Serbian SME’s Still Represent a Potential for Overall Economic Development

Although late, economic development of Serbia prior to the Global economic crisis was relatively fast, comparing to other transitory economies. Small and medium scale enterprises (SMEs) had also fast growth and become important economic subject. The Global economic crisis has negatively influenced the national economy from late 2009, including SMEs. Those companies and shops are on the low level of international competitiveness, as a consequence of process of de – industrialization and slow process of restructuring. In order to get better look into labor productivity driving forces an analysis was performed through regression framework, while the analyses, performed for EU countries was used as a benchmark. Those results pointed that labor productivity growth of Serbian SMEs during recession years was results of decreasing employment and not from expansion. It also pointed that export growth and investments growth are important for increase in labor productivity. Improving labor productivity is essentially important for increasing international competitiveness of Serbian SMEs. It is very complex issue from analytical point of view and improvement in data basis and analytical methodology would be useful, especially for decision makers and policy makers also

The Process of Mergers And Acquisitions – a Way For Higher Concentration in the Banking Sector

Serbia has started transition of its financial system in 2000 and until 2008 the first phase of transition is finished. The national financial system became of bancocentric character, with very week insurance, leasing,innovative institutions, funds and financial markets. The main step ahead made banking system, whichrecovered credit and saving functions, with high capitalization, high interest rates and interest margins,but with low efficiency and low level of its concentration. If look at the process of mergers and acquisition in Serbian banking system one can recognized two episodes. The first wave of mergers was happened in 2005-2006, when more than one dozen of banks changed ownership structure, both state owned and private ones. As a result of this first wave the ownership structure of banking sector became completely different with three fourth of banks in foreign hands, like in other transitory economies. Although the transition of all banks is not finished before the Global economic crisis came, and a lot of economists expected the new wave of mergers and acquisition, the crisis phase was rather not seen as right time for doing this. With general economic recovery started in 2015 it seems that there were some steps forward in this regard. Some banks left the national market because of their own problems (Greek, Belgian, French), some banks were lost their licenses. In recent period several banks were acquired and it seems that the general picture is changed, with 20 banks all in all, with increasing concentration of the sector. One has to be aware of still high potential of national banking system for development. In other words, total volume of bank’s crediting is still on the low level, measuring their share in GDP. Although the national banking system became profitable from 2005 on, the profitability is still low. Total capital of banks is also too low, and on the microeconomic level (considering a bank as a single company) the capital of average bank is too small by international standards. It is also worth noting that banks during last several years considerably lowered the share of nonperforming loans, NPLs, due to measures introduced by the Central bank and by its own. The share of NPLs in the total portfolio of Serbian banks is now even lower than in comparison to the pre- crisis period. In the future firstly, there is a need for further concentration of the national banking system. Secondly, considering a banco-centric character of the national financial system there is a room for additional changings, which the Central bank as the main regulator can introduce. A process of liberalization of banking system is one of the important issues, as it is necessary to open room for new players, like micro credit institutions and saving companies and cooperatives, and especially for new innovative hi-tech institutions. The aim of the paper is threefold. Firstly, to measure the level of concentration of the national banking system, with intention to point a need for further process of mergers and acquisitions. Secondly, to point differences in two waves of M&E, which produces sharp discrepancies in the prices of acquired banks. Thirdly, to suggest further necessary market reforms in the national financial system. The paper is based on the results of the process of mergers and acquisitions of banks in Serbia with reference to the period since 2000, both in the period before and after Covid-19. During the pandemic (2019-2021) and after, larger banks increased the level of liquidity and decreased the level of credit activity compared to smaller banks operating in Serbia. Nevertheless, the profitability of larger banks in Serbia remained at a high level compared to smaller banks. Larger banks in the pre- and post-pandemic period achieve higher rates of return on capital compared to smaller competitors. In the same period, larger banks reduced the share of capital in the balance sheet, but within limits that do not threaten the stability of the banking sector. Also, large banks have opportunities when it comes to reducing costs, through digitalization, and achieve higher rates of profitability, but also lower passive interest rate

The evaluation and integration of strategic projects in framework of the SPRS: example of implementation programme of SPRS

U radu su prikazani rezultati kritičke evaluacije Programa implementacije PPRS 2011–2015.godine (PIPPRS) sa stanovišta izbora, usklađenosti i teritorijalne integrisanosti predloženih strateških (ekonomskih) projekata sa projektima predviđenim u Zakonu o budžetu Republike Srbije za 2012. godinu, Nacionalnom investicionom planu (NIP) i Operativnom programu ekonomskog razvoja 2012–2013.godine, kao i predlog smernica za prevazilaženje postojećeg implementacionog i upravljačkog jaza i unapređenje pristupa implementacije strateških projekata koji je utemeljen na koherentnoj teorijsko-metodološkoj osnovi i novijim iskustvima. S obzirom na to da PIPPRS ne elaborira instrumentarijum za teritorijalnu integraciju opštih ekonomskih, sektorskih politika i strateških projekata, predlaže se primena evropskih okvira politika (posebno Europe 2020 Strategy, Cohesion policy 2014–2020, izmenjena Lisabonska strategija, i dr.) i smernice o upravljanju projektnog ciklusa. Konstatuje se da je za evaluaciju i teritorijalno usklađivanje strateških projekata na različitim prostornim nivoima planiranja i upravljanja potrebna primena novog efikasnog alata – teritorijalno integrisanog investiranja (ITI - Territorial Integrated Invesment). Ovaj alat je veoma značajan za implementaciju strateških projekata zasnovanih na programiranju i decentralizovanom upravljanju razvojne pomoći EU (IPA instrumenata), odnosno za teritorijalno integrisanu implementaciju projekata utvrđenih u dokumentima: Okviri strateške usklađenosti, NIP, prostornim planovima, razvojnim planovima, opštim razvojnim i sektorskim politikama, na različitim prostornim nivoima.This paper presents the results of critical evaluation of the Programme implementation of SPRS 2011-2015 (PIPPRS) from the point of selection, compliance and territorial integration of the proposed strategic (economic) projects with the projects wich are envisaged in the Budget Law of the Republic of Serbia in 2012, the National Investment Plan (NIP), The Operational Programme for Economic Development 2012 – 2013, and the proposal of guidelines to overcome the existing implementation and management gaps and improvement of access to the implementation of strategic projects based on a coherent theoretical and methodological framework, and recent experiences. Since PIPPRS not elaborates instruments for territorial integration of general economic, sectoral policies and strategic projects, here is proposed the implementation of European policy framework (in particular the Europe 2020 Strategy, Cohesion policy 2014-2020, revisited Lisbon Strategy, and others.) and Guidelines for Project Management Cycle.. It is estimated that is for the evaluation and territorial alignment of strategic projects at different spatial levels of planning and implementation necessary the using of new effective tools - Territorial Integrated Invesment (ITI). This tool is very important for the implementation of strategic projects which are based on the programming, and decentralized management of development assistence (IPA instruments) and territorially integrated implementation of identified projects in document of Strategic framework compliance, NIP, spatial plans, strategic development plans, general development and sectoral policies on different territorial levels.Urednici: Saša Milijić, Boško Josimović, Tijana CrnčevićPosebna izdanja 7

Development Strategy of Republic of Serbia - Critical Analysis

Main subject of this paper is the analysis of existing development documents in Republic of Serbia. Missing of development strategy and other relevant development and planning documents causes suboptimal results in last years in Serbian economy. In spite the fact that results on GDP growth are positive, it is obvious that it is unsustainable term in long term, as there is permanent generating of two imbalances : internal, expressed in fiscal deficits, and external, expressed in large and growing balance of payment deficit and specially in current account deficit. Reforms that has been implemented in Serbia in last years are often unconsistent, even in some cases confronted each to other. Under such conditions, when we have "wild" market economy, without effective regulation of market mechanism, we adopted Development Strategy of Serbia till 2010. Critical analysis of this document and alternative solutions and scenarios of sustainable development in Serbia in following years are the key part of this paper.Urednici: Miodrag Vujošević, Milorad Filipovi

Strategic framework for sustainable development in the period of transition towards market economy: Critical overview of the strategy of long-term development of Serbia

This paper offers a critical analysis of the strategic framework for long-term economic development of Serbia, of the role of strategic development in the success of the transition process, and the consequences of the lack of a development strategy. The strategy of long-term economic development of Serbia, as a programme intended to designate the economic and development policy of the state, is analyzed with the aim of finding an acceptable formulation of development strategy. The authors consider various approaches and propose a strategy for Serbia in the period of transition towards market economy. They also point out that, in the period of transition from a government-planned towards a market economy, strategy should be given greater importance than in periods that do not represent turning points, because of the greater possibility of incorrect policy making, potential conflicts of interest groups, reaching sustainable development, and maximizing prosperity. The authors take into account the advantages and disadvantages of the radical and of the gradualist approach to transition and propose formulating a development strategy that would contain combined elements of plan and market mechanisms. They believe that the process of transition lacks a clear development strategy, and that the quality of the existing development strategy of Serbia until 2010 is such that it cannot be understood as a serious approach to the transition issue. The authors stress the consequences of undergoing transition without a development strategy, that include inappropriate dynamic and sequence of reforms; a lack of coordination between development policy, macroeconomic policy, market reforms, and spatial planning policy; higher costs of transition, insufficient rate of economic growth, etc. They offer proposals for a comprehensive development framework (CDF) and for strategic planning of territorial industrial development

Rethinking deindustrialization, and the reindustrialization policy in Serbia

The paper explores deindustrialization as the main development problem in Serbia and examines the possibilities for a new industrial policy and its implementation. The aim of the paper is to re-examine the process of deindustrialization in Serbia (its causes and consequences), and to give useful suggestions related to Serbia's existing strategy of longterm industrial development until 2020 and to new industrial policies. Addressing the deindustrialization process is an issue of developmental and economic policy. A reindustrialization strategy or a new industrial policy could be one answer, and this has to be addressed if the share of industry in the GDP is to increase. Both qualitative and datagiven approaches have been applied to the analysis of deindustrialization and to the question of how to improve the conceptual framework for reindustrialization in Serbia. Also, some recommendations to the on going national reindustrialization strategy, or the “smart specialization strategies” are made

Slow Growth and Development of Serbia till 2020 – Factors and Outcomes

U radu se pošlo od potrebe da se oceni moguća dinamika razvoja Srbije do kraja ove decenije. Naime, nakon brzog ekonomskog rasta u periodu 2001–2008. godina, u periodu krize, poslednjih šest godina, Srbija je imala (prosečan) nulti privredni rast. Brojni su problemi i razvojna ograničenja sa kojima se domaća privreda suočava u ovom trenutku. Osim demografskih problema, to su problemi javne potrošnje, spoljnotrgovinske razmene, unutrašnjeg i spoljnog duga, problem lošeg privrednog ambijenta i vođenje neadekvatne ekonomske i razvojne politike. Zbog navedenih razloga, a uzimajući u obzir relevantne projekcije razvoja za naredni period, došlo se do procene da će do kraja ove decenije privredni rast biti spor, tj. između 2 i 3% mereno rastom BDP-a prosečno godišnje. Ovakva dinamika rasta kvalitativno bi rezultirala daljim zaostajanjem za zemljama u tranziciji kao i za kakvim-takvim držanjem koraka prema razvijenim zemljama.The paper started with the need to access the possible development dynamism of Serbia until the end of this decade. Namely, after speedy economic growth in the period 2001-2008, in the crisis period, during the last six years, Serbia faced with zero rate of growth. There are numerous development problems and limits which domestic economy is faced with in this moment. These are demographic problems, problems of public consumption, foreign exchange problems, internal and external debt, non - stimulative business environment and non - adequate economic and development policies. Taking into consideration several available, relevant development projections for the future period, it was accessed that rate of growth would be 2-3% as average GDP growth. In qualitative terms such a dynamic means that Serbia in the future would lag behind other economies in transition and at the same time development distance with developed countries would stay as it is now.Posebna izdanja 74Urednici: Jasna Petrić, Miodrag Vujošević, Miroljub Hadžić, Branislav Baja

Is reindustrialization a realistic path? An empirical insight from South-Eastern Europe

The global economy has been faced with two dramatic crises (the global financial crisis and the pandemic), and it is still suffering. As an answer to the first crisis, the European Union formulated reindustrialization as a development approach, by which it wanted to strengthen its position on the world market, with the aim of manufacturing achieving a 1/5 share of the GDP. During the last decade, results have differed among the member countries, as well among the candidates for membership. Some countries have continued the trend of deindustrialization, while others have succeeded in starting reindustrialization. However, what is clear is the fact that achieving the goal defined is a challenge for all. There are economists who argue that this goal is not only unrealistic, but even not useful. The paper presents a comparative analysis exploring the development characteristics of several countries in South Eastern Europe (SEE): Albania, Bosnia and Herzegovina, Croatia, Montenegro, North Macedonia, Kosovo and Serbia, using a meta-analysis in a synthesis of the results of this empirical research. It also shows a regression analysis and correlation analysis using the IBM SPSPS 28 software package. The paper analyzes whether the countries considered follow the trend of deindustrialization or reindustrialization, and it examines and tests whether a higher share of manufacturing within the GDP results in a higher rate of growth. The results show that all the countries under consideration have already fulfilled the aim of manufacturing having a 20% share of their GDP (except Montenegro). At the same time all of the countries, except two (Bosnia and Herzegovina and North Macedonia), have experienced a deindustrialization trend. The paper could be useful for policy makers in South-Eastern European Countries as well other transitory/transitional countries as they create reindustrialization policies in line with the EU industrial policy

Sustainable economy development of Serbia

The paper offers a critical analysis of the strategic framework for long-term economic development of Serbia, of the role of strategic development in the success of the transition process, and the consequences of the lack of a development strategy. The strategy of long-term economic development of Serbia, as a programe intended to designate the economic and development policy of the state, is analysed with the aim of finding an acceptable formulation of development strategy. The authors consider various approaches and propose a strategy for Serbia in the period of transition towards market economy. They also point out that, in the period of transition from a government-planned towards a market economy, strategy should be given greater importance in period that do not represent turning points, because of the greater possibility of incorrect policy making, potential conflicts of interest groups, reaching sustainable development, and maximizing prosperity. The authors take into account the advantages and disadvantages of the radical and of the gradualist approach to transition and propose formulating a development strategy that would contain combined elements of plan and market mechanism. They believe that the process of transition lacks a clear development strategy, and that the quality of the existing development strategy of Serbia until 2010 is such it cannot be understood as a serious approach to the transition issue. The authors stress the consequences of underground transition without a development strategy, that include inappropriate dynamic and sequence of reforms< a lack of coordination between development policy, macroeconomic policy, market reforms, and spatial planning policy< higher costs of transition, insufficient rate of economic growth, etc. They offer proposals for a comprehensive development framework (CDF) and for strategic planning of territorial industrial development.Urednici: Nada Milašin, Nenad Spasić, Miodrag Vujošević, Mila PucarEv.br.projekta 1383 "‘Planiranje i upravljanje razvojem u uslovima prelaska na tržišnu privredu privredu- institucionalno prilagođavanje praksi i standardima EU", Ekonomski fakultet Univerziteta u Beogradu i Institut za arhitekturu i urbanizam Srbije, 2002-2005.Posebna izdanja 4