WE CAN ALWAYS DO BETTER

ZORAN PETROVIĆ PRESIDENT OF THE AMCHAM BOARD OF GOVERNORS

National authorities have plenty of room to influence the economic and business environment even under the conditions of a global pandemic. We expect the new Government, as has been the case to date, to work together with us to build a good business environment, but for us to work together more intensively, faster and more efficiently

This year certainly isn’t a regular year for businesses worldwide, and that also goes for AmCham member companies in Serbia. “People’s health is endangered, and we are witnessing that public health systems are extremely sensitive to such shocks, and that they are very quickly overburdened,” says Zoran Petrović, President of the AmCham Board of Governors. “That certainly doesn’t change the fact that, even in these challenging times, businesses must continue to operate under the new conditions.” It is up to governments around the world to show sensitivity and understanding for the given juncture to businesses that must be higher than ever, says Petrović. According to our interlocutor, the Government of Serbia responded fairly quickly, comprehensively and efficiently, helping companies, especially small and medium-sized enterprises, to overcome the first blow of the crisis, primarily in order to maintain relatively stable employment levels. “The rating for the business climate is moderately satisfactory, and that also goes for expectations for 2021, where we see crucial obstacles to an improved business climate in the continuation of the COVID-19 virus epidemic, inefficient public administration

(especially in the areas of taxes, customs, forex operations, because we must no longer allow ourselves to pass laws and property rights, labor and the predictability of legislative regulations concerning the economy without first consulting changes) and the availability of labor,” says the President the economy, or without enough time being set aside to proof the AmCham Board of Governors. vide quality inputs on the contents of regulations. We need, Has COVID-19 caused changes to the business environ- with clear rules of the game, and an environment in which ment and, if so, how? Can we blame the pandemic for all the rules of the game are the same for everyone. When we the changes that have taken place? reach that level, we are left with real market competition and - The viral pandemic has impacted greatly on the way almost real competition for the benefit of citizens, the state, and all companies do business. Digitization processes that had undoubtedly business. We expect the new Government, as already started were further accelerated, and we were has been the case to date, to work together with us to build compelled to reorganize almost all business processes to just such a business environment, but for us to work together the extent and in a way that we continue to provide services more intensively, faster and more efficiently. and deliver our products to our customers. Some coped mustn’t be - to the detriment of the health of employees. together with the Government, to create an environment better, some handled it worse, but they all worked very hard In which areas is it possible to progress, and what kind of and fast to transform their business models. The majority progress can be made? Is that progress in the legislative of AmCham member companies still have more than half of domain or in the practical application of regulations? their employees working from home, and this model is so far - In the annual “Investor Satisfaction and Confidence” survey, yielding good results. The question of what the post-epidemic AmCham member companies consistently point out the period will look like remains, as well as what long-term ef- problems that torment them in doing business. Institutional fects it will have on the way business is done. The last decade reforms are increasingly in the focus of our members, from year to year. Improving the rule of law, the

The opening of the Belgrade office of DFC, i.e. the American efficiency of the judiciary and the fight

Development Bank, will be a positive signal to future investors planning investments in Serbia and the region, but will also provide support to existing investors who plan to expand their business activities in this region against corruption are increasingly mentioned as indispensable preconditions for realizing the effects of any sector-specific reforms. The predictability of amendments to legislation is no less important, while can be dubbed the decade of accelerating and transforming been high on AmCham’s reform agenda for years. Combined business models, and the epidemic only further accelerated progress in all of these areas will provide a positive incentive and forced a shift in those ill-suited changes. It is no less for existing domestic and foreign investors, but also act as important that none of the changes implemented are - and a magnet for attracting new investors. their consistent implementation has What kinds of expectations do your members have: What What are the business sector’s expectations of the new results will they end this year with; and will they manage Serbian government? If we take the Fiat factory in Kraguje- to retain all the workplaces that they provided prior to vac as an example, which repeatedly postponed and halted the pandemic? production due to the global situation, and not due to the - According to research on the negative effects of the situation with the pandemic in Serbia, can we see that as pandemic that AmCham conducted on two occasions, our proof that national governments have very little room to members expect a 25% drop in profitability and a 30% influence the economic environment? drop in investment, but most of them don’t expect to face - National authorities have plenty of room to influence the liquidity problems. The biggest cause of the decline in busieconomic and business environment. Governments are the ness activity, for as many as 68% of respondents, is falling drivers of changes in the business environment, and without demand for products and services, which is particularly political will, and cooperation with the business sector, these evident in the sectors of tourism and hospitality, transport changes come very slowly, and often include cardinal errors. and real estate. Apart from the majority of companies that In other words, without public-private dialogue between the intend to maintain the same number of employees until the state and businesses there is no progress, and that is what end of the year (71%), the number of those that plan to hire AmCham has been principally committed to for many years. new workers (14%) and those expecting to make layoffs We must have a broad, thorough and timely public discourse, (15%) is relatively similar.

Many companies accelerated their digital transformation years already, and domestic private investment, the level of processes and organized work from home during the previous which should be higher. This bank cooperates directly with period. How well ordered is the area of work from home? the private sector, primarily in developing countries. The - The mass directing of employees to work from home sectors that are financed by this bank are usually relate to happened because of the epidemic. This was nothing new the infrastructure, agriculture, health and energy sectors, for many of our member companies, as employees had but also new, advanced technologies. No less importantly, that opportunity before. What was new was that we were DFC pays special attention to the SME sector and the forced to reorganize our businesses so that we could di- development of women’s entrepreneurship. And these are rect most employees to work from home. At this moment, programs that work in cooperation with commercial banks. large sections of employees are still working from home, All of this is important for us, because our economy also while we are trying – depending on the has great potential in the sector of micro epidemiological situation – to return and small companies, and we mustn’t employees to offices bit by bit, following forget that it is just such companies that the instructions of the Governmental represent the backbone of the success crisis task force. Our colleagues from of every economy. It should be noted that the AmCham HR Forum discussed both European institutions, such as the Eurothe positive and negative effects of pean Investment Bank and the European working from home in great detail. They Bank for Reconstruction and Developare considering whether permanent ment, have also been present with their work from home could be a lasting offices in Belgrade for a long time and option for some jobs and some indus- that they have helped, and continue to tries, and it is to be expected – due to help, in the development of the private the new circumstances - that working and public sector, with significant funds. from home will become more frequent than has been the case to date. On the Could the DFC’s arrival influence the deciother hand, there are challenges in the sions of private investors from America individual motivation of employees and to invest more in Serbia? monitoring their performance, but also - The opening of the DFC office in Belin preserving and building a team spirit, grade only serves to further confirm that nurturing the corporate culture and Belgrade is becoming the financial center hiring and introducing new colleagues. of the region and that some projects will There are also sectors in which frequent soon find themselves on the radar of supsocial interaction among employees is crucial, so in that sense the significance of According to research on the negative effects of the pandemic the team, communication and leadership is very important. that AmCham conducted on two occasions, our members expect a 25% drop in profitability and a 30% drop in investment, What could the arrival of America’s De- while expectations vary regarding employment levels velopment Finance Corporation (DFC) mean for Serbia? How can we take advantage of the op- port thanks to the physical presence of the DFC. Alongside portunities provided? the implementation of the mini-Schengen initiative, this will - The opening of the Belgrade office of DFC, i.e. the Ameri- provide a positive impetus to the economic development can Development Bank, will be a positive signal to future of the region, encouraging a faster flow of people, goods, investors planning investments in Serbia and the region, services, and capital. Additionally, it is expected that in the but will also provide support to existing investors who future U.S. companies planning investments in Serbia or the plan to expand their business activities in this region. The region will turn to the DFC for information on the potential arrival in Belgrade of such an important financial institution for investment on the ground, which will help them in making from the U.S. places our country on the list of desirable decisions. Of course, there are still a lot of tasks that we need investment destinations and creates the possibility for us to resolve, and AmCham member companies highlight the to strengthen both the inflow of foreign direct investment, rule of law, corruption and predictability in the adopting of which has contributed to a high share of GDP for several regulations that impact on doing business.