REGIONAL COOPERATION AND ECONOMIC INTEGRATION

measured and reflected in the overall increase in FDI, declining unemployment, increasing
export activities and various other indicators of economic development.
However, there are some positive signs that Serbia can use its development potential in
the next ten years and can achieve economic growth and improve the standard of living of
citizens, while turning into a competitive and functioning market economy. For example,
the program of reform of laws and other regulations is in progress, in order to meet the
standards of the European Union. Macroeconomic and business environment is constantly
developing over the last few years, and the Government is passing a large number of
new laws, stabilizing the annual budget, and it is achieving formal arrangements with the
International Community about the debt and the questions to support the budget. There is
more evidence of international and local approval on the progress that has been achieved in
the speed and direction of the overall economic reform programs, which is seen in:
• Relative readiness to begin negotiations on EU accession.
• Renewal of credit support from the IMF in 2010.
• Positive evaluation of legislative reforms of the OECD.
• Increased dialogue and support to the Government of the domestic private sector
and existing foreign investors.
Positive attitude and active participation of foreign investors is an important factor in the
overall business environment in the determination and allocation of priority, key initiatives
for the improvement of the overall environment for business development in the country.
CONCLUSION
FDI FLOWS IN SOUTH EASTERN EUROPE
Competition in new FDI is reflected in the global and rapid technological progress and
development of logistics, together with the global need for reduced costs in most industrial
sectors, all of which increases competition and raises the internal standards and expectations
of the investors. Serbia must make efforts to catch up with the countries in the region. The
Government has noted this need and presented it in all its plans and strategies. Therefore,
a more active and accelerated approach and commitment for additional resources and
initiatives should be adopted, in order to improve and enable the business environment.
It is especially important to create conditions for effective application of discoveries and
inventions (innovative results) in the economy, so that the time needed from the arising
to commercialization of the innovation reduces to the level required in the world market.
Innovative activity, together with the scientific research work, is the most important driving
force of the total technological and economic development of the country. New knowledge
and technologies, based on the inventive and innovative development, applied in the
production and the process of creation of new products and services, can only increase the
overall competitiveness of Serbian economy in the world frames. It can be concluded that
the creation of a favorable environment for domestic and foreign investment is a major
challenge for all countries. Competition in attracting FDI grows throughout the world,
especially in the countries that have a small and open economy. Encouraging foreign
direct investment in Serbia requires at the same time action and partnership relation of all
stakeholders: central government, local government and foreign companies.
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