Serbia is gradually progressing towards a functioning market economy, but the difficult economic and fiscal situation persists. Unemployment remains high, up to 25% in rural areas and up to 40% for youth. Unemployment of women is 35% (46% in disadvantaged regions). The poor economic situation particularly affects the least educated population, women and youth in rural areas. 12.2% of rural inhabitants suffer from absolute poverty compared to 6.7% in urban areas. These significant regional disparities result in migration, which leads to a depopulation of the countryside and jeopardizes social stability in rural areas. In an effort to address these structural problems, the relevant national strategies state that creation of an efficient and sustainable agriculture sector is crucial for growth and jobs in rural areas and that tourism development will create sustainable employment, contributing to local economic development (LED).

The overall goal of the program is that “Local economic development is strengthened and rural migration is reduced by increasing employment and income opportunities, particularly for women and youth“.

The following results are anticipated:

A) > 88 Mio CHF of additional income;

B) > 4‘400 additional jobs created;

C) > 4‘400 persons (45% women) benefit from an improved return on labor;

D) > 2‘OOO gain access to financial services for starting a business.

PSD will target young people and women (job seekers in the tourism and traditional products sector, SME‘s and small farmers and producers) in 100 municipalities in rural areas of all Serbia except of Vojvodina. The project will particularly focus on the youth with little or no previous work experience and on women with limited access to the employment market in order to include them in value chains and allow them access to trainings, social benefits and financial services.

Outcome 1 — Young people, women and SMEs get new jobs and income in the tourism sector.

Outcome 2 — Value chains of traditional products become competitive on domestic and foreign markets.

Outcome 3 — Local Economic Development benefits from improved framework conditions.

Outcome 4 — Rural women contribute to the household income and improve their decision power within families.

Expected results:  

Jobs and income in the tourism sector will be increased by: development of private sector responsive curricula; and development and promotion of new tourism products. Value chains of traditional products will support increased sales due to: improved access to sales channels; improved quality requirements and improved access to finance. Framework conditions for local economic development will be improved by: establishment of Public Private Development Partnerships (PPDP); and improvement of the tourism business enabling environment in order to support SME development and increase investment. Rural women will increasingly contribute to household income and improve their decision power within families through: increased access to the labour market, social security system, trainings and financing for rural women.

Results from previous phases:  

The project had positive results in the most remote and vulnerable regions through:

A) Additional income of over CHF 12.7 Mio created, of which 46% for women;

B) 2‘300 new jobs created, of which 46% for women.

This was achieved by facilitating systemic changes such as the change in the legislation to extend the winter season. Also, women and youth were provided access to the raspberry and honey production, through new business models which provide financial and advisory support for small scale producers and a secured market access. On social level, this has contributed to poverty reduction and creation of better living conditions, since full time employment brought a package of social benefits for beneficiaries and their families (health, unemployment and pension insurance).

Ministries of Agriculture and of Trade have a decision making role in enacting relevant legislation and developing new products. The Private sector is key for bringing change into the sector functioning. Municipalities are important for building PPDP‘s.

The project cooperates with Swiss projects: PSD South Serbia supporting improvement of value chains; Education to Employment (E2E) addressing policy changes for improving employment; SIPPO and Trade Cooperation Program IV of SECO; and other donor projects, active in similar regions and topics.

Phase 4 01.06.2017 - 30.06.2024   (Completed)