July 15 (SeeNews) - Serbia’s investment climate had been improving modestly in recent years but the country needs to curb bureaucratic delays and corruption, the US Department of State has said.
"Significant risks to the investment climate include unresolved loss-making state-owned enterprises (SOEs), a large informal economy, corruption, and an inefficient judiciary. Political influence on the decisions of nominally independent regulatory agencies is also a concern," the State Department said in a "2019 Investment Climate Statements" report issued last week.
US investors in Serbia are generally positive, highlighting the country’s strategic location, well-educated and affordable labor force, excellent English language skills, investment incentives, and free trade arrangements with key markets, particularly the EU. Generally, US investors enjoy a level playing field with their Serbian and foreign competitors, the US Department of State said.
The Serbian government has passed significant reforms to labour law, construction permitting, inspections, public procurement, and privatisation that have helped improve the business environment. Both companies and officials have noted that the adoption of reforms has sometimes outpaced their thorough implementation, while digitising certain functions has not yet brought a dramatic improvement in processing times, which may be a longer and more difficult process.
If the government delivers on promised reforms during the course of its EU accession process, business opportunities could continue to grow in the coming years. Sectors that could benefit include agriculture and agro-processing, solid waste management, sewage, environmental protection, information and communications technology (ICT), renewable energy, healthcare, mining, and manufacturing, the US Department of State noted.
Serbia successfully completed a three-year Stand-by Arrangement with the International Monetary Fund (IMF), with the country exceeding all of its fiscal targets in 2018. The government signed a new Policy Coordination Instrument with the IMF in mid-2018. However, as additional reforms slowed, Serbia fell five places in 2019 on the World Bank’s Doing Business list, and is now ranked 48th globally in terms of the ease of doing business, still up from 59th two years earlier.