Doing Business On-Line – New Trends in Serbia

Belgrade, Dec. 21, 2009 (Serbia Today) - In coming years the Internet could become the work place for over 100,000 Serbian workers and the office space for over 18,000 new Serbian companies, according to the Boston Consulting Group; provided, that is, consumers become acclimated to doing business other than face to face and legislators modernize old business laws.
Over the past five years the Information Technology sector has been the fastest growing part of the Serbian economy. Since 2003 more than 4,600 IT businesses have been started, employing over 27,000 people. Included among the many success stories of on-line businesses in Serbia today are www.eKapija.com, a business news portal, www.infostud.com, an employment agency, and www.selo.com, a tourist agency.
The advantages of doing business on line and particularly selling retail products on-line rather than face to face are becoming recognized in Serbia today by entrepreneurs and consumers alike. Serbia. There is, for example, no need for office space, stores, extensive inventory and a large supporting labor force. Everything is seen and done in the virtual space of the website page, instantly, worldwide. An on-line retail business is about 46% cheaper to operate than a classical retail business.
In most European countries today on-line sales account for over 33% of all retail sales. In Serbia that percentage is below 7%, in part because of consumer reluctance and in part because of antiquated business legislation. For example, many retailers still cannot utilize credit cards for on-line transactions until enabling legislation just recently enacted by the Serbian Parliament is fully implemented.

Instead of airplanes JAT Airways buys automobiles

Belgrade, Dec. 21 2009, (Source: eKapija, Serbia Today) - JAT Airways will end this year with 15m EUR in losses, but it will enter the new year with 13 brand new vehicles which the new management has decided are necessary to buy. Within a month the public will know exactly what kind of new automobiles will be used by managers of the national airline and at what cost.
JAT has asked for bids on one low-class auto, six middle-class autos, and six passenger vans.
Some middle-class automobiles are, for example, "mercedes" C class, "BMW" series 3, "audi A4", "peugeot 407", "škoda octavia" and "toyota avensis, ranging in price from 15,000 EUR to 30,00 EUR or more depending upon luxury features.
Traditionally the managers have selected the “mercedes,“ which for the six would cost JAT and the Serbian taxpayers approximately 200,000 EUR. It cannot be said that JAT lacks a good fleet of automobiles. Only one year ago, the Company had 14 "mercedes A170" and 5 "mercedes C200" automobiles, as well as one "mercedes E320" and one "audi A6" vehicle. Recently it bought in addition one "škoda Octavia," and one "mercedes" B class. There are also several "lada" and "zastava" vehicles, a "toyota corola" automobile, as well as "volkswagen" minibus and several "mercedes" vans.

The Anatomy of a Resignation

Belgrade, Dec. 15 2009, (Serbia Today) – A week ago, the General Manager of the well-known and successful Serbian company “The Belgrade Fair” Mr. Andjelko Trpkovic resigned. Through the Serbian News Agency Tanjug, he issued a statement saying: “I made my decision after I learned of the conclusions of the SPO Leadership in regard to the business appointments this political party had a control over. As a member of the SPO I have to comply and thereby I resign”
It would be hard for a non-Serbian reader to understand this without further explanation. Serbia is a parliamentary democracy with the coalition of parties governing the country. Coming out of the one-party socialist system of the former Yugoslavia, where the majority of the big companies were state owned, Government started a huge “program of privatization”, or sale of the business assets to the private investors. From the beginning, this brought controversies and embarrassments through the stories of corruption, shady deals with Serbian “tycoons”, and total disregard of the law and the rights of the working people employed in the privatized companies.
Nevertheless, a number of stable and successful business entities remained in state hands and kept resisting undervalued sales to the private investors often done just for the sake of privatization. Parties in power divided among themselves a control over state owned enterprises through the political appointments of the top management.
These positions were given to the loyal party members as a reward for their work and support. Of course, they did not come without a price. Those appointed had to continue active role in their political party and follow party discipline in the employment policies of the business entity they manage by giving advantage in hiring to the fellow party members, often regardless of the professional or other qualifications.
Five years ago, a control of the Belgrade Fair has been given to the SPO, which appointed its loyal member Andjelko Trpkovic as a General Manager. Founded in the 50’, Belgrade Fair was envisioned as a “postcard image” of the “successful” communist era economy of the former Yugoslavia. After years of the unselfish financial and other support from the Yugoslavian Government, undeniably it became one of the biggest, and most successful Fair companies in the Europe. With 14 exhibition and conference Halls, and over twenty major International Exhibitions and Events, 203 employees of the Belgrade Fair managed to keep company growing and profit making for over fifty years.
At the time of Trpkovic’s appointment, employees perceived him as just another political figure that will seat in the general managers office for a while, without real impact on the regular business routine of the Belgrade Fair, and leave when better ( political) appointment comes along the way. However, Mr. Trpkovic surprised everybody. He emerged himself into day-to-day business operations. Many saw him as a micro manager and a control freak, but nobody could deny his dedication to the professional responsibilities he was given. Revenues were growing, even in the hardest times of global economic downturn.
However, in all of it, he spent so much time running Belgrade Fair that he was not able to be active member of his political party. In January of this year, he informed party leaders that due to his professional obligations he would not be able to be active politically. On several occasions, he refused to hire party loyalists when it was against business interests of the company. He successfully fought privatization of the Belgrade Fair through the bargain sale of the company to the shady Italian- Serbian partnership of investors.
Which of these three - political inactivity, refusal to hire party loyalists, of disruption of the shady business deal, triggered Party Leader’s resentment of the Mr. Trpkovic, it is hard to say, but he was notified of their displeasure with the way he handled his appointment. Was he forced into resignation, or honorably resigned before being fired by the same people that appointed him, it is also unknown.
One is known for sure - A practice of the control of state owned business entities by the political parties directly comes out of an autocratic communist era ruling style, and is in complete contradiction with the democratic programs, which these Parties claim to follow. Mixing business and political interests is always the best recipe for disaster, misconduct, and conflict of interests. In such situations, common people usually pay the price.

A young unemployed Serb waiting in the line of the Employment Agency told our reporter: “Before, in the communist time, was easier. To get a good job, one had to belong to the communist party. Today, one has first to look which party controls a company he intends to apply for a job, and then apply, if politically qualified. Professional qualifications don’t matter much”.

Austrian transportation and logistics company "Gebruder Weiss" to invest 100m EUR in east and southeast Europe prior to 2011

Belgrade, Dec. 15 2009, (Source: eKapija) - Austrian transportation and logistics company "Gebruder Weiss", which became the majority owner of Serbian "Eurocargo" last month, is going to invest 100m EUR in east and southeast Europe prior to 2011.
That amount, a part of which was invested in the takeover of company "Eurocargo", is included in the Austrian company's plan for development of business in the period 2007-2011.
In Serbia, where "Gebruder Weiss" took over 75% of freight-forwarding company "Eurocargo", Austrian company plans to become one of the three leading freight-forwarding companies and the strongest logistics company.
We will do our best to become leaders in provision of logistics services and solutions, and we believe that we will be able to do that prior to year 2011. Therefore, it is clear that we will keep investing in Serbia and the region - Wolfram Seneger-Weiss, the CEO of the company, pointed out.
Regional Manager of the company, Erich Schafer, said today that "the synergy will contribute to broadening of the spectrum of logistics solutions in Serbia, as well as growth of share of value added services such as tracking goods or transporting dangerous goods".
"Gebruder Weiss" is present in Serbia since 2004. Its branch office in Serbia registered net turnover of 5.6m EUR and transported 55,000 tons of goods in 2008.

Serbia Plans Gas Infrastructure

By Milen Vesovic
Novi Sad, Dec.10, 2009 (Serbia Today) - Minister of Energy and Mining Petar Skundric announced that Serbia, under a joint investment with Slovakia in the next two years could get a new underground natural gas storage capacity of at least 500 million cubic meters.
This month talks will be held with potential partners in the Slovak project, as agreed in the protocol signed last week during the visit to Serbia by Slovak President Ivan Gasparovic, said Skundric in Novi Sad.
The new storage facilities will also be built in Vojvodina, as well as gas storage in Banatski Dvor. The amount of investment planned and other details will be released later to the public, said Minister Skundric.
“New underground gas storage should be completed by 2011, and the fulfillment of the project will contribute to the energy stability of Serbia, and support the country’s regional energy position," added the minister, during a break in the meeting the ‘Energy Development Strategy of Serbia in Vojvodina’ meeting.

Serbia Opening Trade to East and West

Belgrade, Dec 8th, 2009 (Source: Serbia Today) – Ministry of Trade Services Slobodan Milosavljevic and Minister of the Moscow City Government Mikhail Mikhailovich Vyshegorodtsev will open trade talks, at a joint expert working group for commercial and economic cooperation between the Serbian government and the City of Moscow December 8th.
The working group co-presidents Milosavljevic and Vyshegorodtsev will open the meeting, to discuss the possibilities for improving economic cooperation.
The Moscow City delegation is comprised of representatives of the City Government, the Moscow Chamber of Industry and Commerce, the Moscow Centre for Developing Entrepreneurship and businessmen from this city.
Minister Vyshegorodtsev will also meet with Serbian Minister of Infrastructure Milutin Mrkonjic and Belgrade mayor Dragan Djilas.
On the second day of the visit the Moscow delegation will visit Jagodina and meet with Jagodina mayor Dragan Markovic. Ministers Milosavljevic and Vyshegorodtsev will also sign the protocol of the working group’s meeting.
Today may also see the implementation of the Interim Trade Agreement with the EU, and as former head of the government EU integration office Tanja Miscevic says this will have an immediate impact on trade margins.
"If the European Union council of foreign ministers decided today or tomorrow to implement the Interim Trade Agreement with Serbia, Serbia's exporters will receive guarantees that they may continue to export their products tax free to the EU countries," Miscevic, who now teaches at the Faculty of Political Science, told Belgrade daily Politika on Monday.
“Serbia would thus have true agreement relations with the Union, instead of a unilateral regime, and the legal relations between a state and the EU is the most important thing,” Mrs. Miscevic said .

The Serbian Dinar Stabilizes After a Bump in the Road

Belgrade, Dec.8th 2009 (Serbia Today) - Serbia recent bumps in the road on the international currency market appear to have stabilized according to National Bank of Serbia (NBS) Governor Radovan Jelasic. The Republic of Serbia Dinar (RSD) has been stable over the past few months against its bench mark currency the euro, but last week there was some slippage in value.
In a statement for Tanjug Jelasic evaluated that the upset does not constitute for "some kind of a trend", but rather a situation sometimes happening at the end of a year, and added that the Serbian dinar's fall was due to the reference rate decrease.
One euro is worth RSD 96.2 this Monday, but has been trading at less than 95 for weeks prior.
“Serbia has enough foreign exchange reserves to achieve the two main goals - not to have too big fluctuations on a daily basis and to make the foreign exchange market function, which already happened last weekend when a number of banks were buying foreign currencies with the Serbian dinar,” said Jelasic, reported the Serbian news service B92.
In Serbia’s favor is the fact that decades of economic difficulties have produce seasoned and hardened managers that have recently been garnering the respect of their European counterparts.
“Serbian managers are more accustomed to a tough political and economic environment,” says Oliver Roegl, head of Raiffeisen Bank Serbia for the past eight years. “People here are realistic when it comes to the crisis.”
The government underscored that the general level of the rate will be determined by the market and that the NBS will use its reserves, which now amount to more than EUR 10 billion, whenever it is needed.
The country’s young banking system, although now three-quarters foreign owned, remained comparatively from most of the global turbulence brought on by the global recession.
The central bank intervened last Friday, for the first time since February 25 this year, by selling EUR 42 million from the reserves, in order to prevent daily oscillations in the exchange rate, according to B92.

Infrastructure Projects in Serbia Picking Up Speed

Kraljevo, Dec 7th, 2009 (Serbia Today) – Serbian Prime Minister Mirko Cvetkovic said that the main priority in the Government’s economic policy for the next year will be the construction of Corridor 10, from the Hungarian to Bulgarian border, which will boost economic activity and create new jobs.
Cvetkovic said that funds have been already earmarked in the 2010 budget for continuation of construction of the northern section of Corridor 10, towards Hungary, while the eastern section towards Bulgaria will be built with the loans from the World Bank, the European Investment Bank and grants from the Greek government’s Hellenic Plan for the Balkans.
The ring road around Belgrade will be completed next year with the funds from the budget, Cvetkovic said, and the construction of a main road towards the southern Adriatic will begin.
As for the railroad infrastructure, the Prime Minister said that negotiations are being held with representatives of Russia on an important loan for railroad improvement. He added that most funds from that loan will go to railroad around Belgrade.
Minister of Infrastructure Milutin Mrkonjic said during his recent visit to Kragujevac that construction of Belgrade-Bar highway on Corridor 10 will start next year, adding that EUR 20 million has been set aside in the State budget for that purpose.
While visiting work sites on the section of the road leading to Kragujevac, Mrkonjic told reporters in Kraljevo that construction of the Corridor 10 highway heading towards Port Bar in Montenegro is important both from the economic and political point of view.
The Minister of Infrastructure said that construction of Corridor 10 is a very profitable project because the Belgrade-Bar railway and Port Bar are inseparable parts of one whole regional economic zone. Creating this artery will help business all along the intended path to develop and find markets for their products. Investment in the areas along Corridor 10 will also do much to stimulate the local economy.

Serbia Takes Over CEFTA Presidency

Belgrade, Dec. 7, 2009 (Source: Serbia Today) –Serbia took over the presidency of the Central European Free Trade Agreement (CEFTA) for 2010 from Montenegro at the end of the CEFTA summit in Becici, announced Minister of Trade and Services Slobodan Milosavljevic.

As of 1 May 2007, the parties of the CEFTA agreement are: Albania, Bosnia and Herzegovina, Croatia, Macedonia, Moldova, Montenegro, Serbia and Kosovo. Former parties are Bulgaria, the Czech Republic, Hungary, Poland, Romania, Slovakia and Slovenia. Their CEFTA membership ended when they joined the EU.

Originally developed in the 1990’s to integrate member nations with Western European nations by joining political, economic, security and legal systems. CEFTA’s ultimate goal is to support democracy and free market economics.

Milosavljevic stressed that he presented Serbia’s priorities for its presidency at the summit, which are related to removing economic barriers in trade, reported Serbian news agency Tanjug.

He said that serious work needs to be done in order to remove obstacles in the areas of customs and goods inspections, adding that Serbian representatives also said that they expect the trade liberalization process to go faster than initially planned.

“We insisted on quicker liberalization, first and foremost in the fields of agriculture and industrial products,” the Minister said. He added that at the meeting it was agreed that investment within the CEFTA region should be boosted and new industrial corporations formed which would do business in the region and in developing countries.

He explained that Serbia has a big advantage because of its free trade agreement with Russia, Belarus and Turkey. Other countries showed great interest in common projects that would focus on the markets of those countries.

Milosavljevic said that CEFTA successfully concluded the year and added that the Montenegrin chairmanship was of good quality, which is a good start for Serbia.

Austria Hosts Serbian Farmers and Ranchers

By Milen Vesovic
Jagodina, Dec.5th, 2009 (Serbia Today) - A group of 120 farmers from Jagodina will visit Austria to meet with the agricultural policy of the country and the benefits offered by the European Union.
The farmers selected for the international exchange have significant plots of arable and they are often engaged in the cultivation of more than one crop. Medium to large size ranchers will also be included in the group which is to travel to Austria, according to the Mayor of Jagodina, Dragan Markovic.
Markovic, who will lead the delegation of farmers, said that Austria will be organizing visits to the farms to provide training and information on how Serbian farmers and ranchers can work inside the EU.
The visit of the farmers from Jagodina to Austria will mark, in a symbolic way, the end of Serbia’s isolation from the countries in the EU and for the citizens of Serbia.
Expenses will be covered by the city of Jagodina, but money for the visit to Jagodina by Austrian consultants is being provided by an EU grant.

Results In on Serbia’s Debt Report

By Milen Vesovic

Belgrade, Dec.5th, 2009 (Serbia Today) - National Bank of Serbia (NBS) published a detailed analysis of the total debt of the Republic of Serbia on fiscal year ending on September 30th, 2009. According to the report, the external debt was EUR 21.8 billion. According to the indicators of external liquidity and solvency, Serbia can now be classified in the category of medium-indebted countries.
The external debt of Serbia was almost unchanged compared to the end 2008. According to the indicators of external liquidity and solvency, Serbia was able to settle foreign liabilities maturing in the short term.
External debt of the private sector at the end of September 2009 amounted to EUR 14.9 billion, 27.3% of which is debt of the banking sector. Public debt of the Republic of Serbia was approximately EUR 9.9 billion.
During the first three quarters 2009, the total use of foreign loans amounted to approximately EUR 3 billion, while in this period EUR 2.3 billion of principal and EUR 0.5 billion of interest was paid. Public debt of the Republic of Serbia ending in September 2009 was approximately EUR 9.9 billion.
External debt of the public sector at the end of the fiscal year (September 2009 ) was approximately EUR 6.8 billion, and the participation of public sector debt in the total increased from 29%, as it amounted to the end of last year, to 31% percent at the end of this fiscal year.

EUR 6.2 Million to Encourage Investment!

By: Milen Vesovic
Belgrade, Dec. 4 (Serbia Today) - Serbian Ministry of Economy signed contracts this week awarding EUR 6.2 million for the promotion of investments to 18 companies that will open 2,252 new jobs in Serbia.
Serbian Economy Minister Mladjan Dinkic said after signing the contract that the company invested a total of EUR 46 million in the construction or expansion of production facilities in 13 municipalities, and that most of the production of these facilities goes to exports.
Director of the Agency for Investment and Export Promotion of Serbia, Vesna Peric, said that grants applied for by 26 different projects.
Succesful applicants to the fund include "Danny style", "Proleter", "Group Fiorentino", “Alfa Properties”, “K and M”, "Lucic Prigrevica", "Insert", "Wizard", "Ivkovic", "LTS", "The primary techno", “Almag”, “Gruner”, “Hintek”, “RTRK” , “List Solutions” and “Sprinktec”.
The owner of the Slovenian company, Robert Beans said that the subsidies for jobs allow faster implemented planned investments in new plants. Company Beans Automotiv received EUR 1.6 million for expansion of capacity in production of electronics in the municipality Batocina, which will invest a total of EUR 11.2 million and employ 400 workers.

International meeting at SEIPA's "Buyer’s Day"

Belgrade, Dec 4, 2009 (Serbia Today) - A business meeting of representatives of seven German and Austrian companies and more than 30 Serbian suppliers was held by the Serbian Investment and Export Promotion Agency (SIEPA).
The foreign companies that were presented at the Belgrade event are BBG (production of agricultural machines), BMTI (production of metal constructions), Ferro (industrial installations), Hoffman & Co. (components for car industry, rail industry and home appliances), NGR (production of recycling machines), Umdasch (machinery producer) and Wittur (production of components for lifts).
The initiators of this business meeting are SIEPA and the BMÖ organisation, founded by Austrian and German companies with the aim of finding suppliers of parts and services worldwide.
The Austrian BMÖ organisation includes more than 300 companies, some of which are the world's leaders in various industries, like Magna Steyr and Siemens Austria.
This is the last meeting of domestic and foreign companies organized by SIEPA as part of the “Days of Exports” campaign this year.

Recapitalization Plans for Commercial Bank

Belgrade, Dec 4, 2009 – A Letter of Intent concerning economic policy measures for 2010, which are in line with IMF recommendations, according to Deputy Prime Minister and Minister of Economy and Regional Development Mladjan Dinkic.
Speaking at a press conference held after the government session, Dinkic said that he is convinced that the IMF executive board will formally approve the arrangement reached with Serbia at its next session, which is to be held in Washington on December 21st.
He said that the IMF’s condition was that the Serbian government should adopt the budget and the Letter of Intent two weeks before the IMF session.
Dinkic said that the Serbian government has also adopted a draft agreement on the recapitalization of Commercial Bank, which envisages increasing the capital of the bank by EUR 120 million through the European Bank for Reconstruction and Development (EBRD) , the International Financial Corporation, Swedish Investment Fund and the German government’s investment fund. Dinkic said that it is expected that the agreement will be signed on December 17.
Commenting about the State’s share in the ownership of Commercial Bank, the Minister said that the agreement specifies that the Serbian Government has three years to follow up the recapitalization in order to maintain its present 42.6% ownership.
Dinkic added that after the recapitalization and payment of the capital sum within a three year time period, Serbia will retain its present 42.6% ownership, while the EBRD, together with other international financial institutions, will increase their share from 25% to 34.6%, while small shareholders will drop out.
Serbia will still hold a majority ownership in Commercial Bank, but the Bank’s capital will increase significantly, and Serbia will have three years to make its share of the payment.
The Minister said that the Government also approved a conclusion on the announcement of a public tender for encouraging interest in the privatization of the pharmaceutical company Galenika, adding that the pre-qualification tender for the factory will be announced on December 15.
The tender will be announced in two parts, adding that in the first phase it will be seen if there are buyers willing to purchase 100% of the company’s capital, at an initial price of not less than EUR 200 million.
The binding tender will be announced later if there are any interested buyers, adding that if no acceptable offers are made the tender will be cancelled. This will not be done before January 2010, when the construction of a new pharmaceutical factory will be completed, in which EUR 60 million has been invested.

Inflation 1% for November and 8% for ’09

Uzice, Dec.2, 2009 (Serbia Today) - National Bank of Serbia (NBS) Governor Radovan Jelasic said on Monday that the inflation figures for November are a result of the seasonal price increases in agricultural products, as well as oil prices.
Jelasic added that the annual inflation would not exceed 8% by the end of 2009 and that he hoped the inflation in 2010 would be reduced to 6% in the coming year according to Serbian news service Tanjug.
"Serbia's foreign debt is not a problem, but there is a problem with the speed at which new debts are acquired, because we raised our debt by another 7% of GDP in the first nine months of 2009, and if we were to continue at that pace, then we would be in danger of experiencing a debt crisis," Jelasic remarked.
Jelasic later added that Serbia would not enter a debt crisis due to the arrangement it had with the International Monetary Fund (IMF), which have bound the government to reduce public spending, freeze salaries and pensions, which should then prevent new debts.

2010 Budget Daft Debate on Agenda

Belgrade, Dec.2, 2009 (Source: B92)-- The Serbian government will hold a meeting on Tuesday afternoon to discuss the 2010 budget, government officials confirmed for B92.
The remaining committees are expected to meet in the morning to give their opinions on the planned spending and income which was presented to them by the Finance Ministry.
The draft budget has been adopted late for several years running. According to law, it was to be adopted by the parliament on November 1st.
However, the parliament has room until the legal deadline of December 15th to adopt the document.
If the budget is not adopted by December 21st, the International Monetary Fund board of directors will postpone the approval of the institution’s financial arrangement with Serbia until it January meeting, National Bank of Serbian Governor Radovan Jelasic said.
“The government must adopted the budget this week and submit it to the parliament, because if it does not, it will be a question of whether the IMF board will even look at its program with Serbia on December 21, as it was planned. If this date passes, the next one is not until mid-January,” Jelasic said.
Finance Minister Diana Dragutinovic said that for the first time, the budget will show the donated kelp budget users receive, as well as all the donations coming from European Union funds.
A part of the budget will be own income of its users and the losses of the state because of the implementation of various tax relaxations.

Big Trade Between Serbia and its Neighbors

Belgrade, Dec.1, 2009 (Serbia Today) - Deputy Prime Minister and Minister of Economy and Regional Development Mladjan Dinkic said today that the Serbian government will provide suitable political and financial support to companies doing business in the markets of the former Yugoslav republics.
Speaking at the forum “Economic Cooperation between Former Yugoslav Republics”, Dinkic said that last year Serbia’s trade with former Yugoslav republics stood at nearly EUR 4.4 billion.
He said that in 2008, Serbia had a surplus in trade with these countries, adding that exports stood at EUR 2.8 billion and imports at EUR 1.6 billion.
Dinkic said that 37% of Serbia’s exports go to the former Yugoslav republics, while imports from these republics are 11% of Serbia’s total imports, adding that the volume of trade with Bosnia-Herzegovina is the largest.
Dinkic said that the trade with Bosnia-Herzegovina stood at EUR 1.35 billion last year, adding that second to that was EUR 1 billion trade with Montenegro, followed by Macedonia, Slovenia and Croatia.
Serbia’s highest goods export is to Bosnia-Herzegovina, while the largest surplus was in trade with Montenegro, followed by Bosnia-Herzegovina and Macedonia, said Dinkic, adding that Serbia has a deficit in trade with Slovenia and Croatia.
Besides trade, another important aspect of economic cooperation between the former Yugoslav republics are investments. Serbia has received the most investment from Slovenia including those by Merkator, Cimos, Merkur, Droga Kolinska and Gorenje, while top Croatian investors are Agrokor and Nexe Group.
He said that Serbia has invested EUR 12 billion in the former Yugoslav republics and its largest investment is by Telekom Srbija in Telekom Srpska, the Serbian companies Hemofarm, Delta and the Commercial Bank have also invested in Bosnia-Herzegovina. Delta and Telekom have made investments in Montenegro, while investments in Slovenia and Croatia are significantly smaller.
Dinkic announced that the government will endorse Serbia’s investment in the Bar Harbour project from the budget since it will be a minority owner in the joint company to be formed with Serbian companies interested in taking part in this project.
He also said that next year Serbia will take over the CEFTA presidency and its main goals will be liberalization of services and public procurement markets.
Dinkic reminded those in attendance that EU 1 billion in subsidized loans were approved this year, of which only EUR 50 million from the budget were allocated for subsidizing interest rates.

Output up 1.5% in SME’s

Belgrade, Dec.1, 2009 (Serbia Today) - The Serbian Statistics Office stated that industrial output in October went up 5.8% compared to October 2008 and 1.5% compared to the 2008 average.
The production of small and medium-sized enterprises (SME’s) that were not included in regular statistical surveys is monitored based on a sample of selected units. In October 2009, compared to the 2008 average, overall industrial production increased by 0.5 % and manufacturing fell by 1.9%.
In January–October 2009, compared with the same period in 2008, industrial output of the larger industries fell by 14 %.
Examined by sectors, in October 2009, compared with the same month in 2008, there was a 7.6 % fall in the processing sector, 6.1% fall in mining and quarrying and a 1.9% rise in energy production and distribution of electric energy, gas and water.
There was a fall in the production of durable consumer goods by 25.4%, capital goods by 12.7 % and non-durable consumer goods by 12.4 %, while a rise was recorded in intermediary products, energy excluded, by 2 % and the energy sector by 0.5%.
The industrial production volume in October 2009, compared to October 2008, showed that there was fall in 21 divisions, which participate in the structure of industrial production with 68 %, while production grew in 8 divisions, which participate in the structure of industrial production with 32 %.
Industrial production fall in October 2009, compared to October 2008, was mainly influenced by the manufacture of food products, chemicals and chemical products, furniture and machine and appliances (electrical appliances excluded).
The seasonally adjusted industrial production index for October 2009, compared to September 2009, indicates a 0.8 % fall in overall industrial output and a 1 % fall in the processing industry.
The seasonal adjustment of the industrial production index for October 2009, compared to the 2008 average, indicates a 9.5 % fall in the overall industrial production and a 13 % fall in the processing industry.

Economy Back on its Feet 2011

By: Milen Vesovic
Belgrade, 30 November (Serbia Today) - Serbia will back to full speed by 2011 and it growth should reach or exceed the level of growth in 2008, said Prime Minister Mirko Cvetkovic in the Serbian Chamber of Commerce on Friday, when he announced the government's economic measures for the next year.
Cvetkovic said that the executive has no plans to introduce a new tax burden on the economy next year and reiterated that the pensions and salaries in the public sector will not be cut, but remain frozen. The practice of encouraging economic growth through subsidized loans, liquidity, investment and consumption will also be continued throughout 2010 year.
The Prime Minister hopes that next year the budget deficit will be 4% and that, at most, in five years the budget will be operating without a deficit. There is plan for a tax refund on interest savings, but it will be 10%, not 20% as had earlier been discussed. Next year, the Prime Minister expects a stable exchange rate for the Dinar, and to reduce the NBS prime interest rate, lower the inflation rate and stabilize prices.
The Prime Minister, speaking on Serbia’s debt, said that "our indebtedness increased, but less than it could have." Next year will be marked by infrastructure investments that have been planned this year after reaching agreements on more borrowing.
“We will be able to say, we have debt, but we have time. We have debt, but we have a bridge. We have debt, but we have a new railway,” said Cvetkovic in his closing statements.

Serbian companies at Tirana Fair

Belgrade, Nov.30, 2009 (Serbia Today) - As political issues have come and gone, the economic relations between Serbia and Albania have steadily strengthened in the last couple of years, and in the period between 2001 and 2007, Serbia's export to the country increased from USD 15 million to 85 million.
The Belgrade Office of the United States Agency for International Development (USAID) has released a statement indicating that 21 small and medium-sized companies from Serbia, engaged in different industries, will take part in the International Fair PANAIR 2009, which is being held in Albania from November 25 to 30.
Of the total of 21 Serbian companies, which will exhibit their products at the PANAIR fair and thus contribute to the further improvement of the Serbian-Albanian economic relations, eight companies have been backed by the USAID Office in Belgrade, i.e. the USAID Serbia Competitiveness Project and the USAID Serbia Contingency Planning and Economic Security Program, which promote the development of small and medium-sized companies in Serbia, according to Serbian news service Tanjug.

Serbian Budget Not Yet Ready

Serbian Budget Not Yet Ready
Belgrade, Nov.28, 2009 (Serbia Today) - As reforms start to take their effect, and international loans are put in place, the Serbian budget is slowly righting itself to a sustainable level. However, recent budget sessions have produced information that the budget is still off target to the tune of RSD 107 billion or EUR 1.13 billion.
The official budget is still RSD 107 billion over the target for next year, said Serbia Minister of finance Diana Dragutinovic to Serbian daily Blic.
The upcoming changes of on property taxes should be expected in January or February at the latest. These increases will significantly increase the overall property tax for Serbian home owners.
“The budget has been made so that we all take our share of the burden,” said Dragutinovic to Serbian daily Blic.
Subsidies have been cut by approximately RSD 7 billion, which means less money for public enterprises and agricultural projects. Savings were also made in the purchase of goods and services. The most important savings realized was securing outside investments for the Corridor 10, which amounted to RSD 12 billion for the Northern stretch.
The retirement pension and disability insurance fund shall receive RSD 215 billions (EUR 2.26), which is almost the same amount as in 2008.

Serbian Government Reaching out to Businesses

Trgoviste, Nov 28, 2009 – Serbian Deputy Prime Minister and Minister of Economy and Regional Development Mladjan Dinkic talked today with businessmen and representatives of the Trgoviste municipality, one of the least developed municipalities in Serbia.
Dinkic said that support for the reconstruction and expansion of the Simpo factory, which produces of children’s beds, in Radovnica near Trgoviste, will not be the only state investment in that municipality.
The state will draw resources from the Development Fund and it find out whether there are small companies in Trgoviste whose development can be supported.
Minister for the National Investment Plan (NIP) Verica Kalanovic said that several important infrastructure projects have been launched in the past year in order to resolve the town’s infrastructure problems.
She said that according to the government’s special program for 2009, RSD 2 billion from NIP was set aside for underdeveloped municipalities, of which sum RSD 300 million went to the Pcinja District for the purpose of solving infrastructure issues.
Kalanovic said that three large projects were initiated in Radovnica, recalling that this residential area now has a regular water supply. She also said that the government plans to construct a sewage and waste water collection system.
Dinkic today officially opened the modernized and reconstructed children’s bed factory in Radovnica, stressing that thanks to the Development Fund, over 5,600 square meters were renovated and 1,400 square meters added to the factory.
The children’s beds produced here are intended for export, almost entirely for the Swedish retail chain Ikea, he explained.
Dinkic specified that following reconstruction and expansion the factory has tripled its capacity and it monthly output now stands at 90,000 beds.
He also noted that EUR 1.8 million was used for procuring new equipment and machinery from French and Italian companies.
Simpo general director Sladjan Disic stressed that Simpo was granted EUR 2.5 million from the Development Fund for the reconstruction of the Radovnica factory, adding that another half a million euros from Simpo’s own funds was also used.
Also present at the opening were acting director of the Privatisation Agency Vladislav Cvetkovic and Simpo President Dragan Tomic.

Turkish and Russian Partnership for JAT

Belgrade, Nov.28, 2009 (Serbia Today) - Turkish Airways and Russian Aeroflot are interested in partnership with Serbian national carrier JAT Airways. These companies will not invest money in JAT, but planes of late production. The Turkish company already has such arrangement with a Bosnia/Herzegovina carrier and this approach to the JAT is within its strategy to invest its capital in the whole of the Balkans.
Such arrangement would have a significant impact on JAT because it is needs a new fleet since its planes are 20 years old on average.
It is not known when the partnership could be concluded, but the Government has formed a working group to deal with the sale of JAT.
Turkish Airlines is flying to 103 international destinations in Europe, Asia, Africa and North America. It has a fleet of 127 planes.
Russian Aeroflot on the other hand, is flying to 90 destinations in 47 countries and has a fleet of 90 planes. Greek based Marfin Investment Group which bought Olympic Airlines last year has expressed interest in being a potential buyer.