After Economy Minister Rade Basta recently asked the Government to make a statement on the sanctions against Russia, because, as he said, of the high price that Serbia is paying by not imposing sanctions, and Foreign Affairs Minister Ivica Dačić said that Serbia would impose sanctions if its economy and citizens started to suffer irreparable damage from not imposing sanctions, Bojan Stanić from the Serbian Chamber of Commerce says that the deterioration of relations with the EU, due to the refusal to impose sanctions, could cost Serbia dearly.
Stanić adds that, since the beginning of the war in Ukraine, no foreign investors have withdrawn from Serbia, nor have there been announcements of withdrawal. He also points out that it is difficult to assess how much the non-imposition of sanctions against Russia has cost Serbia, but says there is a possibility that this political attitude has influenced, potentially, the decline of direct foreign investments from the countries based in the European Union.
“According to the 2022 data, that is, for the first nine months of that year, we could see a significant drop in investments from the EU, of almost 33 percent, while investments from China have increased significantly, almost 67 percent, so we recorded an overall increase in investments because of that,” Stanić explains.
He also says that it is difficult to separate how much the decline in the share of foreign direct investments from the EU in total FDIs was influenced by Serbia’s rejection to impose sanctions against Russia, and how much by the current crisis in Europe and the slowdown in economic activity.
Stanić points out that, in addition to the fact two-thirds of Serbia’s external trade is with the EU, the favourable geographical position should also be taken into account.
He states that companies that export more than 50 percent of their products to the EU market employ about 370,000 people in Serbia and that the PKS survey showed that possible EU sanctions would negatively affect their revenues and investment opportunities.
He reminds that Serbia had significant growth in trading with the EU in the past year. Of the total exports of Serbia, 64 percent of goods were exported to the European Union. In terms of service export, 70% of services were exported to the USA and the UK.
Agriculture analyst Goran Đaković believes that, in general, domestic agriculture has not suffered much damage because Serbia did not impose sanctions on Russia, but exporters have had a problem with transporting products to the Russian Federation for a long time. The most affected are cold storage companies that export apples, strawberries and cherries. Đakovic says that pet food also has a significant share in exports to Russia.
Some owners of cold storage companies, especially from the Čačak region, complain that the export of apples to Russia has almost completely stopped. Đaković says that the main reason for this is the transportation costs, which have risen significantly.
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