For the twelfth episode of the IDEEA Podcast, Marina invited Aleksandar Ljubic, Executive Director at the Foreign Investors Council (FIC). The FIC was established in 2002 to develop and enable an investment conducive business environment with solid business ethics in Serbia. The council members represent expertise from various sectors and industries, have invested over €35 billion, and employ more than 100,000 employees in Serbia.

Watch the full episode as Aleksandar shares insights the council has seen regarding investment and the sectors that are gaining traction in Serbia. If Serbia is your target market, this is worth a watch.

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TRANSCRIPT

Intro 00:00

Welcome to the IDEEA Podcast, a channel for the IDEEA Hospitality Investment Forum, which is an annual gathering for the Hospitality Investment Community in Eastern Europe. Tune in to insightful conversations between the IDEEA team and hospitality investment leaders and innovators across Europe. And now let's dive right into today's episode.

Marina Franolic: Hello everyone, and welcome today to one more IDEEA podcast. As you know, IDEEA will be held in 10 days in Athens September 26th and 27th. And upfront, we have today with us, Mr. Aleksandar Ljubic, he is the Executive Director of the Foreign Investors Council in Serbia. And we have been cooperating with FIC for some time, so Aleksander, it's a great pleasure to have you with us today.

Aleksander Ljubic: Thank you very much for inviting me.

Marina Franolic: Aleksander, let's just explain a little bit, what is FIC and what is your main purpose?

Aleksander Ljubic: Foreign Investors Council is one of the oldest business associations in Serbia; it exists 20 years. This year actually, we are celebrating 20 years of our presence in Serbia. And our main goal is the advocacy. So we are gathering large international corporations and we help Serbia through the institutional relationship with the government to be a better place for investment and for doing the business.

Marina Franolic: Would you consider yourself something similarly like the investment agency, but not governmentally organized?

Aleksander Ljubic: No, we are not. Actually we are gathering the companies who are already present here in Serbia, and we help them to facilitate the business. We are not representing any company in particular, we basically represent the industry which the company came from. So we are one focal point or the first stop when the potential investors want to come to establish their business in Serbia. They have an opportunity to discuss with us and with our members about the experience of doing business in Serbia. As you know, like any other business association, you always have problems on a daily basis regarding the performance of the business and for the 20 years, we try to resolve the majority of this. What is important actually, is that the entire year, we are gathering all information from our members through our committee. And once a year we have our own publication, it's called White Book, which is very famous and at least the event that we are having once a year is the biggest political economic event here in Serbia when we present our findings about the business climate here in Serbia. This is very important for the government. And they are trying to understand what are the needs of the business and how to facilitate and to improve this.

Marina Franolic: So what are the findings for the past couple of years? Do you see the increase in foreign investors? Do you see interest in specific investment sectors? What is the main thing that is maybe changing in Serbia in the past couple of years?

Aleksander Ljubic: Actually, as everybody in Europe, we divide our job like pre-Corona, during Corona and after Corona situation. As you know, before the corona we were more focused on generally improving different areas of legislation especially because Serbia is a European candidate for the accession and lots of work need to be done to be fully in line with all our key regulation of the European Union. And this is when we put our efforts to fully harmonize the Serbian legal system with the European one. But during the corona pandemic, we have been more focused on the day-to-day operation. For example, digitalization; as you know it was locked down like everybody in Europe. So all our businesses more switched in digital form, so push like this digital agenda was very important for us. Again, we have different areas of the business but some of the industries was more hit during the pandemic than others. For example, the tourism which was really suffering during that time period. And we know here in Serbia and also the UN General Assembly recognized this in 2022 that tourism is a very important industry. And it's very vulnerable in this situation like we have this pandemic. So we are in fact very proud for our committee of the tourism and hospitality and how we handle all of these challenges that we have during this pandemic. Of course, not only tourism, but other sectors like pharma, like industry, like food sector, like others, and we are dealing with this 24/7 360 days a year; this is our main achievement, that we make Serbia and the companies that operate here make a predictable surroundings. And this is very important for any business that you have. Large companies don't like surprises. They don't like any kind of surprises, they like to be bored. So our goal is to make the Serbia business boring here in Serbia, this is what we do.

Aleksander Ljubic: That is true; not only big businesses, but investors especially they really want to have security when investing in a certain country. So I definitely support it, you actually provide this to them, at least in some way. You were telling me about the management board and how interesting it is, a combination of who is sitting on the management board of FIC Serbia. Can you tell me a little bit more about it.

Aleksander Ljubic: The FIC is predominantly gathering the company from European Union. And in a sense of that our biggest partner and our biggest allies in everything, what we do is the European Commission and of course, European delegation here in Belgrade. The one speciality of the FIC organization is that the FIC is the only organization in Serbia and I also think in region, is the gathering the business and International Financial Institution. So the EBRD and EIB are the members of the board of the FIC. And these are the only two board members which are institutional, so they don't go to the election, they're always members of our board, and other board members we are choosing from the member company. So this connection between the businesses and financial institution is of course also very, very, very important, very important for us for this predictability as we already discussed. Again, one addition to that, the FIC is the only organization who are gathering the bilateral Chamber of Commerce here in Serbia. So we have bi-European bi-lateral Chamber of Commerce as a member of the FIC. Because FIC by themself is not the chamber, we are Business Association. And for us, it's also very important to have their opinion in the process of improving the business climate here in Serbia, and join all of these voices and proposals. We put one document which we then communicate with the government. Again, because of the special treatment of the company, because it's large international companies. In the 20 years we have established one sort of the special relationship with the government. So aside of our operation, we have a joint body with the government, we have joined committees with the government, chaired by Prime Minister and Deputy Prime Minister of the Republic of Serbia, and followed by our board members, which once a year we're sitting on the event that we call Reality Check and see what the government do in the previous six months and what needs to be done in the upcoming six months before we publish our new edition of the White Book. Why is this important for the government? Because we are independent organization everything what we do is done by members; meaning the member company draft all documents that we present to the government. So it means it's a real picture from the from the real life. It's actually real picture from the execution of everything with the government before that made in the cabinets, and this is the first why it's very important for them. And the second because we are independent source, European Commission uses our White Book report for the economic part of the Serbia accession report to the European Union. So the double function and double goal for the government is to try to achieve and try to fulfill as much recommendation as is possible that the FIC proposed?

Marina Franolic: I sincerely hope that actually really take some of your findings and implement them within the official institution. Aleksander do you see new investment investors coming to Serbia and being interested in new events, new sectors, or just the ones that haven't been yet present there?

Aleksander Ljubic: To be very honest, yes. Especially after the corona, we are all facing the new crisis that arise in effect with the war in Ukraine. And of course, this is what we are closely monitoring, especially on the impact of the energy crisis, because Serbia is many European countries fully energy reliable from some other countries. And again, what is encouraged for us is that the number of the investment coming Serbia is not declining in the last couple of years. But of course, we are closely monitoring what will happen in the future. And especially because you need to know, Serbia is a place that the majority of their economy operations are done exclusively with the European Union. And not all European Union, the two major Serbia partners inside of the European Union are Germany and Italy. And what's happened in these two countries are heavily reflected on the Serbian economy, let's say with a delay of 30 days. And this is why it's very important that the European economy, our members headquarters, have smooth operation into the upcoming year not to slip into the recession. Because if something like that happened, it definitely will reflect to our operation here in the Serbia economy in general.

Marina Franolic: I really hope that that recession, even if it will come it will be short and not that harmful.

Aleksander Ljubic: Everyone has the prediction that we do is that anyway, if there is a recession, of course, our prediction is that we lost very short, because we have now where European Union and in Serbia and in Croatia we are facing with inflation, which is not seen from some -- actually Serbia, yes, but in other European countries are not seeing for very long time. And to be in line with that, of course, we hoping that this growth or limited growth will be just kept for one or two years. And after that we will be again on the full speed ahead. as European economy, say you can of course, that Serbia is pretty tight to the European one. It's also reflected on the Serbian economy.

Marina Franolic: Yes, unfortunately, our countries depend heavily on the outside markets. And whatever happens there, we can't influence that much.

Aleksander Ljubic: Unfortunately, not.

Marina Franolic: Aleksander, thank you so much. I think it's very helpful that FIC is doing so much with both new and current investors in Serbia. And I think you definitely support them in order to be more successful, in order to understand all the laws that sometimes maybe more confusing than in some developed markets. But I definitely wish you all the best to the organization to be better to have more investors and to support the government and the growth as much as you can.

Aleksander Ljubic: Marina, thank you very much for inviting us and looking forward to see you soon.

Marina Franolic: It was a pleasure to talk to you. Thank you, Aleksander. Bye bye.

Aleksander Ljubic: Bye bye.

Outro: Thank you for listening to the IDEEA Podcast, the channel for the IDEEA Hospitality Investment Forum. You can find a full transcript of this conversation in the Content Library on ideaa-forum.com. With other reports and insights. We look forward to welcoming you and your colleagues in person at IDEEA in Athens, Greece on the 26th through 27th of September 2022. If you haven't registered yet, please go to ideaa-forum.com to purchase your pass today and save before ticket prices increase. Please feel free to email us with any questions at hello@thebench.com.

Until the next episode, stay safe and keep well. Bye-bye for now.