MARKO ČADEŽ SPEAKS WITH KURIR: 'The Serbian economy has handled the coronavirus impact better than anyone expected.'

'We have fared better than much stronger economies – a fact acknowledged by the international financial organizations and global media outlets. It is estimated that at year-end our GDP will be down by no more than one percent year on year, and that we will have the smallest decrease in Europe.'

Do you agree with the estimate that the impact of the coronavirus pandemic on the economy will exceed that of the 2008 global financial crisis?

"The fact that this economic crisis comes bundled up with a health crisis, that a battle is being fought for people's health and lives, as well as for companies and jobs, makes the crisis harder than any other so far, both for states and economies. There are different scenarios, but what is certain is that the final outcome will hinge for the most part on how the epidemiological situation develops. The gravity of the consequences and the speed of recovery of the global economy and all individual economies will depend on how much success the world has in the fight against the coronavirus and how fast it puts the virus under control."

What is the situation in Serbia? Is it possible to identify now the effects on the economy brought about by the epidemic?

"Although there is not a single business, in Serbia or elsewhere, which has not been affected by the pandemic, taken as a whole, the Serbian economy has handled the impact of the coronavirus comparatively well. Better than anyone might have expected and better than much stronger economies – a fact acknowledged by the international financial organizations, analysts, and global media outlets. Owing to the extensive state aid, the support provided by the Chamber of Commerce to the member companies, the solidarity, and the great efforts put in by the businesses, we have succeeded in saving both the companies and the people, as well as in making up for large portions of the losses incurred in the spring months. Despite everything, the industrial production remained at last year's level for ten months, exceeding by nearly two percent in October the level at which it had been in the same month in 2019. Although exports fell by 20 percent in March and April, they decreased by no more than 5.2 percent year on year, for the period until and including October. Employment remained under ten percent. Foreign and domestic investments were not disrupted, and major companies have serious investment plans for the next year. It is estimated that at year-end our gross domestic product will be down by no more than one percent year on year, that we will have the smallest decrease in Europe, and that we have better prospects of recovery than any other comparable economy. Naturally, the Serbian economy is not an island and, in addition to the epidemiological situation, its recovery in the next year will also depend on the rate at which the European economies recover, especially the economies of countries which are our biggest trading partners."

In line with the new measures, some hospitality venues close as early as 5pm, with large numbers shut down over the weekends. How long can small businesses keep up with this pace?

"Certainly not long, and this is why the measures are time-limited. It is therefore important that the epidemiological situation improves as soon as possible. Viewed in this light, this week's decision for the state to relieve the worst-affected tourism and hospitality sectors by paying another minimum wage amount is all the more important. The same holds for the announcement that the private, entrepreneurship sector can count on additional support in January. The Chamber of Commerce has already submitted concrete suggestions from the businesses to the government. We are reviewing them together, with the aim of mitigating the effects of reduced activity in a portion of the economy brought about by the latest coronavirus wave, taking account of the budgetary limitations and the need to maintain the macroeconomic stability."

Is another relief package for the citizens and businesses being considered, as was the case at the start of the epidemic?

"This week's decisions have practically set up the new relief package for the worst-affected. However, it is not realistic to expect that this aid will be as large and as widely inclusive as during the first wave in the spring. In addition to the direct support for the worst-affected – the tourism and hospitality sectors, the transportation industry, which has also been hard hit by the pandemic, and any other sectors forced to reduce their activity – we propose to earmark additional funds for state guarantees for the banks, aimed at ensuring the continuation of liquidity maintenance crediting and investments under last year's arrangement. To this end, it is important to make use of the opportunities opened up by the collaboration with our European and American partners. We think that the problem of reduced demand in the domestic and international markets would also be mitigated by the following: an increased involvement of domestic construction and process manufacturing companies in the implementation of infrastructural and other government projects; the inclusion of local companies in the supply chains of big exporters – both domestic and foreign; production replacing exports wherever possible; and supporting exporters by increasing the export credit insurance fund."

Announcing the opening of the Chamber of Commerce office in Jerusalem, you said that the office would not only be related to commerce, but that it would also be the office of the Serbian Government, under the patronage of PM Brnabić. What will be the office's responsibilities?

"It is a joint office of the Government and the Chamber of Commerce of Serbia. It will focus on improving the economic cooperation with Israel – especially in the area of innovation – as well as on representing the Serbian economy via promoting its investment and export potential and attracting foreign investments."

In mid-September you announced that the office would be opened by the end of the month. Where is the snag hindering the implementation of the plan?

"The opening was planned, and the plan has been put into action, without snags. It is really a question of when we will go to the official opening under these circumstances. As I said back then, the space in Margalit Startup City in Jerusalem is available to us from 1 October. We have worked out all the legal and technical details with the Serbian Government, and completed the procedures required to open a joint office, i.e. our first joint foreign trade centre as a new approach to representing our economy in the world. At the same time, we have been exchanging information and outlining future joint activities with our Israeli partners, companies, and organizations."

Do you expect the change of the US Administration to affect the implementation of the Washington Agreement in any way?

"There are many reasons why I believe that the outcome of the US elections will not affect the implementation of the Washington Agreement. I see no reason why the agreement would not be carried through by implementing projects which are strategically important for growth and interconnecting in the Western Balkans. It is in the interest of Belgrade, Priština, and the entire region; the people and the economies in these parts; Washington, Brussels, and their business community; as well as the present and future investors. Even more so as this agreement – which relates to the economic normalization of relations between Belgrade and Priština as a requirement for stability and prosperity, and tighter regional and European integrations of the Western Balkans – reflects the views of Trump's as much as of the previous US administrations."

Katarina Blagović