Republic of Serbia

Motivating Factors

According to 2018 World Bank Data, 43.91 % of Serbia’s population is comprised of rural residents. This is the second-highest percentage of rural residents across the Balkans, with 51.76% of Bosnia and Herzegovina’s residents making their homes in rural areas according to 2018 World Bank Data. In contrast, Bulgaria’s rural population is only 24.99% of residents according to the same source. For this reason, rural innovation in Serbia and Bosnia Herzegovina is crucial for the realization of the sustainable development goals. Given that rural residents in Serbia and Bosnia and Herzegovina are primarily farmers, education related to carbon emission reduction, green energy, alternative building options such as hemp-based materials, and the planting of income generating crops, such as industrial hemp, that are simultaneously carbon-negative, are crucial elements of sustainable development across the region.

In 2019, data from the National Statistics Office of Serbia (RZS) drew attention to children, teenagers, the unemployed and rural residents being at greatest risk due to the effects of poverty. Official figures for 2017 showed that 25.7% of the population lives at or below the poverty line. The poverty line is drawn at 15600 dinars (130 euros) for a family with one member, 28080 (234 euros) for a couple with one child and 32760 dinars (273 euros) for a couple with two children.

According to Future Challenges and Strategies for Smallholders in Serbia, “Poverty in Serbia is predominantly a rural phenomenon, given that rural communities in some periods were affected more than twice as much in comparison to the cities. Before the beginning of the economic crisis (2006-2008) there was a significantly faster decline of life quality in rural, rather than in urban areas. Rural areas are more responsive to the economic crisis and were strongly affected by it, with the overall growth of poverty in the Republic of Serbia generating an increase in poverty in rural areas.”

According to the May 2011 Assessment of the Labor Market in Serbia by Vienna Institute for International Economic Studies, “The Serbian labour market is characterized by low employment and activity rates, particularly for women and young people. This indicates the weaknesses of the secondary educational system in adapting to the needs of the labour market, but also the obsolete skills of the high percentage of long-term unemployed.”

According to the 2019 Labor Force Survey conducted by the Serbian Office of Statistics, although the official unemployment rate is reported as 10.4%, the data shows that permanent employment is, in fact, rare. The official employment rate is reported as being only 49%, with the difference between employed and unemployed recorded as “inactive”. Therefore, for our purposes, we are deeming official statistics to be inaccurate and unreliable. We are therefore relying on third-party data and personal experiences reported by our current employees and advisors.

Gender Equality Considerations

The World Bank guide, “Women’s Access to Economic Opportunities in Serbia“, addresses the overall challenge of gender representation across the Serbian economy through the Executive Summary on pages 1, 2 and 3. On page 3, the guide states that, “Serbia has one of the highest rates of unemployment in Europe, and austerity measures that are to be implemented in 2016 will include cuts in public sector employment that may affect women more than men.” While on page 5, “This report shows that women in Serbia tend to report poorer health than men and are more often unable to afford medical services.” Page 16 specifies that, “The employment rate is substantially lower among women than among men”. Significantly, note on page 50 that, “Significant gaps remain in women’s access to jobs. Compared to EU member states, Serbia has the lowest score of the Gender Equality Index than any other country in the domain of work.”

Stakeholder Feedback

On the basis of stakeholder feedback, including information gathered from local community cooperatives, nonprofit cultural and environmental organizations, and members of our Stakeholder Board and Stakeholder Engagement planning working group, we have established the following:

  • The employment process is difficult for individuals between the ages of 16 and 40 to grasp, unless they seek employment by a large public institution, financial institution, or established international corporation. There are no clear and transparent job descriptions, application processes or pathways to employment beyond individual referrals. 
  • Many individuals ages 19 to 40 seek contract-based employment through online channels such as LinkedIn and online platforms for project-based contracting for copywriters, designers, web developers, software developers and engineers, and other professionals who work online. Such employment or contract-based work does not result in the payment of healthcare, unemployment, or pension benefits by the employer or contract provider.
  • Individuals who are able to secure formal employment are usually paid at minimum wage outside of large city centers and even below minimum wage in South-Central Serbia and in isolated villages. Within city centers, wages are usually formally paid at minimum wage or slightly higher than minimum wage, while additional payments are not formally reported nor do employees receive benefits beyond the payment of contributions (government healthcare, insurance, and pension plans) on their reported wages.Private health insurance is rare, and private dental benefits and pension plans are usually reserved for corporate executives or managers at large multinational corporations.
  • Agricultural workers are not generally formally employed but are rather paid in cash for their work, and they do not receive healthcare benefits, unemployment insurance contributions or government pension contributions. Although legally mandated, the formal filing of employment contracts for agricultural workers usually only covers a small fraction of their actual work rather than the full term of their seasonal work.