Decenija lokalnog ekonomskog razvoja u Srbiji: koje su pouke za budućnost?

Decade of Local Economic Development in Serbia: Lessons Learnt

27 December 2012, Dragiša Mijačić

Which direction should the future project interventions take? That is the question that arises now, a decade or so since the first local development projects were launched. The economic environment in Serbia is characterised by substandard economic regulations, high unemployment, an uncompetitive local economy and a high degree of corruption in public procurement at all levels. Although local self-governments (LSGs) have limited legal avenues for addressing most of these problems, they need to be pro-active. Furthermore, they need to advance their cooperation with the business sector by introducing mechanisms for continuous consultations and cooperation. Strengthening capacities for forming public-private partnerships will be one of the greatest challenges in the upcoming period. In addition, the fact that democracy entails pluralism and consensus has to be borne in mind at all times; this is why it is crucial to involve the private and civil sectors in the adoption of decisions relevant to local development.

Promotion of entrepreneurship is also an important field of intervention. Entrepreneurship based on the economy of knowledge and modern technologies and focusing on areas enabling the creation of added value and new jobs needs to be promoted and stimulated. In that sense, efforts need to be invested in the development of entrepreneurial skills, particularly of the professionals who want to start their own businesses, as well as of the young, women and the jobless.    

Integrated development of business infrastructure at the local and regional levels should also be an important segment of the future local development interventions. Business infrastructure elements, clusters, business incubators and industrial zones and parks have mostly developed independently of each other, frequently out of sync with the local economic systems and policies. These elements need to be interlinked to serve a single vision and strategic orientation of the local economy if more efficient local development is to be achieved. Furthermore, more efforts need to be invested in revitalising “brownfield” sites to ensure that they are in the service of local development.

Attracting foreign direct investments is another area in which LSGs need to play a more active role. Many cities and municipalities have designed their promotional material and taken an active part in the investment fairs at home and abroad. However, they need to work more actively with potential investors (both domestic and foreign) and the national authorities in addressing the problems accompanying every investment: from obtaining various licences from national and local authorities to securing a quality labour force, the construction of the accompanying infrastructure, et al. The establishment of One Stop Shops within Local Economic Development offices could be the first step towards a more active approach to assisting foreign investors at the local level. 

Raising the capacities of LSGs and LED offices is another important area of intervention in the ensuing period. Strengthening human potentials for the adoption of local development policies based on quality analyses will be instrumental. The collection of statistical data at the local level is also an important prerequisite and will considerably improve local development planning in Serbia.

Not one city or municipality can address its developmental problems all by itself. This is why the implementation of regional development policies and inter-municipal cooperation will have to intensify. Many LSGs in Serbia, however, are behaving autistically and designing their development policies without analysing their immediate environment. There is animosity among many neighbouring LSGs, based on political, historical, cultural or ethnic grounds. Facts, however, corroborate that the degree of inter-municipal and regional cooperation is clearly correlated with the number of geographically concentrated project interventions in a specific territory. Hence the importance of initiating and implementing projects of common interest to the LSGs at the district or regional level. This is why LSGs need to strengthen their cooperation with regional development agencies, which are playing an increasing role in the implementation of development policies in Serbia.

At the national level, all the stakeholders need to work on improving the legislation impacting the design and implementation of local economic development policies. A set of indicators for the comparative monitoring of the development levels of LSGs in Serbia needs to be developed.

And, last but not the least, the lessons learnt and good practice examples of local economic development need to be promoted. A comprehensive analysis needs to be conducted to identify the impacts of the implemented projects on sustainable local economic development in Serbia. Such an analysis will also help define the types of interventions that will contribute the most to raising human and operational capacities and to economic empowerment at the local level.

Dragiša Mijačić
Institute for Territorial Economic Development (InTER) Director

The attitudes outlined in this article represent personal beliefs of the author and do not necessarily reflect viewpoints of the European Partnership with Municipalities Programme, or the European Union, the Government of Switzerland and the Government of Serbia.

Please be informed that the European Partnership with Municipalities Programme – EU PROGRES was completed on 31 March 2014. If you would like to learn about the activities and results of the European PROGRES, which is a continuation of development support of the European Union and Government of Switzerland to the South East and South West Serbia, please visit