Distinguished Minister Cvetkovic,

Dear Representatives of the Swiss Business Community,

Ladies and Gentlemen,

Let me first of all warmly welcome you and thank you for having accepted my invitation to participate at this round table.

The objective of today’s gathering is to brief you on the development of the economic relations between Switzerland and Serbia, to inform you about the current state of affairs regarding our support to SMEs and our support to the Serbian dual education system. I am extremely honoured by the presence of Minister Cvetkovic, who has agreed to address the Swiss Business community. As usual we are organizing this round table in cooperation with the Swiss-Serbian Chamber of Commerce and I am pleased to welcome its President, Mr. Majo Micovic.

Let me start with a brief, personal overview of the overall economic outlook and our bilateral economic relations:

After a quite vigorous start into the new year, Switzerland's economic growth slowed down in the second quarter. Consumer spending however remains strong, and the services sector saw growth across the board, but the industrial sector recorded a decline, both in terms of investments and value added. Current indicators do not signal a trend reversal in the months ahead and this is mainly based on the rather overcast economic outlook of some of the main markets of Switzerland, like Germany and China. Most forecasts expect the economic growth of Switzerland in 2023 to be at the level of 1.3%, a figure that most likely will not be exceeded also in 2024.

This would mean a significantly below-average growth for two years, but no imminent fears of economic recession. This forecast is of course based on the assumption that there will be no energy shortage with widespread production losses during the winter time. This word of caution reminds us, that there is a war being fought in Europe and risks of economic disruption remain high.

In summary, we have a continuing strong consumer spending, supported by a sound labour market situation and a relatively low inflation rate of around 2.2% per year. Employment and salaries remain high and we have a strong Swiss franc. These are actually good preconditions for a continuation of Swiss investments in Serbia and for the strengthening of Serbian exports of goods and services to Switzerland.

And indeed, Serbia has continued to be an attractive investment destination for Swiss companies. With over two billion euros of net investments accumulated in the period from 2010 to 2022, Switzerland has regularly been among the six largest foreign investors in Serbia. Swiss companies in Serbia are employing over 14.000 people.

To illustrate, let me name a few of the most significant Swiss investments in the last two years: the new plant-based food factory of Nestlé in Surčin, the Regent Lighting factory in Svilajnac, the Barry-Callebaut chocolate production in Novi Sad, the Serbian Glass Factory in Paraćin (an investment by the Swiss-Slovenian consortium Global Glass) and the latest Swiss investment in Serbia, of February this year, the Swiss metal stamping and fine cutting company Etampa in Kruševac. In the real estate sector, the „King’s Fountain Dedinje Project“ is one of the largest Swiss real estate investments in Serbia so far, worth over 40 million Swiss francs.

I would like to point out however, that Swiss investors and clients are very sensitive to perceived risks to their business activities. In the wake of the recent, violent events in North Kosovo and the deteriorating relations between Belgrade and Pristina, the Swiss Embassy has already been contacted by a number of Swiss companies operating in Serbia. Questions asked range from security concerns raised by a Swiss delegation due to perform audit tasks in a company in South-Western Serbia to concerns of Swiss clients of Serbia-based service providers about possible sanctions by the EU and their impact on their business relations. I mention these examples just to highlight how important it is for the Serbian government to handle this crisis with diligence in order to prevent a negative impact on the bilateral economic relations.

Returning to our agenda let me provide you now with a clearer picture of the Swiss companies operating in Serbia. This analysis was elaborated by the Embassy on the basis of data provided by the Serbian Business Register (APR) as well as own available knowledge, and I would like to thank Mrs. Dragica Tomcic, economic advisor of the Swiss Embassy, for this comprehensive overview of the Swiss Business community in Serbia.

• The current number of CH companies in Serbia with at least 30% of Swiss ownership stands at 534;
• This number has been increasing from year to year. Most of the new companies were registered in 2022, mostly in the ICT sector;
• In total they directly employ about 14.000 persons (13.855);
• Most of the companies are Micro (28%) and SMEs (24%) whereas 15 companies or ca. 3% of the total number are large companies (with over 250 employees), assuming nearly half (43%) of the employment share (6.200 employees).
• Furthermore, more than half of the Swiss companies in Serbia are managed by citizens of Serbian nationality (58%), followed by Swiss (20%) and Germans (6%).
• Main sectors of interest are: the Information and Communications branch (encompassing services and products), the sector of professional, scientific, innovative and technical activities and wholesale and retail services (specifically in the automotive sector) employing together around 6.000 employees (43%).
• The Information and Communication (IC) sector alone is employing 3028 persons, or half of all employees, followed by Wholesale /Retail services (1.848) and the professional, scientific, innovative and technical activities (966).
• If we consider the capital investments, then of course the top position is held by the manufacturing industry, followed by wholesale and retail trade, agriculture, financial activities, electric energy production and trading, and real estate business.
• Location wise, Belgrade is still the most attractive location, followed by Southern and Eastern Serbia and Sumadija and Western Serbia. Belgrade and Vojvodina are mostly attractive for ICT companies, while the manufacturing sector is more and more looking for SE Serbia and Sumadija thanks to the favorable incentives of the Government and lower production costs.

These findings are probably not very surprising to most of you but feel free to give us your impressions of the trends that you are aware of in terms of the Swiss businesses in Serbia. We would be happy to discuss together during the Q&A how your company fits into these trends and figures.

Wrapping up my observations, I am glad to highlight in the presence of the Minister of Economy that the bilateral economic relations of Serbia and Switzerland are very strong, they are underpinned by a longstanding cooperation program aimed at supporting the reform efforts of the Serbian government, and a vibrant Serbian diaspora in Switzerland.

In terms of trade, Serbia is the main trading partner of Switzerland in the Western Balkans, which in 2022, registered an increase of 46.6% compared to 2021. In the area of trade in services, Switzerland has become the 4th most important partner of Serbia worldwide, with a total trade volume of 615 million EUR. Serbia has a surplus of 151.6 million EUR which only confirms the current vitality of the Serbian ICT sector. There is a strong potential for further growth. Swiss companies are interested in investing in Serbia, above all in the ICT sector, services, and renewable energies.

These excellent economic relations are supported and fostered on the state level by the bi-ennial Meeting of the Joint Economic Committee Switzerland - Serbia, coordinated by the State Secretariat for Economic Affairs (SECO) on the Swiss side and the Ministry of Internal and External Trade on the Serbian side. The most recent meeting in this format took place in June this year, in Bern.

Bilateral relations are also fostered by the activities, on both ends, of private sector operated Chambers of Commerce: The Chamber of Commerce Switzerland – Central Europe, based in Zürich, the Swiss-Serbian Chamber of Commerce, based in Belgrade, and since May this year, also a Swiss-Montenegrin Chamber of Commerce. I am pleased to invite later on Mr. Majo Mićović, as president of these two chambers, to briefly welcome participants today.

I will not prolong my presentation by going into more details regarding the Swiss cooperation program in Serbia, but it is worth to know that fostering economic development and employment is an important pillar of our international cooperation program. One of its focus areas is raising the competitiveness of the Serbian economy by strengthening the innovation ecosystem and supporting both high-tech start-ups and SMEs in traditional industries like manufacturing. I am pleased that Mr. Aleksandar Goracinov has agreed to brief us on the SME Hub, a joint initiative of the ICT Hub and the Swiss Development Cooperation Office, collaborating closely with the Development Agency of Serbia (RAS), attached to the Ministry of Economy.

Another area in which Switzerland has specific expertise and know-how of relevance to Serbia lies in the field of Vocational Education and Training (VET), as well as labour-market insertion of youth. My colleague, Mr. Derek George, Deputy Head of the Swiss Cooperation Office, will brief you on the support provided by Switzerland to the Serbian dual education system at secondary school level.

Before giving the floor to our distinguished guest speakers, I would like to use this opportunity to thank once again the Swiss companies having contributed with their generous support to the celebration of the Swiss National Day on August 1st at the Swiss Residence. Thanks to your cooperation I have been able to host more than 600 distinguished guests and I have been able to organize an unforgettable evening with a great Swiss touch.

Let me invite now Mr. Majo Micovic, President of the Swiss – Serbian Chamber of Commerce, to express some welcoming remarks before giving the floor to our distinguished key note speaker of today, the Minister of Economy, Mr. Slobodan Cvetkovic. His address will be followed by a presentation in Serbian language by Assistant Minister Branislav Pejcic, who will also take any questions from the floor on this interesting subject of investment incentives and framework conditions.

I thank you very much for your kind attention and look forward to continuing our conversation during the Q&A session and the subsequent lunch.