To put it simply, we were deceived. But, the fact that we were deceived is not the biggest problem. Some other issues are even more problematic, and I want to highlight them so that our citizens understand the true scope of the problem.
First, our current model for attracting foreign investment to the Republic of Serbia is exhausted and has been so for some time. No single company can change this and no single politician would want to admit this to the public. For years, we have been subsidizing various foreign companies, paying our workers from the state budget in their stead, providing them with land, overlooking violations, our courts handing out only symbolic fines below the legal limits for river pollution. A number of things are happening that are detrimental to both the economy and politics. Foreign investments have been increasing while our GDP stagnates. Between 2009 and 2018, the share of foreign direct investment in GDP averaged 5.84%, and from 2012, this percentage grew to 8.12% in 2018, which, after Montenegro, is the highest in the region and beyond. Even so, GDP growth has been modest: 0.8% (2015), 2.8% (2016), 2.0% (2017), and 3.0% (2018). Since then, foreign investments have had no deeper effect, and the current account deficit has remained a constant in the Serbian economy.
That’s why we can question whether any individual company, be it Rio Tinto or any other, will be able to bring about significant changes. Will 1,300 employed engineers, geologists, and miners be able to pull the entire economy out of the gutter? No serious or sober person could claim that they would. If this is not clear, let us ask ourselves: Did the standard of living in Serbia increase as investments in mining increased? No. Is there a direct link between the increase in mining investments and the standard of living across Serbia, as Rio Tinto and Vučić assure us? No.
Therefore, it is far from true that Rio Tinto will save the Serbian economy. If it were the case, it would have already happened since investments in mining have already grown and are already generating jobs. But that did not happen. And, even if it did, it would have been undesirable because, if we really let the mining sector lead our entire economy, then we do not need to expect any other sources of growth, and that is a dangerous position to be in. For, according to a recent United Nations study, countries that are dependent on a single industry become reliant on that industry and become more vulnerable to shocks such as fluctuations in prices of raw materials, in this case, lithium.