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Italy’s economic crisis and the OECD warnings

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At the Columbia University in New York I have recently met many young, skilful and well-trained Italians, who are very worried about the future of their country.

 Currently the Italian Statistics Institute (ISTAT) tells us that the cost of training multiplied by the number of Italian researchers abroad amounts to over one billion euros a year.

 Every year approximately 3,000 researchers leave Italy for other countries – the well-known “brain drain”. We lose 16.2% of researchers trained in Italy, but we succeed in attracting only 3% of scientists from other countries.

 The reasons which underlie this situation are the following: old-fashioned universities, exam-rigging, corruption and nepotism, never-ending public competitions and ridiculous salaries.

 The “brain drain reversal scheme” started by the  government back in 2001, has convinced only 488 researchers to come back to Italy, of whom less than a quarter decided to prolong their stay in Italy for the following four years.

 A student at the Columbia University told me “we need to start a revolution”. It is true, but we need to agree on the meaning of this remark.

 No other country in the West is undergoing a structural crisis like Italy – and recession is looming large. The current Purchasing Managers Index, which measures the manufacturing activity, is at its lowest level over the last four years, in Italy as in the rest of the world.

 Hence a very severe crisis of the whole Euro area is  expected, while Italy will distribute an ever decreasing  GDP that will be reduced to nothing in the near future.

 Hence obviously the redundancy Fund shall be increased significantly and the public debt, which is already under pressure, will immediately sky-rocket.

  The VAT cannot but increase by 12.5 billion euros – a “safeguard clause” that cannot be met otherwise.

 According to the estimates made by some research centres, the VAT increases – 23.1 billion euros for 2020 and 28.7 billion euros for 2021 – will naturally entail a 1,200 euro annual extra-cost per each household.

 Young people will be the most penalized, considering the low wages and salaries they normally earn – if any.

 It is self-evident that if the VAT increases, the propensity to buy decreases – and this would happen precisely in a recessionary phase.

  Economic masochism, but probably inevitable when you are wrong in defining the public budget composition, as is currently the case.

 Furthermore, within a framework of fully negative forecasts for Italy’s economy, the OECD report of April 2019 has been made public.

 The topics are well-known, given the wide media coverage,  but it is good to examine them analytically.

 In particular, the OECD recommends to work on institutional, economic and social reforms, which have been debated in recent years.

This means and immediate and strict simplification of the government system – probably including a one-chamber parliamentary system, but not in the regional devolution sense envisaged by former Prime Minister Renzi’s proposal –  tax reform and regional simplification with only two or three macro-regions.

 Nevertheless reducing the Regions’ spending powers is an essential issue, currently still capable of redressing public budgets.

 The OECD also recommends a medium-term budget plan within the framework of the EU Growth Pact.

  This means that a program is proposed to correct the annual imbalances with respect to the Maastricht rules and to the other European financial treaties.

 Said program, however, envisages budget cuts that no one knows whether they are possible.

 It is equally true, however, that – according to the current government’s rhetoric and storytelling – these are Draconian rules and measures for Italy.

 Nevertheless we need to refinance a huge public debt and  at the best rates – hence we can only follow the rule of the great football coach, Nereo Rocco: “kick and run”.

 Control of debt securities sale, reduction of public spending and analysis of its effectiveness.

 The sooner we enter the Euro comfort zone and safety area – without ridiculous pseudo-economic theories – the better.

 Furthermore, the OECD asks Italy to implement measures designed to foster productivity. It is an excellent proposal but, from 2010 to 2016, productivity in Italy increased only by 0.14% a year – which means virtually nothing.

  Here we go back to the issue of science and innovation, which Italy is unable to retain in the country, thus forcing the young researchers who produce them to leave.

 The main reason for it is the excessive fragmentation of companies which, due to their small size, cannot invest in innovation, but rather focus on the gradual specialization of low-tech traditional productions, which will soon be swept away by international competition.

 It should be recalled that in Germany the graduates’ unemployment rate is 2-4%, as against the Italian one which ranges between 8% and 13%.

 Moreover, in Italy the number of humanities graduates is twice as much as in Germany.

 Once again, quantity does not favour quality. Quite the reverse.

 Another OECD request is to fully implement the reform of cooperative banks (BCC), also known as banche popolari.

 It is really a thorny issue. Certainly cooperative banks (BCC) must be placed in a position to face and withstand the other types of banks.

 There is the widespread feeling, however, that much of the cooperative banks’ capital (currently the number of members in Italy is equal to as many as 1.3 million) is strongly desired by larger and currently less capitalized banks.

 Italian banks had the Supervisory Authority of the Bank of Italy when their  European competitors resorted to the  usual consulting firms.

  Hence there should be a good reason why the network of cooperative banks is successful, while the network of ordinary banks has a smaller capital allocation ability.

 Hence obviously the OECD basically wants the recapitalization of Italian banks “by other means”, i.e. with the cooperative banks’ liquidity, which is on average higher.

It is by no mere coincidence that 63% of Italian high-risk banks are in favour of the cooperative banks’ reform.

 Another key aspect of the OECD recommendations is the abolition of the so-called “quota 100″early-retirement scheme intended for employees aged at least 62 and having accrued at least 38 years of social security contributions..

Certainly, from Mario Monti’s government onwards, the Fornero pension reform has been the State’s way to “swell its coffers”.

 The impact of “quota 100”, however, is significant on public accounts, if we consider the expected deficit of 17 billion euros. Furthermore, with this schemethere is the risk of an early retirement of civil servants that the Public Administration can partly replace, but the Municipalities cannot replace at all.

 Without changing the Fornero pension reform, over the next two years 500, 000 civil servants would retire from the Public Administration. Currently, however, the “quota 100″early-retirement scheme costs one billion euros for SMEs alone, in terms of severance pay. Nevertheless, with  “quota 100”, the State shall pay 335,000 pensions more than expected.

 Hence spending will rise to 4.7 billion euros and we do  not know yet where this money can be found.

 Moreover, the OECD considers “quota 100” a generational injustice, given the different economic treatment granted to the various pensioners.

 Nor does it seem credible that any job vacated by a pensioner is ipso facto filled by a young person.

 This is tantamount to applying to pensions the “voodoo economics” with which George Bush senior referred to  Ronald Reagan’s economic and tax policies.

 Certainly the “quota 100” early-retirement scheme will reduce staff in hospitals, schools, courts and municipalities significantly.

 And there are no real and cheap alternative options to solve the issue.

 Moreover, as natural, the OECD recommends to reduce tax amnesties, but also asks for a very interesting measure, i.e.  to improve the coordination of the bodies dealing with taxation.

 This is a dual problem certainly requiring to organize the bodies, but also to simplify and streamline rules and regulations.

 For example, a standard tax system for each activity can be defined and the taxpayers’ data in relation to this tax benchmark can be later checked.

 Without tax simplification, there will never be tax fairness and equity. Currently the tax rate on limited liability companies increases by 14%, while the flat-rate regime decreases and the minimum tax bases increase. Everything is fine but, if we do not deal with taxation on natural persons, there will always be a big problem of tax injustice.

 With specific reference to the public investment that the OECD requires, reference must be made to my old friend Paolo Savona and his plan to set aside 50 billion of savings from treasury bonds (BTP) and other securities to be invested in infrastructure.

 That plan on which he had been working, was immediately shelved because the Five Star Movement members cringe whenever they hear people talking about infrastructure to be built.

 Savona was also thinking of introducing the so-called  mini-BOT, named after Italy’s short-term treasury bills -the quasi-parallel currency also permitted by the EU regulations, which leads to investment and growth.

 It was not possible to implement that plan and this already bears witness to the conceptual and practical narrowness of the current government.

 Once again, no imagination and above all no technical knowledge of problems.

 What about the so-called “reddito di cittadinanza” – a citizen basic income which is conditional upon undertaking “unpaid work” in community-based services? It can be implemented, although it is an expensive and probably useless measure.

I share the OECD view according to which it is an artificial increase in the minimum labour income which, however, many small companies will not accept.

 They will prefer not to hire rather than paying wages and salaries competing with the “reddito di cittadinanza”.

 Hence we will easily reach a situation of massive support for long-term unemployment, which will discourage many individuals from undertaking productive work since they would earn less than the “reddito di cittadinanza”.

 Mass poverty, however, does exist, and it mainly results from the fact that, since 1999, 25% of Italy’s production system has moved abroad.

 The OECD also wants to reduce the “tax wedge”.

 It is an excellent idea that is partly already envisaged by the current tax legislation.

 However, what about workers having a good share of their wages and salaries without tax wedge, in exchange for a normal tax return?

 Certainly there are obvious dangers, but entrepreneurs would gain a good share of tax-insurance costs and  employees would pay their taxes independently.

 Another problem to be discussed is the OECD proposal to gradually lower the “reddito di cittadinanza” and, at the same time, introduce a subsidy for low-income workers.

 It is a good, albeit abstract idea: in principle, those having low labour incomes cannot invest in their training.

  Furthermore the subsidy to workers favours the employers’ tendency to lower wages and hence produces  adverse and costly effects.

 It is better to make investment in the education and training sector open to workers or even to provide tax support to have access to the refresher courses organized by the trade unions.

 Finally, the OECD confronts Italy with its long-standing  problems: the per capita GDP is at the same level of 2000,  when we introduced the Euro, but it is anyway clearly below the pre-crisis level.

 Therefore each negative cycle leaves us poorer and less industrialized.

 And hence less able to face our social needs: poverty; the aging of population and the increase in the number of elderly people; the young researchers who leave the country.

 The OECD recommends to provide subsidies to workers.

 Nevertheless, we need to be careful: if entrepreneurs get used to paying a “political” price for wages and salaries, the whole system will collapse.

 The OECD envisages a living wage that is worth 70% of the average wage.

 Will it be enough? However, it shall be linked to a salary already active in companies or also in the Public Administration which – as university researchers know all too well – currently lives on unpaid work.

 But certainly the State must tackle the wage crisis and supplement wages and salaries with the reduction of the tax wedge – with the aforementioned mechanisms and also with ad hoc funds for the most crisis-stricken sectors.

 Certainly an aggressive operation – like the one designed and planned by Hitler’s banker, Hjalmar Schacht, with the “MEFA” securities, which were “private” bills payable by banks – would not be a bad idea.

 A great deal of imagination will be needed here, because currently all the old theories of economic “balance” do no longer apply.

 The OECD also thinks that the regional development funds must be added to those inside ordinary expenses. Currently, however, they are both lacking. Where are the funds to make them effective?

 In short, if we abandon the current policy based on “all power to the imagination” and study problems more carefully, we will probably make a few steps forward.

Advisory Board Co-chair Honoris Causa Professor Giancarlo Elia Valori is an eminent Italian economist and businessman. He holds prestigious academic distinctions and national orders. Mr. Valori has lectured on international affairs and economics at the world’s leading universities such as Peking University, the Hebrew University of Jerusalem and the Yeshiva University in New York. He currently chairs “International World Group”, he is also the honorary president of Huawei Italy, economic adviser to the Chinese giant HNA Group. In 1992 he was appointed Officier de la Légion d’Honneur de la République Francaise, with this motivation: “A man who can see across borders to understand the world” and in 2002 he received the title “Honorable” of the Académie des Sciences de l’Institut de France. “

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Fifth report on the EU visa-free regime with Western Balkans and Eastern Partnership countries

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What is the Commission presenting today?

Today, the Commission reports on results of its monitoring of the EU visa-free regime with Albania, Bosnia and Herzegovina, Montenegro, North Macedonia, and Serbia as well as Georgia, Moldova and Ukraine. For the countries that obtained visa exemptions less than 7 years ago (Georgia and Ukraine), the report also provides a more detailed assessment of other actions taken to ensure the continuous fulfilment of the benchmarks.

What is the general assessment?

The Commission considers that all countries concerned have taken action to address the recommendations made in the previous report and continue to fulfil the visa liberalisation requirements. However, all 8 countries need to continue to take further measures to address different concerns related to the fight against organised crime, financial fraud and money laundering, as well as addressing high-level corruption and irregular migration. To ensure a well-managed migration and security environment, and to prevent irregular migration flows to the EU, the assessed countries must ensure further alignment with the EU’s visa policy. Countries concerned should also take action to effectively phase out investor citizenship schemes or refrain from systematically granting citizenship by investment.

It is imperative that the reform process undertaken during the visa liberalisation negotiations is sustained and that the countries do not backtrack on their achievements.

What is a visa liberalisation requirement (benchmark)?

While 61 countries around the world benefit from visa-free travel to the EU, in some cases, visa free access can be decided following bilateral negotiations, called ‘visa liberalisation dialogues’. They are based on the progress made by the countries concerned in implementing major reforms in areas such as strengthening the rule of law, combatting organised crime, corruption and migration management and improving administrative capacity in border control and security of documents.

Visa liberalisation dialogues were successfully conducted between the EU and the 8 countries covered by today’s report. On this basis, the EU granted visa-free travel to nationals of these countries; for Montenegro, Serbia and North Macedonia in December 2009, for Albania and Bosnia and Herzegovina at the end 2010, for Moldova in April 2014, for Georgia in March 2017 and for Ukraine in June 2017.

These dialogues were built upon ‘Visa Liberalisation Roadmaps’ for the Western Balkan countries and ‘Visa Liberalisation Action Plans’ for the Eastern Partnership countries.

During the visa liberalisation dialogues, the Commission closely monitored the implementation of the Roadmaps and Action Plans through regular progress reports. These progress reports were then transmitted to the European Parliament and the Council and are publicly accessible (see here for the Western Balkan countries and here for Eastern Partnership countries).

Why does the report only assess 8 countries out of all those which have visa-free regimes with the EU?

The report only focuses on countries that have successfully completed a visa liberalisation dialogue: Albania; Bosnia and Herzegovina; Montenegro; North Macedonia; Serbia; Georgia; Moldova and Ukraine.

Under the EU rules, the Commission is responsible for reporting to the European Parliament and the Council on the continuous fulfilment of visa liberalisation requirements by non-EU countries which have successfully concluded a visa liberalisation dialogue less than seven years ago.

Georgia and Ukraine have been visa-exempt for less than seven years, therefore the Commission is required to report on the continuous fulfilment of the benchmarks. As regards Moldova and the visa-free countries in the Western Balkans, which are visa exempt since more than 7 years, the report focuses on the follow-up to the specific recommendations the Commission made in the fourth report adopted in August 2021, and assesses the actions taken to address them. An assessment of aspects related to the visa liberalisation benchmarks for the Western Balkans is included in the European Commission’s annual Enlargement Package.

What is the Commission doing to help partner countries to address organised crime and irregular migration?

The Commission together with EU agencies and Member States are stepping up operational cooperation to address both organised crime and irregular migration with the countries assessed in the report.

On 5 December the Commission presented an EU Action Plan on the Western Balkans. It aims to strengthen the cooperation on migration and border management with partners in Western Balkans in light of their unique status with EU accession perspective and their continued efforts to align with EU rules.

Partner countries are encouraged to actively participate in all relevant EU Policy Cycle/EMPACT operational action plans, undertaken to fight serious and organised crime. The EU-Western Balkans Joint Action Plan on Counter-Terrorism is an important roadmap and evidence of our strengthened cooperation to address key priority actions in the area of security, including the prevention of all forms of radicalisation and violent extremism, and challenges posed by returning foreign terrorist fighters and their families.

The EU has signed a number of Status Agreements with Western Balkan countries on border management cooperation. The agreements allow the European Border and Coast Guard Agency (Frontex) to carry out deployments and joint operations on the territory of neighbouring non-EU countries. A number of agreements have been successfully implemented and the remaining agreements should be swiftly finalised.

Cooperation between Frontex and partner countries takes place though different level working arrangements, and includes cooperation on return operations as well as information exchange, sharing best practices and conducting joint risk analyses.

The Commission is also providing significant financial support to partner countries to support capacity building and the law enforcement reforms.

What is the Commission doing to ensure the partner countries’ alignment with the EU’s visa policy?

Visa policy alignment is a pre-condition to ensure a continuous fulfilment of the visa liberalisation benchmarks as well as to ensure a well-managed migration and security environment.

All countries covered in the report are required to take further actions to align their visa policies with the EU’s. The Commission has consistently recommended, both in the visa suspension mechanism reports and in the annual enlargement packages, that the countries should ensure further alignment of their respective visa policies with the EU lists of visa-required third countries, in particular as regards those third countries which present irregular migration or security risks for the EU.

What are the next steps?

The report sets out actions to be taken by the partner countries to ensure the sustainability of reforms. Close monitoring is an ongoing process, including through senior officials meetings as well as the regular Justice, Freedom and Security subcommittee meetings and dialogues between the EU and visa-free countries, the regular enlargement reports, including, where relevant, EU accession negotiations.

What is the revised visa suspension mechanism?

The visa suspension mechanism was first introduced as part of the EU’s visa policy in 2013. The mechanism gives a possibility to temporarily suspend the visa exemption for a non-EU country, for a short period of time, in case of a substantial increase in irregular migration from the partner countries.

The European Parliament and the Council adopted a revised mechanism which entered into force in 2017. Under the revised mechanism, the Commission can trigger the suspension mechanism, whereas previously only Member States could do so. In addition, the revised mechanism introduced an obligation for the Commission to:

  • monitor the continuous fulfilment of the visa liberalisation requirements which were used to assess to grant visa free travel to a non-EU country as a result of a successful conclusion of a visa liberalisation dialogue;
  • report regularly to the European Parliament and to the Council, at least once a year, for a period of seven years after the date of entry into force of visa liberalisation for that non-EU country.

The new measures allow the European Union to react quicker and in a more flexible manner when faced with a sudden increase in irregular migration or in internal security risks relating to the nationals of a particular non-EU country.

When can the suspension mechanism be triggered?

The suspension mechanism can be triggered in the following circumstances:

  • a substantial increase (more than 50%) in the number people arriving  irregularly  from visa-free countries, including people found to be staying irregularly, and persons refused entry at the border;
  • a substantial increase (more than 50%) in the number of asylum applications with from countries low recognition rate (around 3-4%);
  • a decline in cooperation on readmission;
  • an increased risk to the security of Member States.

The Commission can also trigger the mechanism in case certain requirements are no longer met as regards the fulfilment of the visa liberalisation benchmarks by non-EU countries that have gone through a visa liberalisation dialogue.

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Hungary’s Victor Orban uses soccer to project Greater Hungary and racial exclusivism

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Image source: veja.abril.com.br

Hungary didn’t qualify for the Qatar World Cup, but that hasn’t stopped Prime Minister Victor Orban from exploiting the world’s current focus on soccer to signal his Putinesque definition of central European borders as defined by civilization and ethnicity rather than internationally recognized frontiers.

Mr. Orban drew the ire of Ukraine and Romania for wearing to a local Hungarian soccer match a scarf depicting historical Hungary, which also includes chunks of Austria, Slovakia, Slovenia, Croatia, and Serbia.

It was the second time in a matter of months that Mr. Orban spelt out his irredentist concept of geography that makes him a member of a club of expansionist leaders that includes Russia’s Vladimir Putin, China’s Xi Jinping, Israel’s Benyamin Netanyahu, and members of the Indian power elite, who define their countries’ borders in civilisational rather than national terms.

Speaking in July to university summer camp students in Romania, which is home to 1.2 million ethnic Hungarians, Mr. Orban insisted that “Hungary has…national…and even European ambitions. This is why…the motherland must stand together, and Transylvania and the other areas in the Carpathian Basin inhabited by Hungarians must stand together.”

Responding to Ukrainian and Romanian objections to his scarf, Mr. Orban insisted that “soccer is not politics. Do not read things into it that are not there. The Hungarian national team belongs to all Hungarians, wherever they live!”

Hungary has accused Ukraine of restricting the right of an estimated 150,000 ethnic Hungarians to use Hungarian in education because of a 2017 law that curbs the usage of minority languages in schools.

Slovak Prime Minister Eduard Heger presented Mr. Orban with a new scarf at a recent summit of Central European leaders in a twist of satire. “I noticed that Viktor Orban has an old scarf, so I gave him a new one today,” Mr. Heger said on Facebook.

Mr. Orban’s territorial ambitions may pose a lesser threat than his supremacist and racist attitudes.

Those attitudes constitute building blocks of a cvilisationalist world that he shares with Christian nationalists and Republicans in the United States, as well as a new Israeli coalition government that Mr. Netanyahu is forming. Mr. Putin has used similar arguments to justify his invasion of Ukraine.

In contrast to Mr. Putin and potentially Mr. Netanyahu, depending on how the Biden administration responds to his likely coalition, Mr. Orban is on a far tighter leash regarding territorial ambition as a member of NATO and the European Union.

As a result, far more insidious is what amounts to a mainstreaming of racism and supremacism by men like Mr. Orban, Mr. Netanyahu, and former US President Donald Trump, who consistently mainstream norms of decency and propriety by violating them with impunity.

Speaking a language shared by American Christian nationalists and Mr. Netanyahu’s potential coalition partners, Mr. Orban rejected in his July speech a “mixed-race world” defined as a world “in which European peoples are mixed together with those arriving from outside Europe.”

The prime minister asserted that mixed-race countries “are no longer nations: They are nothing more than conglomerations of peoples” and are no longer part of what Mr. Orban sees as “the Western world.” The prime minister stopped short of identifying those countries, but the United States and Western European nations would fit the bill.

In a similar vein, Mr. Trump recently refused to apologise for having dinner with Ye, a rapper previously known as Kanye West, who threatened he would go “death on con 3 on Jewish people,” and Nick Fuentes, a 24-year old pro-Russian trafficker in Holocaust denial and white supremacism.

Mr. Trump hosted the two men at Mar-a-Lago, his Florida resort, just after launching his 2024 presidential election campaign. Mr. Ye “was really nice to me,” Mr. Trump said.

Candidates backed by Mr. Trump in last month’s US midterm elections, including Hershel Walker, who is competing in next week’s runoff in Georgia, have similarly felt comfortable associating themselves with Messrs. Ye and Fuentes.

Mr. Fuentes asserted days before the dinner that “Jews have too much power in our society. Christians should have all the power, everyone else very little,” while Mr. Ye’s manager, Milo Yannopoulos, announced that “we’re done putting Jewish interests first.”

Mr. Yonnopoulos added that “it’s time we put Jesus Christ first again in this country. Nothing and no one is going to get in our way to make that happen.”

Featured on notorious far-right radio talk show host Alex Jones’ Infowars, Mr. Ye professed his admiration of Adolf Hitler. “I like Hitler,” Mr. Ye said, listing the various reasons he admired the notorious Nazi leader.

Mr. Netanyahu’s likely coalition partners seek to legislate discriminatory distinctions between adherents of different Jewish religious trends, hollow out Israeli democracy, introduce an apartheid-like system, disband the Palestinian Authority, expel Palestinians “disloyal to Israel” in what would amount to ethnic cleansing, deprive women of their rights, and re-introduce homophobia.

Avraham Burg, an Israeli author, politician, businessman, and scion of a powerful leader of a defunct once mainstream religious political party, warned in 2018 that Messrs. Orban, Trump, and Netanyahu “are the leaders of paranoia and phobia.”

Mr. Burg cautioned that they represent “a global phenomenon that crosses all boundaries, ethnic, racial, or religious, gathering into a tribal ghetto that is smaller than the modern state, which is diverse and inclusive of all its citizens. Their fierce antagonism to the foundations of democracy and the attempt to do detriment to as many accomplishments and benefits of the open society as possible are evidence of inherent weaknesses and real existential fears.”

Mr. Burg’s dire vision is even more a reality today than when he spoke out four years ago.

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Strong will to enhance bilateral relations between Serbia and Pakistan

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Although the Republic of Serbia and the Islamic Republic of Pakistan are two sovereigns, independent states, with different cultures, religions, languages, histories, and ethnicities. One is located in Europe and the other in Asia. Yet, there exist so many similarities and commonalities, which provide a strong basis and convergence of interests.

Both, Serbia and Pakistan, are developing countries and struggling to improve their national economies and the standard of life of respective nations. Both nations were victims of the Western world and sanctions. Ugly media has been projecting a distorted image of both countries. Hindrances created by Superpowers in the path of development are a common phenomenon in both cases.

People in both countries are hardworking, strong, resilient, and capable of surviving in harsh circumstances. Both have demonstrated in the past that they can resist pressures from any superpower. Both have learned the lessons from past bitter experiences and are determined not to repeat the same in the future.

In my recent visit to the Republic of Serbia, I noticed that there exists a fair awareness in Serbian regarding Pakistan. I came into a cross with the general public and common people and they know a lot about Pakistan. They have shown strong feelings for Pakistan. There exists immense goodwill for Pakistan among Serbian youth.

Both countries are in the process of industrialization and promoting trade. Currently, both countries are earning from the export of workforce and human resources. Serbian youth are working in Western Europe and sending back foreign exchange. And Pakistan workforce finds a convenient destination in the Middle East for earning more and sending back foreign exchange to Pakistan. But, both nations have the potential to earn through export and foreign trade.

Serbia is known as the gateway to Europe and Pakistan is the gateway to Oil-rich Middle East, South Asia, East Asia, Central Asia, and Eurasia. Both countries can utilize each other for re-export too.

Both countries are far away from each other but, a strong bond of friendship and mutual understanding is admirable. Based on the convergence of interests, we can cooperate with each other. Especially can help each other in their areas of weaknesses and benefit from each other’s strengths.

Serbia has vast cultivatable land and is rich in water resources, very niche in the agriculture sector. Whereas its population is limited to only 7 million approximately. While Pakistan is 250 million population and a strong workforce in the agriculture sector. Both nations can positively collaborate and cooperate in the Agriculture sector.

The Republic of Serbia is in the process of Industrialization, especially in the automotive sector, whereas, Pakistan has a strong base for industrialization and is rich in the technical and skilled workforce. Pakistan has established a rich supply chain for industrialization and Serbia can benefit from Pakistan’s strength.

Science, Technology, Research, Innovation, and Higher Education is the important area where both can benefit from collaboration and cooperation. Pakistan has world-ranked Universities, recognized globally with English as a medium of study, and can meet the demand of Serbian youth. Whereas Serbia has the edge in the IT sector, Pakistani youth can be beneficiaries of Serbian facilities.

However, to achieve the real benefits from each other’s strengths, there is a need to do a lot of homework. There is a dire need to promote people-to-people contact and mutual visit at all levels. Scholars, intellectuals, academia, and media can play a vital role in bringing both nations closer.

Governments in both countries may take appropriate policy measures to strengthen the relations like relaxing visa regimes, removing tax barriers, and introducing attractive policies to each other’s nationals in various fields of life.

To promote trade, Free Trade Agreement (FTA) can be signed among them and formulate a trade policy benefitting each other. Similarly, investment mechanisms need to be devised to attract investment from each other country.

Media has a long-lasting impact and collaboration between two nations in Media will greatly help to build a positive narrative of both countries and simultaneously need to counter negativism in the ugly media in some countries over-engaged in distorting our image.

There is a strong will to enhance our bilateral relationship between the two nations, and whenever there is a will, there is a way. I am optimistic that bilateral relations will grow exponentially in the days to come.

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