Christine Moro, Ambassadeur de France : La Serbie a tout intérêt d’attirer des compagnies du monde entier
Interview of the Ambassador of France, Mrs Christine Moro
French companies showed interest in number of PPP projects in Serbia recently. Can you tell us what are the most important plans of French companies for investments in Serbia ?
When the French Prime minister visited Serbia in November 2014, he was accompanied by a number of companies from different sectors : transport, energy, information technology, telecommunications, civil works, banking and professional services. A lot of these sectors can be concerned by Public Private Partnerships, which are not only about finding new ways of financing but also new models, which can offer significant improvements in the quality of public services.
Which sectors are most attractive for French companies for investments ?
There is a potential for new ideas and new projects in many different sectors – from information technology to agriculture, through to automobile production or public infrastructure projects. French businesses have established a solid presence in Serbia and can bring solutions and expertise to improve local public services or transport infrastructure. Serbia is also well placed to become a logistics platform for the region, as the country is now open for business with the EU, which is the primary point of origin and destination of trade flows, and trade is also developing with CEFTA countries and the rest of the region. Low production costs contribute to Serbia’s competitiveness as a destination for investors, particularly in the industrial sector. And I know that companies in the IT sector, like Atos or Schneider, have a positive experience of what they have done so far, and other French companies could benefit from having a closer look at what Serbia has to offer in this domain.
What are biggest investments of French companies in Serbia ?
There are several sectors in particular where French companies have developed a significant presence in the country. I just mentioned information technology. Finance is also an important area : French banks and insurance companies have been working in Serbia for a number of years, now, and they have a good network, with Serbian and international companies in Serbia, and also with families all over the country, from Belgrade to Uzice, Leskovac or Subotica. Of course the Michelin factory in Pirot is a good illustration of what can be done in Serbia – Michelin is now the third Serbian exporter and production could increase by as much as 30 % in the next three years. It means that Michelin thinks that working in Serbia makes good economic sense from their perspective, and it also has a significant positive impact on the country’s economy. We have new, smaller investments from company making parts for the car industry – it is a new trend that is beginning to emerge, I think it could accelerate in the coming years. Agriculture, finally is equally an important sector for our companies, there is already a number of them operating in Serbia, particularly in Vojvodine, and a strong potential for new trade and investment.
What are main problems investors face while doing business in Serbia ?
French companies in Serbia continue to signal the fact that the justice system is slow and unpredictable and corruption has not disappeared. Land ownership – or simply the possibility of planning ahead with a long term perspective is a very serious impediment to development in the agricultural sector. The difficulty in getting construction permits is still mentioned as well. Also, a lot of our companies can bring efficiency and competence in the infrastructure sector, roads, trains, but at the moment it is difficult for them to grow. There are changes underway in the main public companies responsible for these investments, it could mean that the situation will change and make it easier for companies have a clear view of the future developments. It is in the interest of the country to bring in companies from around the world, because bringing different competences will have a positive impact on the quality and on the price paid for these large projects. And of course, improving transport infrastructure in the region will be a key to economic development.
What advantages French companies see in investing in Serbia ?
It depends on the sector and the company. For companies in the industrial sector, Serbia’s position in the region, easy trade flows and proximity to other European production and consumption centers, the low cost of production, and the good quality of the work force are all very strong assets. It means that with the right infrastructure, Serbia can be a solid alternative for production as opposed to other regions in the world. IT companies benefit also from the quality of the engineers, which comes probably both from a solid tradition in that domain and the strength of your mathematical high schools. I am told also by the French companies which employ significant number of people in Serbia that there is a good cultural “fit” between French and Serbian employees.
The French business community both in Serbia and in France follows closely the economic situation of the country, the reforms undertaken or planned, the discussions under way in the context of the EU negociation and of the agreement with IMF. They are confident that Serbia has a big potential which is going to generate new opportunities for trade and investments. Unfortunately the floods last spring have had a negative impact on growth, and reconstruction has requested time and money that could have been employed for further projects otherwise. But reconstruction has also been an opportunity and still is, to join forces, and take into account new criteria linked with prevention of floods and adaptation to climate change, which is a growing topic for the years to come.
What is necessary to do to make Serbia more attractive for investments and trade ?
You asked earlier about the main problems faced by French companies : clearly, solving some of these issues will have a positive impact. I would add a few more items to the list : a healthier macroeconomic perspective ; completing the privatisation programme in the time frame set by the law ; improving the efficiency of the large public companies. I would like to stress also the importance of the political factor of regional dialogue and cooperation. It helps create a better background for economic developement and enhancing regional projects and the regional market will have a positive impact on growth for every and each country.