SERBIA

Flag Description: Three equal horizontal stripes of red (top), blue, and white - the Pan-Slav colors representing freedom and revolutionary ideals; charged with the coat of arms of Serbia shifted slightly to the hoist side; the principal field of the coat of arms represents the Serbian state and displays a white two-headed eagle on a red shield; a smaller red shield on the eagle represents the Serbian nation, and is divided into four quarters by a white cross; interpretations vary as to the meaning and origin of the white, curved symbols resembling firesteels or Cyrillic "C's" in each quarter; a royal crown surmounts the coat of arms the Pan-Slav colors were inspired by the 19th-century flag of Russia

Location

Serbia is largely mountainous. Its northeast section is part of the rich, fertile Danubian Plain drained by the Danube, Tisa, Sava, and Morava river systems. It borders Croatia on the northwest, Hungary on the north, Romania on the northeast, Bulgaria on the east, Macedonia on the south, and Albania, Montenegro, and Bosnia and Herzegovina on the west.

Area:

total: 77,474 sq km
country comparison to the world: 117
land: 77,474 sq km
water: 0 sq km

Land boundaries:

total: 2,026 km
border countries: Bosnia and Herzegovina 302 km, Bulgaria 318 km, Croatia 241 km, Hungary 151 km, Kosovo 352 km, Macedonia 62 km, Montenegro 124 km, Romania 476 km

Coastline: 0 km (landlocked)

Maritime claims: none (landlocked)

Climate: in the north, continental climate (cold winters and hot, humid summers with well-distributed rainfall); in other parts, continental and Mediterranean climate (relatively cold winters with heavy snowfall and hot, dry summers and autumns)

Terrain: Extremely varied; to the north, rich fertile plains; to the east, limestone ranges and basins; to the southeast, ancient mountains and hills

Ethnic groups: Serb 83.3%, Hungarian 3.5%, Romany 2.1%, Bosniak 2%, other 5.7%, undeclared or unknown 3.4% (2011 est.)

Languages: Serbian (official) 88.1%, Hungarian 3.4%, Bosnian 1.9%, Romany 1.4%, other 3.4%, undeclared or unknown 1.8%
note: Serbian, Hungarian, Slovak, Romanian, Croatian, and Rusyn all official in Vojvodina (2011 est.)

Religions: Serbian Orthodox 84.6%, Catholic 5%, Muslim 3.1%, Protestant 1%, atheist 1.1%, other 0.8%, undeclared or unknown 4.5% (2011 est.)

Population:

7,209,764
country comparison to the world: 101
note: does not include the population of Kosovo (July 2014 est.)

Age structure:

0-14 years: 14.8% (male 549,469/female 515,988)
15-24 years: 11.6% (male 432,471/female 407,367)
25-54 years: 41.6% (male 1,512,888/female 1,488,099)
55-64 years: 14.7% (male 511,516/female 551,117)
65 years and over: 16.9% (male 508,751/female 732,098) (2014 est.)

 

Serbia signed a Stability and Association Agreement with the European Union in 2008 and formally applied for membership in 2009. Accession talks were contingent on the arrest of wartime leader Ratko Mladic, who was apprehended in May 2011. In March 2012, Serbia was invited to begin the accession process after agreeing to allow Kosovo to attend West Balkan regional meetings. The center-left Socialist Party of Serbia won the July 2012 parliamentary elections, and Prime Minister Ivica Dacic has pledged to continue working toward Euro–Atlantic integration and membership in the World Trade Organization. Serbia’s economy has attracted significant investment in manufacturing and services and has become far more integrated into the international economic system. However, economic growth remains sluggish, and unemployment is a significant problem.

Serbia - financial assistance from the European Union
The Instrument of Pre-Accession Funds, called IPA, is a funding mechanism of the EU, which includes candidate and potential candidate countries like Serbia.
• Funding allocation for 2013: €208.3 million
• Serbia has access to:
   - IPA Component I (Transition Assistance and Institution Building)
   - IPA Component II (Cross-Border Cooperation).
This assistance is managed by the EU Delegation in Serbia.
As a candidate country, Serbia will have access to Components III to V when the country receives accreditation to manage assistance itself (under the Decentralised Implementation System).
• EU assistance focuses on:
   - Justice/home affairs – efficient judicial system, fight against organised crime and corruption.
   - Public administration reform – at local and central government level.
   - Social development – social inclusion (especially of the Roma population), employment, human resources development and human rights.
   - Environment & energy – nature conservation, water and air quality, waste management, climate action, renewables, energy efficiency and security.

 

Serbia’s business climate

Serbia has a transitional economy largely dominated by market forces, but the state sector remains significant in certain areas and many institutional reforms are needed. The economy relies on manufacturing and exports, driven largely by foreign investment. MILOSEVIC-era mismanagement of the economy, an extended period of international economic sanctions, civil war, and the damage to Yugoslavia's infrastructure and industry during the NATO airstrikes in 1999 left the economy only half the size it was in 1990. After the ousting of former Federal Yugoslav President MILOSEVIC in September 2000, the Democratic Opposition of Serbia (DOS) coalition government implemented stabilization measures and embarked on a market reform program. After renewing its membership in the IMF in December 2000, Serbia continued to reintegrate into the international community by rejoining the World Bank (IBRD) and the European Bank for Reconstruction and Development (EBRD). Serbia has made progress in trade liberalization and enterprise restructuring and privatization, but many large enterprises - including the power utilities, telecommunications company, natural gas company, and others - remain in state hands. Serbia has made some progress towards EU membership, signing a Stabilization and Association Agreement with Brussels in May 2008, and with full implementation of the Interim Trade Agreement with the EU in February 2010, gained candidate status in March 2012. In January 2014, Serbia's EU accession talks officially opened. Serbia's negotiations with the World Trade Organization are advanced, with the country's complete ban on the trade and cultivation of agricultural biotechnology products representing the primary remaining obstacle to accession. Serbia's program with the IMF was frozen in early 2012 because the 2012 budget approved by parliament deviated from the program parameters; the arrangement is now void. However, an IMF mission visited Serbia in February 2014 to initiate discussions with Serbian authorities on a possible new IMF arrangement and these talks will continue following the formation of the new government. High unemployment and stagnant household incomes are ongoing political and economic problems. Structural economic reforms needed to ensure the country's long-term prosperity have largely stalled since the onset of the global financial crisis. Growing budget deficits constrain the use of stimulus efforts to revive the economy and contribute to growing concern of a public debt crisis, given that Serbia's total public debt as a share of GDP doubled between 2008 and 2013. Serbia's concerns about inflation and exchange-rate stability may preclude the use of expansionary monetary policy. During the recent election campaign, the victorious SNS party promised comprehensive economic reform during the first half of 2014 to address issues with the fiscal deficit, state-owned enterprises, the labor market, construction permits, bankruptcy and privatization, and other areas. Major challenges ahead include: high unemployment rates and the need for job creation; high government expenditures for salaries, pensions, healthcare, and unemployment benefits; a growing need for new government borrowing; rising public and private foreign debt; attracting new foreign direct investment; and getting the IMF program back on track. Other serious longer-term challenges include an inefficient judicial system, high levels of corruption, and an aging population. Factors favorable to Serbia's economic growth include its strategic location, a relatively inexpensive and skilled labor force, and free trade agreements with the EU, Russia, Turkey, and countries that are members of the Central European Free Trade Agreement (CEFTA).

GDP (purchasing power parity):

$80.47 billion (2013 est.)
country comparison to the world: 81
$78.89 billion (2012 est.)
$80.3 billion (2011 est.)
note: data are in 2013 US dollars

GDP (official exchange rate):

$43.68 billion (2013 est.)

GDP - real growth rate:

2% (2013 est.)
country comparison to the world: 141
-1.7% (2012 est.)
1.6% (2011 est.)

GDP - per capita (PPP):

$11,100 (2013 est.)
country comparison to the world: 111
$10,900 (2012 est.)
$11,100 (2011 est.)
note: data are in 2013 US dollars

Gross national saving:

26.7% of GDP (2013 est.)
country comparison to the world: 40
28.3% of GDP (2012 est.)
22.6% of GDP (2011 est.)

GDP - composition, by end use:

household consumption: 75.8%
government consumption: 19.2%
investment in fixed capital: 16.3%
investment in inventories: 5.4%
exports of goods and services: 42.7%
imports of goods and services: -59.4%
(2013 est.)

GDP - composition, by sector of origin:

agriculture: 7.9%
industry: 31.8%
services: 60.3% (2013 est.)

Agriculture - products:

wheat, maize, sunflower, sugar beets, fruits (raspberries, apples, sour cherries), vegetables (tomatoes, peppers, potatoes), beef, pork, and meat products, milk and dairy products, grapes/wine

Industries:

automobiles, base metals, furniture, food processing, machinery, chemicals, sugar, tires, clothes, pharmaceuticals

Industrial production growth rate:

5.5% (2013 est.)
country comparison to the world: 49

Labor force:

1.703 million (2013 est.)
country comparison to the world: 125

Labor force - by occupation:

agriculture: 23.9%
industry: 16.5%
services: 59.6% (2013 est.)

Unemployment rate:

20.1% (2013 est.)
country comparison to the world: 163
22.4% (2012 est.)

Population below poverty line:

9.1% (2013 est.)

Distribution of family income - Gini index:

38 (2013 est.)
country comparison to the world: 72
28.2 (2008 est.)

Budget:

revenues: $17.47 billion
expenditures: $19.6 billion
note: this is the consolidated budget, including both central government and local goverment budgets (2013 est.)

Taxes and other revenues:

40% of GDP (2013 est.)
country comparison to the world: 43

Budget surplus (+) or deficit (-):

-4.9% of GDP (2013 est.)
country comparison to the world: 165

Public debt:

61.2% of GDP (2013 est.)
country comparison to the world: 47
59.3% of GDP (2012 est.)

Types of business entities in Serbia

• a.d./a.д. (akcionarsko društvo / aкционарско друштво): ≈ plc (UK) ≈ AG (Germany)
• d.o.o./д.о.о. (društvo sa ograničenom odgovornošću / друштво сa ограниченом одговорношћу): ≈ Ltd. (UK) ≈ GmbH(Germany)
• k.d./к.д. (komanditno društvo / командитно друштво): ≈ Limited partnership (UK)
• o.d./о.д. (ortačko društvo / ортачко друштво): ≈ General partnership (UK)
• preduzetnik : ≈ Sole proprietorship (UK)

 

Business reforms in Serbia

2014:
Paying Taxes:
Serbia made paying taxes more costly for companies by increasing the corporate income tax.

2013:
Starting a Business:
Serbia made starting a business easier by eliminating the paid-in minimum capital requirement.

Enforcing Contracts:
Serbia made enforcing contracts easier by introducing a private bailiff system.

Resolving Insolvency:
Serbia strengthened its insolvency process by introducing private bailiffs, reducing the starting prices for the sale of assets, prohibiting appeals, expediting service of process and adopting an electronic registry for injunctions to make public all prohibitions on the disposal or pledge of movable or immovable property.

2012:
Registering Property:
Serbia made transferring property quicker by offering an expedited option.

Resolving Insolvency:
Serbia adopted legislation introducing professional requirements for insolvency administrators and regulating their compensation.

2011:
Resolving Insolvency:
Serbia passed a new bankruptcy law that introduced out-of-court workouts and a unified reorganization procedure.

2010:
Starting a Business:
Serbia eased the business start up process by putting in place a one stop- shop for company registration.

Employing Workers:
Serbia introduced priority rules applying to redundancy dismissals or layoffs.

Getting Credit:
Serbia’s new Law on Personal Data Protection guarantees by law that borrowers can inspect their own data, thus improving access to credit information.

2009:
Dealing with Construction Permits:
An administrative backlog at the Construction Department of Belgrade Municipality increased the time for obtaining building permits by 75 days.

Registering Property:
Serbia amended the Tax Property Law to reduce the property transfer tax from 5% to 2.5% of property value. As a result, the cost to transfer a property in Serbia decreased from 5.37% to 2.85% of property value.

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