In 15 and a half years, the Serbian state has allocated 928 million euros for foreign and domestic investments. There have been distributed over 342 investment projects, while the value of the investments, which led to the employment of almost 100,000 people, is around 5 billion euros.
This is shown in the analysis of the justification of investments which was recently published by the Ministry of Economy. The Ministry has also concluded that the amount of money allocated to investors by the state treasury has been justified because Serbia has become an attractive investment destination. The fact that Geox has left 1,200 workers without a job overnight by closing its factory in Vranje after the state had given the company over 11 million euros in subsidies, is not worrying because, they say, this was a lone case.
“With the exception of Geox, we have no information that any other company else, even in the year of the pandemic, has closed their factory. On the contrary, all the projects that were launched are ongoing and new investments have been made. We are particularly pleased that we have more than 40 reinvestments,” the Ministry of Economy told Blic Biznis.
However, domestic companies claim that, given the amount of incentives that foreigners receive from the Serbian budget per employee, which range from 2,000 to over 20,000 euro per worker, foreign companies recognise Serbia as a profitable destination where they can generate profit without making significant investments of their own.
Domestic businesses have maintained this position since the beginning of the implementation of the state subsidy measure, claiming that the state has been favouring foreign investors for the past 15 years to the detriment of domestic ones. Research has shown that only 25% of state subsidies ended up in domestic companies and that foreign investors received 14 times more subsidy money than they did.
Professor of the Belgrade Banking Academy, Zoran Grubisic, has a different view on the matter: “We are forced to become a country that attracts capital from abroad, so we offer benefits, subsidies and direct investments where it suits the state. Domestic companies do not have the capacity to invest as much as foreign ones, and that has to been taken into account in terms of the amount of investments and subsidies. Instead, it would be useful for foreign investors to have local companies as subcontractors.”
(Blic, 20.08.2021)
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