According to JPM Senior Partner Jelena Gazivoda, Serbian law firms are doing well these days. "We are all very busy these past few months, which is good,” she says. "Notwithstanding the fact that there are different comments in newspapers, we are not really feeling any bad signs. In fact, we are all participating in some significant transactions, making us really busy.”
Gazivoda ties the boom, at least in part, to the political calendar. “The situation is really interesting and challenging,” she says, "because this is a pre-election year. Next year the parliamentary elections and local elections will be held, probably in April. This affects to a significant extent what is happening on the market, because in pre-election years the government tries to achieve the best results demonstrating progress and economic growth.” As a result, she says, “what we are seeing is a significant number of projects which have been launched recently.”
It’s not only political scheduling that accounts for the good times. Gazivoda cites statistics showing that Serbia is among the countries in Europe with the highest number of projects involving both greenfield investments and FDI investments. In 2018 alone, she says, there were 107 FDI projects — “over 20 more than in previous years.” These projects, she reports, are appearing in diverse sectors, and she describes “a few important new projects involving new plants and facilities for production of automobile components,” as well as “a few famous foreign investors involved in the repair of aircraft parts and engines” and “a significant number of investments in FMCG, tobacco, and textile.”
And it doesn’t appear the well is about to run dry either. According to Gazivoda, Serbia’s national investment plan for the upcoming period predicts the investment of between 10-12 billion euros in infrastructure projects involving "communal services,” such as waste-water processing, transportation, energy products, and digital infrastructure, with investors coming from different parts of the world, including Germany, France, and Japan.
Ultimately, though, “the energy and highway construction sectors are receiving the greatest investments.” Gazivoda cites with some pride JPM’s work (performed along with Bojanovic & Partners) on the ongoing energy project — a pipeline project jointly financed by Gazprom and Srbijagas — to transport natural gas from the Russian Federation to Serbia, via the Black Sea and through Bulgaria, that will replace the now-abandoned South Stream project and will be the second line from the Turkish Stream. She describes the project, which is worth several billion euros and which is designed to "bring energy independence and security to Serbia,” as "the biggest energy infrastructure project ever realized in the Republic of Serbia.”
In addition, Gazivoda reports, “there are a significant number of infrastructure projects predominantly run by Chinese investors, who are heavily involved in highway and railway construction in the Republic of Serbia as part of their Silk Road initiative.” Among the most prominent of these projects, she says, is the 60-kilometer segment of the Trans-European road project in Central Serbia connecting Serbia to Central Europe that was officially opened on Sunday, August 18, which JPM advised on as well. In addition, last year China’s Zijin Mining pledged to invest USD 1.46 billion in Serbia’s RTB Bor copper mine in return for a 63% stake, and Gazivoda says that construction of an Industrial Park for innovation technologies — a joint Chinese/Serbian investment — will begin in a suburb of Belgrade next year that is envisaged to employ more than 10,000 people in Serbia when it opens in 2022.
But it’s not only the Russians and Chinese investing in Serbia at the moment. “At the end of August the Serbian and Turkish presidents will open construction of a highway connecting Belgrade with Sarajevo,” Gazivoda reports, noting that JPM advised on that as well. In addition, French companies have played a significant role in the country’s recent development, including the concession award in 2018 received by French infrastructure group Vinci 2018 to expand, operate, and maintain Belgrade’s Nikola Tesla airport, and she says the recent visit to Serbia by French President Emmanuel Macron resulted in the execution of more than two dozen bilateral investment agreements between the two countries. Among other things, she reports, “French companies will be involved, along with the Chinese, with the construction of the metro in Belgrade.”
Despite the good times, Gazivoda reports, Serbia is “not really a big market,” and while the leading law firms are working at full capacity, none of them are growing significantly in size. In addition, she says, while there are "many many lawyers in Serbia,” there are “relatively few remarkable law firms engaged in all these transactions.” She says, with a sigh, that "the overall climate has changed,” as, “in this consumer-driven world, clients are paying less attention to quality in favor of 'one size fits all advice, which does not require high quality.” She’s quick to clarify that she is not talking about "serious clients, of course, who are ready to engage serious law firms and give them serious tasks.”