showing how China’s solar-energy expansion has helped transform Africa’s power sector. Investment in infrastructure and industrial development can also generate positive spillover effects. Evidence from Sub-Saharan Africa shows that the presence of at least one Chinese-financed infrastructure project in a second-order administrative region (comparable to a municipality) is associated with a 5% increase in nighttime luminosity – a widely used proxy for economic activity. Neighboring regions experienced a 10-15% rise in luminosity, indicating that the benefits of such projects extend well beyond the immediate investment site.

Justin Yifu Lin Former Chief Economist and Senior Vice President of the World Bank

Yan Wang

Senior Academic Researcher at Boston University’s Global Development Policy Center

technology, and digital connectivity, including fintech solutions, to support EMDEs. Importantly, such collaborations should be viewed as a mutual learning process in which partners assume complementary roles and shared responsibilities. To be sure, there have been missteps along the way. China’s financing of coal-fired power plants before 2021, for example, had slowed reduction in CO₂ emissions. But these outcomes, once recognized as policy errors, can help strengthen accountability and foster self-correcting mechanisms within the international development ecosystem. Through ongoing learning and adaptation, global partners can build a more resilient, inclusive, and sustainable framework for development finance.

These outcomes underscore the critical role of infrastructure investment, particularly in energy and transportation projects. By improving electricity access, affordability, and connectivity, they reduce energy poverty, bolster public services, and stimulate economic activity in underserved areas.

Justin Yifu Lin, a former World Bank chief economist and Senior VP, is the honorary dean of the National School of Development and director of the Institute of New Structural Economics at Peking University. Yan Wang is Senior Academic Researcher at Boston University’s Global Development Policy Center.

To meet the evolving challenges of development finance, both traditional and non-traditional donors and creditors should move beyond aid and adopt multidimensional strategies that combine trade, investment, infrastructure, green

Copyright: Project Syndicate, 2025. www.project-syndicate.org Accompanying this commentary is a chart, which you can download here. SERBIA 2026

OPINION

Two Models for Agentic AI By Daron Acemoglu BOSTON – AI “agents” are coming, whether we are ready or not. While there is much un-

certainty about when AI models will be able to interact autonomously with digital plat-

forms, other AI tools, and even humans, there can be little doubt that this development will be transformative – for better or worse. Yet despite all the commentary (and hype) around

agentic AI, many big questions remain unaddressed, the biggest being which type of AI agent the tech industry is seeking to develop?

ifferent models will have vastly different implications. With an “AI as adviser” approach, AI agents would offer individually calibrated recommendations to human decision-makers, leaving humans always in the driver’s seat. But with an “autonomous AI” model, agents will take the wheel on behalf of humans. That is a distinction with profound and far-reaching implications. Humans make hundreds of decisions every day, some of which have major consequences for their careers, livelihoods, or happiness. Many of these decisions are based on imperfect or incomplete information, determined more by emotions, intuitions, instincts, or impulses. As David Hume famously put it, “Reason is and ought only to be the slave of the passions.” Humans may make most decisions without systematic reasoning or due attention to the full implications, but as Hume recognized with the “ought” part of his statement, this isn’t all bad. It is what makes us human. Passion reflects purpose, and it may also play a key role in how we cope with a complex world. With AI advisers that provide customized, reliable, context-relevant, useful information, many important 68

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decisions can be improved, but human motives will remain dominant. But what’s so bad about autonomous AIs making decisions on our behalf? Couldn’t they improve decision-making even further, save time, and prevent errors? There are several problems with this perspective. First, human agency is critical for human learning and flourishing. The very act of making decisions and contemplating outcomes – even if the inputs and advice come from nonhuman agents – affirms our own sense of agency and purpose. Much of what humans do is not about computation or collecting inputs to decide on an optimal course of action; rather, it is about discovery – an experience that will become increasingly rare if all decisions are delegated to an AI agent. Moreover, if the tech industry mainly pursues autonomous AI agents, the likelihood of automating more human jobs will increase substantially. Yet if AI becomes primarily a means of accelerating automation, any hope of widely shared prosperity will be dashed. Most importantly, there is a fundamental difference between AI agents acting on behalf of humans and hu-

mans acting for themselves. Many settings in which humans interact have both cooperative and conflictual elements. Consider the case of one company providing an input to another. If this input is sufficiently valuable to the buyer, a trade between the two companies is mutually beneficial (and typically also benefits society). But for there to be any exchange, the price of the input must be determined through an inherently conflictual process. The higher the price, the more the seller will benefit relative to the buyer. The outcome of such bargaining is often determined by a combination of norms (such as about fairness), institutions (such as contracts that will impose costs if violated), and market forces (such as whether the seller has the option of selling to somebody else). But imagine that the buyer has a reputation for being completely uncompromising – for refusing to accept anything but the lowest feasible price. If there are no other buyers, the seller may be forced to accept the low-ball offer. Fortunately, in our day-to-day transactions, such uncompromising stances are rare, partly because it pays not to have a bad reputation and, more importantly, because most humans have neither the nerve nor the aspiration to act in such aggressive ways. But now imagine that the buyer has an autonomous AI agent that does not care about human niceties and possesses nonhuman steely nerves. The AI can be trained always to adopt this uncompromising stance, and the counterparty will have no hope of coaxing it toward a more mutually beneficial outcome. By contrast, in an AI-as-adviser world, the model might still recommend an uncompromising position, but the human would ultimately decide whether to go down that path. In the near term, then, autonomous agentic AIs may usher in a more unequal world, where only some companies or individuals have access to highly capable, credibly hard-nosed AI models. But even if everyone eventually acquired the same tools, that would not be any better. Our entire society would be subjected to “war-of-attrition” games in which AI agents push every conflictual situation to the brink of breakdown. Such confrontations are inherently risky. As in a game of “chicken” (when two cars accelerate toward each other to see who will swerve away first), it is always possible

Daron Acemoglu

A 2024 Nobel laureate in economics and Institute Professor of Economics at MIT

that neither party will cave. When that happens, both drivers “win” – and both perish. An AI that has been trained to win at “chicken” will never swerve. While AI could be a good adviser to humans – furnishing us with useful, reliable, and relevant information in real time – a world of autonomous AI agents is likely to usher in many new problems, while eroding many of the gains the technology might have offered. Daron Acemoglu, a 2024 Nobel laureate in economics and Institute Professor of Economics at MIT, is a co-author (with Simon Johnson) of Power and Progress: Our Thousand-Year Struggle Over Technology and Prosperity (PublicAffairs, 2023). Copyright: Project Syndicate, 2025. www.project-syndicate.org SERBIA 2026

OPINION

The Impact of Trump’s Tariffs on Latin America By Eugenia Andreasen SANTIAGO – A year into US President Donald Trump’s second term, his trade threats have proved more restrained in practice than the sweeping tariff war many initially anticipated. Instead, his administration has used high import duties as a negotiating tactic, as demonstrated by the many delays and exemptions. While the average effective tariff rate on US imports has increased sharply, from 1.5% in 2022 to 17% in 2025, the impact of Trump’s “Liberation Day” tariff announcement last April has been more subdued than expected.

he economies of Latin America and the Caribbean (LAC) have fared relatively well so far, with their exports to the US facing an average effective tariff of roughly 10%. This may reflect the region’s long-standing commercial links with the United States, which remains LAC’s most important trade partner: Nearly 44% of LAC’s total exports in 2023 went to the US, which was the source of roughly 31% of its total imports that year. But beneath these averages lie stark differences in trade exposure and export composition. Mexico and countries in Central America and the Caribbean are more exposed to the US market than their South American counterparts. While LAC exports to the US are heavily weighted toward agricultural goods, food products, and primary commodities, Mexico accounts for most of the manufactured exports from the region – particularly vehicles and auto parts – owing to its deep industrial integration with the US. The average effective US tariff rate for LAC, which pales in comparison to the roughly 20% duty imposed 70

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on Southeast Asia’s major manufacturing economies, understates the diversity of outcomes across the region. LAC countries have been subject to widely different tariff regimes, ranging from broadly defined “reciprocal” rates, typically in the 10-15% range, to highly targeted measures affecting specific countries and products. The highest average effective tariffs apply to Brazil (roughly 33%, although at one point it faced tariffs of up to 50% on select exports), Uruguay (20%), and Nicaragua (18%). Mexico, by contrast, has faced a much lower average effective tariff, around 8%, because more than 85% of its exports are compliant with the US-Mexico-Canada Agreement and thus exempt from the 25% tariff announced in March 2025 (although the agreement will be reviewed this year). Several South American countries have similarly faced below-average tariffs, owing to the large share of their exports – such as copper cathodes, tin, and oil – that fall under exemptions. It quickly became clear that Trump regards tariffs as an effective tool of coercion. Late last year, the administration removed tariffs on some exports from Ar-

gentina, Ecuador, Guatemala, and El Salvador under bilateral framework agreements that give US companies greater market access. But the concessions that the US has sought to extract from its trade partners have consistently extended beyond the commercial realm and into other domains, including drug control, geopolitical alignment, and sensitive domestic political developments. For example, in March 2025, Trump declared that the US could impose a 25% tariff on imports from any country that purchased Venezuelan oil, to be implemented at the discretion of the Secretary of State. The administration later announced 50% tariffs – among the highest it has imposed – on a range of Brazilian exports explicitly for political reasons: Trump wanted to pressure the country to stop the prosecution of former President Jair Bolsonaro. Congressional action and subsequent negotiations substantially watered down the tariffs, with relief granted on several agricultural products. Trump’s pattern of unilateral action followed by bilateral bargaining, in which tariff policy is used as leverage, reflects a global shift toward weaponizing economic tools to pursue broader geopolitical objectives. The uneven effects of this approach, with industries such as auto parts, steel, aluminum, coffee, and agricultural products facing the brunt of the pressure, have prompted strategic responses and trade reconfiguration throughout the LAC region. Legal challenges to Trump’s tariffs, which the US Supreme Court is expected to rule on in the coming months, have added another layer of uncertainty. That uncertainty has reduced foreign direct investment in LAC, with FDI project announcements falling sharply in the first half of 2025 – especially in sectors that rely on exports to the US. At the same time, while exports to the US were temporarily boosted when US firms front-loaded purchases ahead of anticipated tariff hikes, trade flows are adjusting to the new reality. Moreover, LAC’s relatively lower effective tariffs have created opportunities for trade diversion from Southeast Asian economies in sectors such as clothing, medical devices, and agro-industry. The Trump administration’s trade war has not been as damaging for LAC as feared. But the sustained uncertainty has had profound implications for investment, sourcing decisions, and long-term trade relationships. Most of the

Eugenia Andreasen

Assistant Professor of Economics at the University of Chile

region’s economies, with limited scope to confront or retaliate against the United States, have begun seeking stability elsewhere through diversification. The case for diversification – in terms of both extra-regional and intraregional trade – has never been stronger. The new European Union-Mercosur free trade deal underscores the potential gains from deeper integration with reliable partners. Now, LAC countries must look to each other and friendly markets outside the region to continue building a buffer against an increasingly unpredictable US trade policy and uncertain global conditions for trade. Eugenia Andreasen is Assistant Professor of Economics at the University of Chile. Copyright: Project Syndicate, 2026. www.project-syndicate.org SERBIA 2026

OPINION

India’s Middle-Power Dilemma By Ajay Shah NEW DELHI – Canadian Prime Minister Mark Carney has issued a battle cry in the global fight against deglobalization. In a historic speech at the World Economic Forum’s annu-

al meeting in Davos, he called on the world’s “middle powers” to take a new approach to revisionist powers, a list that now includes not only China and Russia, but also the United States. In an era of economic nationalism, Carney thinks that middle powers must band together to uphold a rules-based international order.

an India, the world’s largest middle power, reinvent its foreign policy to meet this moment? Doing so would certainly be to the country’s benefit, as its interests are fully aligned with Carney’s proposed approach. India’s economic success over the last three decades was born out of engagement with the world economy: the miracle of services exports, built on Western technology, financing, and markets. US President Donald Trump’s capricious trade policy took aim at those commercial ties, dealing a serious blow to India. The India-US trade deal that Trump recently announced will supposedly lower US tariffs on India’s goods exports from 50% – among the highest imposed by his administration – to 18% in exchange for India agreeing to halt Russian oil imports and reduce trade barriers. But many questions remain unanswered, and the lack of a rules-based order means that trade friction between the two countries will continue. In this environment, deepening ties with the rest of the OECD economies, which boast a combined GDP of roughly $38 trillion, holds immense potential for India. Indian heft would also help stabilize the international order. Logic dictates that India should focus its diplomatic engagement here, forging the commer72

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cial and technological links required to drive its economic growth. Its new free-trade agreements with the European Union and the United Kingdom are steps in this direction. But this approach is inconsistent with the conventional wisdom of India’s foreign-policy establishment. Many in India have interpreted Carney’s call as a vindication of its traditional non-alignment doctrine. Some commentators have seized on the “middle power” rhetoric to argue for a return to the vision of India’s first prime minister, Jawaharlal Nehru, who believed that India should stand aloof from global affairs, hovering above great-power rivalries. Where does this thinking come from? It reflects deep-seated anti-colonial, anti-Western sentiment. In fact, while India’s stated position for decades was non-aligned, its operational bias tilted toward the Soviet Union. The Indian state’s strategic memory is long: China’s attack on India in 1962, and the Soviet Union’s support for India in the 1971 war with US-backed Pakistan that established an independent Bangladesh, are not historical footnotes. For many in the establishment, they remain formative events. Alongside this, the Indian establishment has long had a penchant for econom-

ic nationalism, with an ever-present tactical willingness to use state power to “protect” domestic firms and workers. Former Prime Ministers Atal Bihari Vajpayee and Manmohan Singh, as well as former foreign ministers Jaswant Singh and Yashwant Sinha, spent years trying to awaken India’s foreign-policy and security establishment to post-Soviet realities. They recognized that, in the 21st century, India’s natural partner is the West. Their impact upon mainstream beliefs was limited. Trump’s behavior has reinforced skeptics’ view that the West is unreliable, and that “strategic autonomy” is India’s only safe harbor. To anticipate how Indian foreign policy will work, we should categorize state capability in foreign policy into three modes. At the most basic level, a state may practice strategic autonomy and make no deals. Policymakers may engage in moral posturing and give stirring speeches while eschewing the compromises required for deep engagement with alliance partners. This would be a bit like a judge who delivers lectures but refuses to issue enforceable orders. The second mode is transactional behavior like that of Trump, resulting in hot-and-cold relationships that fluctuate with the news cycle. The third, most advanced mode is focused on developing values-based alliances, which require long-term, strategic connections in the economic, defense, and cultural domains. Foreign-policy sophistication is where governments accept the need to modify domestic policies to suit their partners, as the security and economic benefits outweigh the loss of absolute sovereignty. But building alliances calls for complex state capability in coordinating between the Ministry of External Affairs and all other arms of the government. Wolf warrior diplomacy is easy; explaining necessary compromises to a domestic audience is hard. After decades of non-alignment and strategic autonomy, India’s foreign policy oscillates between the first and second modes. Authorities are allergic to modifying domestic policy to accommodate external partners. This is also consistent with the non-strategic approach seen more broadly in the Indian state. As a result, India is often isolated, and when its security is threatened – for example by Chinese incursions into its northern borderlands – it is forced to fight alone.

Ajay Shah

Co-Founder of XKDR Forum, a non-profit research organization in Mumbai

State capability doesn’t change quickly. While many in the international community hope that India will participate in a coalition of middle powers to offset American isolationism and Chinese expansionism, such an evolution will be slow at best. The Indian government will likely respond to the current global turbulence with a blend of aloofness and continued engagement with Russia. Ajay Shah, Co-Founder of XKDR Forum, a non-profit research organization in Mumbai, is the co-author (with Vijay Kelkar) of In Service of the Republic: The Art and Science of Economic Policy (Penguin Allen Lane, 2022). Copyright: Project Syndicate, 2026. www.project-syndicate.org SERBIA 2026

OPINION

The Outlook for the US Economy in 2026 By Nouriel Roubini NEW YORK – This has been a bumpy year for the US economy. Although there was a massive boom in AI-related investments, uncertainties caused by President Donald

Trump’s tariffs and other polices curtailed growth in the second half of the year, and

disruptions to official employment and inflation data as a result of the longest-ever government shutdown have further clouded policymakers’ perceptions. The big question now is what 2026 will bring.

here are three possible scenarios. In the baseline case, the US will suffer a growth recession (meaning below-trend GDP growth) for a few months, followed by a recovery and a gradual decline in the inflation rate toward the US Federal Reserve’s 2% target. Think of this as the Goldilocks scenario. In the second scenario, the economy experiences a shallow recession for a few quarters, followed by a slower return to growth than in the first scenario. And the third scenario features a “no-landing” outcome in which growth remains strong but inflation does not fall toward the target rate. The Goldilocks scenario is the baseline because market discipline, good advisers, and a still-independent Fed (notwithstanding Trump’s periodic threats) have already forced the White House to blink and climb down from the high tariffs announced on April 2. Since then, the administration has negotiated various trade deals and frameworks featuring more modest tariff increases (often in exchange for commitments to invest in the United States). As a result, US and global growth have slowed somewhat, but inflation has risen only modestly. 74

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If there is a strong recovery by the middle of next year, it will be driven by several factors: further monetary easing by the Fed; fiscal stimulus that is still in the pipeline (most of the recently legislated spending cuts will not occur until after the 2026 midterm election); strong household and corporate balance sheets; easy financial conditions (owing to high equity prices, low bond yields and credit spreads, and a weaker dollar); and the strong tailwinds from capital expenditures (capex) relating to AI. Moreover, inflation may peak and then start to fall next year as the base effects of tariffs wane, and as technology-driven productivity gains start to reduce costs and unlock new efficiencies. While the second scenario (a short, shallow recession with a slower recovery) cannot be ruled out, it is less likely than the baseline. The effects of tariffs tend to appear with a lag, which means that US trade policies could still push up inflation, thereby eroding real wages and further weakening consumer confidence. There is already talk of an emerging “K-shaped economy” in which high-income households thrive and lower-income households struggle. Business confidence

also could take a hit, especially if concerns about an AI bubble lead to a large equity-price correction and softer capex. But even in this gloomier scenario, the recession would be short and shallow, because the Fed would cut rates more aggressively, and fiscal authorities may intervene with additional stimulus to support economic recovery. Finally, the upside, no-landing scenario cannot be ruled out, because some recent indicators suggest that the economy is more resilient than many previously thought. For example, the apparent slowdown in hiring may be driven by a fall in labor supply – owing to the Trump administration’s crackdown on immigration – and early productivity gains from new or recently adopted technologies. Tight product and labor markets would lift wages and promote overall growth, and core price inflation (excluding food and energy) would remain closer to 3%. In this case, those on the interest-rate-setting Federal Open Market Committee who worry about overheating would have the upper hand, and the Fed may refrain from cutting rates as long as above-potential growth and above-target inflation persist. That said, this last scenario is not the baseline (most likely) because other recent indicators do point to economic weakness. Moreover, various geopolitical headwinds – like a worsening of Sino-American trade tensions and overall relations, or a new conflict that causes oil prices to spike – could always push the economy into the recession scenario. Fortunately, such shocks have largely been contained, and one must hope that they will remain so.

Nouriel Roubini

Professor Emeritus at NYU’s Stern School of Business

If the US economy stages a recovery in 2026, and if the Chinese economy remains resilient and maintains growth close to 5%, the global outlook will improve. Advanced economies and emerging markets alike would be on track for stronger growth compared to what we saw in 2025. Even if important downside risks remain, one can be cautiously optimistic heading into the new year. Nouriel Roubini, Professor Emeritus at NYU’s Stern School of Business, is the author, most recently, of MegaThreats: Ten Dangerous Trends That Imperil Our Future, and How to Survive Them (Little, Brown and Company, 2022). Copyright: Project Syndicate, 2025. www.project-syndicate.org SERBIA 2026

OPINION

Penicillin and American Power By Paolo Surico LONDON – When we think about wartime innovation, we usually imagine dramatic breakthroughs: Alan Turing’s cracking of the Nazi Enigma code, the invention of radar, the Manhattan Project’s development of the atomic bomb. But a less visible biological innovation – the mass production of penicillin – was just as transformative.

lthough Alexander Fleming identified penicillin’s antibacterial properties in 1928, it remained fragile, unstable, and almost impossible to produce in meaningful quantities for more than a decade. It was only during World War II that penicillin was turned into a treatment that could be produced, distributed, and widely used. The stakes could not have been higher. Estimates from military records indicate that during World War I, roughly 12-15% of soldiers wounded in battle died from bacterial infections. For some injuries – most notoriously femur fractures – mortality rates reached 80%, almost entirely due to post-wound complications. Survival often depended less on the severity of the injury than on sheer luck. By the final years of World War II, once the Allies began mass-producing penicillin, medical outcomes changed dramatically. Military records show infection recovery rates of around 95%, far surpassing the efficacy of earlier antiseptics and sulfa drugs. Mortality from comparable wound infections fell to roughly 3-4%, and penicillin is estimated to have prevented tens of thousands of amputations that previously would have been necessary to stop the spread of gangrene. Equally important, it sharply reduced recovery times, shortening convalescence from months to just a few weeks. Mass production of penicillin was as consequential to the Allied war effort as any breakthrough in cryptog76

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raphy or nuclear physics. Despite its formidable scientific capacity, Germany failed to do so. Research efforts began late, remained confined to a handful of university labs, and stalled at the experimental stage, as Nazi scientists lacked access to high-yield strains, advanced fermentation methods, and – most critically – the institutional coordination necessary for large-scale production. The Allied experience was markedly different. From 1941 onward, the United States mobilized its scientific and industrial infrastructure through Vannevar Bush’s Office of Scientific Research and Development, funding parallel research projects across universities, public laboratories, and private firms while absorbing the financial and scientific risks. By adapting deep-tank fermentation techniques – originally developed for food processing and industrial chemistry – 21 American companies, including Pfizer, were able to produce millions of penicillin doses in time for D-Day. Three features of the American innovation system proved decisive. First, penicillin manufacturing could be scaled only because of sustained investment in civilian technologies developed long before the war, such as fermentation, and in microbiology and industrial engineering. This non-military technological base became a strategic wartime asset. Germany, despite its strength in synthetic chemistry, lacked the diversified industrial ecosystem needed to manufacture antibiotics at scale.

Second, the US innovation environment was shaped by a government willing to take risks. At the start of the war, penicillin was experimental, expensive, and highly uncertain, giving private firms little incentive to invest. But President Franklin Roosevelt’s administration recognized that technological progress requires a tolerance for failure. Through the Office of Scientific Research and Development, it financed a wide range of exploratory efforts, fully expecting many to fail. In doing so, it allowed the most promising approaches to emerge and scale. Germany’s more centralized research system, by contrast, emphasized immediate military payoff and discouraged open-ended experimentation. Third, the US built an innovation system that, though dispersed, was highly integrated, linking public investment, academic discovery, and industrial execution. The government set priorities and absorbed early risk; universities and laboratories advanced the science; and private firms translated discoveries into mass production. This division of labor gave the Allies a technological advantage that Nazi Germany, constrained by institutional rigidity, could not replicate. In a recent paper, my co-authors and I argue that the penicillin story illustrates a broader pattern in the evolution of American technology. Since World War II, the most transformative US-led breakthroughs – from semiconductors to biotechnology – have relied on a distinctive institutional framework: publicly funded basic research, strong universities and research institutions, a competitive private sector capable of scaling new technologies, and large social returns from public investment in health and education. Penicillin, initially justified as a defense investment, ultimately had as great an impact on the war as any weapon, and it transformed civilian medicine and global health. In this sense, America’s most powerful wartime asset was not a particular technology but the system that made such breakthroughs possible. Accounts of the Allies’ victory often highlight a narrow set of technological achievements. In reality, the Allies prevailed not simply because they built better weapons, but because they created a deeper, more adaptable innovation ecosystem flexible enough to convert scientif-

Paolo Surico

Professor of Economics at London Business School

ic knowledge into practical, life-saving tools when it mattered most. That system did not emerge by accident. It was the product of deliberate policy decisions that aligned academic research, industrial capacity, and institutional development – a nexus that Donald Trump’s administration is jeopardizing by axing funding for basic research and targeted investment, especially for health (NIH) and science (NSF). Today’s policymakers need to recall the lesson of penicillin’s wartime development: true security depends as much on fostering innovation as on weaponry. Paolo Surico is Professor of Economics at London Business School. Copyright: Project Syndicate, 2026. www.project-syndicate.org SERBIA 2026

OPINION

The Cost of Concentrated Power By Pavle Petrović BELGRADE – The findings of Acemoglu, Johnson, and Robinson on the central role of institutions in economic prosperity and technological progress offer a useful lens for under-

standing Serbia’s current trajectory. At its core, the country’s main structural problem lies in the high concentration of political power, which has skewed economic institutions – the

“rules of the game” – in favor of a narrow group of actors. This shift is constraining domestic entrepreneurship and, ultimately, long-term economic growth.

ver the past decade, Serbia has regressed from an electoral democracy to an electoral autocracy. This shift has been accompanied by a marked deterioration in the rule of law, a weakening of the level playing field, and a significant rise in corruption. As economic institutions have worsened, the domestic private sector has been increasingly constrained, particularly in terms of investment and entrepreneurship. This helps explain the country’s sluggish technical progress, which now poses a growing risk to its long-term prosperity. While Serbia’s per capita income (PPP) stands at about 65% of the level seen in Central and Eastern European (CEE) countries, the economy has recently (2018–2025) grown faster, averaging 3.6% compared to the CEE average of 2.6%, suggesting a degree of convergence. But the structure of that growth is revealing. It has been driven primarily by state investment (42%) and state-supported foreign direct investment (22%). Domestic private investment remains modest, accounting for less than onefifth of the total (19%), while the remaining 17% consists of household investment, largely in real estate. Such a growth model is unlikely to be sustained. Excessive public investment cannot continue indefinitely, and foreign direct investment inflows are already declining. More broadly, this pattern reflects growth driven by increasing inputs – a “brute force” model – rather than by 78

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Pavle Petrović

Member of the Serbian Academy of Sciences and Arts (SASA), Former Chairman of Serbia’s Fiscal Council, and Professor of Economics at the University of Belgrade

Figure 1: Serbia and the EU: Convergence in Total Factor Productivity (TFP)

Source: Petrović, Brčerević, and Minić (2026)

technological progress. As a result, it cannot deliver durable convergence or long-term prosperity. Evidence from total factor productivity (TFP) trends reinforces this concern. Serbia’s technical progress lags behind what would be expected given its level of income by roughly one percentage point. This gap is a direct consequence of a weakened domestic private sector that lacks both the capacity and the incentives to invest and innovate. Over time, this shortfall reduces Serbia’s potential long-term growth by about one percentage point, or roughly one-quarter of its growth potential. These economic outcomes are closely linked to broader institutional dynamics. The concentration of political power has enabled a steady erosion of institutional constraints, allowing the “rules of the game” to be shaped in ways that favor those in power. This occurs both through selective enforcement or reinterpretation of existing laws and through the adoption of new ones designed to serve specific interests. In this context, the distinction between the rule of law and “rule by law” becomes increasingly blurred. The deterioration of political institutions in Serbia has been pronounced. Since 2012, the country has shifted from an electoral democracy to an electoral autocra-

cy, reaching a position by 2025 that places it just one step away from a closed autocracy. Serbia is now grouped with countries such as Belarus, Russia, and Turkey, rather than with its Western Balkan peers, and ranks among the fastest-autocratizing countries globally. This process has been accompanied by a steady decline in the Rule of Law Index, with the trajectory of institutional weakening closely following the erosion of democratic standards. A recent attempt to develop a luxury hotel in Belgrade illustrates how these dynamics operate in practice. The project involved plans to build a Trump-branded hotel on a protected cultural heritage site. To facilitate the investment, authorities initially sought to bypass existing legal protections by pressuring institutions to lift the site’s protected status. When that approach failed, a special law (lex specialis) was introduced to override existing safeguards. The process required additional legal interpretations to address procedural inconsistencies, and the project ultimately collapsed under the weight of controversy. The episode illustrates SERBIA 2026

Figure 2: Progressing Autocracy in Serbia: Liberal Democracy Index

Source: V-Dem Dataset v16 (2026)

Figure 3: Rule of Law Index and Global Rank

Source: World Justice Project

how legal frameworks can be ignored, reinterpreted, or reshaped to accommodate particular interests. Such practices have broader economic consequences. The uneven treatment of investors – with strong protections often granted to foreign investors, while domestic property rights remain less secure – helps explain why domestic entrepreneurship remains subdued. There is also a clear political economy dimension to this imbalance. A strong domestic private sector may be perceived as a political threat, reducing 80

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incentives for those in power to establish a genuinely level playing field. Taken together, these dynamics point to a model of growth that is both fragile and self-limiting. Without stronger institutions, improved protection of property rights, and a more competitive economic environment, Serbia is unlikely to achieve sustained convergence with more advanced economies. The concentration of political power may generate short-term gains, but it comes at a significant long-term cost.

OPINION

How to Feed Ten Billion People By Yurdi Yasmi ROME – With the world struggling to feed eight billion people today, how will we feed ten billion by 2050? Meeting the nutritional needs of a growing population requires not just a

radical increase in food production – almost all of it plant-based – but also a more equitable distribution to ensure that no one is food-insecure.

hat is a tall order. The current food system is already buckling. Roughly 673 million people go to bed hungry every night, and in 2025, we witnessed two famines (in Gaza and Sudan), each driven by conflict, climate shocks, and soaring food prices. At the same time, 1.66 billion hectares – 60% of which are agricultural land – have been degraded by the very practices we rely on to feed the world. Global hunger stems not from a lack of capacity to produce enough food, but partly from our failure to produce it efficiently and distribute it evenly. Conflict and insecurity remain the dominant causes of hunger across 20 countries and territories, leaving nearly 140 million people facing acute food insecurity. Disasters have inflicted an estimated $3.26 trillion in agricultural losses worldwide over the past 33 years – an average of $99 billion annually, or roughly 4% of global agricultural output; and recent supply-driven foodprice spikes have pushed tens of millions of people into hunger almost overnight. Worse, these are not one-off shocks. They represent the new normal. For decades, the agriculture sector has responded well to rising demand by developing higher-yielding crops and using more of everything: more fertilizer, more pesticides, and more water. Yet this trend has produced unnecessary waste, polluted rivers, degraded the soil, and released ever-more greenhouse gases

Yurdi Yasmi

Director of the Plant Production and Protection Division at the Food and Agriculture Organization of the United Nations (FAO)

SERBIA 2026

(GHGs). We need to find a better path, and science can show us the way. We already have the knowledge and the tools to optimize what we use and diversify what we grow. One priority is to improve efficiency. Between 1990 and 2020, fertilizer use rose 46% and pesticide use doubled. But only 30-60% of fertilizer nutrients and 20-70% of pesticides are effectively absorbed; the rest washes into rivers, degrades soil, or releases GHGs. Fortunately, research shows that optimizing nitrogen use can boost yields by up to 19% and slash fertilizer use by 15-19%. Improved pesticide management – through precision spraying, biopesticides, and residue monitoring – reduces chemical waste while safeguarding biodiversity. Agroecological practices – such as intercropping, crop rotation, and integrating trees into farm systems – further enhance soil health, lower input dependence, and strengthen long-term resilience. The next priority is to diversify the food system. Decades of productivity gains have fostered a dangerous dependency on just three crops. Wheat, rice, and maize now provide most of the world’s calories. Such reliance on monocultures creates profound vulnerability to pests, diseases, and climate change. The solution lies in the crops we have marginalized. Traditional and underused species – hardy millets, nutrient-dense legumes, indigenous fruits, robust yams – offer ample nutrition alongside other benefits such as climate resilience. United Nations Food and Agriculture Organization initiatives like Future Smart Food (in Asia) and 100 Crops for Africa demonstrate how these “forgotten” crops can simultaneously expand diets, boost farm incomes, and restore degraded soils. Finally, we must scale up effective technologies. Data analytics and precision-agriculture tools are already reshaping farming. Drones can plant seeds and deliver inputs with pinpoint accuracy. AI platforms can use satellite imagery to provide tailored, real-time recommendations. Robots can detect weeds for targeted spraying, avoiding the need for blanket herbicide applications. Digital soil tests and weather stations can guide day-to-day decisions, and blockchain systems can link smallholders to transparent and traceable markets. Scaling these tools will require substantial investments in agricultural extension services (to promote best 82

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practices), major science-based policy shifts, and knowledge-sharing platforms to help farmers optimize inputs. Likewise, ongoing innovation must be incorporated into local practices, which calls for greater collaboration among governments, investors, the private sector, and farmers. The objective is clear: agriculture must produce more with less – more crop per drop, more calories per kilogram of fertilizer, and more nutrition per hectare – every season, everywhere. That requires replacing one-size-fits-all industrial packages with resilient, context-specific systems finely tuned to local soils, water regimes, crops, and climates. Publicly funded research must lead where markets fall short to ensure equitable access to precision agriculture, while private innovation continues to scale up what works. Knowledge is no longer the bottleneck; political will and aligned incentives are. Even in the face of recurring conflict, drought, and market chaos, stable production and affordable prices are possible. Resilient soils, diversified cropping, and precision management hold the key. A world where nearly everyone eats well, farmers prosper, soils regenerate, waters run clean, biodiversity recovers, and agrifood systems emit minimal GHGs is not utopian. It is the realistic reward for embracing a different agricultural model before the old one collapses. The only question is whether we use the knowledge, science, and proven tools already in hand. Future generations will not ask whether the solutions existed; they will ask what took us so long to implement them. The choice is ours, and it starts with turning science into real-world practice. Yurdi Yasmi is Director of the Plant Production and Protection Division at the Food and Agriculture Organization of the United Nations (FAO). Copyright: Project Syndicate, 2026. www.project-syndicate.org

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