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With the economic crisis acknowledged in 2008, unemployment strongly increased – mostly due to the fall in the industrial sector – which indicates the possible emergence of a new poor and extremely poor population, alongside the decrease of trade deficit and foreign direct investment. Serbia has a large informal sector estimated at 35 per cent of GDP in 2007, fuelled by a weak regulatory framework, inappropriate tax and expenditure policies, and weaknesses in law enforcement, including the fight against corruption. It remains an important challenge as it reduces the efficiency of economic policies. The government should now focus on the following three issues to attract entrepreneurs in the formal sector: (i) contract enforcement (especially the functioning of the courts); (ii) access to finance (particularly bank credits); and (iii) clear title to land real property.

This paper presents the contribution to the creation of the Serbian rural development model which is based on balanced regional rural development (BRRD), and requires a constitution of an adequate policy of BRRD as a multidimensional process: political-institutional, socio-cultural, economic and ecologic, concerned with the idea of an integrated approach to achieving strategic aims in the areas of: 1) Establishing a national network for a BRRD; 2) Improving the value of human capital in rural regions, 3) Ensuring that the agricultural sector be competitive; 4) Developing a non-farm economy; and 5) Protecting natural resources and environment. It is also necessary that some measures should be adopted for the purpose of the implementation of the programmes, the projects and the activities defined in the strategy of the Sustainable regional rural development. Bearing in mind that strengthening of rural development policy is becoming increasingly important and that it represents one of the main development priorities of the EU, this could be a good indicator for Serbia if it wants to become a full member of the European Union. Besides empirical proofs of the benefits of presented recommendations, this paper will also highlight the theoretical concepts that are the foundations for the justification of their acceptance.

Small and Medium-sized Enterprises are recognized as the backbone of every economy and the key source of economic growth, dynamism and flexibility in advanced industrialized, as well as in transitional and developing countries. Policymakers are conclusive in attempt to promote the more dynamic development of SME sector by creating policies and consistently implementing the basic principles contained in the European Charter for Small Enterprises. The further course of the Serbian integration into the European Union will be primarily determinate by the development of the SME sector. The SME sector in the Serbian economy accounts for the largest part of total number of active companies, GDP, total export and import and for the majority of employment. Due to the fact that the world financial crisis has worsen the already vulnerable SME sector in Serbia, the government, by setting the adequate policy framework in which SMEs can operate, has provided economic benefits through the selection of business support instruments, the problems they address and the way they are delivered. Even though the importance of the role SMEs play is even more emphasized in times of crisis, these enterprises are facing significant problems when providing necessary financial resources and maintaining liquidity.