LOCAL SELF-MANAGEMENT AS AN IMPORTANT ASPECT OF RAPID ECONOMIC DEVELOPMENT OF SERBIA AND CREATION OF JOB OPPORTUNITIES

Summary: Local economic development depends on the ability of local communities to adapt to dynamic conditions of domestic and international market economy. During the transitional period, local self-management authorities had by and large lost giant enterprises that had been the main contributors of economic development locally, as well as the main employers of the local work force. Newly formed startups could not absorb the surplus workforce that had emerged as a consequence of privatization processes; therefore there was an even greater need for integration of local self-management in the economic development processes. Strategic planning of the local economic development is beneficial for communities that strive to boost economic development capacity, improve investment conditions, increase productivity and competitiveness of the local economic subjects, as well as competitiveness in relation to other local communities. Local self-management must take into consideration all aspects of local economic development and strategic positioning in the domestic and international global markets which are subject to rapid changes and strong competition. Local communities must attain a more balanced regional allocation of investments which have thus far been directed towards more developed regions, as well as a more prominent role in managing tax policies; they must also ensure that a greater portion of natural resources revenues remain in their domestic regions. Tax facilitation measures for labor intensive processes that contribute to employment of the local workforce, combined with stimulation in basic resources investments, represent a certain solution for self-sustainable local development. 

Advantages of a clearly defined local strategy include improved exploitation of resources, fulfillment of requirements for foreign funding, and an increased probability of attracting financial resources. This type of strategy also represents support for local communities in the process of transformation from the basic role of the service provider into the role of catalyst in changes; moreover, it facilitates the catalyst role in the process of building local partnerships that ensure greater transparency, responsibility and dedication to local communities. 

Entrepreneurial initiatives of the local self-management and active participation of higher levels of government, that include formation of business incubators, industrial parks and business improved districts, launching promotion campaigns that aim to boost investment potential of communities and different forms of public-private partnerships, are indispensable for local economic development. Different types of initiatives at the local self-management levels, as well as the government levels, contribute to creation of an improved economic environment and influx of new investments. Mutual relations between the society and economy are essential; if the society boosts economic development, the economy would in turn be able to support the society. Local economic development has proved its legitimate and crucial role at distinct local community levels, as well as the national levels. Local economic development fosters competition among local communities, which compete against each other for investments. However, the final outcome of competition is not the zero sum game, but creation of optimal business conditions for all economic subjects, especially for those that do business in local communities that work towards economic development.