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Serbia, a European Union candidate country, has amended a number
of laws over the past few years to improve its business climate
and introduced subsidies for investors to boost growth and
combat unemployment which is running at 17.3 percent.
But IKEA, which wants to provide 300 jobs and invest 70 million
euros ($76.8 million) in Serbia, had to negotiate a number of
bureaucratic obstacles before receiving its construction permit
last year.
Vladislav Lalic, the Swedish company's Southeast Europe
director, said IKEA had encountered numerous problems related to
the "huge inefficiency" of administrative procedures.
"We have recently, together with the government, formed a work
group which supported this (project) ... even in that working
group where there was one speaking partner, we had 17 relevant
institutions which also took part," Lalic told a business forum
at the Kopaonik mountain resort late on Tuesday.
Lalic said the IKEA store in the Belgrade suburb of Bubanj Potok
would be completed by early 2017.
Serbia's economy grew 0.8 percent last year and the government
forecasts it will grow by 1.8 percent in 2016, but unless the
country continues reforms and attracts investment, it will be
condemned to slow growth and high deficits, a top fiscal
advisory body has warned.
Lalic said despite improvements, there was still a lack of
coordination between the general legal framework and by-laws. He
also warned about a lack of infrastructure and proper plans,
including for the location where the IKEA store will be built.
"It took us 35 months to produce the zoning plan ... If a
company like IKEA, which is a 32 billion euro business, can face
those problems, then ... you can imagine what kind of problems
will be faced by other smaller investors."
In its 2015 financial year which ended on Aug. 31, IKEA
increased revenue by 11.5 percent to 32.7 billion euros, while
its net profit was 3.5 billion euros.
($1 = 0.9114 euros)
(Editing by Adrian Croft and David Clarke)
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