Evaluation of the competiveness and the business environment in Serbia.

Διπλωματική εργασία--Πανεπιστήμιο Μακεδονίας, Θεσσαλονίκη, 2011.It is well known that Serbia used to be an independent economy in the past, prior to the disintegration of Yugoslav Federation. But, in the 1990s, the loss of markets, international isolation, armed conflicts and interruption of long-established production relations left a dire legacy for the Serbian economy. What distinguishes Serbia in the Balkan region is that although it delayed to enter the transition process, it achieved significant progress in a very short period. The upward trend of Serbian economy took place after the change of the president Slobodan Milosevic in October 2000. Trade and price liberalization as well as the establishment of a more stable political environment led to significant progress. FDIs contributed to this success to a great extent. Serbia boasts for a high qualified technician and engineer labor force inherited from the communist past. Having an experience in heavy industry, it constitutes a suitable place for doing business in manufacturing and automobile sector. Labor cost is extremely low in the region and the tax system is very conducive to potential investors. Moreover, its geographic location constitutes the cross boards of East and West and allows trade relations among several EU economies. However, there are significant obstacles to doing business in Serbia. Inefficient government bureaucracy, corruption and damaged infrastructure are the most significant problems that require immediate restructuring. Doing business is inhibited by burdening and time consuming procedures to get licenses, inefficient judiciary system and misinterpretation of commercial legislation. It is emergent to apply drastic reforms in order to increase competitiveness and attract more capital inflows to the region. Privatization process should be completed as monopolized industries do not function efficiently. Government should focus on the enhancement of SMEs and agricultural sector as well as to the improvement of the financial system. What is required at the moment is more attraction of Greenfield investments so as to develop a high quality business environment from the start-up. Educational reforms in the business sector are essential as managerial skills are absent. Although Serbia lags from being a developed economy, there are many promising factors for its future progress. Still, global crisis has plagued EU economies, and consequently Serbia, inhibiting in general business development at the time being