Serbia has made some important strides toward improving its business environment and increasing the competitiveness of its economy. Still, a lot remains to be done for a truly competitive economic environment, where the private sector leads on growth and job creation. Competitiveness is one of the key areas where further improvements are needed to align with best practices from the European Union, which Serbia aspires to join.
Reforms to date have helped attract new foreign investment and create new jobs, enabling a relatively stable growth path for the economy. Macroeconomic and financial sector stability has been maintained, and the labor market remains fairly robust, despite the ongoing impacts of the COVID-19 pandemic.
But Serbia must do more. Relatively low growth over the previous decade is linked to Serbian enterprises’ low productivity and competitiveness, which is partially the result of challenges in the business environment, such as a lack of predictability and the need for more transparency in the regulatory environment.
The European Commission, on behalf of the EU, and the World Bank have partnered together in a project called EU for Better Business Environment to help strengthen mechanisms in Serbia that enhance stakeholder coordination, streamline business regulations, and more flexibly target technical assistance.
The European Commission is funding the project, which will run until June 2025, with 5.5 million Euros, while the World Bank is implementing it and providing technical assistance to the Government of Serbia to boost select aspects of the country’s business environment such as better policy coordination and planning, which should improve predictability, and simplified administrative procedures, which will reduce costs for businesses.
The project incorporates a three-pronged approach that seeks to alleviate the main constraints that companies in Serbia face, and enhance governance mechanisms related to business environment by:
- Further increasing transparency and improving planning, coordination, and predictability with regards to business environment reforms;
- Simplifying business procedures to reduce the financial and time costs of compliance;
- Targeting technical assistance to address priority regulatory reforms and provide complementary analytical support.
Given this approach, the project’s success will depend on engaging relevant stakeholders, including the private sector. And by project’s end, Serbia’s business environment will be bolstered by:
- having a fully developed, operational and regularly used platform for coordination of the business environment reforms;
- simplifying at least 350 administrative procedures;
- maintaining an up-to-date and comprehensive online registry of administrative requests;
- creating and regularly updating guidelines for running business legally; and
- providing other targeted support to Government counterparts in their reform efforts.