The main highway through Serbia (E75) is actually not that bad and very nicely located as a transport link to Turkey. I guess today most of the Turkish imports are going via Italy. If they could improve this highway all the way down to Istanbul that should be very helpful.

Not to get too locked into geographic location, the most important factor will always be economic reform and institution building. Hopefully Serbia will have the stamina to pull through on this.

Belgrade should be the regional hub for a variety of things, from financial services to air transport. (Right now, to fly between any two Balkan capitals, you have to go through some airport in central Europe, usually Vienna. C’est whack.) Unfortunately, Slobo trashed that too. Belgrade may eventually grow back into that role, but it’s going to take a long time.

Doug M.

Total GDP (current usd) for the Balkans, excluding Greece, is about 210 billion. This is split just about evently between the former Yugoslavia and the rest. Romania accounts for 75 billion, Croatia and Slovenia for 30-35 billion each and Serbia and Bulgaria for about 25 billion each.

This is about the same as the total GDP of Greece (200 billion in current usd) and somewhat less than Denmark (235 billion usd) and, I’d guess it’s also somewhat lower than the GDP of the US state of Maryland.

So, the size of the Balkan (ex Greece) market isn’t huge. What’s interesting is that it’s today one of the most rapidly growing markets in Europe and it’s pretty virgin territory.

Although Serbia is neither the largest market nor has the largest population in the region, I think it could use its central geographic location to attract investments looking to service the ‘Balkans’ (though I doubt Slovenia or, even, Croatia, would be too happy about being seen as part of the Balkans).

Nah, not really. For the reasons Oskar gives. Southeastern Italy is pretty peripheral, and Montenegro has an inconvenient mountain range between it and the rest of Serbia. And, yeah, bad roads.

Oskar also points out that Serbia is not a large market. True, but it’s an excellent jumping-off point for the rest of the former Yugoslavia… five countries (soon to be six or seven), totalling over 20 million people.

There’s quite a lot of investment between the FY countries, though most of it is flowing south from Slovenia and Croatia. Same or similar language, same or similar culture, shared history. A Slovene can do business in Serbia much more easily than an Italian or German.

McKinsey just opened an office in Zagreb, BTW. This is /not/ because Croatia’s economy is big enough to support a major consultancy. No, it’s because Zagreb is within easy striking distance of that whole former YU market. They’re buying market share in five countries at once. I think it’s rather clever of them, myself.

Doug M.

Italy is just a ferry trip from Montenegro. Doesn’t that count?

In Sweden the former Yugoslavia is not such an exotic place and people are quite well informed. Yugoslavs have been moving to Sweden since the 1960s and are a well integrated community. Many Swedes have been to the Adriatic coast. So at least Swedish executives will typically know a lot more about the countries of the region than your average American, or, even, British excutive.

From my own perspective, the main drawback of Serbia is that it’s neither a large market (compared to f.ex. Poland or Russia) or close enough to serve as a good base for servicing the major West European markets (as say Poland, Hungary or Slovakia). On the other hand the Balkans have some of the highest growth in Europe right now.

@Oskar Lindström
I guess most big/serious investors just aren’t ready to invest (I know, I work for one)…
Visit http://www.lunov.com

Although the 1990s were a lost decade for Serbia while the others steamed ahead, it should be able to catch up quite quickly once the Kosovo issue is solved. They’re not starting from scratch like post-communist countries were in the 1990s. Although the situation in Serbia is not good today, it’s still much better than Poland was in 1990.