“Let us create a region that actively furthers its own interests”Adriatic Journal 27 February 2020
There is only one principal legitimate interest of the Western Balkans, Blaž Brodnjak, CEO of Nova Ljubljanska banka, is convinced.
Author: Špela Bizjak Photos: Iztok LAZAR
The belief that changes are the only constant in today’s world might be a bit clichéd, but it is still an accurate description of the current global geopolitical and economic situation. In recent months, we have witnessed the Brexit developments and the end of a 47-year-long marriage between the United Kingdom and the European Union. After several years of economic growth, we are now entering a period of economic slowdown both in the EU area and globally. . The power has notably shifted from the Atlantic influence area to the Pacific region. New strong players – not only China, but also India and Russia -, are not hiding their ambitions, says Blaž Brodnjak, CEO of Nova Ljubljanska banka, the largest bank in Slovenia.
"Seeing this changing world order, the question of Europe's role in it logically arises. Is Europe capable of acting globally as a single 500-million market? Can it formulate common strategic positions and offer solutions beneficial to all people living here? One would be hard-pressed to answer in the affirmative, given the dispersed interests as a result of various factors."
It is well known the Western Balkans, due to its business currents,arrangements and interconnections, is very dependent on the economic situation in global markets. How do you see current geopolitical and economic position of the WB and where do you see opportunities and challenges for the region?
The fact is the people of the Western Balkans are closely integrated into the global flows and therefore dependent on the developments on the so-called systemic and influential global markets.
To work and make decisions in this region it is crucial to understand the current developments well and correctly, as this is the only option to consider the challenges and opportunities resulting from the changing conditions. As a businessman, I see opportunities in much closer connections in the region in order to achieve economic development, stability in the security area and the establishment of a new interest area that will be able to enforce the region’s interests at the global level.
You repeatedly stress there must be a common area in the WB that will be attractive to capital, knowledge and talents. Can you elaborate on this idea?
The countries of the Western Balkans should consider a joint interest platform that would allow the region to exploit all its strengths and natural riches. We need a very clear vision that will build on predictability for the economic operators. This means we have to set priorities. Personally, I see these in the formulation of the region into a zone supporting the free flow of capital, goods and talents, with emphasis on the competitive advantages of individual countries, since each country in the region can position itself in such manner.
The next step would be the reduction or complete elimination of administrative barriers in the area. This would quickly make the area more attractive for new fresh capital. Capital is an opportune category that preys on good opportunities for business. Additional capital would bring new infrastructure into the region – transport, energy, information and communications infrastructure facilitating the movement of goods, knowledge and people. We would gain new know-how, new development opportunities would be opened, and it would mean a general boost to the region. Once the infrastructure is in place, the business will follow.
As we know, local development is the only possible way forward for the region. But this can only be achieved with international competitiveness.
International competitiveness can be defined as a principal legitimate interest of the Western Balkans. The region must set the ambitious goal of being an active link in the global value chain through business players. It is not enough for the companies to be present in such chains; it is essential for them to be included in the development and to actively participate in the activities creating the lion’s share of added value. This can be done through smart niche specialisation. Niche companies occupy better positions in the global supply value chains. The positive effects include more tax inflows in the domestic environment, more know-how in the local area (spill-over), greater productivity and increased resilience of the companies to the ever-changing situation in the global arena, as well as to market shocks and uncertainties.
On 26 February 2020, Nova Ljubljanska banka d.d. entered into a share purchase agreement (“SPA”) with the Republic of Serbia for the acquisition of an 83.23% ordinary shareholding in Komercijalna banka a.d. Beograd (“KB”).The closing of the transaction is expected in Q4 2020 and is subject to mandatory regulatory approvals from, amongst others, the European Central Bank, Bank of Slovenia and the National Bank of Serbia.
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Possibly the most problematic issue currently afflicting the region, including its most developed areas such as Slovenia, Croatia and Serbia, is the loss of talent, especially young people, among which many have tertiary-level education. What can we do, and what measures should we take to keep the talent and attract those who have left to return?
I believe the entire region should systematically strive to establish an ecosystem that will allow talents to foster their personal development, invite them by offering opportunities and stimulate their entrepreneurial thinking and creativity.
We should set up appropriate financial and existential initiatives for young people so that they would return home after finishing their schooling. At the same time, we should think about ways to attract experts to the region, who would increase the value added and develop solutions that are interesting for global markets. In my opinion, two measures are crucial for resolving this issue.
The first one is to reduce labour costs; and the second one is to build companies that will be perceived as interesting employers. I am talking about the companies-regional champions that enable human resources to further their personal and professional development and that are also interesting as brands promoting values and allowing young people to connect. Such companies will be more successful in attracting talents.
"At the same time, we should think about ways to attract experts to the region, who would increase the value added and develop solutions that are interesting for global markets. In my opinion, two measures are crucial for resolving this issue."
Environmental responsibility is nowadays taking over one of the most important positions in enterprises' business models, and financial businesses are no exception in this regard, true?
I believe that after January 2020 we do not need to explain that our region has a serious problem with sustainability. We simply cannot afford any longer to delay the commencement of an extensive program of changing over to renewable and more sustainable sources of energy, and begin to appreciate our living environment, that is, our home. Environmental responsibility must have priority over short-term economic interest. In the coming years the NLB Group will actively strive for participation in energy projects with a sustainable orientation, and we will also promote activities to help clean up our environment and make it shine again. We live in one of the most beautiful parts of the world and it is time to become aware of this and act with all due respect.