Cheaper and Easier Ways to Send Money to Serbia?

Shamefully, Paypal still doesn't serve any of the Balkan countries.

In the past, when I needed to send funds to Serbia I relied on bankwire or various types of moneygrams -- usually costing me at least $35 in fees per send.

Those fees can add up quickly, so if I had to send money to someone frequently, such as paying a freelancer on a routine basis, I often sent a larger sum to one person in Serbia I trusted, such as a relative, and then had that person disburse the funds over time. For example, my husband's white-haired godmother used to personally pay various Serb contractors for us every two weeks. I think she enjoyed it; she put on her best dress to draw funds from our account at the local bank where they treated her like a visiting dignitary, and then she majestically handed out pay packets to contractors as they came cap-in-hand to her house.

If you have to send a lot of money to one person, which an intermediary might not be comfortable with, you might consider opening up an Everbank account. The good thing about Everbank is they have, to my knowledge, the best Dollar->Euro exchange rates you'll find in the US and if you exchange your dollars with them, they'll wire the Euros anywhere in the world for free. And you can do the wire by faxing instructions, instead of visiting the bank in person which most other US banks insist on. The drawback is, again to my knowledge, they don't exchange Dollars for Dinars. If I were to buy a house in Serbia, I'd probably send the money over via Everbank. But I might not use it for more routine things.

Today I discovered iKobo, an online service that I've decided to try next. They charge $8 per transaction, and you can do the whole thing online, which is a lot cheaper and easier than dealing with bankwires. However, there's an additional $33.60 charge the first time you send money to a particular individual in Serbia. That's because iKobo uses Federal Express to send that person a Visa debit card. Then, when you send additional funds, the debit card is automatically "topped off".

This tactic has an added bonus in that the Serbian recipient gets to flaunt a Visa card in their wallet, which is still unusual enough for some people there to get excited about. For example, I doubt my husband's godmother has any credit cards whatsoever.

If you've tried this tactic, or others, let me know how it went. And let's cross our fingers that Paypal gets to the Balkans sometime soon!

Shortsighted Balkan Business Mentality -- Why I Avoid Doing Business in Croatia & Serbia

Not every Croat or Serb professional or businessperson is like this -- but enough are that the others stand out like red roses on a field of snow.

Here's what happens: you start a business relationship, perhaps hiring a person in the Balkans to do a job for you or perhaps starting a business contract if some type. Everyone is smiling and nice and happy. Then, fairly soon after that your friendly employee or partner screws you. Blatantly.

I've had all sorts of people, both Serbs and Croats ask for emergency loans... and then string me along with excuses for months until I realized they never intend to pay the money back, and sometimes the "emergency" had never existed in the first place.

I've had Serb contractors, who had just finished one job but were up for rehire on another, turn in their company computers... that were just hollow shells because they'd literally stripped out the innards to use somehow elsewhere.

I've had a Croatian lawyer, who was on the US Embassy's recommended list, agree in writing to do a job for me for a particular amount, and then when he was up against my tight court deadline, he suddenly raised the amount of money required and demanded it up front before he'd do a lick of work.

The weird thing for me in all of these situations is not that people screw other people. I'm not naive. That happens in every country of the world, including America. The difference in the Balkans is that all these people screwed me when it was against their own best interest!

In each of the cases I mentioned above, I was in the midst of starting what I thought would be a longer-term business relationship with these people. One that would be very fruitful for them. But, they grabbed the chance to screw me at the very start. That lawyer, for example, knew we had a longer court case coming up.
Why cheat me at the beginning when I'll just dump you?

My theory is it's due to short-sighted Balkan mentality. Maybe if you grew up in a country where everything kept changing and falling apart over and over again, you begin to think, "forget tomorrow, grab what you can for today!" If you don't have faith in even the near future, why build toward it?

This may also explain why Balkan ex-patriots themselves very rarely invest in Serbian or Croatian business. You only hear about expats investing their savings in two things -- cafes and residential buildings. Even the infamous Pink Panther gang of international jewel thieves funnel their millions back home into almost nothing but cafes and flats in towns such as Nis. Which is incredibly stupid from both a local and national economic standpoint. Outside of limited tourism areas (which are overbuilt and underselling these days in much of Croatia) cafes and buildings don't help rebuild Serbia or Croatia's economy. They don't provide many new ongoing jobs. They don't help with exports. They don't grow expertise. They just sit there.

I do still, occasionally now, do business in the Balkans. But I catch myself flinching whenever I'm doing it. I've been burned too often.

Astrology in the Workplace: How Serbs Hire the Right People

I find it really tough to hire the right people for my company in America. I've studied HR books, developed applicant quizzes and tests, honed my interview skills, contacted references, checked Facebook profiles, etc. And yet, usually about half the people I hired turned out to be the wrong match. For a small, entrepreneurial company that can be very painful.

My husband tries to be helpful and supportive as I agonize over a stack of applications. "Get their birthdays and I'll check their astrological charts for you," he says.

Huh? But when I had a few openings in Serbia in 2005, I noticed that every Serbian applicant featured their astrological sign at the very top of their CV or resume. "Here's my contact info, my sun sign and a list of my past employers...."

Huh again. Well, maybe it helps to pick the right people. The only problem, for a useful astrological chart you need birth year. And in the US, you can't ever ask what year a candidate was born in, or you lay yourself wide open to age discrimination lawsuits, a constant danger here. (In fact, some creeps apply for jobs just so they can try to sue when they don't get them.)

Which is too bad. I'd like to try this chart stuff.

P.S. If you are looking for a job in Serbia, please don't contact me. Here's my blog entry with everything I know about jobs in Serbia. I can't help you other than that.

Trade Mission From Boston Visiting Serbia Today

Kind of fun to read this press release about mainly Boston-based companies whose executives are touring Serbia today as part of a trade mission. Seems like they are mostly seeking cheap tech labor; although, based on his name alone, I bet US executive Milenko Beslic will be busy also visiting relatives!

I've emailed him personally to ask how the mission goes and will let you know if I hear back.

A Job in Belgrade: Applications Due Today Though

Thanks to the reader who posted this job opening in PR and media monitoring in Serbia for a "young person who reads English." http://www.webbdowse.com/account%20executive%20ad.pdf

No Jobs for Expats in Belgrade (That I Know Of)

In 2007, when I was living for a few months at our home in Sombor Serbia, I received a bunch of queries from Western companies seeking executives who had Western work experience and a willingness to work in Belgrade. Most of them didn't know me from Adam, but I was one of the very, very few Serbia-based executives with a Western background their HR recruiters could find on LinkedIn, which is a tool recruiters heavily rely on.

Blithely -- and in hindsight idiotically -- I wrote about this over at the popular Serbian media site B92 where I was a guest blogger. Just after that, my husband and I went on extended trips to Nepal and Croatia, and then wound up back in the US where I'm now working. While we traveled, two things happened: firstly the global economic meltdown ensured that nobody was hiring anybody in Serbia. Secondly, B92's webmasters shut down my guest blogging account during my extended absence and won't now re-open it. (Yes, I asked, but no reply.)

Unfortunately, the old blog post is still up and attracting attention. Nearly every week I get another hopeful inquiry about it. Usually it's the Western spouse of a Serbian expat who is moving back home. The emailer asks for where to go and who to talk to for these jobs I mentioned. I am forced to reply, I don't know. I don't think there are any jobs right now. If there are, I have no idea how to go about finding them.

Here's what I do know:

- Don't count on the US, UK, Australian or any other Embassy located in Belgrade to have job openings. In my experience, there are very few openings in Embassies. These are filled either by locals who never give them up, or by career foreign service officers assigned by the home country.

- Don't count on an embassy to know of other job openings. They have a hard enough time informally helping the spouses of their own Embassy staffers to find employment or at least busywork in Serbia.

- Don't count on merit (your brilliant experience and accomplishments) to help you land a job. Just as in many countries (Croatia and Italy to name two), your personal and family connections are the true levers to gainful employment at both local firms and at local branches of global firms if the boss is a local.

- Do seek out connections at international business clubs in Serbia such as the American chamber of commerce. Try to find out which companies might be opening new offices in Serbia - who is coming new and who is expanding. Remember though, that many job placements may be handled by the offices back in the head country.

- Do update your LinkedIn profile to show Serbia as your location -- even if you're still in the process of moving. Remember, that's how HR people search.

- Do surf other places recruiters for multinationals hang out online, such as RecruitingBlogs.com. Start networking with the recruiters for companies which you've identified as hanging long-term potential business interests in Serbia.

- Do network with international staff of multinational non-profits, and other non-governmental organizations which have branches in Serbia. The Desperate Serbwife blog which was written a few years ago by an American woman looking for a job in Belgrade is all about this. It's not encouraging - she networked her brains out for months to find a position. But, at least it's something.

- Do consider starting your own company if you have an entrepreneurial background and (this is important) a Serbian spouse who is willing to roll up his/her sleeves and help you deal with cross-cultural misunderstandings with employees, customers, government regulations, you name it. Or, you can work from home on the Internet for a Western firm (which is what I did when I lived in Serbia.)

That's all I know. I have NO OTHER connections or ideas. Please don't email me and ask for them. I am tired of feeling guilty all the time. I wish I had not written that B92 blog about jobs. I didn't mean to give hope in an impossible situation.

On the other hand, if YOU know something that could help job seekers, please, please, please write a comment and post it here. Everyone would really appreciate it. Thanks!

Will Serbian or Croatian Banks Fail in the Economic Crisis?

I'm of two minds on this, and would very much appreciate any feedback you have if you're the sort of person who knows things...

Banks in Serbia are required to keep something like 40% of deposits in cash at the national central bank. So if there's a bank run during say a Global Economic Crisis, they can pay off 40% of the funds customers gave them . In Croatia that rate is 17%. (In comparison, banks in the US are required to keep something like 5% of their deposits with the Fed, the remainder can be loaned out or invested elsewhere. So if there's a bank run, we're in trouble.)

However, unlike the US which now offers $250,000 per account federal insurance, backed by a 200+ year old government, the far newer country of Serbia only offers a few thousand dollars-worth of account insurance. And it's not like they could vote to make that much bigger, there just isn't all that much money to spend on bailouts, nor friendly countries to borrow it from easily.

The banking sector has been one of the top three booming industries in Serbia for the past five years (the other two being telecommunications and construction.) Most of the banks are new, and have expanded super-aggressively. Our small city of Sombor is served by more than a dozen different name brand banks. Those brands are mainly European - Ernst, Raiffeisen, etc. You'll find most of these same banks in Croatia now as well. But there's one huge difference. The Croatian branches tend to be direct divisions or subsidiaries of the main bank. The Serbian branches tend to be franchises. They got the logo from the main bank, and maybe some management advice, but they're not directly owned 100% by that main bank. So, if they fail... the main bank may not be obliged or interested in bailing them out.

Consumer lending has already tightened in both countries - Croatians are having a much harder time getting mortages, according to a friend of ours who is a real estate developer in Zagreb. Serbs can still get modest mortgages, but interest rates are going upwards fast and may have already hit 10%. Oddly, this hasn't stopped real estate prices from continuing to rise sharply in Belgrade. I don't know who the Belgrade bubble buyers can possibly be... surely the supply of newly rich Montenegrins can't continue forever? Fairly soon they're going to run out of waterfront property to pawn off on Russians and/or Madonna.

So anyway, things are looking rough for the Serb and Croatian economies in the next couple of years. My gut is that Serb banks will be OK, aside from another big wave of M&As, so we'll see fewer name brands coming out the other end of the economic tunnel. For some reason I believe Serbia's isolation can be its salvation. It won't be pulled down by external forces, because the country isn't intertwined enough with Europe yet to be.

My gut doesn't feel like Croatian banks are as safe. Croatia is much further along in the process of integration with the capitalist world. More Croatians have mortgages and credit cards, the government of Croatia has an astonishingly high public debt (in the tens of billions) in comparison with the actual size of the country, and Croatia relies heavily on Europeans for everything from tourism revenues to running its banks. In fact, unlike Serbia, there are no banks in Croatia that are majority owned by locals.

If you have money in a Croatia or Serbian banks and you're considering flying home to yank it out, there's one bit of good news. Last minute flights from the US to Europe are extremely cheap right now, and plenty of seats are available. I know, I've been booking them.

Serbian vs American Working Styles

Just saw this very funny blog post by Alexis Hughart (born in Novi Sad, lives in the US now) where she explains the differences between Serbian and American attitudes toward work. Two examples:

West: Time is money.
Serbia: I prefer to be rich in time.

West: Follow the rules.
Serbia: What rules?

Having in the past worked at a US company which had some Serbian contractors, I can tell you both sides - the Americans and the Serbs - bitched about each other. Both sides think the other's values are skewed; the others are a bit lazy; the others are far harder to communicate with than seems reasonable; the others are greedy for money; etc. I can also tell you both sides respect each other's intelligence and are excited by the idea of visiting each other's countries in person.

In short, it's far more stressful than I ever thought it would be to work with Serbians-in-Serbia in a US business context, even though the rewards on both sides are plentiful.

What about Serbs in America? In my experience Serb expats, just like every other group of expats I've worked with personally in the US (Latin Americans, Koreans, Pakistanis, Indians, South Africans, Phillipinos, etc), are often harder working than both "normal Americans" and "normal Serbians". It's due to what I call "Immigrant Syndrome". You left so much behind - family, friends, language, culture, etc., - to make a life in this new place and now by golly you are going to make it pay off! Starting, often from nothing, you learn to work extra-hard to make ends meet. Having acquired the habit of work, and perhaps gotten a taste of success and/or money that's better than the old country, you dig in and work harder.

"America's for making money", says my hardworking sister-in-law, a Serb in the US planning her retirement back home. "Belgrade is for living."

So, I guess you can see how the work-life cultures in both places take a sharp divide!

Reveling in Bath Towel Luxury: Serbia's Pannonian Linens

The UPS guy just dropped off a big fat box at our doorstep. "Come see, come see!" I call the family. "My new towels from Serbia have arrived!" My step-daughter rounds the corner looking skeptical. "Serbian towels are AWFUL." My husband, who's been known to load up on discount luxury towels at TJ Max before trips back to Serbia, promptly agrees. What's this crazy Amerikanka going on about?

Although most Serbs may be oblivious to it, Serbia has a longstanding tradition of fine luxury towel-making. The cotton is from Turkey; the work is done by hand on antique Swiss shuttle Jaquard looms; and, the initial customer base were Hapsburg nobles who visited Serbia's plentiful, natural thermal spas. (I've heard Serbia has more hot water spas than any other country in Europe. Sadly most are in very bad shape now. Could be a goldmine for the right investors.)

A Serbian company called Pannonian Linens offers large towels in a variety of colors (I got one each in white, off-white, blue, gold, and teal - all use German eco-friendly dyes.) They feel lush and slightly silky but not overly soft to the touch - a perfect balance between brisk roughness and soft thickness. I don't know how you can get them in Serbia, but if you are in the US or Canada you can get them online in the towel section at Bon Savon or call (877) 832-4635.

Bon Savon is a California-based, online store specializing in fine soaps from around the world. They don't have any soaps from Serbia, so why the towels? Turns out president Alex Hughart is actually originally from Novi Sad. Her friends back home know her better as Dragana Aleksic.
(Dragana is not exactly an English-friendly name -- people think you're named after a giant lizard -- so she changed her name for her new country.)

New Serb-Husband Blog: Canadian Man Marries Nice Girl From Novi Sad

For me, the best and most unexpected result of this blog are the new friends and acquaintances I'm making through it. Thousands of people are now reading it each month, and nearly 100 have written me so far. I'm learning of this whole world of Serbs married to Westerners... and often vice versa. It's wonderful not feeling alone.

It's also been wonderful hearing how many people are either in the process of moving [back] to Serbia or at least considering it seriously. I have to admit, I'm only in Serbia part of each year now as we also keep a house in the US, and admire and am a bit envious of the people who are there full time. Envious but also relieved for myself. Serbia is like very strong wine -- sometimes the experience is best with a bit of water.

I woke today to the good news in my in-box that one of my new favorite correspondents, Rob Russell, a Canadian married to a Serb from Novi Sad, has kickstarted his blog to talk more about what it's like as a Serb-husband. He and his wife also run a bio-tech firm and have the experience of interviewing potential Novi Sad-based employees. Having had Serb employees in Sombor for a while myself when I headed a US Internet firm, I ruefully laugh at many of their experiences.

Anyway, check out Rob's blog and give him support if you like it as I have. Also, if you are a Serb expat considering returning home, or already returned, or a Westerner married to a Serb, do contact me if you're interested. I may start a Facebook group or something soon... we deserve our own special club!

My Car Lost; Feared Stolen by Balkan Shipping Company

Dang! Cars are insanely expensive in Europe so we decided to ship my US car to a Croatian port and then drive it to our home in Sombor Serbia. After surfing the Web and getting quotes for RORO (roll on, roll off) services, I picked ShipOverseas because they were at the median price and answered emails more quickly and politely than others.

Thing is, in the US when you hire a shipping company to send your stuff overseas, they don't do it themselves. They are "freight forwarders" and subcontract the actual job to shippers. As an individual apparently you can't deal with the shipper directly.

As directed, my step-son drove my car down to a warehouse in New Jersey in early February. It was "totally sketchy" with a lot of cars with parts taken off sitting around. He was concerned but I said, "No problem, ShipOverseas have been in business since 1983, they know what they are doing. Warehouses are always weird places."

I was an idiot. Or rather, ShipOverseas were idiots. When we never got the email announcing our car had departed, nor the email announcing our car was arriving, we began to worry. I just got off the phone with the guys at ShipOverseas and they are worried too. Turns out they entrusted our car as well as six other ones to a shipper they'd never done business with before. Now nobody at the shipper's offices, from the president on down are answering calls or emails.

"What country are the shippers from?" I asked. "Well they have offices in the US," said my rep. "No, what country are they actually headquartered in?" "They have a really really great Web site and wonderful references," my rep said. "What country are they from?!" "They ship all over Serbia, Montenegro, Croatia. They are local experts there, that's why we chose them," the rep replied.

"Oh no!" I said. "You're doing business with a company from the Balkans? We're screwed. If I had known you did business with those people I would never have given my car to you." "Don't worry," the rep said soothingly, "if there's any trouble we will register a complaint with the Federal Maritime Commission and they will launch an investigation." "Yeah, and sometime in 2009 we'll find out my car is gone forever and we're screwed."

I don't want to be undiplomatic. But here's the factual truth. Every single businessperson I've met in the Balkans has earnestly told me, "Don't do business in the Balkans." At first in my peppy naive American way I'd chirp back, "Oh come on, it can't be That Bad." Then they'd look at me like a screw in my head was loose.

By the time a close connection who was a top exec at the bank of Serbia told me this February, "Don't ever put more than a few thousand dollars into any bank here, it's not safe," I nodded my head calmly. Of course. I'd be screwed. I wouldn't make that mistake.

(Note: The golden exception to this rule are small, entrepreneur-owned companies where you know the owner personally and/or they used to be ex-pats so they've had a lot of Western business experience. Even then, watch their charactor, do they want to get rich quick? Are they a wheeler dealer type? Or are they an earnest, slightly geeky small businessperson with a passion for the business they are in? Only do business with the latter.)

Unfortunately, the ShipOverseas people don't have Balkan business experience. "We never have problems with shippers to Finland or Russia," the rep told me like this should make the Balkans OK. After awhile I just wished him good afternoon and ended the conversation. I've accepted the fact that my car is gone, almost certainly for good. I guess the grieving process now begins.

Why Can't Serbian Honey Be Like Italian Olive Oil? Expensive and Highly Sought After

Recently we attended the Annual Sombor Beekeeping Convention. Here is the President of the Convention Committee Mr. Nebojsa Filipovic with his lovely daughter. Behind them you can see some of the equipment on sale, including a beekeeping hat my husband promptly purchased.

There were about 25 tabletop exhibits, mostly beekeepers offering a full range of honeys - ranging in color and taste depending on which flower the bees were gathering pollen from. They also offered propolis, which our family (as well as the ancient Greeks, Romans and Egyptians) use as a type of natural antibiotic to help cuts, scrapes, and even canker sores heal far more quickly. You could also get bags of pollen to help with allergies, and royal jelly to boost hunger and energy (especially useful for invalids.)

Most booths had a token gargantuan wheel of wax (like a huge wheel of cheese) included as decor, but none that I noticed sold actual candles. I'm pretty sure that's because most extra wax is sold to the Serbian Orthodox Church which makes candles, blesses them, and sells them on at very low prices to the public. Why buy an unblessed candle from your local beekeeper when a blessed one is available?

None of the beekeepers mind that. What they do mind is the lackluster honey market. You can't sell much, and you can't sell it for a proper price. Honey keeps nearly forever, so many Serbian professional beekeepers have literally tons in storage. In fact, as you can see below, what I thought was an unusually lumpy bench on my neighbor's front porch turned out to be the unsold honey supply he's got on hand. I've perched on that "bench" many times drinking tiny cups of coffee, so lifting the sheets was rather a surprise.

Here's a photo of my beekeeper neighbor Andre and his life companion Milica. He keeps his hives on a plot of land by the Danube a few miles way. Here they are processing the beeswax from the harvested frames in their backyard. At the right you can see part of the giant boiling vat of scraped wax and water. And in the middle they are pressing out the pure wax from the mixture:

Serbian honey is fantastic stuff, probably far better for you than the honey on supermarket shelves because it's not overprocessed, and the bees were very likely gathering pollen from entirely organic sources. However, most producers are like Andre, sole owner-operators who do it themselves and then can't move much product locally because too many Serbs have a hobbyist relative who gives them honey for free. (We have scads of them and haven't bought honey in years.)

The US market is also flooded with ultra-cheap honey from China and parts of South America. They fill up a tanker, send it to the US and sell it for next to nothing. Pennies per pound. Guys like Andre can't begin to compete globally.

What's the solution? Speaking with my business hat on, I think it comes down to cooperative organization and global marketing. The local guys have to pool product and resources to present a united front and make large export sales possible. At the same time, they need to establish a Serbian Honey Brand marketing team to brand the product as a whole and educate the world market that this is something rare and special.

Olive oil producers in Italy and the fine wine industry in California have accomplished this under somewhat similar circumstances. They had a whole bunch of small, independent producers, and a brand nobody cared about. 20 years ago the Italian oil industry was languishing in nearly the exact same circumstances. Now prices are so high that the New Yorker magazine recently did an expose on cheaters trying to hone in on the crazy profits by selling faked oil.

Is this a crazy dream? If the Serbian bees are not infected by the horrific Colony Collapse Disorder that's currently killing off up to 90% of US bees, I think Serbian Honey as a widely sold gourmet delicacy could happen. For Andre's sake, I hope it's sooner than later.

Serb Internet Industry Insiders Send in Some Notes & Hotlinks

Since my posting a few days ago about the Serb Internet industry, a few folks posted really insightful comments (thanks) and several contacted me directly.

Dejan Bizinger in Belgrade is B92's blogmaster. He's also doing an official blog for the BlogOpen conference in Novi Sad in November. He emailed me, "As I wrote in my comment there, excellent article. Maybe you have seen my post about Adria market on my eMarketingBlog - or my article on Top Web Applications in Serbia on very popular Read/Write Web Blog."

Viktor Markovic who's one of my favorite writers at Belgrade 2.0 blog emailed me that, "Net business here is still in diapers as you mentioned in your previous blog post. As for the 'who is who' I guess you'll find out most by reading forums, elitesecurity.org devprotalk.com and dizajnzona.com - if you know Serbian, that is. I don't know of any good or forums or blogs in English where you could find such an info... maybe you have just given me idea for a blog post in the future - 'who is who in Serbia net industry' :) "

As for myself, visiting Serbia now and meeting these guys (albeit virtually for now) is a really cool thing because it's the second time I've been witness at the start of a healthy Internet business. (Yes, I know Serb Web sites have been around for a decade and B92 in particular has more historical importance than most US Web sites ever did for their country! But I'm talking about business here, as in for-profit, because hey, I am a capitalist after all....)

Anyway, for me it's a bit like being in a time machine. I feel, for the second time in a row, like a cheerleader cheering the Internet-inventing team on to victory.

Serb Blog Conference Set for Nov 10th in Novi Sad

I'm pretty sure it's the first annual. I won't be able to make it because I'll be about 4,000 miles away that day, but have been assured many of Serbia's most famous bloggers will be there. More info here.

Attn Web Programmers Worldwide: Serbian Firm Seeks Freelancers

As I mentioned in my post below, Web programming shops in Serbia are gaining business like crazy mainly from external clients (especially British marketers) who are shopping for cheap but well-done systems and design.

At a picnic yesterday evening, I ran into Igor Trpcevic who heads Novi Sad-based Web development firm Program In who also run this site. When I mentioned I was writing this blog, he asked me to post a few job openings for virtual, freelance programmers. If you can write in English, have any of the following skills, and would like to moonlight for Igor, it's not a lot of money but he can toss you plenty of business because his company has been growing quickly. (In fact, he says the only thing holding him back right now is the lack of programmers with a few years work experience who are seeking work. )

Program In is seeking:

- PHP programmers
- CRM system experts, especially those who've worked on B2B applications and/or with Joomla, or OSCommerce
- Flex programmers who also have some MySQL abnd PHP skills
- Web designers with HTML, Photoshop, Dreamweaver and Flash experience

Apply by contacting Igor by email -- igor.trpcevic(at)gmail.com

Serbia's Internet Industry: Ready for Takeoff?

Depending on which source you research, the amount of Serbs who are online ranges from 16% to 27%. That's somewhere between 1 and 2.5 million people, which is not a a large universe to build an entire industry around.

I assume this figure includes people at work, but most white collar workers here are not online at the office yet. Example: although Radio Sombor has a Web site, the station's 20-person staff share about four PCs between all of them, and most of these are reportedly fairly old.

On the consumer front, from what I've seen of Internet cafes in Sombor at least, going online means you're a teenage boy who uses the Internet exclusively for game playing. A 14 year old girl, I met last week at the beauty salon that her mother manages, told me she'd like to do more on the Internet but she couldn't find any Web sites to visit aside from Google, B92 and Krstarica. She simply had no idea where else to navigate to.

Based on my admittedly brief time here, plus 13 years in the Internet industry in the US here's my analysis of Serbia's Internet potential.

On the down-side:

o You probably can't profit online in Serbia by exploiting a particular micro-niche, which has been the strategy of many US Netpreneurs, especially the AdSense publisher crowd, because the whole country is a niche in and of itself. Anything you launch has to be of wide interest, or cost you so little in time and effort it's worth doing even though the payoff may be small.

o Extreme convenience and time saving -- which are the raison d'etre of many ecommerce, Web conferencing and other online services in the US -- may not be very compelling here either. The overwhelming majority of Serbs online are concentrated in just two cities, Belgrade and Novi Sad. So, they already have ready in-person access to (a) each other and (b) the best stocked stores the country has to offer. And, for now at least, they're not time stressed the way Americans tend to be. It's a more relaxed life.

o Serbia's not ready for video which is where the big bucks are headed in US Internet services and advertising. I pay extra for the best bandwidth you can buy from the cable company in Sombor, and video is very slow and jerky. It takes 4 hours to download a one-house low rez TV show from iTunes.

o Ecommerce security may be still a very real problem. The vast influx of banks to Serbia in the past three years means a lot more people have credit cards. However they are not protected by some of the laws and customer service traditions Americans have. If someone steals your card number online and starts charging, you probably have to pay even though it's not your fault. Everyone I know in the Net world here has been saying ecommerce will take off when PayPal at long last comes to Serbia. Unfortunately, PayPal doesn't appear to be on the horizon.

On the good side for the Serbian Internet industry:

o Recently the government slashed the VAT (purchase taxes) on PCs from 18% to less than half that amount. And, close to 42% of Serbian households have cable TV, so they might be upsold to Web if they don't have it already. (However, even $20 a month which many US households pay for Internet, is going to be too high here to entice the broad use the Web needs to take off in a big way.)

o Diners Club and Mastercard have reportedly announced Serb ecommerce-enabling initiatives in the past couple of months. This could be huge, even if PayPal takes their slow sweet time getting here.

o Web development professionals here are already getting plenty of practice by doing loads of freelance projects for clients outside Serbia. In fact, they routinely beat bids from teams in India because Serb prices are often a bit lower. You'd be surprised to learn how many Web sites for British small and mid-sized businesses are built and maintained by Serbian firms such as Program In who are based in Novi Sad.

o Serb programmers are unusually well-rounded. If you attend university to become a programmer here, your classes concentrate solely on that topic (no liberal arts extras, Serbian universities assume you got all that stuff in high school.) To graduate, you have to learn at least six, and sometimes ten or more programming languages fluently. This is exceptional brain preparation for an Internet world where new programs and applications are invented frequently. These guys are not paralyzed by over-specialization.

o 90% of adult Serbs have cell phones, and I can tell you most teens do too. Just like their peers all over the world, those teens are driving their parents nuts by text messaging all times of the day and night. Plus, according to my step-daughter, a fancy new cell phone is a MUST-HAVE for showing off affluence here. Younger consumers will scrimp like crazy on every other expenditure but lay out the big Dinars on new cell phones. If your cell phone is a year or two old, even if it works perfectly well, your friends will start thinking you have no dash and no dosh.

So, as the whole mobile Internet confluence gains strength, Serbia may end up going online through their cell phones. I bet the whole space will be transformed in the next 24 months.

Things Stocked in Office Supply Stores in Serbia

Ash trays. On the display shelf next to the digital cameras. Because every office needs them.

Radio Sombor to be sold off to highest bidder on Sept 20th

Radio Sombor, one of the town's radio stations, is up for auction as part of Serbia's privatization movement as the government sells off many of its business assets. Serbia's official privatization Web site for government-owned company auctions and offerings nationwide is here (just click the link to the English language section.)

It's fascinating reading for the business-minded. You can see revenues, assets, costs, staff sizes, etc for an enormously wide range of operations, including farms with thousands of acres, shoe factories built to serve a nation, several vet clinics, and of course the media including newspapers, magazines, TV stations as well as Radio Sombor.

Most are officially losing money each year, mainly people here tell me, because they are overstaffed sometimes by 50-100% which is typical of state-run organizations everywhere in the world since the time of the Roman Empire.

However, staff here make very little money -- a top manager of a government organization may have take home pay of 500 Euros a month (plus the employer kicks in roughly 70% more to the state for pension, healthcare, etc.) That's incredibly low. So, although you might be able to "save money" by cutting extra staff after your obligatory first year when you legally are bound to keep everyone, in a few years staff costs will go right back up again as market forces cause employees to require more money.

Let's face it, the days of employing a 40-year old experienced worker in Serbia for 200-300 Euros take home pay are on their way out the door. So the profits a "privateer" can make by simply slashing staff down to 'normal' Western company size will be eaten away by Serb staff beginning to require normal Western wages.

This means anyone taking a company private should be buying into supporting the growth of the Serb economy as a whole, so they have a strong healthy country to do business in as wages increase. Otherwise future profits are doomed. Unfortunately that's not always what seems to be happening now. Stories abound of "privateers" buying state-run orgs, sucking all the possible fast profits out of them (slashing staff, selling off assets, neglecting to pay for staff pensions, etc) and then flipping them again to new buyers. Although the initial "privateers" are I think required by law to be Serb citizens, I don't think there's any law (or at least anything that's remotely enforced) requiring them to sell in turn to Serbs too.

So more and more of the former Yugoslavia's best assets -- including prime farm land and key media such as Radio Sombor -- are owned by outsiders who have no real allegiance to Serbs at all beyond making a profit. It's a dangerous thing, but I don't see how the government can stop it.

Anyway, kind of cool to think it's possible to buy a radio station in my new home town!

Serbs claim you can't lose on Belgrade Stock Market

In 2006 the Belgrade Stock Market was one of the top 10 fastest growing markets in the world although hardly anyone in the US ever heard of it. In fact roughly 60% of funds on the market are from foreign backers -- according to my husband this is mostly Croatian financial firms and expatriated Serbs.

Aside from real estate, the Belgrade Stock market is the hip hot thing for young people (by which I mean ages 25-35) to talk about getting rich on. I'm hearing about new brokerages being formed by former bank employees who want to get rich. The new brokerage I have a connection to say they'll either take 1% commission on all transactions for a client, or if you wish to invest a minimum of 100,000 Euros, they'll manage your funds personally, buying and selling as needed to get you the highest possible return. The latter service costs a straight 17% cut of the "profits" (I'm not sure how often it's calculated) and they say they "guarantee" at least a 20% return on investment pre-commission of course.

If you look at the annual growth charts in the latest monthly report (PDF here, it's in Serbian but the numbers are obvious to any English-speaker) , you can see why everyone's so bullish.

But I'm not. Whenever I hear about a "guaranteed sure thing" on the financial markets, I immediately grow wary and suspicious. I've heard of and seen too many bubbles fall. Heck, I lived through the dot-com blow out when so many of my friends lost their businesses (and some their marriages and homes to boot.)

Anyway, past performance is not a remotely solid indicator of the future. And this market has too FEW influencers. Only a few companies are represented, only a few brokers are involved, only a few million-Euro funds are investing, etc. When there are only a few influencers, the problems of any one of them could pull the entire market down. Plus, let's face it, Serbia is a pretty small country that's spent most of its history being batted around like a mouse toy by bigger powers (Russia, Turkey, Austria, Germany, NATO, etc.) who care little if anything for the fate of the little man - or average stockholder. Any of these could make a move that could squash the Belgrade market like a bug ... at least for a while.

Serbian Real Estate Market Taking Off

Nearly everyone I meet is talking about real estate. Feels like California in the 1980s. There's this strong feeling the market is significantly underpriced, and will be going up fairly quickly - as in 10-20% steadily per year for the next five years at least. Seems to hold true no matter what real estate Serbs are talking about - farm land, houses, flats, Sombor, Novia Sad or even the biggie, Belgrade.

Here's some ways it differs from the US markets:

o Pricing by the square meter. People tell you how much by square meter, and then when you ask, they tel you how many meters, and then you have to do the math. Everything is evaluated by square meter price though. (Except farm land which is in hectares)

o Euros. Everything in the stores is Dinars only... but if you want to buy Serbian real estate, bring Euros. (BTW: If you need to exchange large sums of dollars for Euros for real estate deals in Europe, I strongly recommend this peer-to-peer el cheapo currency exchange which several friends have used FXA World.)

o Building & rebuilding is pretty cheap. Unlike the US where there's still a shortage of skilled building labor in many markets, Serbia has loads of talented workmen eager to take on renovation and building work. In fact, a Church painting restorer just finished painting the entire inside of our house in Sombor. He was quick, very pleasant, always on time, did a great job, and affordable. I've never had that experience with home repair in the US.

o Very few real estate agents... and they only rep a tiny percent of the actual homes or land for sale. Most homes and land are sold direct by owner. But hardly anyone puts the local equivilant of a for sale sign up. Very occasionally they might post a tiny black and white flyer in the window. You hear about everything through word of mouth. Incredibly we've seen far more flyers posted in public by flat (condo) seekers than we have from sellers. If you realy want to get into a particular building, you post a flyer outside it asking for people to contact you!

o Title and ownership -- fuzzy titles due to WWII, communism, etc are supposedly all being sorted out over the next year or two. This seems to be a bigger problem in Croatia than it is in Serbia because so many Serbs fled Croatia due to civil war, and their homes, often half burned-out, are still standing empty. It seems, to my perhaps misinformed eye anyway, few Croats fled Serbia. So there's not such a problem in the reverse.

Anyway, the giant mansion at the end of our street is a case just like much of belgrade... a beautiful building that's falling apart partly because the title hasn't been cleared up completely yet. It belonged to a rich foreigner (Austrian I think) before WWII, then invading troops used it, then the Yugoslav government took it 'for the people', and now someone in an office somewhere is sorting out what to do with the title. Meanwhile it stands empty.

Some of the best deals for formerly-government properties being privatized are being advertised in The Economist. I saw a ad there last week for a chain of 20+ department stores across Serbia for 150 million Euros... having been in some of the store in question, they themselves are totally not worth it. Horribly run down and half-deserted. However, the land they sit on is the real value. Gold, gold, gold.

Must go off to my language lesson now. Eyeing potential investment property all the way!