Ambassador Addresses American Chamber of Commerce

December 16, 2008

Ambassador Munter Addresses the American Chamber of Commerce

Thank you very much. I am very happy to be back to speak at the American Chamber of Commerce again. A little more than a year ago I made my first public address in Belgrade to AMCHAM and since then together we have been through many things. I'm not sure any of us would have predicted in September of 2007 that as we turn the corner now to 2009 the world economy would be facing a severe crisis, Serbia would be led by a broad-based coalition that are all committed to moving toward a European future and the West, and that a historic new leader would be preparing for inauguration as President in the United States.

As I think back to the themes I raised with you last year, I am encouraged by the progress Serbia has achieved with your help, but I also see much work to be done, and many difficult challenges ahead. Our common goals have not changed. I continue to share with you the prosperous vision of Serbia's future, one that is commensurate with the talents and dreams of Serbia's people.

The new administration in Washington in January will bring many changes, but one thing that will not change is the U.S. government's commitment to support peace, stability and prosperity in the Balkans. Under our new leadership the United States will continue to reach out to Serbia in support of a better future for both countries. I have just returned from Washington, where I met with leaders in President-elect Obama's team. I spoke with them about the great opportunities and the great challenges ahead for Serbia.

As we all know, the coming year will be a difficult one as we face together the challenges of the global financial crisis. Serbia's prudent policies of reducing public debt, controlling the expansion of credit and making some progress in economic reform have so far cushioned Serbia from the first wave of the financial crisis. Now, however, Serbia must face the difficulties of the second wave in the crisis as markets for Serbian exports contract and the rapid economic growth that Serbs have experienced in the last four years grinds to a halt. The Serbian government's struggle with the 2009 budget demonstrates to all of us how difficult the choices that lie ahead will be.

At the same time, I am heartened by the fact that this year a wide majority of the Serbian people made clear in the Presidential, parliamentary, and municipal elections that Serbia's future is in Europe. Serbia's people reaffirmed what all of you told me when I arrived in Belgrade, that the average person wants a transparent, efficient government that supports economic reform and development and that will lead Serbia to a brighter future.

Prime Minister Cvetkovic's government now has an opportunity to seize this consensus, demonstrate its vision and leadership, and press forward with the difficult work that lies ahead. Elections are over, and they should stay that way. Those who support reform and engagement with the West won. Now is the time to buckle down, press ahead with the business of governing, and to lead Serbia forward. I have encouraged the government in my discussions to press ahead with reform legislation, move quickly to implement the regulatory guillotine process, and build the foundation for a stronger and more vibrant business community. I have also urged the President to meet more often and more publicly with business leaders to discuss the common agenda of government and business. I hope that you will join me in carrying that message to the government and to the people of Serbia.

I challenge you as business leaders, and especially those of you here in AMCHAM who represent the best of the businesses community in Serbia, to reiterate the message that Serbia's economic future depends on advancing reforms, clearing away bureaucracy, enhancing the rule of law, and strengthening democratic institutions.

I was pleased to see that following the government formation last summer, AMCHAM worked with other business organizations such as FIC, NALED and the Serbian Chamber of Commerce to put together a broad-based business agenda to present to the government. That was exactly the kind of initiative that I encourage you to follow-up on, and to expand. Business leaders have to work together to continue to press the government to address your concerns, and to meet the needs of the private sector. Individually and in private each of you can raise with the government issues of direct interest to your firms, like the property law, or the company law, or the securities law. When businesses work together, through organizations like AMCHAM to advance a common business agenda you maximize your effect.

Despite the difficult road ahead I am optimistic that Serbia has an opportunity to be a leader in the revitalization of the global economy. The fact that both U.S. Steel and Ball Packaging announced additional investments in Serbia in the last few months highlights the opportunities that exist.
When we talk about Serbia, we cannot talk about Serbia in a vacuum. One of the United States' priorities in the Balkans is to see greater partnership and integration across the region. Serbia cannot succeed alone, nor can it fail alone. I am convinced the region will move forward. Serbia can enhance the depth and pace of economic growth and speed the pace towards Europe if Serbia becomes an active participant and partner in the region. Partnership and regional approaches that build on shared interests will bring the greatest success to each of the individual countries in the Balkans. Serbia must more fully engage with its neighbors if it is to realize its potential. For our part, the U.S. Government must have a regional policy for the Balkans that incorporates a broader vision.

While Serbia is the geographic and economic hub of the Balkans, its position as the center of business activity will only continue if the government sets a course that advances economic reform and opens the doors to new and existing businesses to invest and expand. The approach of the U.S. government in the Balkans has for too long been driven by discrete issues. We viewed the countries of the region as compartmentalized entities, when in fact our goals for the region were universal -- prosperity, security, and integration with Europe, so our policies and approaches also must be regional. That is our homework.

I hope that Serbia's government and people will also look increasingly to the region as well. Serbia's ability to attract investment in this very difficult global economy will reflect the country's competitiveness in the international market. Serbia's challenge is to transition from privatization driven investment to greenfield investment. The Serbian Government has made an effort to attract investment, but must do more. In addition to the need for new laws and regulations, Serbia must focus on proper implementation and enforcement. Specifically, institutions must have the capacity, and the necessary support, to implement reform measures in a fair, transparent, and equitable manner without political interference.

Corruption remains a major issue. It corrodes public confidence and discourages investment. The government must address the perceptions and realities that companies face. I am encouraged that President Tadic made this a key issue in his campaign. Foreign companies operating in Serbia and prospective foreign investors must have confidence in the sanctity of contracts and that courts can and will enforce their decisions. Without commitment to the rule of law, prospective foreign investors will look elsewhere.

I am increasingly impressed with the dynamic leaders in Serbia, both at the local and national levels, pursuing efforts to tell the story of economic opportunity in Serbia and across the Balkans. I am consistently impressed by local leaders and business people as I travel around Serbia. These leaders are striving to look forward and seize the opportunities for Serbia's future.

Finally, I would like to return to an issue that I feel strongly about. Last week I had the honor to present an award at the second annual Virtus Corporate Philanthropy Awards to the Serbian company Sto Posto for its work in providing support to health care, education, cultural activities in the community. At the same ceremony we honored U.S. Steel for its outstanding contributions in Serbia.

I believe it is vital for U.S. and other AmCham member companies to continue to lead the way in setting positive examples in terms of business ethics, community contributions, and active participation in humanitarian initiatives. I am pleased that with the assistance of the United States through USAID, the Institute for Sustainable Communities (ISC's) Civil Society Advocacy Initiative and Smart Kolektiv we have established the Business Leaders Forum, a coalition of companies working together to encourage corporate social responsibility in Serbia. The Business Leaders Forum -- which many of you are members of -- provides a springboard for even more systematic cooperation between companies and civil society organizations.

I am delighted that AmCham is increasing its activities together with you to promote corporate social responsibility activities. The diplomacy of deeds is a framework for advancing growth and development that is good for business. I will continue to work closely with all of you in these efforts.

As we look together to 2009, I know that next year will be a year of change and a year that will test all of us. I look forward to continuing to work with AMCHAM and all of you directly to support our common vision of a better, more prosperous future for Serbia and for ever closer relationships between our two countries. The difficulties ahead are significant, but with your help Serbia can continue to advance towards greater integration with Europe and closer ties to the United States.