Belgrade, Feb. 19, 2010 (Source: serbiangov.rs) – Deputy Prime Minister and Minister of Economy and Regional Development Mladjan Dinkic said today that four months after the beginning of production, the savings of the petrochemical complex HIP Petrohemija stand at €13 million. The restructuring of the company has produced good results owing to favourable agreements with suppliers and the reduction of expenditure, said Dinkic.
Dinkic said that he is satisfied with today’s talks with Petrohemija executives and the factory trade unions and is pleased to see the results achieved since the completion of restructuring and the beginning of production. Major savings have been made compared to the previous period. Petrohemija should focus on increasing savings, improving energy efficiency and starting a new investment cycle, said Dinkic. We have decided to obtain a loan for new investments from the European Investment Bank as soon as possible. It is estimated that €70 million needs to be invested in the upcoming years, for since the 1980s no investments were made in the company, Dinkic said. He said that Petrohemija is potentially the most profitable state-owned company and that €200 million profits are expected this year. The factory can very soon make €300 million from exports, with previous financing. Dinkic said that new investments will satisfy the ecological aspect as well and that modernization of technology will make Petrohemija a factory that fulfils all EU ecological standards and citizens of Pancevo will no longer have to be fearful of pollution.
Wednesday, February 24, 2010
Government ready to support large investors
Kragujevac, Feb. 18, 2010 (Serbia Today, srbija.gov.rs) – Deputy Prime Minister and Minister of Economy and Regional Development Mladjan Dinkic together with a delegation of the International Monetary Fund (IMF) today visited car manufacturer Fiat Automobili Srbija (FAS) in Kragujevac.
After meeting with company’s management that presented the results of work on launching the new car model, Dinkic pointed out to the importance of this company reaching the figure of €1.5 billion from annual export. He said that the meeting with IMF representatives addressed ways to improve competitiveness of Serbian exports and the economy and noted that the project implemented in Kragujevac is one of those ways. Dinkic confirmed that the Serbian government is ready to support large investors. He added that it is good that IMF representatives could see that Serbia has export potentials for companies such as Fiat. He expressed satisfaction over the fact that the Kragujevac factory has continuously recorded positive progress. Dinkic announced that the company’s CEO Giovanni de Filippis informed him that orders for reconstruction works in the factory start this week and their value will amount to approximately €150 million. We have seen new investment in the area of lacquering unit, new uniforms are arriving, a thousand people were admitted to FAS, and they can now earn their living by themselves and not live from government subsidies, said Dinkic.
According to Dinkic the Serbian government in cooperation with Fiat plans to organise a summit of suppliers from Italy, South Korea, Japan and Slovenia in spring, with the idea of presenting Serbia as the most suitable locations in Europe for investment in car industry. Dinkic, together with Governor of the National Bank of Serbia Radovan Jelasic and the IMF delegation, will also visit the winery Radovanovic in the village of Krnjevo later today.
After meeting with company’s management that presented the results of work on launching the new car model, Dinkic pointed out to the importance of this company reaching the figure of €1.5 billion from annual export. He said that the meeting with IMF representatives addressed ways to improve competitiveness of Serbian exports and the economy and noted that the project implemented in Kragujevac is one of those ways. Dinkic confirmed that the Serbian government is ready to support large investors. He added that it is good that IMF representatives could see that Serbia has export potentials for companies such as Fiat. He expressed satisfaction over the fact that the Kragujevac factory has continuously recorded positive progress. Dinkic announced that the company’s CEO Giovanni de Filippis informed him that orders for reconstruction works in the factory start this week and their value will amount to approximately €150 million. We have seen new investment in the area of lacquering unit, new uniforms are arriving, a thousand people were admitted to FAS, and they can now earn their living by themselves and not live from government subsidies, said Dinkic.
According to Dinkic the Serbian government in cooperation with Fiat plans to organise a summit of suppliers from Italy, South Korea, Japan and Slovenia in spring, with the idea of presenting Serbia as the most suitable locations in Europe for investment in car industry. Dinkic, together with Governor of the National Bank of Serbia Radovan Jelasic and the IMF delegation, will also visit the winery Radovanovic in the village of Krnjevo later today.
Monday, February 22, 2010
A very “thin” minimum wage envelope in Serbia
Belgrade, Feb. 15 2010 (Serbia Today) – According to the last info released to media a minimum monthly wage in Serbia was in the second half of 2009 RSD 15.138 (155 Euros or 206 US dollars). When Labor Unions asked Government last year that this amount be raised for 3.5% to meet the growth of the living costs, the request was denied.
Recent proposal by the Labor unions in regard to the adjustment of minimum wages for 2010 is still not addressed by the government and it is expected that this question be resolved at the next session of the Social economy Committee. The prospects of the raising minimum wages are very small taking in the account the situation in the Serbian industrial sector. Last year industrial production went down 12.5%, the number of employees went down 5.1% and the average wages went down 8.6%.
According to economy experts in Serbia, bad economy policies and large public spending caused this situation in Serbia. If government raises minimum wage based only on the growth of the living costs, and not based on the realistic revenues from the business sector this will cause further problems for the Serbian economy.
Similar situation is in other countries of the former Yugoslavia with the exception of Slovenia. The minimum monthly wage there was recently raised for 22% ant it is now at 562 Euros ( $765).
Recent proposal by the Labor unions in regard to the adjustment of minimum wages for 2010 is still not addressed by the government and it is expected that this question be resolved at the next session of the Social economy Committee. The prospects of the raising minimum wages are very small taking in the account the situation in the Serbian industrial sector. Last year industrial production went down 12.5%, the number of employees went down 5.1% and the average wages went down 8.6%.
According to economy experts in Serbia, bad economy policies and large public spending caused this situation in Serbia. If government raises minimum wage based only on the growth of the living costs, and not based on the realistic revenues from the business sector this will cause further problems for the Serbian economy.
Similar situation is in other countries of the former Yugoslavia with the exception of Slovenia. The minimum monthly wage there was recently raised for 22% ant it is now at 562 Euros ( $765).
Sunday, February 21, 2010
EU strategy for Danube region
Belgrade, Feb. 12, 2010 (Serbia Today) – Deputy Prime Minister for EU integration Bozidar Djelic held the fifth meeting of the government’s working group for cooperation with the EU in the Danube region on Wednesday, of which he is president. The meeting was also attended by representatives of 27 municipalities and cities which are located on the banks of the Danube River.
Key priorities of local government were discussed at the meeting. Projects for utilizing the development potential of the Danube will be designed based on these priorities. Djelic presented the underlying principles of Serbia’s national platform for participating in the comprehensive EU Strategy for the Danube Region. The platform will soon be posted on the Serbian government website and citizens will be able to post comments, proposals and state their opinions. It was agreed at the meeting that a larger-scale gathering should be held in early April to include representatives from all towns and municipalities in the Danube region, at which local government projects will also be presented.
Key priorities of local government were discussed at the meeting. Projects for utilizing the development potential of the Danube will be designed based on these priorities. Djelic presented the underlying principles of Serbia’s national platform for participating in the comprehensive EU Strategy for the Danube Region. The platform will soon be posted on the Serbian government website and citizens will be able to post comments, proposals and state their opinions. It was agreed at the meeting that a larger-scale gathering should be held in early April to include representatives from all towns and municipalities in the Danube region, at which local government projects will also be presented.
Friday, February 19, 2010
NBS sells EUR 10mn in order to enable normal functioning of the foreign exchange market
Belgrade, Feb.11, 2010 (Serbia Today) - National Bank of Serbia (NBS) sold EUR 10mn on the interbank foreign exchange market on Monday, Serbian News Agency Tanjug reports. The decision came in order to encourage trading and enable normal functioning of the foreign exchange market, the central bank said in a statement.The indicative euro exchange rate on Monday, determined by the morning trading on the interbank foreign exchange market, was RSD 98.6946 for one euro, said NBS. Including today's intervention, the central bank has sold a total of EUR 351.5mn since the beginning of the year, in order to alleviate excessive oscillations in the dinar exchange rate and enable normal functioning of the foreign exchange market. On Monday, the dinar continued its three-day recovery trend against the euro, as it went up by three paras (1 dinar=100 paras) or 0.03 percent, making the official middle exchange rate RSD 98.6519.
Thursday, February 18, 2010
Program for starting up production in underdeveloped communities ready soon
Belgrade, Feb. 10, 2010 (Serbia Today) – Deputy Prime Minister and Minister of Economy and Regional Development Mladjan Dinkic said today that a program for starting up production in underdeveloped communities should be prepared by the end of February and that more than €100 million will be set aside for that purpose.
At a meeting between the Business Council and Serbian businessmen, Dinkic called on companies which have secure export markets and that can sell their goods to take part in this program and assist in the development of underdeveloped areas. The Deputy Prime Minister explained that the program provides long-term loans through the Development Fund and that it also includes two sub-program. The first sub-program is intended for companies from active industries which would obtain loans from the Development Fund. The loans would be favorable in the sense that 50% of funds from the loan should be covered by a mortgage. The second sub-program is intended for very poor municipalities like Kursumlija, Merosina and others. A mortgage will not be needed for loans, but only collateral for equipment that will be purchased with the loan, the Minister said. Dinkic explained that any bigger domestic or foreign renowned company can apply for the program, as well as those wanting to build more capacity. He underlined that this is not privatization, but starting up production in underdeveloped municipalities and creating jobs. The Deputy Prime Minister said that lower exports and poor domestic demand are problems that are still present in Serbia’s economy. Last year exports dropped by over 20% in relation to 2008, while imports dropped by 28%. However, he said that exports of semi-finished goods and raw materials increased by 10% and of durable consumer goods by almost 9% in relation to 2008. Dinkic said that a hard year is behind us and that according to economic indicators, Serbia will already get out of recession by the first quarter of the year. He voiced hope that economic growth this year will be bigger than 1.5%. he Minister stressed that Serbia’s public debt stands at 32% of GDP, which is still much lower than the EU’s average public debt of around 73% of GDP. Except for the loans for several infrastructure projects and factories of strategic interest for Serbia, the state should not get into any further debt, he said. The state will take loans for the real sector and its large exporting companies, the first of them being the mining and smelting complex RTB Bor, to which the state has already issued a guarantee for a €135 million loan. These funds are to be invested in a new smelting facility and a sulphuric acid factory, the Minister explained. Dinkic added that the second company is the petrochemical producer Petrohemija, announcing that talks will be held with the European Investment Bank regarding a loan to help increase the company’s competitiveness and energy efficiency. The Deputy Prime Minister noted that a program for purchasing Serbian buses with state subsidies will be initiated this week.Dinkic said that the program for purchasing Ikarbus and Neobus buses envisages allocating over RSD 1 billion from the state budget for the purpose of public transport in Serbian cities, as well as the private sector. He stressed that both companies and private individuals will be allowed to purchase the buses with a 20% discount for those with a Euro 4 diesel engine and 30% for LPG powered buses. The program will help to produce and sell over 200 buses made in Serbia in 2010, Dinkic noted.
At a meeting between the Business Council and Serbian businessmen, Dinkic called on companies which have secure export markets and that can sell their goods to take part in this program and assist in the development of underdeveloped areas. The Deputy Prime Minister explained that the program provides long-term loans through the Development Fund and that it also includes two sub-program. The first sub-program is intended for companies from active industries which would obtain loans from the Development Fund. The loans would be favorable in the sense that 50% of funds from the loan should be covered by a mortgage. The second sub-program is intended for very poor municipalities like Kursumlija, Merosina and others. A mortgage will not be needed for loans, but only collateral for equipment that will be purchased with the loan, the Minister said. Dinkic explained that any bigger domestic or foreign renowned company can apply for the program, as well as those wanting to build more capacity. He underlined that this is not privatization, but starting up production in underdeveloped municipalities and creating jobs. The Deputy Prime Minister said that lower exports and poor domestic demand are problems that are still present in Serbia’s economy. Last year exports dropped by over 20% in relation to 2008, while imports dropped by 28%. However, he said that exports of semi-finished goods and raw materials increased by 10% and of durable consumer goods by almost 9% in relation to 2008. Dinkic said that a hard year is behind us and that according to economic indicators, Serbia will already get out of recession by the first quarter of the year. He voiced hope that economic growth this year will be bigger than 1.5%. he Minister stressed that Serbia’s public debt stands at 32% of GDP, which is still much lower than the EU’s average public debt of around 73% of GDP. Except for the loans for several infrastructure projects and factories of strategic interest for Serbia, the state should not get into any further debt, he said. The state will take loans for the real sector and its large exporting companies, the first of them being the mining and smelting complex RTB Bor, to which the state has already issued a guarantee for a €135 million loan. These funds are to be invested in a new smelting facility and a sulphuric acid factory, the Minister explained. Dinkic added that the second company is the petrochemical producer Petrohemija, announcing that talks will be held with the European Investment Bank regarding a loan to help increase the company’s competitiveness and energy efficiency. The Deputy Prime Minister noted that a program for purchasing Serbian buses with state subsidies will be initiated this week.Dinkic said that the program for purchasing Ikarbus and Neobus buses envisages allocating over RSD 1 billion from the state budget for the purpose of public transport in Serbian cities, as well as the private sector. He stressed that both companies and private individuals will be allowed to purchase the buses with a 20% discount for those with a Euro 4 diesel engine and 30% for LPG powered buses. The program will help to produce and sell over 200 buses made in Serbia in 2010, Dinkic noted.
Wednesday, February 17, 2010
IMF mission in Belgrade on Monday
Belgrade, Feb. 09, 2010 (Source: Beta, Tanjug) – The International Monetary Fund (IMF) mission arrived on Monday to continue talks regarding the third revision of its credit arrangement with Serbia. The IMF delegation will hold talks with various technical experts of the government and National Bank of Serbia. The IMF has warned Serbia that is not honoring the decision for freezing wages and pensions and the plans for the rationalization of the administration. The international financial institution stated that the government adopted EUR 120mn more than was agreed for wages in the administration, while the implementation of the plan for cutting the number of employees in the public administration is running late. A member of the Serbian Prime Minister’s economic team, Dejan Šoškić, said that he expects the IMF to have understanding for the tardiness in letting people go from the administration.
“Some things need to be implemented in accordance with realistic possibilities. In other words, it is not realistic to expect to finish all this in one or two months,” he said. “Sometimes the procedural questions are such that they are impossible to solve in a short period of time, so I believe that it is important whether we are working in accordance with the chosen orientation, and whether there are some objective circumstances for the tardiness,” Šoškić said.
“Some things need to be implemented in accordance with realistic possibilities. In other words, it is not realistic to expect to finish all this in one or two months,” he said. “Sometimes the procedural questions are such that they are impossible to solve in a short period of time, so I believe that it is important whether we are working in accordance with the chosen orientation, and whether there are some objective circumstances for the tardiness,” Šoškić said.
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