Engaging for Change: AmCham Serbia Works to Improve Business Environment

ENGAGE FOR CHANGE IN 2014 | 3
EDITOR
Saša Marić
s.maric@aim.rs
COPY EDITOR
Chris McDonald
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ART DIRECTOR
Ilija Petrović
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PROJECT MANAGERS:
Biljana Dević
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Marina Pilipovic
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Darko Novaković
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Milica Pajić
m.pajic@aim.rs
PHOTOS
Zoran Petrović
TRANSLATORS
Snežana Bjelotomić
_________________________
SPECIAL THANKS TO
Branislav Čale, AmCham
AmCham Serbia
_________________________
EXECUTIVE DIRECTOR
Ruža Ristanović
r.ristanovic@aim.rs
GENERAL MANAGER
Ivan Novčić
i.novcic@cma.rs
FINANCIAL DIRECTOR
Ana Besedić
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EDITORIAL MANAGER
Tanja Banković
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OFFICE MANAGER
Nataša Nešić
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4 COMMENT: SERBIA’S
POTENTIAL AND
LIMITATIONS
ANA S. TRBOVICH,
Ph.D. Faculty of Economics,
Finance and Administration
– FEFA, Belgrade
6 BRINGING THE
BEST OF BUSINESS TO
SERBIA
MILOŠ DJURKOVIĆ,
President of AmCham Serbia
10 PROVIDING COUNSEL
H.E. MR. MICHAEL KIRBY,
US Ambassador to Serbia
14 AMCHAM AIMS
TO ACT AS A
ROLE MODEL TO
SERBIA'S ECONOMY
MAJA PIŠČEVIĆ, Executive
Director of AmCham Serbia
18 IMPORTING THE
AMERICAN DREAM
JANE KITSON, Commercial
Counsellor at the US
Embassy in Belgrade
21 EMBRACING CHANGE
TRS Europe
22 SUCCESS POSSIBLE
WITH LEADERSHIP AND
SUPPORT
SUSAN KOSINSKI FRITZ,
Mission Director of
USAID Serbia
26 PUTTING SERBIA
ON THE MAP
ŽELJKO SERTIĆ, President
of the Serbian Chamber of
Commerce (SCC)
29 DECADE OF
IMPROVEMENT
STACEY KENNEDY,
Managing Director South
East Europe at Philip Morris
International
30 STABLE PARTNER
OF THE STATE
DRAGINJA DJURIĆ,
Executive Board President of
Banca Intesa
33 US COMPANY EXPLORES
MINING POTENTIAL OF
BOR
Rakita Exploration d.o.o Bor
34 SYSTEM OF VALUES
DIMITAR ANDONOV,
Operations Director for
Serbia, Macedonia and
Montenegro at Coca-Cola
36 EVERY ITEM HAS
A BUYER
DARKO MATIJAŠEVIĆ,
Managing Director of
Executive Group
39 HARMONISING
LEGAL NORMS
VLATKO SEKULOVIĆ,
Partner at Sekulović Law
Office, Belgrade
40 A CALL FOR DIALOGUE
JASMINA PAVLOVIĆ,
Country Manager for
Serbia, Central Balkan
Countries and Moldova at
Pfizer H.C.P. Corporation
Representative Office
41 MEETING GLOBAL
STANDARDS
TOMASZ ROGACZ, CEO of
McDonald’s Serbia
42 ONE OF THE
GLOBAL LEADERS
IN DIRECT SALES
VESNA KOVLJENIĆ,
National Sales Manager of
Avon Serbia
43 CONFIDENT IN
PARTNERSHIP
MILUTIN DELIĆ,
General Manager of
GSK for Serbia and
Montenegro and
Commercial Director for
the Adriatic Cluster
44 EXPORTS TO
US RISING
Trading overview
46 US COMPANIES
IN SERBIA
Investments
47 A LIFE IMPROVED
EVERY THREE
SECONDS
ZVEZDANA IVANOV,
Country Manager for
Medtronic B.V. Serbia
48 AMCHAM IN 2013:
DRIVING CHANGE!
50 AMCHAM EVENTS
IN 2013
CONTENTS

4 | ENGAGE FOR CHANGE IN 2014
Serbia’s Potential
and Limitations
A
merican investments
in Serbia reflect both
the potential and the
limitations of Serbia
as an investment destination. There are relatively few investments
considering the size of the US economy, with the majority of US
companies in Serbia operating out of small sales offices or via a
representative (franchise) local company. This includes big brands
such as IBM, and it is not uncommon for small countries like Ser-
bia, even when you consider the larger regional market. Yet those
companies that made the leap into the Serbian market tend to be
satisfied with their investment, with many expanding.
The US is one of the largest foreign direct investors in Serbia,
with investments of more than US$3.5 billion and employing
more than 9,000 people. These investments include Philip Mor-
ris International’s purchase of the Niš Tobacco Factory in Au-
gust 2003 through the privatisation process, Colorado-based Ball
Corporation’s greenfield investment to produce beverage cans,
followed by the Coca-Cola Company’s purchase of bottled-water
producer Vlasinka and Merrill Lynch purchasing a 25% stake in
real-estate firm MPC Properties, which subsequently built the Ušće
Shopping Centre in New Belgrade. In August 2008, PepsiCo in-
vested more than €200 million to acquire Marbo. Other sizeable
US investments came through the Darby investment fund, which
presently owns the Sevojno copper
mill, as well as cable production
company Novkabel and Klas bread
manufacturing. The KKR fund
invested in flooring producer Tar-
kett and SBB (Serbia Broadband),
while additional direct investments
were made by Van Drunen Farms,
Alltech, Eaton etc. Most recently,
NCR made Belgrade its headquarters in one of largest greenfield
endeavours, employment-wise, engaging hundreds of university-
educated people.
Serbia’s primary advantage compared with other emerging
markets is its European location and enhanced market access as
a result of the regional CEFTA trade treaty, the Stabilisation and
Association Agreement, which guarantees free trade to the EU for
most products, and bilateral treaties with Russia, Turkey and sev-
eral other countries. While many US investments initially targeted
Serbian and regional markets, they are also exporting beyond the
region. Yet the key question is why does Serbia not have more US
investments, especially those featuring higher-value-added prod-
ucts and services like those of Ball Packaging or Microsoft.
Microsoft established a software development centre in Bel-
grade in 2005, engaging in research and development rather than
just the sale of software. While critical, the most decisive factor
for this business development was not the availability of software
engineers or English proficiency, but the desire of Serbian expatri-
ates who had developed an excellent professional reputation while
working for Microsoft in the US to build a local team and work
from Belgrade. Today, Microsoft Serbia is a successful enterprise
with an active software development centre that attracts young lo-
cal talents who can develop an exciting international career while
remaining in their home country. Ball Packaging, meanwhile,
came in great part to serve Coca-Cola, which has been present in
the Serbian market for decades and is an important buyer for alu-
minium cans. It took Ball two years to overcome Serbia’s complex
construction permitting process and build their production plant.
Still, they later expanded production and the company often prais-
es Serbia at international investment forums as one of their most
productive facilities worldwide. In short, both Microsoft and Ball
Packaging, while highly content with their investment decisions,
needed an additional reason to choose Serbia over another desti-
nation. To attract more of such investments, Serbia needs to first
invest more in its business climate, currently ranked well below
its potential even when measured by GDP in surveys such as the
World Bank’s Doing Business or the
World Economic Forum’s Global Com-
petitiveness Index.
Interestingly, Ernst Young’s at-
tractiveness survey Europe 2013 con-
firms the discrepancy between the less
attractive perception and the actual
investment experience of companies
in Serbia. The survey’s results show
that only 1% of interviewed investors (808 international decision-
makers) picked Serbia as the most attractive destination in Central
Eastern Europe, yet in practice Serbia scooped 11% of CEE FDI pro-
jects in 2012. These results highlight the need for improved brand-
ing and smarter, more consistent policies aimed at advancing the
business climate, as well as the accompanying infrastructure and
education, which impacts on a country’s global competitiveness.
US investors in Serbia engage with the American Chamber of
Commerce and other organisations to improve Serbia’s business
environment and attract additional business to the country, as it is
in American and Serbian businesses’ common interest that Serbia
prospers economically and is anchored stably to the EU. ■
Ernst Young’s survey Europe
2013 showed that only 1% of
investors picked Serbia as the most
attractive destination in Central
Eastern Europe, yet Serbia scooped
11% of CEE FDI projects in 2012
COMMENT ANA S. TRBOVICH, Ph.D. Faculty of Economics, Finance and Administration – FEFA, Belgrade

Working Together For A Healthier World
Pfizer HCP Corporation, Representative office Belgrade
Tresnjinog Cveta 1, Belgrade
Tel: 381.11.3630 000; Fax: 381. 11. 3630 033
e-mail: office@pfizer.co.rs

Bringing
the Best of
Business
to Serbia
T
he most important thing AmCham be-
gan with was the institutionalisation
of a constructive standing dialogue be-
tween the private and public sectors,
with the goal of improving the business climate
in Serbia, says AmCham Serbia President Miloš
Djurković of measures he believes to have been
successful. “Naturally,” he goes on, “when dia-
logue at an institutional level is initiated, many
topics of interest for companies and the overall
economy emerge.” Djurković is proud of such
achievements and advances made by AmCham
during its time in Serbia.
Now, AmCham is look-
ing to build on them and
develop a generation of
“uncompromising” new
Serbian business leaders.
■ What are AmCham’s
current priorities?
- Our current priorities
relate primarily to a series
of measures that need to be implemented con-
sistently to facilitate more investment and the
creation of new jobs, namely: reforming labour
legislation; implementing measures aimed at
increasing liquidity in the economy and stabilis-
ing the macroeconomic environment; securing
a predictable and efficient tax system; reducing
the grey economy and corruption; and equip-
ping professionals with know-how and skills
adapted to the needs of the modern market.
■ Your role can be described as a catalyst for
bolstering business cooperation between
Serbia and the US, and maintaining a dia-
logue with Serbian officials with the goal of
advancing this cooperation. How efficient
have you found this goal’s implementation?
- Let me reply to your question by giving a
short review of the economic context in which
AmCham started more than 12 years ago. At
that time, investors were not eager to invest in
Serbia. They were mistrustful to a certain de-
gree and the whole environment was deemed
unsafe. At first we had
11 companies as associa-
tion members with a clear
goal of making Serbia a
good investment destina-
tion. The country’s tran-
sition process was still in
its infancy and there were
no investments or foreign
companies in the market.
Today, when we look
back at everything we have achieved, we can see
that we now have 187 American, international
and domestic companies as members. It is also
important to mention that AmCham members
have invested more than €14 billion and created
100,000 jobs in Serbia so far. You have to admit
these are impressive numbers.
■ What has been the most important focus of
American-Serbian business collaboration,
Since the start of its
activities here, the
American Chamber
of Commerce has
promoted the best
principles and
practices of US
and international
business in Serbia.
As well as its
efforts to reform
and modernise
Serbia’s business
environment in the
short term, AmCham
is making ethical
practices and the
education of future
business leaders
its key priorities
The current priorities of
AmCham relate primarily
to a series of measures that
need to be implemented
consistently to facilitate
more investment and the
creation of new jobs
INTERVIEW MILOŠ DJURKOVIĆ, President of AmCham Serbia

and which areas should be targeted in particular?
- The ongoing promotion of Serbia as an investment destina-
tion is the centre of our attention. To illustrate this, let me
say that we’ve already had a big IT investment conference
in San Francisco in the last year. And together with the re-
gional American Chambers of Commerce, we are planning
to hold a regional investment conference in Serbia in the
second half of this year.
There is more that we do. The Generalized System of
Preferences (GSP), which allows Serbia to export to the US at
a reduced customs duty, expired on 31 July last year and is
expected to be renewed. Until that happens, companies are
advised to keep all of the required documentation because,
in the past, when the GSP was renewed, export companies
were refunded the money they paid on account of higher
custom duties prior to the renewal of the GSP.
■ How much does the slow but evident recovery of the
US economy from recession affect Serbia in terms of
the American companies that do business here?
- Basically, this favourable influence can be seen through
American companies showing a heightened interest in
investing in Serbia. Judging by
American investment in IT over
the last year or two, we can safely
conclude that Serbia has a good
basis for attracting both American
and other investors. Additionally,
implementing necessary reforms
is one of the prerequisites for cre-
ating a better business climate.
■ The IT industry is often cited as an economic branch
with huge potential in Serbia. What obstacles does
the industry face, i.e. what kind of conditions must be
fulfilled for the IT industry to develop faster?
- The ICT market in Serbia is still small compared with other
countries. Investment per capita is several times lower than
in neighbouring countries and even dozens of times lower
than in developed countries. The infrastructure, particu-
larly within the public sector, is far below average compared
with medium-developed countries, while the situation is
somewhat better in the private sector. There are exceptions
to this rule, namely certain companies that have gained a
competitive advantage over others by investing in the mod-
ern IT sector. This opens up the possibility of facilitating the
faster development of the country through bigger invest-
ments in ICT and the higher productivity and efficiency of
both the public and private sectors.
Serbia can implement most of the projects in the pub-
lic sector through EU pre-accession funds, given the coun-
try now has better access to pre-accession and other funds
because of the commencement of accession negotiations.
Of course, we need to arm ourselves with more knowledge
than we have today in order to draft projects and receive
money from said funds. So far,
Serbia has used only 16% of the
available fund money, while the
Czech Republic, for instance, has
used 65%.
Apart from that, we need to
be much more transparent in
implementing these projects be-
cause project implementation is
not something Serbia can brag about. A great opportunity
lies in combining the international experience of large mul-
tinational companies and the experience of sound domestic
companies. Such collaboration would enable the first to in-
vest more in Serbia and the latter to expand their acquired
know-how and experience to other countries. A better infra-
structure would improve the efficiency of the public sector
and make Serbia an investment-competitive country, while,
at the same time, enabling citizens to work and live much
more efficiently.
■ Cooperation with political decision-makers is re-
quired in a transitional country. How would you rate
the quality of cooperation between AmCham and the
Serbian authorities?
- As I have said before, the dialogue with the Serbian gov-
ernment and representatives of state institutions has almost
The Generalized System of
Preferences (GSP), which
allows Serbia to export to the
US at a reduced custom duty,
expired on 31 July last year
and is expected to be renewed
Investments
AmCham members have invested
more than €14 billion and creat-
ed 100,000 jobs in Serbia so far.
Know-how
We need to arm ourselves with more knowl-
edge than we have today in order to draft
projects and receive money from EU funds.
EU
The American Chamber of Commerce intends
to fully contribute to the expedition of the EU
accession process in the upcoming period.

8 | ENGAGE FOR CHANGE IN 20148 | ENGAGE FOR CHANGE IN 2014
always been open and constructive. Implementing what
has been agreed has proven the biggest challenge. We have
been working to create a better business climate for more
than 12 years now and have seen improvements in many
areas. Still, I have to say that the pace at which reforms are
conducted is slower than the one desired by political stake-
holders. We do understand that there are certain transition-
al issues, particularly those relating to EU accession, but we
hope that the implementation of reforms will pick up.
■ What is the future of AmCham and US-Serbian
business cooperation?
- We have been trying to coordinate our goals with the cur-
rent economic, social and political environment. EU acces-
sion remains the most important issue for Serbia, and the
American Chamber of Com-
merce intends to fully con-
tribute to the expedition of
this process in the upcoming
period. We will continue to of-
fer suggestions and proposals
to better facilitate companies’
operations and improve the
business climate, which, in
turn, would result in new in-
vestments and keep us on the
road to the change we want to
accomplish together. We want
to continue to be the voice of
American business in Serbia.
■ What is the key differ-
ence between AmCham
and other, similar business
associations, and do for-
eign investment organisa-
tions in Serbia cooperate
with each other often?
- The American Chamber of
Commerce is not a classic bi-
lateral chamber. We are more
of a business association that
assembles 187 companies –
American and other successful
international and domestic companies, which, at this time,
make up the healthiest part of the Serbian economy.
I would like to underline that our association has a very
diverse portfolio, starting from regulatory efforts to improve
the business climate and promote Serbia as an investment
destination, to getting involved wholeheartedly in educat-
ing about and promoting the best business practices and
most successful principles of American business, where
corporate responsibility and developing business ethics play
very important roles.
In terms of our cooperation with other business associa-
tions, we have tried to leave enough room for collaboration
with similar organisations, to transfer our experience to
others and to provide assistance and offer advice. It is vital
that we work together on important economic issues. This
should be the priority of the government, business associa-
tions and every individual.
■ How would you rate your term as AmCham Presi-
dent? What are you most proud of and what has been
the Chamber’s biggest accomplishment during your
term in office?
-Iwillletothersjudge,andwilljustmentionsomeimportant
facts. Specifically, from October 2011 to date, the number of
AmCham members grew from 160 to 187. We have been
actively involved in promoting
Serbia as an attractive invest-
ment destination by our par-
ticipation in two investment
events held in the US thanks
to the US Embassy in Serbia.
The first event was dedicated
to energy and took place in
December 2011, while the
second event – the IT mission
trip – happened in May 2013
and, as the name suggests,
was centred on IT. During
that time, AmCham held an
investment conference in San
Francisco under the name ‘IT
Believes in Serbia’.
The Association has
launched several education-
al programmes for young
managers such as AmCham
Academy, which has devel-
oped into a serious and very
prestigious business course ti-
tled ‘Champions of AmCham
– AmChamps’. Addition-
ally, we have launched a new
programme called ‘SMART
Breakfast’, where we talk to
renowned leading public figures at meetings and they tell
their life stories in an effort to inspire and incite various busi-
ness initiatives. I would especially like to single out one of
our more recent projects, the AmCham award called ‘Lead-
er in Change’. This award will be given out annually, both
to individuals and member companies in five categories. It
is part of an effort to promote the values AmCham endorses,
with the end goal of positioning these values as a model
for doing business in Serbia. Judging by the huge interest
shown by member companies, we’ve done well.
There are too many schemers,
which is obvious when we see all
of these affairs happening around
us. If we want a better, more
transparent and more successful
Serbia, we all need to work on
improving business ethics

Finally, in terms of our regulatory work, AmCham has
managed to make its key priorities a part of the govern-
ment’s work plan. What needs to be done now is to imple-
ment these plans. With know-how, comparative practices
and expertise, AmCham supports ongoing reforms in many
areas that are crucial to bolstering the business climate –
from parafiscal taxes, changes to real estate regulation, pub-
lic acquisition regulation and the Labour Law, to stepping
up the fight against the grey economy, promoting intellec-
tual property rights and the like. We hope we will see the
first results soon.
Of course, this success wouldn’t have been possible
without a strong team. My top priority has been to assemble
right people, and you need a good leader to guide a strong
team. That’s why we brought Maja Piščević, whose ideas
and energy have further motivated our great team. I would
like to thank all of them – Maja, Amalija [Pavić], Milica
[Samardžić], Bane [Čale] and Bane [Valent], Tina [Kostić]
and Anita [Karadžić] – for their great work. Our success be-
longs to them. I am confident that they will accomplish even
more in the upcoming period.
■ If you could change one thing about the business
climate in Serbia what would it be?
- Business ethics. There are too many schemers, which is
obvious when we see all of these affairs happening around
us. If we want a better, more transparent and more success-
ful Serbia, we all need to pull in. This won’t happen over-
night; it requires long, hard work, primarily by the state
authorities, as well as from all of us. We need to provide a
good example and educate those in our business surround-
ings constantly. Creating uncompromising new leaders is
imperative for us. ■
xxx
Miloš Djurković assumed the position of President of the
American Chamber of Commerce in Serbia in October
2011. He has worked in the IT industry in Serbia and
neighbouring countries for more than 20 years and to-
day is the Managing Director of Hewlett Packard Serbia.
Previously, he was General Manager of IBM in Serbia and
Director of the Representative Office of Cisco Systems for
Serbia, Montenegro, Macedonia and Albania.
Djurković graduated from the University of Bel-
grade’s Faculty of Electrical Engineering. He was a mem-
ber of the National Alliance for Local Economic Develop-
ment (NALED) managing board and is a member of the
Association of Serbian Corporate Directors. He is active
in sports and is Vice President of Red Star Rowing Club.
Djurković is married and has two children.
MilošDjurković,PresidentofAmChamSerbia

Providing
Counsel
U
S Ambassa-
dor Michael
Kirby is by
turns sup-
portive and encourag-
ing when it comes to
Serbia’s ongoing mod-
ernisation and reform
process, and forthright when talking about cer-
tain American expectations of Serbia and its in-
stitutions. As Kirby says, much of Serbia’s pro-
gress “depends on getting the legal and regula-
tory framework right”.
■ The relationship between Serbia and the
United States has had many ups and downs
since 2000. How would you describe the
relationship currently?
- US-Serbian relations are strong – and we are
working to make them stronger. We have com-
mon interests and a shared
vision of a prosperous, demo-
cratic Serbia that is integrated
fully with the European Un-
ion and other trans-Atlantic
institutions. These interests
were discussed in early Feb-
ruary when Prime Minister
Dačić visited Washington DC.
He met with senators, con-
gressmen and high officials at
the State Department and praised our two coun-
tries’ good relations. In my experience, we have
enjoyed a very good relationship with the Ser-
bian government. The Serbian government has
been open to hearing our concerns and forthright
when they believe our counsel could be useful.
This question is often asked in a political
context, but the economic situation is no less im-
portant. Yes, Serbia’s economy faces significant
challenges today. But American companies are
optimistic about Serbia’s long-term prospects as
it moves along the path to European Union mem-
bership. US companies are interested in long-
term investments in mining, power generation
and telecommunications – investments in the fu-
ture of Serbia that could mean jobs for thousands
of Serbians. Success here, though, depends on
getting the legal and regulatory framework right,
and that is one important aspect of work with the
Serbian government.
■ For Serbia, the stabilisation of relations
with Kosovo is as important as fostering
good relations with the EU. What expecta-
tions does the US have for the normalisation
of the Serbia-Kosovo relationship?
- We strongly support the dialogue between Serbia
and Kosovo and we want to see concrete measures
that will normalise relations. The United States’
long-term goal is a Europe that is whole, free
and at peace – we believe the
Belgrade-Priština dialogue is
a step toward that goal.
The efforts to normalise
relations, we believe, are con-
sistent with the interests of
Serbia and Kosovo. Not long
ago, I read an eye-opening
statistic – Serbia exported
US$385 million worth of
goods to Kosovo in 2012, and
a little more than twice that to Russia – but Rus-
sia has 80 times the population of Kosovo. Russia
is a large and potentially lucrative market, but
Kosovo’s proximity and history suggest that it,
too, is a valuable market for Serbian companies.
■ This February, Jonathan Moore, director
of the State Department’s Office of South
Central European Affairs, said a period of
stronger economic cooperation between
It is in the interests
of both Serbia
and the US
that the former
continues along
its reform path
and seeks to build
stronger, stable
relationships with
all international
partners – including
Kosovo. Serbia can
count on American
support every step
of the way
In my view, our ties
are broader than our
efforts here at the
Embassy and extend to
the human ties between
ordinary Serbians
and Americans
INTERVIEW H.E. MR. MICHAEL KIRBY, US Ambassador to Serbia

Serbia and the US was coming, particularly in terms of
American companies bolstering investments in Serbia.
What economic projects have been realised since then?
- The United States remains committed to building stronger eco-
nomic cooperation with Serbia, and to laying strong foundations
that will better integrate Serbia into the global economy and pre-
pare it for tough competition in the European Union. That is why
the US and Serbia signed a memorandum of understanding on co-
operation in the ICT industry last year. This cooperation became
evident when Prime Minister Dačić and I led an ICT trade mission
to the United States last year. The Prime Minister met with senior
executives from Amazon, Apple, Cisco, EMC2, Google, IBM, Intel,
Microsoft, PayPal and TeleSign.
Each one of those companies has
been in contact regarding invest-
ment opportunities. In February
I visited Georgia-based NCR’s re-
gional headquarters in Belgrade.
NCR expects to grow its work-
force to 2,000 people by the end
of 2014. Another success: Srem-
ska Mitrovica welcomed Cooper
Standard, which broke ground
last year and is expected to em-
ploy 500 people in this tough
economic environment.
Economic success is not just about big numbers. In many
countries, prosperity is driven by small- and medium-sized en-
terprises: the sometimes family-owned businesses at the core of
a community. For that reason, the United States prioritises wom-
en’s entrepreneurship as a leading international economic issue.
Empowering women economically increases prosperity for fami-
lies, communities and entire nations. We have partnered with the
Association of Business Women here on a variety of projects, and
support its expansion to all regions of Serbia, including the most
economically disadvantaged parts of the country.
■ Economic ties between Serbia and the United States are
not based solely on investments. How are these ties main-
tained and improved?
- In my view, our ties are broader than our efforts here at the
Embassy and extend to the human ties between ordinary Serbi-
ans and ordinary Americans. When we issue visas for students
to study in the US, or for tourists to visit, we facilitate person-to-
person interactions that allow us to understand each other bet-
ter. We try to nurture and build those ties with our programmes.
The Embassy sponsors a host of exchange programmes – for high
school and university students, professionals, members of the
military, politicians etc. These programmes help expose Serbians
to the American perspective on many issues, from how to dimin-
ish domestic violence to how to attract economic investment to
underdeveloped areas. When these Serbians return, I hope they
understand us better, but have also gained something valuable
to share here.
More broadly, we try to open channels of communication.
The Embassy has one of the largest Facebook pages in Serbia
(www.facebook.com/usembassyserbia), which we update daily
and which features vigorous debates about important issues. We
won’t change every person’s opinion, but I hope our followers un-
derstand us better and respect the open dialogue we encourage.
■ In November, Serbian me-
dia reported on a crisis in
the US-Serbian relationship
caused by the Bytyqi broth-
ers case. Serbian authorities
gave their assurance that the
case would be solved. What
does the US government ex-
pect of the Serbian authori-
ties in this case?
- The US Government expects
justice to be served.
No-one – not Americans, not
Serbians, no-one – wants to live in a country where people can
get away with murder. Justice demands that those who murdered
Agron, Ylli and Mehmet Bytyqi be called to account. Fourteen
years after their deaths, no-one has been convicted for killing
these three American citizens.
The US government remains very concerned about the By-
tyqi brothers’ case. We expect police and prosecutors to pursue
aggressively any leads in this case. It is Serbia’s responsibility to
ensure justice within its borders. We expect the Serbian authori-
ties to bring to justice those responsible for murdering the Bytyqis.
■ Serbia is moving towards European integration but not
towards NATO membership. What do you think is Serbia’s
future in terms of its cooperation with NATO?
- It is for Serbia to decide what its relationship will be with NATO.
We believe that NATO helps to assure the
stability of the trans-Atlantic region, and it is
obvious that the Serbian Armed Forces can be
a force for stability in Europe and the world
Markets
Russia is a large and potentially lucra-
tive market, but Kosovo’s proximity and
history suggest that it, too, is a valu-
able market for Serbian companies.
Bytyqi Brothers
The US government remains very con-
cerned about the Bytyqi brothers’ case.
We expect police and prosecutors to pur-
sue aggressively any leads in this case.
Vision
The US has a long-term vision: we see a
Europe that is whole and free, prosperous
and at peace. The countries of the Bal-
kans are critical to achieving our vision.

Every country in Europe, including Russia, has some type of coop-
eration with the NATO allies. Serbia is a member of NATO’s Part-
nership for Peace and has been a strong and active participant in
that programme. We believe that NATO helps to assure the stabil-
ity of the trans-Atlantic region, and it is obvious that the Serbian
Armed Forces can be a force for stability in Europe and the world.
That is why we work with the Serbian Armed Forces to promote
its professionalisation, to assist in reforms and to improve their ca-
pability for cooperation with NATO forces. Since 2007, the United
States has invested about US$7 million in Serbian military person-
nel training and 400 military students have completed their train-
ing in the United States. Over the last two decades, Serbia has gone
from being an importer to an exporter of security – that benefits
the region immensely and I am glad we
have been helpful in that transition.
■ What do you think of the eco-
nomic reforms the Serbian govern-
ment plans to implement in 2014?
- I believe the government recognises
how critically meaningful economic
reform is. Enacting reform tends to be
a complicated political question, in
Serbia or anywhere. Serbia will have a
new government after the March elec-
tions. I cannot predict the future but
I will say that I will encourage the new
government to improve the general
business climate, especially to improve
conditions for international and do-
mestic investors alike. For example,
this could be done by:
• streamlining the construction permit-
ting process so businesses can expand
and create new jobs without bureau-
cratic delay;
• implementing needed reforms to en-
sure clear property rights and fair
compensation or the return to right-
ful owners of property that prior gov-
ernments had confiscated without
compensation;
• addressing rigidities in the labour
market so it is easier for companies
to hire and dismiss employees – without that possibility, many
companies are reluctant to take on new workers;
• reforming state business inspections so they are more about
consumer and worker safety;
• bolstering law enforcement efforts against smuggling and tax
evasion – the formal economy must be more attractive to oper-
ate in than the grey economy; and
• strengthening protections for intellectual property rights.
The new government should focus on getting that regulatory
and legal framework right.
■ Apart from economic reforms, which are now at the cen-
tre of attention, what other areas in Serbia should be re-
formed as soon as possible?
- The rule of law. Because we consider rule of law to be so impor-
tant, we have multiple programmes to help foster it here. USAID
runs several programmes to strengthen Serbia’s courts: one in-
tended to help the courts administer justice more fairly, efficiently
and quickly; another that helps ordinary citizens by bolstering
misdemeanour courts; and another that boosts the judicial in-
dependence of the High Court Council. Along with USAID initia-
tives to support the Anti-Corruption Agency and the State Audit
Institution, these programmes will build durable institutions –
limited by the appropriate checks and balances – that can sustain
anti-corruption efforts over time.
In addition, two American prosecu-
tors are working through a US Depart-
ment of Justice programme to help Ser-
bia build a criminal justice system that
is more effective, more efficient and in
greater compliance with international
and European standards. They work
with the Ministry of Justice and pros-
ecutors’ offices to provide practical
expertise as Serbia re-examines its jus-
tice sector’s laws and codes. They also
conduct legal training programmes,
while a separate programme provides
support and training to Serbia’s police.
In sum, we believe that Serbians
expect and deserve a judicial system
that treats everyone equally, regardless
of wealth or station; and that will in-
sure a healthy and prosperous Serbia.
■ What do you make of the claim
that superpowers such as the
US are no longer as interested in
Southeast Europe? Is this a positive
development given the region is
finally stable politically? What vi-
sion does the US have for this part
of the world?
- The United States is, and will contin-
ue to be, very interested in the security
and stability of the Balkan region. Economic prosperity is key to
the regional stability we believe desirable. Of course, crises and
events elsewhere will attract the world’s attention, but the US
has a long-term vision: we see a Europe that is whole and free,
prosperous and at peace. That work is not yet finished, and the
countries of the Balkans are critical to achieving our vision. The
United States strongly supports the membership of all Southeast
European countries, including Serbia, in the European Union and
expanding security cooperation between the Balkan countries,
the United States and our allies. ■
We believe that Serbians expect
and deserve a judicial system
that treats everyone equally,
regardless of wealth or station;
and that will insure a healthy
and prosperous Serbia

SECURITY · SAFETY · IT · MULTIMEDIA · AUTOMATION
PHILOSOPHY IN SECURITY
Koving d.o.o, 34 Jurija Gagarina street, 11070 New Belgrade, Serbia, Tel/fax: +381 11 319 34 08, office@koving.com, www.koving.rs
25 years experience
Over 7000 references
Partnership with 55 world producers

AmCham Aims to
Act as a Role
Model to Serbia’s
Economy
A
mCham en-
joys a mostly
productive
relationship
with the Serbian government and is thankful
for its ongoing dialogue with officials and min-
istries. The Chamber’s great success has been in
making decision-makers sensitive to the needs
of the business environment, both in terms of
foreign investors and domestic companies. Since
AmCham was established in Serbia in 2011, the
organisation’s recommendations have had an
influence on more than 100 laws and bylaws
passed by the government. However, when it
comes to important issues such as the drawn-
out process of reforming the country’s Labour
Law, the Chamber and
its members are justifi-
ably concerned.
■ The goals and mis-
sion of AmCham are
well-known. How dif-
ficult has it been to im-
plement them in prac-
tice, and what have
been the biggest chal-
lenges the Chamber has had to face on an
executive level?
- It is difficult to give an unequivocal answer to
this good-but-complex question. For me person-
ally, the biggest challenge has been creating ex-
pectations about what AmCham can do for its
members, followed by their successful implemen-
tation. You know, we are a sort of spokesperson
for the most successful sector of the Serbian econ-
omy, assembled under the wing of AmCham.
The trust our members have put in us is a huge
obligation and responsibility, which is tested on
a daily basis. This role also entails our members
fully trusting us to recognise their key priorities
and fight for their realisation, which can some-
times last for years.
The second challenge is finding common de-
nominators, because if one company has a prob-
lem, that doesn’t automatically imply that other
companies, maybe even several of them, have
it too. Hence it is very important to understand
the needs of each member individually and work
on getting as many companies on board to meet
those needs whenever possible. If that is not pos-
sible, we will try to pre-
sent their problem in the
appropriate fashion.
■ AmCham has been
paying a great deal of
attention to direct, dy-
namic dialogue with
Serbian officials. Are
you satisfied with the
efficiency of these ef-
forts and the pace at which agreed changes
are realised?
- If you are asking me about the present time,
I can hardly say that we are happy with how fast
the promised changes are being implemented.
Many publicly stated deadlines have been bro-
ken, which is why our members have expressed
justifiable concerns. They were really encour-
According to the
AmCham Executive
Director, one of
the organisation’s
most important
roles is to serve as
a role model to the
Serbian economy
– especially young
people looking
to launch their
own businesses –
through promoting
examples of best
corporate practices
and ethical,
transparent and
socially responsible
operations
The previous government
recognised AmCham’s
priorities as its own, but, as
we all know, these priorities
did not materialise. I am
referring primarily to
the Labour Law
INTERVIEW MAJA PIŠČEVIĆ, Executive Director of AmCham Serbia

aged by the speed at which the previous government had
recognised AmCham’s priorities as its own, but, as we all
know, these priorities did not materialise. I am referring pri-
marily to the Labour Law.
On the other hand, and speaking in the long term,
I am glad to say that AmCham is exceptionally proud of
the quality of cooperation with state officials, starting with
top government officials
to line ministries, as well
as with the results of our
ongoing dialogue and the
decision-makers’ sensitiv-
ity to our organisation’s
recommendations. Since
the establishment of Am-
Cham in 2001, more than
100 laws and bylaws have
been passed based on rec-
ommendations from the
Chamber.
These results and the
trust that our members
have put in us are both
an obligation and encouragement
for us not to give up on reform
proposals we deeply believe will
not only make investors in Serbia
more content, but will also send
a strong message to the investors
we want to attract, putting Serbia
on the right track for further eco-
nomic recovery.
■ How much influence can Am-
Cham and other foreign investment organisations
really exert when it comes to changing and improv-
ing Serbia’s overall business environment? Especially
in light of Serbia’s EU accession and the necessity of
complying with different standards – from business
codes to legal and other types of regulation.
- Thank you for asking that question. I firmly believe that
one of AmCham’s most important roles is to serve as a role
model to the Serbian economy – especially young people
looking to launch their own businesses – through promot-
ing examples of best corporate practice and ethical, trans-
parent and socially responsible operations. All over the
world, American companies have managed to live up to
their role as promoters of the business values the US econo-
my – as the global leader – is based on.
With this goal in mind, we have decided to launch the
Leader in Change Award this year. The award’s title is also
AmCham’s motto. The aim of this award is to help our mem-
bers to become recognised as leaders of change in their indi-
vidual or corporate activities. I believe that, in this way, Am-
Cham will contribute significantly to promoting the social
values we have continu-
ously endorsed. We are
going to bestow honour
upon award recipients, as
well as the responsibility
to justify the trust of the
AmCham members who
voted for them through
their future activities.
■ What laws do you
think have had the
biggest influence on
improving the busi-
ness climate in Serbia,
both for American and
other foreign investors?
- I would like to mention the infa-
mous Labour Law. For many years,
the American Chamber of Com-
merce has been involved in discus-
sions about this undoubtedly im-
portant subject. Our members and,
we believe, the entire Serbian pri-
vate sector agree that the law has
to be changed. Why? On the one
hand, because Serbia cannot be an
isolated island in a globalised world. If all regional countries
coordinated this important piece of legislation among them-
selves, it would send a really important message to existing
and potential investors. So this should be done for domestic
and foreign investors alike.
It also should be done for young people, whose unem-
ployment rate is frighteningly high, as well as for the mid-
dle-aged population of age 50 and over, who can contribute
hugely to the quality of the Serbian workforce with their ex-
perience and knowledge, but who are not given a chance to
do so because employers fear they might be eligible for sever-
ance pay, which, according to the existing law, employers
are obligated to disburse when they are forced to reduce the
number of employees.
We have decided to launch
the Leader in Change
Award this year. The aim
of this award is to help
our members to become
recognised as leaders of
change in their individual
or corporate activities
Trust
The trust our members have put
in us is a huge obligation and re-
sponsibility – which is tested on
a daily basis.
Business Values
American companies have managed to
live up to their role as promoters of the
business values the US economy – as
the global leader – is based on.
Indicator
The Labour Law has failed to win support
so far. This will be a tremendously impor-
tant indicator of the government’s inten-
tions to put the economy first.

This reformative law has failed to win support so far. For
our members, as well as future investors, this will be a tre-
mendously important indicator of the government’s inten-
tions to put the economy first. Apart from the said law, our
members expect the following legislation to be reformed as
soon as possible: tax legislation, namely, reducing parafis-
cal charges; inspection legislation, with the view of taking
a tougher stance against the grey economy; and real estate
legislation, with the view to being able to acquire the re-
quired building permits in less
time. In this respect, the priori-
ties of all 187 members of the
American Chamber of Com-
merce are our priorities too,
and this is something we are
going to plead in our commu-
nication with the government
and relevant institutions.
■ As regards to the eco-
nomic activities of Am-
Cham members, in which
sector are they most suc-
cessful in Serbia?
- It is difficult to answer that
question given AmCham is
made of American, other in-
ternational and Serbian com-
panies, all of which operate
in more than 25 economic
branches. Some companies
are conglomerates that are
active in five or more econom-
ic sectors. If we look at the Ser-
bian economy as a whole, half
of the top-grossing companies
in 2012 are AmCham mem-
bers, and they are energy, telecommunications, agricul-
ture, processing and pharmaceutical companies. In terms
of our American members, the most successful come from
production, processing and ICT.
■ In the latter half of last year, there was talk of Am-
Cham and the Serbian government cooperating on
youth employment. How far did that project progress,
and what will happen with it in future?
- The Engage for Change survey has been conducted among
our members in order to find out which reforms are neces-
sary in Serbia, i.e. which reforms could facilitate higher em-
ployment in their respective core business activities. Some
answers were expected, and these are mostly about regu-
latory reforms, namely adopting the new Labour Law. On
the other hand, quite a few companies we surveyed talked
about inefficient and inconsistent courts, which should
serve as a guarantee that laws will be enforced and as the
main protector of business contracts, including the rights
and obligations that stem from them.
Finally, this was an opportunity for us to find out
how staff could be better trained, particularly in terms of
practical knowledge, motivating employers to hire more
people. For that reason we decided to launch our new
year-round educational programme called ‘AmChamps –
Young Leaders in Change’. This programme will consist
of a range of carefully devised
workshops, lectures and case
studies where our students
– the best young managers
and best students from the
University of Belgrade, the
cream of the crop – will be
mentored jointly to modern-
ise their knowledge, as well
as acquire practical skills and
precious experience.
At our ‘Engage for
Change’ conference, which
took place in December last
year, we handed over the
survey results and concrete
recommendations to top Ser-
bian government officials.
As far as we are concerned,
the priorities of our members
have been transformed into
the agenda of our regulatory
committees. We are deter-
mined to invest all of the ef-
fort it takes for these priorities
to materialise as much as pos-
sible and in the shortest time
possible, since the time it will
take to implement these priorities directly influences the
creation of new jobs in AmCham companies.
■ What do you feel is the future of Serbian-US eco-
nomic cooperation in light of Serbia’s potential fu-
ture EU accession?
- We are confident that the gate to improving economic co-
operation with the US is wide open today. By taking respon-
sible decisions, the Serbian government has secured official
support from the US administration, which is the first and
main prerequisite for bolstering economic cooperation and
new investment. What still needs to be done is to resolutely
implement reform priorities and conduct a targeted promo-
tion of Serbia and the region. We need to pull together and
get as many good American investors to pass through this
gate. These investors will become ambassadors of the Ser-
bian economy in the US in years to come. ■
Quite a few companies we surveyed
talked about inefficient and
inconsistent courts, which should
serve as a guarantee that laws
will be enforced and as the main
protector of business contracts,
including the rights and obligations
that stem from them

Importing
the
American
Dream
T
he ‘American Dream’ is a concept that
will be familiar to anyone who has been
exposed to US culture and history. The
idea is simple: have an idea, work your
hardest to realise it, enjoy the rewards. It’s a con-
cept the US Embassy in Belgrade’s Commercial
Counsellor Jane Kitson would like to import to
the Serbian business environment.
Kitson, like everyone else, is aware of the
reforms the Serbian government will need to
implement to foster a more
business-friendly environ-
ment, and her organisa-
tion, the Commerce De-
partment’s International
Trade Administration, is
helping US companies to
register their views about
the local changes they’d
like to see. Meanwhile, the
Commerce Department
continues to work to bring
investment and business
from the US, the influence of which on young
Serbian workers might see the American Dream
become a Serbian one too.
■ What has the US Embassy’s Commercial
Section been doing to boost economic rela-
tions between Serbia and the US?
- The United States’ Embassy in Belgrade is for-
tunate to host several agencies that focus on
building bilateral trade between the US and Ser-
bia: USAID, the State Department’s Economic
Section and my agency, the Commerce Depart-
ment’s International Trade Administration. My
agency is “the official trade promotion agency of
the US government” and has three main goals:
promoting US exports, identifying resellers of US-
manufactured goods and services, and bringing
US investors to Serbia.
Here in Serbia, the Commercial Section assists
US companies to offer ad-
vice or voice their concerns
to the Serbian government.
With the government’s at-
tention to the economy,
this centres largely on pro-
posed reforms, the regula-
tory framework and issues
to do with investment. Of-
ten we do this in tandem
with AmCham Serbia.
We worked extensively
on the US and Serbia’s
2013 memorandum of understanding on infor-
mation and communication technology, which
led to the Serbian ICT trade mission to the US.
Every company we visited is exploring invest-
ment opportunities in Serbia.
We also work regionally. The Commerce
Department partnered with the AmChams in
Serbia, Croatia, Romania and Bulgaria to hold
‘Transparency in Government’ seminars last
As Serbia looks to
boost its exports
to the US market,
the US Embassy’s
Commercial
Counsellor is doing
her utmost to
bring investment
to Serbia. The
US Embassy’s
Commercial Section
works to improve
investment and
business conditions
for US companies
here, often in
collaboration with
AmCham and other
stakeholders, to the
betterment of all
Working for a US
company gives anyone,
of any age, an inside
view of transparent, non-
discriminatory, customer-
focused business.
Of course there are
exceptions, but I believe
this is generally true
INTERVIEW JANE KITSON, Commercial Counsellor at the US Embassy in Belgrade

September. We shared best practices for implementing a
consultative process that allows all stakeholders to review
legislation, offer expertise and voice opinions. Interest from
government agencies, businesses and the press was very
strong – we exceeded capacity! The consultative process is
crucial for Serbia to implement effec-
tive and well-accepted reforms.
■ Serbia has traditionally recorded
a trade deficit with the US. Howev-
er, statistical data shows that this
deficit dropped last year, when
Serbia increased its exports to the
US by 70%, primarily due to the export of Fiat vehi-
cles. How might trade between the two countries be
improved further?
- My portfolio focuses on promoting US exports and bring-
ing US investors to Serbia, so I cannot opine on Serbian
export strategy. However, US and domestic businesses
agree: governments must provide stability and predict-
ability through the equitable application of the rule of
law. Entrepreneurs – be they small- and medium-sized
enterprises, or giant businesses – need a legal and finan-
cial framework that allows them to finance their ideas,
hire workers, protect intellectual
property, build a factory and know
which taxes they owe. Guaranteeing
that all businesses are treated equal-
ly before the law is fundamental to
improving any country’s place in the
global market.
I encourage Serbia to think of
itself as competing with other countries for investment.
From that perspective, Serbia gains when it presents a
compelling set of reasons, including investment incen-
tives, for businesses to come to Serbia. US businesses
evaluate new markets all of the time and, when they do
so, they measure one country’s benefits and drawbacks
I encourage Serbia
to think of itself
as competing with
other countries
for investment
Support us
and share in our success!
The very first US tour of the
Belgrade Philharmonic
“With a lot of hard work, commitment and
attention to detail, our musicians can be
even better than the world’s best. After all,
we have soul on our side! We can triumph
with music!”
- Muhai Tang, Chief Conductor of BPO
Zubin Mehta Belgrade Philharmonic Foundation
Designated accounts for the Belgrade Philharmonic
Orchestra’s US tour:
Current account 160-389656-55 Banca Intesa, Belgrade
Foreign currency account
IBAN: RS35160005400000464533
SWIFT CODE: DBDBRSBG Banca Intesa
www.bgf.rs, e-mail:office@bgf.co.rs
OCTOBER 2014
Goals
The US Embassy’s Commercial Section
has three main goals: promoting US ex-
ports, identifying resellers of US goods
and bringing US investors to Serbia.
Framework
Entrepreneurs need a legal framework
that lets them finance ideas, hire workers,
protect intellectual property, build facto-
ries and know which taxes they owe.
Collaboration
The Commercial Section and AmCham
work together on issues such as intel-
lectual property protection or reforms
such as the labour or bankruptcy laws.

against another country’s. A compelling and competitive
framework is crucial.
■ What kind of cooperation does the Commercial Sec-
tion have with AmCham Serbia, and what is its focus?
- The Commercial Section and AmCham Serbia work to-
gether on many projects – the transparency seminar is a
good example – but primarily on industry-related issues
such as intellectual property
protection or governmental
reforms that affect all market
participants, such as critically
needed reforms to the labour
or bankruptcy laws. We strive
to improve the marketplace
for all, making Serbia a more
attractive place to conduct
business for foreign and do-
mestic investors alike.
Of course, US companies
request guidance and ad-
vice, and we direct them to
AmCham Serbia. AmCham’s
membership and valuable
network of service providers
can assist in bringing those
companies into the market,
making Serbia more diverse
and competitive in the global
marketplace.
■ In your opinion, are in-
centives for foreign inves-
tors attractive enough to
bring more foreign direct
investment to Serbia?
- The question of offering in-
centives, and of what type, is
for Serbia to decide. However,
I would note that for large in-
vestments, companies need
access to land and buildings, skilled labour and predictable
taxation regimes. A fund could be set aside to offer large
investors incentives for long-term projects that bring jobs,
technology transfer, economic development and other ben-
efits. Tax incentives for training employees in new technolo-
gies, or grants, capital funds and tax incentives for research
and development, could attract manufacturers.
■ Corporate Social Responsibility programmes are
becoming increasingly important worldwide. How do
you evaluate CSR programmes in Serbia?
- I work mostly with US firms, and their CSR programmes
tend to reflect the firms’ worldwide programmes. Coca-Cola,
for example, focuses on youth development programmes
here and around the world.
One of the largest US employers in Serbia, Ball Manu-
facturing, has one of the most robust programmes. It runs
a youth education programme focused on recycling and
environmental awareness; partners with a local financial
institution to foster the development of local independent
beverage producers; and raises employee awareness of ethi-
cal business conduct.
In Serbia I have noticed
that companies in need of spe-
cialised, skilled labour, such as
those in the IT or mining sec-
tors, often partner with educa-
tional institutions to provide
teaching content, visiting ex-
perts and computers to train
students. This can prove to be
a win-win situation, creating
a highly trained labour pool
that benefits the worker, com-
pany and community.
■ As American investment
in Serbia’s economy grows,
so will the influence of
American approaches to
business. What does that
mean for a young Serbian
who finds a job working
for an American company
in Serbia today?
- Working for a US company
gives anyone, of any age, an
inside view of transparent,
non-discriminatory, custom-
er-focused business. Of course
there are exceptions, but
I believe this is generally true.
Most US businesses are based
on the ‘American Dream’:
that if you have an idea and you work hard, then you will
find success – and that you yourself must be the one to make
it happen! The US has a legal and regulatory framework
that empowers us to succeed, and that is testament to the
appeal and longevity of the American Dream.
I have met many young Serbians who have studied or
lived in the United States, and the American Dream has tak-
en hold of them. They have returned to Serbia to work for
change, for the future of Serbia. Maybe that dream is uni-
versal and appeals to dreamers and risk-takers everywhere.
Regardless, I believe that is America’s best export – a will-
ingness to risk it all, to make the world better for ourselves,
for our families and for our communities. ■
Maybe the American Dream is
universal and appeals to dreamers
and risk-takers everywhere.
I believe that is America’s best
export – a willingness to risk it
all, to make the world better for
ourselves, for our families and
for our communities

Overall, TRS Europe employs about 550
workers and has a projected annual
turnover of €40,000,000, with 98% of its
production exported to 21 countries
Embracing Change
I
n the space of two years, TRS
revenues have increased 60%,
EBITDA by 45% and the com-
pany headcount by 66% (225
new jobs created, 25 of which go-
ing to people with special needs).
Growth has been
achieved through
investments in
HR, technology
and knowledge.
Only last year,
the company
launched 144 new products (18%
of total portfolio). Overall, TRS Eu-
rope employs about 550 workers and
has a projected annual turnover of
€40,000,000, with 98% of its produc-
tion exported to 21 countries.
An ambitious, responsible com-
pany like ours has the right products
– high-quality remanufactured toner
cartridges made in accordance with
the relevant international certifica-
tions, quality and ecological stand-
ards, all of which are conditions for ac-
cess to the global market. By choosing
our products, customers can make sig-
nificant cost savings while at the same
time making a significant contribution
to environmental protection.
Results and business performance
metrics for 2013 rank TRS Europe
among Serbia’s ‘crème de la crème’.
With the highest credit rating, TRS is
a partner vendors are competing to
work with. Now, with great results
following widespread changes within
the company and its working environ-
ment, TRS Europe stands as a testa-
ment that change is an opportunity to
grab – just overcome the odds! ■
CORPORATE TRS Europe
TRS Europe d.o.o.
Rade Končara 1, 21131 Petrovaradin, Srbija
Tel. +381 (0) 21 439 900; Fax. +381 (0) 21 439 901
Web: www.trs.rs
To be acquired by a
global leader – as
happened to print
consumables company
TRS Europe in 2011
– is suggestive of a
company that is ‘on
the up’. Since then,
TRS Europe has been
defined by change:
new technologies, new
organisation, new
markets, new world

Success
Possible with
Leadership
and Support
U
SAID Mission Director Susan Kosinski
Fritz has overseen operations in Ser-
bia since 2010 and presents a positive
view of the country’s potential. She
and her colleagues have been working in Serbia’s
peripheral, less developed regions, bringing busi-
ness know-how and support, as well as helping
to reduce the country’s gargantuan court case
backlogs. These are just a few of the daunting
projects USAID faces, but as Kosinski Fritz says
herself, “With continued
Serbian leadership and
sustained US and interna-
tional support, success on
a national scale is abso-
lutely possible.”
■ As EU accession talks
start, Serbia continues
along its reform path-
way. How does Serbia’s
democratic and eco-
nomic development
compare to Croatia,
Romania and Bulgaria
in 2006, when these countries – all now EU
members – were last approved USAID funds?
- Despite facing individual challenges on their
paths to join the EU, Romania, Croatia, Bulgaria
and Serbia share similar characteristics of transi-
tion economies and political systems. USAID uses
a number of tools to measure the level of reform
in transition countries. One of these tools tracks
and analyses a country’s progress along different
dimensions, comparing USAID-assisted countries
in Europe and Eurasia to Croatia, Bulgaria and
Romania in 2006, USAID’s last year of funding
for each of those countries.
Luckily,2014isnotUSAID’slastplannedyear
of funding for Serbia. Using Freedom House’s Na-
tions in Transit, Serbia in 2013 scores better than
Bulgaria, and close to Romania, but slightly be-
hind Croatia in 2006. Using the European Bank
for Reconstruction and
Development’s (EBRD)
Transition Report, Serbia
in 2013 scores about the
same or slightly lower
than Bulgaria, Croatia
and Romania in 2006 on
most economic indica-
tors. Where Serbia falls
behind is on large-scale
privatisation, governance
and enterprise restructur-
ing, and banking reform.
■ To what extent and
in which areas do the economic and demo-
cratic development problems of Serbia dif-
fer from those elsewhere in the region?
- USAID Serbia’s primary focus is on Serbian de-
velopment. Our USAID colleagues in Bosnia and
Herzegovina, Kosovo and elsewhere in the region
will have more insight into the specific challenges
in those countries. As USAID’s funding in the re-
Contrary to at
times gloomy
outlooks on Serbia’s
transitional efforts,
the USAID Serbia
Mission Director
feels progress is
not only possible
but tangible too.
The organisation
continues to partner
with and support
Serbian enterprises
and, with strong
leadership from the
government, results
will only continue
to improve
Company competitiveness
is dependent on how
supportive the overall
business climate is.
National and local
government legislation and
administrative processes
need to be transparent
and efficient. They should
support, not hinder, a
company’s growth
INTERVIEW SUSAN KOSINSKI FRITZ, Mission Director of USAID Serbia

gion diminishes, though, we are supporting more regional,
cross-border programming to address some of the common
challenges, primarily economic, that countries face.
One of these common challenges is the need to increase
exports in order to create jobs for the many unemployed,
especially youth. For many Serbian companies, other coun-
tries in the region are natural –
and historic – markets. However,
companies need to have products
and processes that make them
competitive in both regional and
global export markets. In part,
a company’s competitiveness is
dependent on how supportive
the overall business climate is.
National and local government
legislation and administrative
processes need to be transparent
and efficient. They should support, not hinder, a company’s
growth. While specific areas of reform vary from country
to country, this is a challenge throughout the region. The
passage and implementation of key economic reforms to
improve labour laws and construction permitting is critical
and urgent for Serbian companies to increase their competi-
tiveness and for Serbia to increase its competitiveness as a
country and attract much-needed foreign direct investment.
Every country has its specific features, though, and Ser-
bia is no exception. Serbia’s democratic transition has been
relatively lengthy, although a number of key governance
reforms have been undertaken only within the past four or
five years. This means Serbia may have lost some valuable
time compared with some of its
neighbours. On the positive side,
with political will and public sup-
port, it may be possible to make
up that lost time.
Another distinguishing fea-
ture of Serbia is its rich multi-
culturalism. Serbia has a diverse
number of multi-ethnic com-
munities in Vojvodina, Sandžak,
south Serbia and elsewhere. How
the Serbian government supports
and helps these multi-ethnic regions and marginalised
groups to develop is an important question. Finally, Ser-
bia has a tradition of civil-society activism dating from the
1990s; as many leaders of that generation leave the scene,
civil society activists have a unique opportunity to help
society address today’s and tomorrow’s challenges in new
and innovative ways.
Through one of our initiatives,
we have improved the business
skills, product design and
sales of companies in south
and south-west Serbia,
resulting in 400 new jobs
and US$13.8 million in sales
from trade fairs alone
Refreshing advice.
www.deloitte.com/rs
Terazije 8,11000 Belgrade, Serbia
Tel: +381 11 3812 100
Fax: +381 11 3812 210
© 2014 Deloitte Serbia

■ USAID and the Supreme Court of Cassation recently
presented a programme to resolve old cases in Ser-
bia’s courts. Under this programme, the total 1.75
million old cases buried in the court system should
be reduced by 80% over the next five years. How is
this possible in a country where it is not uncommon
for an ordinary litigation case to last up to 10 years?
- You are correct – like all worthy goals, this one is ambi-
tious. But we and our Serbian partners think it is achiev-
able. In fact, one of the courts USAID has partnered with
for the last several years has
reduced its old cases by 87%.
The Supreme Court of Cassa-
tion is showing real leader-
ship in reducing case backlogs.
For example, it has created
a special working group fo-
cused exclusively on backlogs.
That same working group in-
cludes many of the judges that
achieved a similar backlog re-
duction in 10 pilot courts with
USAID help. All of these suc-
cesses were only possible by
using a variety of approaches:
enhanced cooperation with
external partners; improved
internal organisation and pro-
cedural steps; and increased
public trust. With continued
Serbian leadership and sus-
tained US and international
support, success on a national
scale is absolutely possible.
■ USAID’s current strate-
gic plan covers the period
from 2013 to 2017, within
which you have focused on,
among other things, the
least developed, peripheral
parts of the country – the
regions of Sandžak and
south Serbia. What are the
biggest problems you have
faced in these places?
- Businesses in south and south-west Serbia are faced with
all of the same macro and micro constraints as those in other
parts of the country – a business environment that is costly
and time consuming, and pressure to continuously improve
products and operations and seek out new markets, to name
just a few. A larger percentage of businesses in these regions
are small and sell their products very close to home, which
makes them more vulnerable to changes in their markets.
I would highlight, however, that there are superb ex-
amples of companies in these regions, including jeans and
shoe producers, exporting to the most exacting customers
in Europe. Just think of all that they could achieve if the
transportation infrastructure were modernised and the
cost and time of transporting products to Belgrade and be-
yond was reduced!
■ Five organisations in Serbia received grants from
USAID recently, with project management placed ful-
ly in their hands. This rep-
resents a new operational
approach for USAID in Ser-
bia. What was the motiva-
tion behind this?
- Our new operational ap-
proach makes perfect sense
in Serbia for a number of rea-
sons. First, USAID is changing
the way we work as an agency
– in Serbia and all around the
world. Second, Serbia is fortu-
nate to have some relatively
strong civil society organisa-
tions with proven capacity to
deliver results and manage
funds effectively, so we knew
we had great potential part-
ners. Third, as our budgets
grow smaller, working direct-
ly with local organisations is
cost-effective and permits us
to put responsibility for Ser-
bia’s development directly
into the hands of Serbians,
who are best attuned to local
needs. This will be especially
important for Serbia as the
country progresses toward
the European Union.
■ Are you satisfied with
results achieved in Serbia
compared to elsewhere in
the region? Which projects
do you consider the best
and most successful?
- We’re proud of all of our assistance efforts, and it isn’t
possible to compare them against one another or to other
countries in the region. Just to name a few quick highlights:
our work through the Separation of Powers Project has de-
livered really impressive, tangible results by helping to re-
duce case backlogs in partner courts by as much as 80%.
Through another project, we supported the development of
There are superb examples
of companies in south and south-
west Serbia, including jeans
and shoe producers, exporting
to the most exacting customers
in Europe. Just think of all they
could achieve if the transportation
infrastructure were modernised

the new Law on Misdemeanours – very progressive legisla-
tion that was drafted with substantial public and expert in-
put. Through our civil society work, we’ve been supporting
pioneering work in digital activism, corporate social respon-
sibility and philanthropic development.
Through our Business Enabling Project, USAID is pro-
viding valuable analysis and
input to the government of Ser-
bia on key economic legislation
that we expect will be passed
soon. Through this project, with
the help of the National Alliance
for Local Economic Develop-
ment (NALED), we have already
helped the government to elimi-
nate 138 parafiscal charges,
reducing the non-tax burden
of a medium-sized company by
47%. We also supported the
development of a new law on
factoring, which helps provide
additional liquidity to Serbian
companies.
Through another initiative, we
have improved the business skills,
product design and sales of companies
in south and south-west Serbia, re-
sulting in 400 new jobs and US$13.8
million in sales from trade fairs alone.
We are excited about partnering with
the government of Serbia’s National
Agency for Regional Development to
develop and implement a project to continue supporting com-
panies in these regions – so stay tuned for more good news!
■ With USAID having supported Serbia’s media for
many years through various projects, it’s safe to as-
sume you are familiar with the worsening financial
sustainability, decreasing levels of media freedom
and tabloidisation of Serbian media. Is there a solu-
tion to the media’s growing problems? To what extent
is government responsible?
- USAID has supported Serbian independent media for
years. In fact, we still do, through a project with an inde-
pendent coalition of media groups promoting media liter-
acy. We follow media devel-
opments closely.
Without necessarily
agreeing that problems in
the Serbian media are grow-
ing, I do agree that further
reforms are needed. Imple-
menting the government’s
media strategy fully is a good
place to start: the strategy
might not be a perfect docu-
ment, but it is a step in the
right direction. Transform-
ing the government’s role
from direct funding to pro-
ject-based media support is
essential to moving toward
a competitive media market.
Ensuring media ownership
transparency is also extreme-
ly important.
On another level, though,
the global media trend is to-
ward consolidation as the in-
dustry is transformed by new
technologies, information
sources and consumer habits. Considering the high number
of print and electronic outlets here in Serbia, some similar
form of media consolidation is inevitable. The question is
how government policies, aligned with European norms,
can help manage that consolidation in a way that encour-
ages real competition while ensuring quality public service
and media freedom. ■
USAID has supported Serbian
independent media for years.
In fact, we still do, through a
project with an independent
coalition of media groups
promoting media literacy

Putting Serbia
on the Map
I
n the view of Ser-
bian Chamber of
Commerce Presi-
dent Željko Sertić,
economic cooperation
between the US and Ser-
bia has been improving
steadily, but there are
stillquiteafewunutilised
trade and investment
opportunities for the two countries to explore and
take advantage of. Exports of Fiat cars have helped
Serbia to register a trade surplus for the first time.
Now, Sertić and his organisation are pursuing all
avenues to turn a novelty into a trend.
■ US-Serbian economic cooperation has had
its ups and downs. How would you rate the
level of cooperation today?
- Over the past three years, our exports to the
American market have
grown. In 2013, Serbian
exports grew to US$493
million, a five-fold in-
crease relative to the year
before. This is our best
export result since 2000.
Given imports from the
US have declined by 5%,
this is the first time we
have had a surplus – in
the amount of US$145
million – in trade with the
US. Exporting Fiat vehicles
has contributed to better
export performance.
Despite Serbia’s GSP status – the General-
ized System of Preferences, or duty-free export
of more than 4,650 Serbian products – expiring
on 31 July 2013, our exports grew. We believe
that Congress will vote in favour of re-activating
the GSP status of countries that had it previously.
The Serbian Chamber of Commerce thinks Serbi-
an companies should continue to export to the US
as per usual procedures and continue their exist-
ing cooperation with American buyers, as there
are no new or additional restrictive measures to
prevent them from doing so.
■ Given political relations between the two
countries have become warmer, it is realis-
tic to expect economic relations to follow
suit. How can the US and Serbia improve
their economic relationship and foster
more dynamic trade?
- Developing relations with the USA is one of our
foreign and economic policy priorities. Ameri-
can companies are among the biggest investors
in Serbia, and developing trade relations with
the US is not only significant for improving our
country’s balance of payments, but for bolstering
overall bilateral relations too.
The best way to strengthen our economic re-
lationship with the US is by
attracting American capi-
tal to the Serbian economy,
namely via new projects and
the privatisation of our com-
panies. We need to continue
to improve the stability and
predictability of our invest-
ment and business environ-
ment, as well as continue de-
veloping market institutions,
promoting our investment
potential, our liberal foreign
investment regulation and
free-trade agreements with
a view to breaking into third
markets, either together or individually.
In order for Serbian products to have a more
prominent presence in the US market, the SCC
will continue to work on the networking between
Serbian and American companies, disseminate
information, educate and provide other services
to Serbian businesses, preparing them for their
In 2013, Serbian
exports to the US
grew to just shy
of half a billion
dollars, its best
result since 2000.
Despite a 5% dip in
imports, American
companies continue
to invest – it is now
up to organisations
such as the SCC and
AmCham to boost
results further and
keep bilateral trade
on the right path
For Serbian products
to have a more prominent
presence in the US,
the SCC will work
on the networking
between Serbian
and US companies,
disseminate information,
educate and prepare
Serbian businesses
for their appearance
on the US market
INTERVIEW ŽELJKO SERTIĆ, President of the Serbian Chamber of Commerce (SCC)

appearance on the American market – including informing
them of new export opportunities.
Also, the Serbian Chamber of Commerce will continue
to develop its activities to inform potential American busi-
ness partners about the conditions and opportunities for
cooperation with Serbian businesses.
■ As you mentioned, the export of Fiat vehicles has
helped Serbia to reduce its disparity in trade with
the US. Could you tell us
about this year’s plans for
further exports to the US,
and which sectors have
realistic opportunities for
growth in this respect?
- We expect export tendencies
to grow, and we would like to
see our export structure im-
proved with a higher share of finished products. The growth
of the Serbian economy and its capacity to secure sufficient
quantities of goods, continuity in delivery and adherence to
delivery times, as well as having appropriate product design
and complying with the demands of the American market,
will certainly contribute to that. Serbian exports to the US
could also benefit from stronger marketing activities, higher
visibility for Serbia’s economic potential and networking
with distribution companies.
New opportunities to develop economic cooperation lie
in the food industry and agriculture, as well as metal pro-
cessing, wood processing, textiles, the IT industry, infra-
structure and construction, the military industry and the
banking sector.
One of the best examples of cooperation with US com-
panies is the company Medino from Krnjevo, which in late
August 2013 concluded an agreement for the distribution of
natural honey and other products with a distribution com-
pany from New Jersey. Serbian honey is soon going to be
sold in more than 1,000 shops across the US under Medino’s
Woodland and ZiZu brands.
The US market is demanding and very competitive, and
transport costs are very high, so any Serbian company mar-
keting its products in the US is very important to Serbia’s rep-
utation and economy. In most cases, Serbian companies sell
their products to the distribution chains of American retailers.
The biggest concentration of Serbian products is in small retail
shops where the Serbian diaspora is the target group.
■ Several Serbian officials visited the US in 2013, with
some concrete business deals announced. Do you
know if the implementation of any of these projects
has begun?
- During Serbian officials’ last visit to the US, American in-
vestors expressed interest in investing in the IT sector, en-
ergy and mining, so we do expect these business initiatives
to be realised in the coming period. In November 2013, Mi-
crosoft representatives reciprocated with a visit to Belgrade,
where they continued talks about investment projects.
Companies such as Freeport, General Electric and Chev-
ron are also willing to invest in Serbia. Freeport is looking
to invest in the exploitation of mineral ore, General Electric
would like to acquire a locomotive and train car factory,
while Chevron is interested in oil shale.
■ Which of the existing
treaties between the two
countries are most impor-
tant to Serbian-American
economic ties?
- The agreement between the
governments of the United
States and Serbia and Monte-
negro on economic, technical
and related assistance, which was ratified on 6 March 2001,
determines the formats and means for providing economic,
technical and other related US assistance to Serbia and Mon-
tenegro, while the agreement on the promotion of invest-
ments between the federal government and the US govern-
ment ratified on 12 December 2001 practically boils down to
protection of US investments. The development of economic
relations between the two countries would be bolstered sig-
The US market is demanding and
very competitive, and transport
costs are very high, so any Serbian
company marketing its products
in the US is very important to
Serbia’s reputation and economy
Leading IT systems integrator with tradition and
reputation in the markets of Serbia and the region.
For a number of years,
we have provided our clients in Serbia and the region
with state-of-the-art IT solutions that incorporate top-
class technology and professional services.
Beogradska 39, 11000 Belgrade, Serbia
Phone: 381 11 3302 500; Fax: 381 11 3232 655
E-mail: contact@sbs.rs; Web: www.sbs.co.rs

nificantly if they concluded an agreement on the mutual promotion
and protection of investments and a double taxation agreement.
■ Can you single out some good examples of American com-
panies investing in Serbia, creating new jobs and contribut-
ing to economic collaboration?
- The biggest American investment in Serbia was the acquisition
of Niš Tobacco Industry (DIN) by Philip Morris International. In
2003, Philip Morris acquired the Niš-based company for €518
milllion and the company’s investments so far have exceeded
€660 million. The following American multinationals have also
made significant investments and operated successfully in Serbia:
Coca-Cola, PepsiCo, Ball Corporation, Microsoft, Cooper Tire, Van
Drunen Farms and Alltech.
Although I am bit apprehensive
about singling out any company, I would
like to mention two: can manufacturer
Ball Corporation, as the first and biggest
foreign greenfield investment in Serbia;
and Microsoft’s regional development
centre. In 2005, Ball Packaging opened
a state-of-the-art production facility in
Zemun, hiring more than 100 domestic
workers. The plant now produces cans
for both the regional and European mar-
kets. In 2011, the company expanded its
production capacity and hired 40 more
workers. According to Ball Packaging,
they have invested around €100 million
in Serbia so far. Also, Microsoft’s decision
to open a regional development cen-
tre in Belgrade in 2005 was very im-
portant for Serbia considering that,
at that time, the company had only
three such centres worldwide.
The latest example of a success-
ful American investment is the one
carried out by National Cash Reg-
ister (NCR). This is the world leader
in providing technological support
to companies across various sectors,
from the public sector to finance and games of chance. NCR has
opened an operations and information centre in Belgrade that will
have close to 2,000 young, highly educated employees by the end
of the year.
This year, we are also expecting the construction of a heat ex-
changer and refrigeration factory to begin. This is an investment
by the company Luvata and the plant will be located in Zrenjanin’s
industrial zone.
■ How would you rate cooperation between the SCC and
the American Chamber of Commerce?
- Our cooperation with AmCham is good. We exchange informa-
tion and have joint activities, while individual members of Am-
Cham participate in our activities.
AmCham is also a member of the SCC Foreign Pool, the role
of which is to develop and bolster mutually beneficial, continuous
and long-term cooperation between our and other bilateral cham-
bers, their representative offices, associations and business clubs
in Serbia. The primary goal of this body is to form networks be-
tween national and international business communities in Serbia
in order to achieve more rational utilisation of resources, higher
synergy and more efficient internationalisation. This is in the best
interest of both the SCC and Foreign Pool members.
ApartfromAmCham,theSerbianChamberofCommercehashad
exceptionally good cooperation with the US Embassy’s Economic and
Trade Affairs Section in Belgrade and on USAID projects in Serbia.
■ There are several thousand Serbs
living in the US and Canada. Most
of them emigrated in the 1990s and
many are still emigrating to this day.
These are often top experts, manag-
ers and scientists in whose educa-
tion Serbia had invested billions of
dinars. Is Serbia communicating
with these people today to help ad-
vance economic cooperation, as Tur-
key and other countries do?
- The Serbian diaspora is a huge and an
insufficiently mobilised development re-
source, which should be better utilised
with the aim of attracting investments to
Serbia and exporting Serbian products.
The Serbian Chamber of Commerce
values our diaspora as an important
part of the Serbian economy and has
been trying to win back their trust, as
well as use their know-how, business
contacts and capital for the better-
ment of the Serbian economy. One
of the first indicators of a successful
economic environment is when its
diaspora starts to invest. Trust and
investments from the diaspora are
good indicators for other investors too.
Back in 2001, the SCC formed the Diaspora Centre and con-
stituted the Diaspora Business Council, which today comprises
32 members from the diaspora and 17 members from Serbia.
At the same time, we have been advocating setting up an intel-
lectual diaspora network as a vehicle to bring our experts back
to the country. We have also signed a cooperation agreement
with the Serbian Ministry of Diaspora stipulating that Serbian
students living abroad should do their professional practice with
Serbian companies, through which we contribute to the state’s
efforts to bring young experts back to Serbia. I expect that an
increasing number of SCC members will recognise that this is in
their interest and join the project. ■
The SCC values our diaspora as
an important part of the Serbian
economy and has been trying to
win back their trust, as well as use
their know-how, business contacts
and capital for the betterment of
the Serbian economy

Decade of Improvement
P
hilip Morris International (PMI) is
behind well-known cigarette brands
such as Marlboro and Parliament and
has been operating in Serbia for over
10 years.
■ Philip Morris marked its 10th anniversa-
ry in Serbia last year. Could you sum up the
company’s most important results during
that period?
- The decade behind us was devoted to the con-
tinuous improvement and development of all
aspects of our Serbian business. Our financial in-
vestments since the acquisition of Duvanska In-
dustrija Niš have amounted to more than €672
million. I am proud to celebrate our 10th anni-
versary in Serbia as a
stable market leader,
but also as an agile
organisation capa-
ble of responding
quickly to consumer
needs and a pioneer
of innovation.
Last year, Philip Morris was the first in Serbia
to launch branded universal tobacco – suitable
both for rolling and tubing. Our Niš factory was
the first PMI factory in Eastern Europe, the Mid-
dle East and Africa to manufacture such a prod-
uct. However, the event that makes me particu-
larly proud was Serbia becoming the first country
worldwide where a new variant of Marlboro was
presented, Marlboro Advance XL.
Additionally, we have increased exports of
our products to other countries significantly.
Products made at our Niš factory are not only be-
ing exported to CEFTA markets, but also to Asian
countries. This is a great achievement, as it con-
firms the high quality standards of the products
we manufacture in Serbia.
■ The illegal tobacco trade disturbs your
company’s market operations. Do you think
enough has been done to curb the growth of
the black market?
- Last year, the legal cigarette market decreased
by 20%, resulting in losses of more than €170
million to the state budget from excise taxes and
VAT. A large number of small retail outlets are
also struggling because of this illicit ‘competi-
tion’. Given the high unemployment rate and
that retail entrepreneurship is the only way
many in Serbia can provide for their families, you
can imagine the black market’s economic and
social impact.
The problem must be tackled quickly and effi-
ciently. The only way to do this is through a joint
effort by all stakeholders involved, proper en-
forcement and a strong ‘zero tolerance’ attitude
to the grey economy.
■ Philip Morris’ ‘Start Up for Your Business’
project supports small family businesses.
What results has the project had thus far?
- It has been five
years since we start-
ed supporting small
and family business
entrepreneurship in
Serbia. I’m proud we
have helped people
address their unem-
ployment directly and encourage entrepreneurial
thinking. ‘Start Up for Your Business’ has helped
as many as 280 business owners build a better
future for their families. They in turn have pro-
vided employment for roughly 1,000 individuals.
The new contest cycle is currently in progress,
through which we hope to help start up another
100 small businesses. ■
The Managing
Director of tobacco
giant Philip Morris’
South East Europe
sector reflects on
the company’s first
10 years in Serbia
and the ‘agility’
that has allowed its
operations here to
adapt to challenges,
innovate and
continue to thrive
in a sometimes
difficult market
Last year, the legal cigarette
market decreased by 20%,
resulting in losses of more than
€170 million to the state budget
from excise taxes and VAT
INTERVIEW STACEY KENNEDY, Managing Director South East Europe at Philip Morris International

Stable Partner
of the State
B
anca Intesa, the Serbian
bank of Italy’s Intesa San-
paolo group, is the strongest
bank operating in the coun-
try. Its Executive Board President Draginja Đurić
has seen the bank continue to perform well since
it started operations in Serbia, even in the face of
worsening economic conditions. Here she explains
the challenges facing the Serbian banking sector
and speaks about the need to create a stronger,
more stable economy for the benefit of all.
■ By most indicators, Banca Intesa has been
the most successful bank in Serbia for years
and you have been heading the bank from
the start. How would you describe the state
of the Serbian banking
sector today?
- Banks are the engine
of the broader financial
system in Serbia, and de-
spite challenges reflected
in amplified credit risk
and contracting demand,
the banking sector is still
the soundest sector of
the domestic economy.
The reasons for this lie in
the fact that, on the one
hand, the local banking
sector is well regulated and supervised, while on
the other most of the banks in Serbia operate as
part of international groups that are fully aligned
with the highest global banking standards. This
provides important, double-stability assurance,
which, coupled with high capitalisation and li-
quidity indicators, gives banks ample capacity
to support the economy along its recovery path.
Still, in order for banks to be able to deploy
their potential to a greater extent, it is crucial
to tackle the high level of non-performing loans
(NPLs), which pose a heavy strain on both the
banking sector and businesses, while at the same
time addressing key market challenges and tak-
ing resolute steps to put the economy on a sus-
tainable growth trajectory.
■ Away from objective reasons and the eco-
nomic crisis, what do you think should be
done to help the banking sector to drive
Serbia’s economy?
- The role of the banking sector in any coun-
try is to channel funding towards productive
investments and facilitate efficient allocation
of resources for the pur-
pose of increasing in-
dustrial production and
exports and creating
jobs. In general, a sta-
ble and healthy banking
sector plays a key role
in supporting econom-
ic activity, but banks
themselves cannot drive
economic growth.
What spurs GDP ex-
pansion is investment,
innovation and techno-
logical advances, which is why it is essential
to improve the overall business climate in the
country. The role of the state is to help foster
a stable and predictable market environment,
giving impetus to economic activity, encour-
aging investors and reviving industrial pro-
duction. The role of the banks is to support
this process.
Banking has become
an often unfairly
maligned industry,
one whose positive
contributions to the
economy and the
lives of citizens tend
to get lost amid the
criticism. Banca
Intesa and its peers
are the “engine
of the broader
financial system in
Serbia”, according
to Draginja Djurić,
and in spite of
challenges the
banking sector is
still the soundest
segment of the
economy
The role of the state is
to help foster a stable
and predictable market
environment, giving
impetus to economic
activity, encouraging
investors and reviving
industrial production.
The role of the banks is
to support this process
INTERVIEW DRAGINJA DJURIĆ, Executive Board President of Banca Intesa

■ Ever since the deepening of Serbia’s economic cri-
sis, banks have been under public pressure for mak-
ing profit. Is there a credible bank or a company in the
world that is not generating profit and what is your
reaction to these occasional populist campaigns?
- The value-creation ability of banks is often considered in
a rather critical and one-sided
way, while their contribution to
the economy and community is
easily overlooked. The capacity of
any bank to preserve the interests
of its shareholders and deposi-
tors, provide for its employees,
help the economy and contribute
positively to the community must
not and should not be placed into
a negative context.
The Serbian banking sector is
a stable partner of the state and
the key supplier of finance for businesses, while providing
jobs and financial security for the families of the more than
27,500 people it employs. It is also second by contribution to
the state budget through taxes paid from business.
On the other hand, the profitability of banks in Ser-
bia is clearly overstated. The domestic banking sector’s
return on equity has been in decline for several years and
is now more than twice below its level in 2008, which is
also reflected in the fact that, according to the last report
of the central bank, as many as 13 of the 31 banks that
operated in the market in 2013 ended the third quarter of
the year in the red.
■ The current economic cri-
sis has narrowed banks’ in-
vestment horizons signifi-
cantly – the number of NPLs
has grown substantially and
lending safety has been re-
duced to a minimum. What do
serious banks such as Banca
Intesa do to overcome such
market conditions?
- In an environment where banks
are unable to collect one of every
five loans they give, the focus is placed on asset-quality man-
agement, additional prudency in new lending and efficient
collection. It is not in the interest of any bank to tie fund-
ing in loan loss provisions, so at the same time we are put-
ting maximum effort into being responsible and proactive,
and helping those clients that have encountered repayment
The value-creation of banks
is often considered in a one-
sided way. The capacity
of banks to preserve the
interests of shareholders,
provide for employees, help
the economy and contribute
to the community should not be
placed into a negative context

Engaging for Change: AmCham Serbia Works to Improve Business Environment

Engaging for Change: AmCham Serbia Works to Improve Business Environment

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