Big cities are becoming even bigger andthese have been and will be the key drivers of economicgrowth in Serbia. Belgrade, Novi Sad, Nis and Kragujevac,Serbia's four largest cities contributed to about 60percent of the increase of value added in the economy overthe period 2001-2008. These four largest cities in 2008accounted for about two thirds of country s economy. Spatialcharacteristics of foreign direct investments inflow,privatization process and location of export orientedsectors, indicate significant concentration. FDI andprivatization were attracted by largest cities, though theproximity to the key transit routes, like Corridor 10, isalso important for making decision where to invest. Exportis concentrated in several places, depending on the type ofproduction, and proximity of major export marketscontributed to concentration of export near the borders ofthe EU (i.e., Hungary) and Bosnia and Herzegovina, thesecond most important export market for Serbia. Spatiallyuneven growth caused differences in living standards. Wagesdid not play significant role, as migrations did inadjusting differences in economic development among regions.Living standards are lowest in southern Serbia which has onaverage negative growth rates over this period and whereboth unemployment and poverty are highest. The last sectionof the report discusses some of the possible options forpolicy makers as response to spatially biased growth.
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