Original interview by Biagio Carrano
“Reform is not a matter of convenience, it is a matter of necessity. Even in turbulent times, systems must continue to evolve”, says us Violeta Jovanovic at the beginning of our conversation in the busy offices of NALED (National Alliance for Local Economic Development) in downtown Belgrade, where she is executive director from the foundation. Indeed, in this period Serbia seems all but a country heading toward a clear direction: protesters blocking the crossroads are a good metaphor of the actual social situation, in which political leaders are suspended between violent crackdown and open dialogue with the protest movement lead by students, in turmoil by more than nine month now.
Serbia is experiencing a strong polarization stage, not only in a political sense but also in a social sense. Since last November, roadblocks and protests have been occurring daily in many cities in Serbia. This inevitably affects the actions of the government ministries and the implementation of the reforms suggested by NALED, so much so that in the last twelve months only two of the 100 reform proposals suggested in the previous edition of the Grey Book have been implemented but only partially. Has Serbia therefore given up on reforms?
At NALED, we remain fully committed to supporting reforms that bring tangible benefits to citizens and businesses. Our Grey Book is not a document of wishful thinking – it is a roadmap based on real needs and developed through dialogue with the public, private, and civil sectors.
Serbia, we believe, has not given up on reforms, although we are clearly facing challenging times that hinder the ability of the decision makers to maintain a consistent reform agenda.
While it is true that only two of our 100 recommendations from the previous edition were partially implemented, we see this not as a reason to give up, to the contrary – as a signal to intensify dialogue and remove the political inertia that often surrounds key issues. Many of the reforms we propose, such as simplifying administrative procedures, introducing digital tools, or reducing parafiscal charges, are not politically sensitive. They are simply overdue steps toward a more functional state.
We believe that Serbia’s long-term development depends on our ability to keep reforms alive even in times of uncertainty. That is why we will continue to work with all stakeholders, to ensure that reform does not become a casualty of polarization, but rather its antidote.
The National Alliance for Local Economic Development (NALED) is an independent, non-profit and non-partisan association of companies, municipalities and civil society organizations that continuously work together to create better conditions for life and work in Serbia. From its establishment in 2006 until today, NALED has grown into the largest private-public association that gathers more than 300 members, while the network of partners consists of over 100 state institutions and international organizations.
NALED has positioned itself as a key interlocutor of the Government and Parliament in defining regulatory priorities and legal solutions of importance for the economy of Serbia. Members advocate for an efficient state, reduction of bureaucracy and parafiscal burden on the economy, as well as fair competition.
NALED gives an independent assessment of the work of state institutions and reports to the public and the European Commission on the status of reforms in Serbia, all with the aim of improving the business climate and encouraging the economic development of our country.
NALED’s mission is to improve the economic environment in Serbia through support for economic reforms with the active participation and cooperation of the economy, local self-governments and civil society organizations.
Well, but the reforms are not an abstract exercise, when the reforms are enacted, they must be implemented. Politicized managers and unnecessary hiring of low-skilled people in public administration are two elements that often slow down economic activities and the growth potential of the country. Could you provide examples from other countries that could be applied in Serbia to address these issues?
We fully agree that reforms must not stop at legislation. To achieve results, laws must be duly implemented and institutionalized to produce results. One of the recurring challenges we face in Serbia is the politicization of managerial positions and the lack of strategic workforce planning in public administration. This not only slows down service delivery but also creates inefficiencies that directly affect the economy’s ability to grow and attract investment.
There are several international examples Serbia can look up to when it comes to professionalizing public administration and ensuring that positions are filled based on merit, not political affiliation. Sweden, for instance, has a long-standing tradition of depoliticized, professional civil service. Their recruitment is based on transparent criteria, with a strong emphasis on competence, ethical standards, and long-term career development. Importantly, local governments in Sweden have high levels of autonomy but are held to rigorous accountability standards, especially when it comes to the use of public funds and the performance of public officials. The United Kingdom is another valuable reference. Through its Civil Service Commission, the UK ensures that all appointments are made through open competition and based on merit. Their Cabinet Office provides continuous professional development for public servants and regularly evaluates their work—not for political loyalty, but for impact, efficiency, and service to the public. Their performance-based culture ensures that reforms, once adopted, are not just implemented but monitored and improved over time.
At NALED, we believe that Serbia needs to adopt similar principles, not just through formal rules, but through cultural change in how we view public service. That includes clearer job descriptions, transparent recruitment processes, regular performance evaluations, and most importantly, the political will to prioritize professional competence over short-term interests.
We also see potential for change at the local level, where many municipalities are ready to lead by example if they are provided with adequate support, training, and policy framework. Through our work with local governments, we’re helping build the capacity needed for real reform ownership, not just at the top, but throughout the system.
Ultimately, successful reform is not about drafting a good policy, it’s about ensuring that the people who implement it have the skills, motivation, and independence to do it well.
Since 2008, NALED is publishing the Grey Book, an annual report containing 100 most significant recomendations by businesses, local government and civil society organizations for the regulatory framework improvements and decreasing / eliminating the administrative obstacles to doing business in Serbia. Grey Book is the result of the dialogue among the NALED’s members about how to improve the ways of doing business and efficiently managing the local administration.
The digitalization of administrative and fiscal procedures is the main choice to eliminate bottlenecks and arbitrariness. However, the digital literacy of users and public employees is also necessary. Furthermore, digitalization requires significant investments, not least in the interconnection between the government ministries and in cybersecurity. What is NALED’s experience in this regard?
Over the past two decades, NALED has been one of the key partners to the Serbian government in advancing digital transformation, particularly in administrative and fiscal procedures. We have spearheaded and supported flagship initiatives such as the introduction of the ePermits system for construction, the eInspector platform, and most recently, eInvoices for businesses and public sector entities. Additionally, together with partners from the Government of Serbia and the Office for IT and eGovernment, we worked on launching eCounters for citizen registration and account creation on the eGovernment Portal in almost all municipalities across Serbia, thereby contributing to the increase in the number of eCitizens, which today exceeds 2.5 million.
These systems have shown that digital tools can drastically reduce bureaucracy, improve transparency, and limit discretion in decision-making. However, as you rightly point out, the success of digitalization depends not only on the existence of platforms—but also on the capacity of people to use them.
This is why NALED strongly advocates parallel investment in digital literacy, for both civil servants and citizens. We’ve organized numerous training programs at the local level and worked to build digital skills among municipal staff, particularly in smaller communities where resources are limited. Among these, we particularly highlight 15 training sessions for over 650 local officials on the use of the new Pisarnica software solution, which enables an almost complete transition of administration to electronic office management. We also organized training sessions on the use of the new eArhiv software and electronic archiving, attended by over 200 employees from all 38 public archives in Serbia, as well as 70 officials from local self-governments and 100 representatives of private companies. Additionally, we held four cycles of trainings on information security, raising awareness and strengthening the capacities of local officials, in cooperation with the National CERT of Serbia – RATEL, for over 200 participants. We also provided support to state institutions in the implementation of the new eInvoicing system by organizing nearly 30 training sessions for representatives of the public and private sectors, which were attended by almost 1.500 participants.
In addition, interoperability between institutions remains one of the biggest challenges. Too often, systems are built in silos, without full integration or data sharing. A great example is the above mentioned Pisarnica software. The Government has initiated the implementation of this unified software intended to enable electronic case management and document exchange between institutions. However, many local governments began developing their own systems several years ago, which now need to be integrated with the national solution, something that is not always a simple task. NALED has consistently called for the development of a unified data infrastructure and inter-ministerial coordination, which are critical for reducing redundancies and improving user experience.
Another area where investment is crucial is cybersecurity. As services move online, the potential risks increase—especially when dealing with sensitive data related to health, taxes, or social benefits. We have emphasized the need for national standards and mandatory protocols in cybersecurity across all levels of government. Last year, in cooperation with TAG International and the British Embassy in Belgrade, we developed highly useful cybersecurity guidelines for local governments and small and medium-sized enterprises in Serbia. These guidelines offer practical information on how to recognize a cyberattack, how to respond, and how to protect oneself in order to reduce the risk of potential cyber threats
In short, digitalization cannot be approached in isolation. It must be seen as part of a broader reform effort that includes people, processes, infrastructure, and long-term sustainability. Our experience has shown that when these elements are aligned, digitalization delivers both efficiency and trust in institutions.
Sometimes, implementing reforms is expensive and puts constraints on budgets, human resources, and mentality. But what are the costs of not implementing reforms for an efficient public administration that serves both citizens and businesses? In this phase of polarization, are reforms a luxury or a necessity, and why?
Reforms are not a luxury; they are a necessity. And the real cost is not in implementing them, but in failing to do so. When reforms are postponed or only partially adopted, we don’t save money, we pay a higher price in the long run: through stagnation, inefficiencies, lost investments, rising public dissatisfaction, and the emigration of our most talented people.
In this phase of social and political polarization, reforms become even more important. They are the only stable ground we can build on. Efficient public administration, clear rules, accessible digital services, these are not abstract goals. They are what allow citizens to trust the system, and businesses to plan and grow.
Yes, reforms require investment – in time, in people, and in mindset. But the absence of reform means accepting a system that is not serving its purpose. That’s why at NALED, we continuously advocate for reforms that are not ideologically driven, but evidence-based and focused on outcomes: simpler procedures, fairer rules, smarter institutions. Because that is the only way to turn polarization into progress.
The Worldwide Governance Indicators (WGI) by the World Bank showed that Serbia scored 0.2 for government efficiency on a scale of -2.5 to 2.5, and 0.1 for regulatory quality, which is below the Central and Eastern European average of 0.5. Nevertheless, almost 26% of the country’s workforce is paid by the state. Is it possible to better distribute public employment?
Certainly, it is also one of the key preconditions for improving the efficiency of public administration. The number of employees in the public sector is not a problem as such. The real issue lies in how these resources are allocated, what responsibilities they carry, and the outcomes they deliver – especially in relation to the needs of citizens and the business community.
The World Bank’s indicators on government effectiveness and regulatory quality clearly show that there is room for improvement, not only by reducing administrative burden, but by enhancing human resource management. The proposal is to abandon a formalistic approach to staffing and progress toward a system that recognizes competencies, performance, and the actual needs of institutions, particularly at the local level, where most services are delivered.
NALED has long advocated for strategic workforce planning and has been actively providing training to strengthen the capacities of local governments. In many municipalities, even where there is political will, there is often a shortage of qualified personnel, whether for managing performance, implementing reforms, digitalizing services, or leading development projects. That is why our recommendation is not downsizing, but optimization. Public administration must become more agile, more efficient, and more citizen centric. Only when the right people are placed in the right roles, with both the skills and the motivation to drive change, can we expect to see improvement in indicators such as the WGI. And more importantly, we’ll see progress reflected in the everyday experience of our citizens.
Serbian women’s participation in working and social life at all levels still lags significantly, around 13 points below the European average. What policies and reforms could mitigate that?
Women’s participation in the economy and society must not be treated as a side issue. It is a question of equal opportunity, but also of sustainable development. Serbia continues to lag the European average—not because women lack ideas, ambition, or courage to start a business, but because the system often fails to recognize the barriers they face.
Through the Small and Powerful project, implemented by NALED with the support of the British Embassy, we have had the opportunity to hear hundreds of personal stories. And they all point in the same direction—women are not asking for privileges, but for conditions that will allow them to compete on equal footing. Today, 85% of people start their businesses with personal funds, and many women remain invisible in public calls and support programs—because they don’t own property, because they work in non-export sectors, or because they register as sole proprietors instead of companies. And for those reasons, the system simply skips over them.
Our response to these challenges is not in slogans, but in concrete action. Through Small and Powerful, we provide support to women running small businesses, knowing that a single grant can be the difference between survival and closure. We organize mentoring and training programs, because many women work alone, without access to support networks or vital information. In parallel, we work closely with local governments to strengthen mechanisms of support at the community level—because that is where the most important changes begin: where women live and work.
One particularly important step has been the establishment of the Council for Small Businesses a body tasked with identifying both administrative and cultural barriers that hold women back and proposing solutions that go beyond symbolism and deliver tangible impact.
Our goal is simple: that every woman with an idea—whether she comes from a city or a village, whether she works in hospitality or IT, knows that the system sees her efforts, values her work, and gives her a fair chance. Because economic development that leaves out half of society is neither sustainable nor smart. And when we empower women, we empower entire communities.
The green transition in Serbia is far from being consolidated, even in everyday practices. Every family has relatives abroad for whom separate waste collection and energy saving are a given. Serbs love to travel and when they return to their home country they don’t even have containers for separate waste collection at their disposal. Don’t you think that citizens are more ready than institutions to contribute to modern recycling chains that generate wealth and jobs everywhere?
According to the latest available report from the Environmental Protection Agency (2023), around 15.5% of municipal waste is recycled in Serbia, which is well below the European Union average. We are encouraged by the growing environmental awareness among citizens and believe that institutions are recognizing this trend. However, we need stronger political will and further investments in infrastructure for primary waste separation for bigger reforms to happen.
Three years ago, the construction and reconstruction of seven regional waste management centers was announced — a major and important step toward building a more efficient and sustainable waste management system. At the same time, it is necessary to work on removal of illegal landfills that do not meet environmental standards, as well as equipping public utility companies with vehicles, containers, and investing in the construction of recycling yards and transfer stations.
In addition to developing primary waste separation, one of the key recommendations from NALED’s Grey Book is the introduction of a deposit refund system (DRS) for beverage packaging, so that our citizens, as in many other European countries, are more motivated to return and recycle their packaging. EU countries have set a goal of having 70% of packaging waste recycled by 2030. Unless the existing domestic system is improved and upgraded with a DRS, it will take Serbia significantly longer to reach EU standards, given the substantial differences in the operational and financial capacities of PUC, which have the main role in implementation of these activities.
We need to match citizen awareness with public policies, and long-term investments that make the green transition visible, not only in strategy documents, but in every neighborhood, school, and household across the country.
Since its foundation, NALED has promoted dialogue between public institutions, private actors, and NGO entities. However, in the last 10 months, the strongest social push has not come from political leaders or social workers but from self-organized subjects, primarily students, skeptical about the mechanisms of representation and delegation. How can the dialogue with these new subjectivities without a stable representation take place?
The recent activism led by self-organized groups, including students, highlights a growing interest in social participation and a need for institutions to engage with citizens in new ways. These groups may not have formal representation, but they express legitimate concerns that deserve attention.
At NALED, we believe it is essential to maintain open and structured dialogue with all segments of society. While our traditional partners are public institutions, businesses, and NGOs, we are open to broadening this network by supporting inclusive formats such as public forums, citizen surveys, and cooperation with academic communities.
Dialogue with informal civic actors requires flexibility and clear frameworks for engagement. By creating accessible platforms for communication, we can better understand their perspectives and incorporate their input into reform efforts, while preserving institutional stability and continuity.