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How would you assess current economic relations between Serbia and Slovenia?
Despite the difficulties caused by the global and local economic crisis, economic cooperation between Slovenia and Serbia is constantly improving on both the macro and micro levels. As a direct result, overall trade balance in 2010 (around EUR 900 million) increased significantly compared to 2009 and approached the pre-crisis level of 2008 to nearly EUR 1 billion. Here I can say with a great pleasure that Serbian exports to Slovenia grew by almost 25 percent, although the trade deficit is still on our side. Even though the majority of our exports to Slovenia can be attributed to Slovenian direct investments in Serbia, important steps in this area are being taken by our export industry. In the first six months of this year, foreign trade between our countries has improved by 17 percent compared to the previous year and we expect this trend to continue.
Furthermore, extensive efforts are constantly being made by the leaders and institutions of both countries to improve administrative procedures and strengthen the platform for more efficient development of economic cooperation. Serbia and Slovenia have so far concluded 17 bilateral agreements in this area, the most important being the Agreement on Economic Cooperation, the Agreement on Promotion and Protection of Investments, and the Agreement on Avoidance of Double Taxation. We should not forget the collaboration of local governments of our countries. Some 42 Serbian cities and municipalities have signed agreements with about 37 Slovene. This provides for exchange of knowledge and experience by local governments, formation of joint projects at the EU level, and can encourage economic exchange at the local level.
How important is Slovenia's support in Serbia's negotiations with the European Union?
Slovenia has shown substantial support to Serbia in the process of European integration. This assistance is manifested in the political support to the region, including my country, that Slovenia provides within the EU institutions. There is also direct cooperation of almost all competent authorities responsible for the technical part of the job, such as fulfilment of the Copenhagen Criteria, harmonisation of legislation and implementation of comprehensive reform processes. I would also highlight the fact that mutual consultations, on the content and execution of this support, are held at every given opportunity during regular and frequent meetings of Serbian and Slovenian highest state officials. In addition, within the domain of the agreement on development cooperation that our two countries have, it is important to emphasise development assistance. Out of EUR 9.5m available in bilateral aid for the Western Balkans in 2010, Slovenia allocated eight percent of funds to Serbia.
Some ambassadors in Ljubljana are quite critical of the business environment in Slovenia. What is your opinion?
I would agree with the general view that entry into the Slovenian market is not an easy task. It is important to mention that particular business circles in Serbia have observed the existence of certain obstacles on different political levels in Slovenia. Aside from operational difficulties, high cost of land and labour could be mentioned, together with the lack of information on business and legal environment in Slovenia that has so far been available to our companies. The last is of significant importance for taking into account the scope and demands of the Slovene market in which a vast number of local and foreign products are already competing. It is also important for building knowledge of the development paths of the local economy, which should provide our companies a better insight and thus a more detailed and thorough entry strategy.
Serbian Nectar recently acquired Slovenian Fructal. How important is this business deal and what sort of message does it send to Serbian companies?
The merger of the two companies and their brands has the potential to grow into a regional giant that can compete with other similar products at the European level. In addition to the message that Serbian companies can be a good and reliable business partner to Slovenia, and therefore are welcome as investors, this acquisition in some way defies the myth that it is impossible to invest in Slovenia, and heralds a "rosy" and more positive perspective on future business cooperation. We do expect that these recent events will pave the way for more such positive ventures.
Are Serbian companies interested in investing in Slovenia?
Trade growth between the two countries, including an increase in Serbian exports, speaks to the rising interest of Serbian companies in cooperation with Slovenia. Successful business stories like ComTrade (Hermes Softlab) and more recently, Nectar, show that Serbian investments in Slovenia are welcome. I am also pleased to state the optimistic conclusion that there are no major political aspects that hinder the entry of Serbian investors in Slovenia. We therefore anticipate increasing interest in investing in Slovenia from our companies. This will depend solely on their assessments and strategic plans, as well as on the economic and financial situation in both countries.
There is a lot of discussion about even greater cooperation both between the two countries and the region. Where, in your opinion, are the opportunities for such cooperation?
There are a number of opportunities for further cooperation in the sphere of the utilisation of Free Trade Agreements that Serbia has with Russia, Belarus, Kazakhstan, and other countries. In this regard, through production in Serbia, Slovenian companies can enter those markets. Slovenia, on the other hand, can be an additional gateway for the placement of Serbian products in the EU but also in North African markets through its port of Koper.
In addition to the conventional sectors of the economy, there is the strong possibility for cooperation in energy, transport infrastructure, as well as in logistics. The last is a very important industry since the most important traffic corridors cross in our region. Opportunities for greater cooperation also exist in agriculture, "green" economy, and information technology, where both countries have highly educated and skilled labour.