Core area “Sustainable economic development, training and employment” Support for growth and employment

The focus in this core area is on the following areas of intervention: private sector and financial sector development; technical and vocational education and training.

Shopping street in Belgrade

Shopping street in Belgrade

Shopping street in Belgrade

Private sector and financial sector development

Micro, small and medium-sized enterprises (MSMEs) play a key role in job creation. Germany therefore provides special support to Serbian MSMEs in areas such as information and communication technology, metalworking, mechanical engineering, and sustainable farming. They are given access to reduced-interest loans and public support programmes and receive assistance with a view to the introduction of modern information technologies.

In response to the COVID-19 pandemic and with a view to mitigating its economic impact, support has also been given to MSMEs as they quickly adopted digital systems for their business processes and models and switched to online channels. This support was provided based on close cooperation with the Center for Digital Transformation of the Chamber of Commerce and Industry of Serbia, which had already been established earlier with support from Serbian-German development cooperation.

Complementing these efforts, advice is being provided to the Ministry of Economy with regard to policies and programmes to foster SME development and with regard to implementing the newly adopted national industrial policy, which focuses, among other things, on digital technology and on support for a green economy. These activities are intended, not least, to facilitate a green recovery after the COVID-19 pandemic. Another focus is on economic and social opportunities for young people in rural regions in order to reduce their migration to big cities or foreign countries.

In 2019, the German and Serbian governments launched a broad-based support programme (Start-up Facility) for people who want to start a business and for businesses that were started just recently. In order to implement the programme, which provides credit guarantees in order to reduce the lending risk for local commercial banks, the Serbian Entrepreneurship Foundation was set up together with the Serbian Chamber of Commerce and Industry (PKS). The Foundation began its operations in 2021. It was possible to mobilise 11.2 million euros from the BMZ's special COVID-19 programme to provide swift and needs-based support to micro, small and medium enterprises (MSMEs) through improved access to loans. This enabled them to bridge liquidity constraints caused by the pandemic, and to protect jobs.

Technical and vocational education and training

Even during the pandemic, economic development remained relatively stable. Nonetheless, youth unemployment in Serbia is very high (about 23 per cent in the second half of 2021). People who enter the labour market for the first time are finding it very hard to find a permanent job in an occupation for which they have been trained.

At the same time, there is a lack of skilled labour in Serbia's labour market. In the area of vocational training, a law on “dual” (industry-based and school-based) vocational education was therefore drafted with support from Germany.

Currently, a number of vocational schools offer dual training in six occupations with great employment potential (including welder/metalworker, electrician, industrial mechanic, apparel tailor, and car mechanic). Through a regional Financial Cooperation programme covering all countries of the Western Balkans, the Regional Challenge Fund, support is being provided in the form of grants for jointly developed training courses and projects offered by enterprises and education institutions. Calls for project proposals are published in cooperation with the Western Balkans 6 Chamber Investment Forum (External link), an association of national chambers of commerce.

In addition, a large programme for higher dual vocational education is being prepared in Serbia in cooperation with the Serbian Ministry of Education.

As at: 08/04/2022