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Čadež: Clear and Rapid Dialogue Between the Business Community and the Policymakers is the Key

Dec 14, 2022

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Uncertainties in doing business, along with inflation, rising energy, and food prices, and disrupted supplier chains, are the biggest challenge, both for the global and European, as well as for the Serbian economy. We are in a race against time, but as a small economy, we have advantages over bigger and stronger economies, because we are compact and can act quickly. We showed this during the coronavirus pandemic and before, but good dialogue between the business community and the policymakers is important to us so that we can react quickly, says Marko Čadež, President of the Chamber of Commerce and Industry of Serbia (CCIS).

Our job and task are to protect the interests of the economy in partnership with the state. We don't always have the same interest, but we have to constantly talk and work together in order to quickly react and solve the companies' problems," Čadež points out in an interview with Bloomberg Adria TV.
He pointed out that macroeconomic data for Serbia are better than expected - we have GDP growth and a record level of FDI that will exceed four billion euros, which is another indicator that investors have not stopped. "From 2020 to the end of 2022, we have 66 new factories, and new production facilities, which is no small thing. The CCIS quarterly survey shows that 75 percent of businessmen do not expect problems with liquidity, which is good news for now," adds the president of CCIS.
Despite these positive indicators, Čadež warns that in 2023, the continuation of inflationary pressures, energy dependence, and uncertainty in business planning will remain the biggest concern for the companies. 
"According to some research done in the EU, companies have transferred inflationary cost pressures of semi-finished products and raw materials to the customers by 34 percent with prospects of reaching 50 percent in the first quarter of 2023. It is the delayed inflationary pressure from 2022. There is, however a limit to price rising towards the end consumer. Companies do not have much maneuvering space, they can only transfer the funds planned for capital investments to operational activities and use that money to maintain the level of production. On one hand, you keep business afloat, while on the other, investments important for productivity are postponed," explained Čadež.

He points to one major innovation - the transition from globalization to regionalization, the formation of larger regional territorial entities led by the leading economic powers - the USA, China, and the EU.
It's a tectonic economic disruption because all supply chains and value chains are shifting. This is not only happening because of the conflict in Ukraine, but is also a consequence of earlier events. Serbia can use these changes as an opportunity brought by nearshoring, Čadež believes.

In the dialogue with the new government, as he pointed out, the Chamber has a multi-sectoral approach to solving problems. "Unlike in the past when we had permanent working groups with individual ministries to solve problems, now we have to work in a multisectoral way." An example is waste management in the construction industry. Serbia is loos a lot of money instead of using that resource in recycling and production. That's why we agreed on a joint working group with the ministries of construction, environmental protection, and energy with the aim of finding a solution as soon as possible, passing regulations, and developing the market," said Čadež.

He adds that for all investment processes and keeping competitiveness at a high level, companies, especially small and medium-sized enterprises, need support, and the solutions are in the use of some financial instruments, guarantee schemes, and the return of tax credits.

Speaking about the results of the regional initiative Open Balkans, he points out that progress is visible, especially in the improvement of trade both among the members (Serbia, North Macedonia, and Albania), and among all economies in the region, but there is a place for improvement. On a scale of one to 10, he rates the results of the Open Balkans between four and five.

In his opinion, it is very important that we act together towards Brussels, we insist on the inclusion of the region in the EU single market. The isolation of the Western Balkans from the single market does not bring any good, both for our region and for the EU says the President of the CCIS.

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