We Expect Foreign Capital to Solve Our Problems – That’s a Fairy Tale; They’re Here for Profit

Nikola Avramović, Director of Financial Advisory at the consulting firm Alvarez & Marsal, told N1 that he sees a problem in the fact that Serbia’s economic policy over the past 25 years has been based on the mantra of foreign direct investment and foreign capital.

“We expect foreign capital to solve all of our economic problems, but that is an economic fairy tale.”

As he explained, foreign capital does not have a developmental mission.

“It is here for profit and did not come to develop the host country. Whether it is Chinese, German, or American capital, its function is the same,” Avramović said.

He added that this is entirely legitimate from the investors’ perspective, but not from ours if we base our development strategy on it, emphasizing that domestic businesses and domestic investment are being neglected.

“On top of that, when a crisis or uncertainty arises, foreign capital does what it always does in such situations—it goes back home,” he stated.

Asked whether Serbia’s growing orientation toward Chinese investments is a good move, he said that “there is a strange habit in Serbia of presenting every Chinese visit as some kind of salvation.”

“In general, the prevailing view is that China uses Serbia as a gateway to the European market. Europe is trying to bring production closer to its own borders. We are in a position to benefit from that trend if production is relocated closer to Europe, but we could also remain on the sidelines, which would not be good,” he said.

He also pointed out what he called a “paradox”—while the European Union advises countries like Serbia to embrace free markets and foreign direct investment, EU countries themselves are increasingly moving toward protectionism.

“They are building their domestic industries, protecting their local economies, and strengthening their own capacities, while advising us to rely on foreign investment,” he said.

Will Prices Rise Again?

Avramović said that he does not believe Serbia is facing a repeat of the inflation scenario seen in 2022.

“The claim that inflation has been brought under control or completely resolved is somewhat premature,” he added, noting that prices have not fallen and inflation has not disappeared—it is simply rising more slowly.

He said that prices are likely to continue increasing, but that he does not expect the increase to be dramatic.