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The Government of the Republic of Serbia

In the service of citizens

Serbia has excellent conditions for development of innovation-driven economy

Belgrade/Paris, 4 September 2018

Belgrade/Paris, 4 Sept 2018 – Prime Minister Ana Brnabic stated in Paris today that Serbia sees digitalization as the greatest potential for the country's growth and competitiveness, which is why the Serbian government declared the digitalization of all aspects of Serbian society its number one priority.

The website of the Serbian government brings the whole speech of the Prime Minister at a panel meeting dedicated to blockchain technology, which is the central theme of the conference of the Organization for Economic Co-operation and Development (OECD):

“Honorable Mr. Gurria, Prime Ministers, ladies and gentlemen,

It is my great honor to be invited to speak in front of such a respectable group of people, and to present what Serbia is doing in terms of digital transformation, with blockchain being one important part of it.

As some of you may know, approximately 5 years ago Serbia was literally couple of months away from declaring insolvency.

With great efforts of my predecessor, current President of Serbia, Mr. Aleksandar Vucic and his team, in which I served as the Minister of Public Administration and Local Government, and in partnership with IMF, we managed to:

- stabilize public finances – to the extent that today we have budget surplus for the 2nd consecutive year;

- reduce public debt – which is currently below 60% of our GDP;

- more than halve the unemployment – from above 24% to below 12% today; and

- increase our business friendliness – so that last year we attracted 2.6 billion EUR of Foreign Direct Investment, which is more than the rest of our region combined. This deserved Serbia a title of the world leader in FDI attraction, as stated by the Financial Times (relative to the size of our economy), and the champion of reforms in South East Europe, as stated by the World Bank.

We are now slowly relaxing very stringent fiscal consolidation measures, and this has started reflecting in our GDP growth.

In the first half of this year, our GDP growth was 4,8%, and although our projected growth for 2018 is 3,5%, it is now highly likely that we will exceed this, and perhaps even exceed 4% growth by the end of 2018.

These are all great news and, as you can imagine, I am extremely proud of these achievements, and, as politician, J, eternally grateful to my predecessor for implementing most of the very difficult measures during his term in the office. The results of which we are seeing today.

But what is it that Serbia needs to do now?

Politics aside, what is the greatest priority, the single most important task and challenge, for my Government in this term?

It’s simple: even more dynamic, and much more sustainable, GDP growth.

This is the task at hand which we need to fulfill in order to catch up with the EU member countries.

And, as always, it is easier said, and defined, then done.

So, where do we see the greatest potential;

the source of growth and competitiveness;

the chance for Serbia to leapfrog?

One word: Digitalization.

It is the 4th industrial revolution that gives a whole new set of opportunities for economies such as Serbian.

Those that were not the winners of the previous industrial revolution(s), have a unique chance to become winners in today’s world.

As the Prime Minister, I have my mind set on Serbia using this unique opportunity, which is why I declared digitalization – digitalization of all aspects of Serbian society – to be the No. 1 priority of my Government.

This means a very wide scope of things:

- from developing eGovernment and delivering more eServices – to increase efficiency and transparency of the Government, and also as a mighty tool to fight corruption;

- to strong support to Serbian fast growing IT sector (which currently grows more than 20% year-on-year, with exports growth of more than 30% annually);

- to significant investments in modernization of education (we’ve introduced programming as mandatory subject in primary schools where children now learn Scratch and Python; we are making digital competencies mandatory in every school subject and this year we are starting with digital textbooks in primary schools; we’ve increased number of specialized IT classes in high schools 5 times compared to last year; and increased number of students at tech faculties by 20%; we’ve also started re-training for people who want to enter IT sector);

- to investment in infrastructure which will enable more startups and innovation companies (we are investing approximately 60 million EUR into at least 2 additional science and tech parks in Serbia, and expanding R&D labs and institutes).

My goal is to drive the transformation of Serbian economy from investment-driven, where we are today, to innovation-driven, where we need to be.

Thus, we have launched a broad set of regulatory and tax reforms, in order to incentivize even faster development of knowledge-based industries and digital transformation. In that regard, we are going to change some of our legislation by the end of this year, in order to enter 2019 with much more competitive regulatory environment.

For instance, in FinTech, Serbia is one of the few countries that has already introduced Regulatory Sandbox for payment solutions, and we are introducing instant payments in October this year, making money transferrable within 30 seconds of payment initiation, 24/7, directly from one account to the other. We believe that this will spark many fintech innovations and enable great strides towards mobile payments and cashless society.

This year, Serbia has doubled the funding of the Innovation Fund that finances innovative companies, and we are now establishing National Science Fund to stimulate scientific research.

Like some other Eastern-European countries with traditionally strong STEM education, Serbia has been known as a great outsourcing destination for years. It is ranked among the top European countries when it comes to the number of freelancers and, according to some estimates, No. 1 country in terms of freelancers per capita.

This is all the great foundation to build an innovative economy on, and we already have a number of companies and startups dealing with new technologies such as Blockchain, Artificial Intelligence, Machine Learning, Genome Sequencing, Virtual Reality, and Gaming.

Several of our companies are the best in the world in their field – but we need more of them.

Regarding blockchain, we have number of successful companies that work with the most notable foreign partners in the world.

In 2017, “Markets and Markets” research recognized Serbia as one of the top 5 countries in the world in terms of number of blockchain developers.

At the same time, Serbian blockchain company, Game Credits, ran the largest Initial Coin Offering in the world, and there are several other blockchain projects developed in Serbia that raised tens of millions of EUR.

One project that might be particularly important is blockchain based solution for sending remittances, since there are couple of billion EUR of remittances sent to Serbia each year. This project is driven by UNDP, an example of our close cooperation with both business and donor community.

Another great example is the Global Sun Foundation, global NGO operating from Serbia which raises funds for treating children, fully transparently on blockchain. This is a great improvement in transparency and trust building, since most NGOs do not have publicly available information on how much of their funds was actually used for the ultimate goal.

The blockchain industry in Serbia has organized itself into the Serbian Blockchain Association. Some of the most notable advisors of Association are Loretta Joseph, a great friend who is here with us and who helps with blockchain regulation around the globe, as well as Joseph Weinberg and Ben Yablon, blockchain experts that most of you already know.

Serbian Government recognizes the importance of backing these efforts and we want to create the best possible environment for growth of blockchain industry in line with the best policies and standards worldwide.

We are also striving to take advantage of blockchain technology in public administration. To be more precise, we are actively considering putting our Citizens Registry on blockchain, and then other applications will follow.

Lastly, I hope I’ve managed to give you a glimpse of great many things that are currently happening in Serbia, with particularly exciting times in Serbian blockchain community.

I strongly believe that digital opportunities are huge and that Serbia has a genuine chance for rapid growth in the foreseeable future. We are convinced that in some areas, blockchain being one of them, Serbia might even be amongst the leading countries of the world.

It is very important to me to drive digital transformation and modernization of my country, but also to spread the word of this new, progressive Serbia throughout the world, and I thank you for the opportunity you gave me to do just that.

My personal dedication, and dedication of my Government, is to be the driver of change. We are open to partnerships that deliver economic growth and I am looking forward to seeing you all doing business either in Serbia or with Serbian partners.

Thank you.”