Not long ago, a manager of a major multinational company spent some time in Belgrade. His hosts took him out to dinner one night, in a part of the city known for good food and night parties. Just like during the day, they talked mostly about money and investment opportunities in Serbia. Even in a relaxed atmosphere, such conversations are never easy – capital is a timid animal, as the old saying goes – but this time, it seemed to be going well. Somewhere around midnight, though, the police came busting in, fully armed, and blocked the entire neighborhood. Just as if Serbia were Columbia and Belgrade-Bogotá. The potential investor was, of course, dismayed, but relaxed a bit after the police swarmed into another restaurant. In any case, he was sure it was about arresting some major drug dealer or mafia boss. However, it soon turned out it was not about that at all, but that the Tax Police swooped into one of the nearby restaurant’s bar. Hearing this, the “investor-to-be” immediately lost interest and the conversation about investing in Serbia was over. Not because he thought something was suspicious, of course – we are talking about a really major multinational company – but because this showed him our government’s attitude towards the economy: what kind of a country points an automatic rifle at a restaurateur? And so we chased away a major foreign investor.
Things are somewhat different when it comes to local businessmen. As soon as they appear somewhere, in some media, to talk about their success or to sponsor an action or a media piece, they immediately get a call from someone close to the highest government authorities and – one way or another, under one excuse or another, but mostly more-or-less bluntly – are asked for money. If, by any chance, they refuse, the Financial Police will show up at their doors within 24 hours. The consequences are many-fold. First, these people give up public appearances, leaving the independent media without a source of income and endangering their survival. Second, if successful businessmen go into hiding, it only intensifies the image of businessmen as (more-or-less) criminals that the current government so often propagates. And, third and most important, successful and credible businessmen retreat not only from the public sphere, but also from the business itself: they diminish their business ambitions, give up on investments, try to preserve what they have and not be an eyesore.
The overall result is: during this year’s first nine months, the investments were 4% lower than in 2013. And last year, the investments were 10% lower than in 2012.
On Friday, December 26th, the Prime Minister Vucic spoke at an opening of a renewed coal seam Tamnava at Kolubara about how important the production of coal and electricity is for Serbia and the fact that it will significantly increase the GDP next year. It is true, but there are two sides to that medal.
It is true, the latest analysis of the Fiscal council says, that Serbia’s GDP would indeed have declined by 50% this year if it weren’t for the floods. In other words, had Kolubara been working normally, the decline would be by 1% instead of 2%. On the other hand, however, if we were to exclude the production of coal and electricity from the GDP for 2015, it would decline not by 0.5%, as currently projected, but by 1.7%. This shows, the Fiscal Council concludes, that “the actual business trends are actually getting worse”.
And it has absolutely everything to do with the above mentioned decrease in investments, especially the domestic ones.
Translated by Marijana Simic