Wednesday, August 24, 2016


Serbia Places Economic Hopes In Latest Investor: U.A.E.

Serbia needs more investment like Italian carmaker Fiat's factory in Kragujevac.
Serbia needs more investment like Italian carmaker Fiat's factory in Kragujevac.
After investments from both East and West failed to lift Serbia out of its economic doldrums, Belgrade is hoping money from the Middle East will improve its sluggish development.

Serbia's economy, which has struggled to recover from economic sanctions during the Balkan wars and damage that the NATO bombing of 1999 did to its infrastructure, has been in desperate need of foreign investment, especially after the economic crisis sent it into contraction in 2009.

But speaking after a two-day visit to the United Arab Emirates (U.A.E.), Deputy Prime Minister Aleksandar Vucic said that the oil-rich Arab state on the Persian Gulf would eventually invest up to $4 billion in Serbia and that the money the U.A.E. intended to put into a microchip factory represented "the biggest investment in Serbia since 1980."

"In four years' time, the investment will come to $220 million," Vucic said on February 24 after signing three deals with U.A.E. Foreign Minister Sheikh Abdullah bin Zayed.

Vucic said that the U.A.E. company Mubadala would make major investments in the missile industry, agribusiness, and the building of a hotel on the site of former military headquarters in Belgrade that had been destroyed in 1999.

The deputy prime minister also vowed that all deals with the U.A.E. would be made public, highlighting the issues Serbia has had with corruption and an opaque investment climate, as well as failed privatizations of the past.

The government of Prime Minister Ivica Dacic needs to find some economic good news, with Serbia's economy estimated to have contracted by almost 2 percent in 2012, unemployment around 25 percent, and an International Monetary Fund (IMF) loan on hold over concerns about Serbia's budget deficit.

Despite talk of investment from Russia as well as the European Union and the United States, Serbia has seen foreign direct investment (FDI) plunge since 2009. Russia has offered loans, but even the proposed building of a 400-kilometer segment of the planned South Stream natural-gas pipeline and the accompanying investment of over $2.5 billion -- allowing Serbia to buy even more Russian gas -- continue to face delays.

And the headline U.S. investment in Serbia, the purchase in 2003 by U.S. Steel of the Smederevo plant for $33 million, came to an ignominious end last year when Belgrade bought the debt-plagued plant for a symbolic $1. In 2010, the plant had $35 million in foreign sales, making up 10 percent of Serbia's exports. But the global economic downturn hit the plant hard, and it reported $73 million in losses in 2011. The government planned to offload the Smederevo plant as soon as possible but has found no takers.

Even hopeful talk of investment by China has produced little, with Chinese investors seeming to take a wait-and-see attitude.

All the more reason for Serbia to do whatever it needs to do to move closer to the European Union -- especially with the top five origins of foreign investment in Serbia being Italy, Austria, Norway, Belgium, and Greece. Small wonder Belgrade has agreed to meet with Kosovo officials to discuss "normalization" with its erstwhile province, despite its declarations that "Kosovo is Serbia" forever.

-- Dan Wisniewski
This forum has been closed.
Comment Sorting
by: Jeff from: London
February 25, 2013 20:32
Thats a particularly nasty piece Dan.
In Response

by: Anonymous
March 04, 2013 07:38
genocide founded Republika Srpska in Bosnia was founded on genocide and rape,killing and extermination and expulsion of Bosnain Muslims(Bosniaks) and Croats, and other Bosnian people,,,,NOW
Belegrade wants the platform proposes establishing an “Autonomous Community of Serbian Municipalities in Kosovo and Metohija,” with the nice-sounding abbrevision ZSO KiM This would constitute a territorial autonomy of Serb majority municipalities in the North and in the South (including Štrpce, Gračanica) and would have competences in education, health care, sports, culture, public Information, environmental protection, urban planning, agriculture, as well as their own police and judiciary under formal authority of Kosovo and the ability to maintain direct ties to Serbia including funding and finally the use of own symbols.
In terms of institutions, this autonomous unit would have an assembly and government, liking it to an autonomous region. Although the plan calls this autonomous region “community” the plan does not contain any non-territorial forms of autonomy or feature of cultural autonomy (except for some semi-autonomous status of sub-municipal Serb settlements, but even they are understood territorially)....whopefully now Serbia will give the same and propose establishing an “each Autonomous Community Regions for ethnic groups within Serbia: Abanians in Presevo Region, Bosniaks in Sandzak Region, Bulgarians in Danilograd, give a full autonomy to Vojvodina, give a Region to Romani peoples, etc....fair is fair.....because Serbs already have full autonomy in Bosnia,Croatia, Slovenia, Kosovo, Macedonia.....

by: Salih from: Sarajevo
February 26, 2013 06:18
UAE how about investing also some of that money in Bosnia,Montenegro and Kosovo...our children are hungry and I can see everyday from my one bedroom apartment in Sarajevo how mothers and their children look in trash containers for food....we have seen little investment from EU,Arabic countries,Russia, and USA after war stopped in our country....please invest in our children and our future....

by: Eugenio from: Vienna
February 27, 2013 07:57
Just as I was saying the whole time: while Europe is decaying and going from one recession to the next, extra-European powers are coming to pick the cherries from the European economic pie. Ten years from now, most of what is European today will have been divided between the Chinese, the Russians and the Gulf Arabs, and Frau Merkel and her genocidal economic policies are the only ones to be thanked for this outcome.
In Response

by: Anonymous
March 04, 2013 07:39
good luck and good night

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