THE STATE OF SOUTH SERBIA’S ECONOMY

Leskovac - The economy of Jablanica and Pcinj Districts,  the area of which is covered by the Regional Chamber of Commerce in Leskovac (RCCL), is characterized by the lack of working capital, high production and infrastructure costs,  high utility costs, a high unemployment rate and unpaid and low wages, says an expert associate at the RCCL Natasa Dobric.

“The situation in our economy is extremely difficult.  In the Republic of Serbia, 46 municipalities are considered underdeveloped, while as many as 10 municipalities in South Serbia are in the category of the least developed ones, "she said.

Industrial output grew in 2013 by 5.6 percent compared to the previous year. This trend of growth in industrial production continued in 2014, so that it amounted to of 6.6 percent in January. Out of 16 industries that are represented in the area, industrial growth was achieved by five of them, while negative results were generated by 10 of them.   
Regarding foreign trade, the total foreign trade in 2013 was 579 million dollars, which is by 15 percent larger compared to the same period in 2012. A surplus was recorded in both 2012 and in 2013, which amounted to 44.9 million dollars in 2012 and to 51.8 million dollars in 2013. 

If we consider the areas in which our companies are involved in foreign trade, we can say that the largest portion of trade is conducted with EU countries and it is 67 percent, followed by trade done with CEFTA countries, which is 16 percent, and trade with other countries, which is 17 percent. The most important countries regarding South Serbia’s exports are Germany, Italy, Slovenia, Bulgaria and Macedonia, while the countries from which South Serbia mostly imports include Italy, Germany, China, Turkey and Macedonia.

As for foreign trade, the total foreign trade exchange in January 2014 amounted to 37.5 million dollars, out of which imports were 15 million dollars, while exports were 22.5 million dollars.  If we compare Jablanica and Pcinj Districts, we may see that Jablanica District achieved greater foreign trade exchange in relation to Pcinj District by 3.3 million dollars. The largest exporters from the area of these two districts are: "Simpo" AD " from Vranje," "Diva divani" from  Vranje Spa, "Erlad Serbia" from Vlasotince, "Noke kozar" DOO  from Vranje, "Gruner Serbia" DOO from Vlasotince, "Falke Serbia" from Leskovac, “Zdravlje” AD from Leskovac,  “Jugprom” DOO from Leskovac. Their exports amount to 50 percent of the total exports. The largest importers include "Erlad Serbia" DOO from Vlasotince, BAT AD from Vranje, "Simpo" AD from Vranje, "Alfaplam" AD from Vranje, "Zdravlje" AD " from Vranje", "Gruner Serbia" DOO from  Vlasotince, "Noke kozar" DOO from  Vranje. “Simpeon” DOO from Bujanovac, “Falke Serbia” DOO from Leskovac and “Nesa Commerce” from Vranje.   

The level of investment in the economy of the area is still insufficient to have a larger impact on the sustainable economic development of South Serbia.  Companies from South Serbia still use few commercial bank loans due to unfavorable conditions, which are reflected in high interest rates, short repayment terms, inability to provide guarantees and the like. On the other hand, a large number of poor and heavily indebted companies are risky business partners, so that banks are restrained about approving loans to them. 

In the previous period, there were no larger foreign investments in the economy of the area, especially in the economy of the least developed municipalities, due to the lack of locations having the utilities and infrastructure for new investments. Therefore, the Chamber of Commerce concluded that in order to create a favorable business environment, the majority of local self- governments in this area need the support of the Government of Serbia through the provision of certain financial assets, primarily through grants.

When it comes to the cost of living and consumer prices, they are, on average, by 1.4 percent higher compared to December 2013, while the average annual increase in the cost of living in 2013 was 7.8 percent.

As for earnings, the area covered by RCCL is among the last ones in the Republic of Serbia.  The average wages paid in January amounted to 30, 330 dinars and it is by 20 percent lower than the average wages in the Republic of Serbia. The net paid earnings in Jablanica District amounted to 30, 150 dinars and to 31, 101 dinars in Pcinj District.

As far as employment and unemployment are concerned, according to the most recent data of the Chambers of Commerce, there were 76,907 unemployed people in the area in January, 38, 718 of them in Jablanica District and 29, 189 of them in Pcinj District.  

According to data of the National Bureau of Statistics, the total number of employees, including those in the economy and non-economy, as of September 30, 2013, amounted to  72, 643 people. Looking at the ratio of the employed and unemployed, it can be concluded that there are only 7 percent more employed persons than those who are waiting for a job.

 Source:  Jugpress and the Coordination Body