The Target Inflation Rate for 2010 – 6 pct

Belgrade, Dec. 22 2009 (Serbia Today) – According to Serbian News Agency Tanjug, the main goal of the central bank's monetary policy in 2010 will be achieving its target inflation of six percent.
The National Bank of Serbia (NBS) said today that this figure will have a margin of plus or minus two percent.
The target inflation rate for 2011 is 4.5 percent, with a margin of plus or minus 1.5 percent, while the rate for 2012 is four percent plus or minus 1.5 percent, an NBS memorandum on inflation targets states.
According to the NBS, the established inflation targets reflect the intent to achieve stability of prices through gradual reduction of inflation, without causing macroeconomic disturbances.

Atlas Holding Company to expand

Belgrade, Dec. 21 2009 (Source: eKapija) - Atlas Holding Company, a member of the Austrian "Asamer" group of companies, announced last Tuesday (December 15, 2009) that its priority for 2010 was to establish new partnerships in markets in this region and in the EU where it has never been before.
Since 2001 Atlas has invested 75m EUR in the production and processing of stone and other building materials in Serbia. This year Alas invested 14.5m EUR in "Zorka Keramika" and in "Keraben, a Spanish company that produces ceramic tiles. The Company's priority in 2010 and thereafter is to invest an additional 2-3m EUR in order to produce and market 2m square meters of "Keraben" tiles in Serbia. Zorka Keramika" has begun to invest 750,000 EUR in new energy saving production processes, aimed at reducing consumption of fuels by 15%.
The subsidiaries of Atlas Holding Company are "Zorka Keramika", "Zorka Opeka", "Zorka Alas Kamen" and "Alas Rakovac".
Atlas also announced that it fulfilled its investment plans and kept its workers despite the economic crisis of 2009, which impacted negatively on public construction works financed by the state.

Fund "KD Exclusive" to merge with fund "Triumph"

Belgrade, Dec. 16, 2009 ( Source: eKapija) - Investment fund management company "Citadel" has been given the consent by the Securities Commission for the merger of fund "KD Exclusive" and fund "Triumph".
According to the plan of "Citadel", the merger of investment funds will be carried out on February 11th.
"KD Eksluziv", the open-ended property growth fund run by the namesake Belgrade-based company, will cease to exist upon the merger.
That fund will transfer whole property and all obligations to open-ended fund "Triumph", while the members of "KD Ekskluziv" will become the members of fund "Triumph".
The investment aim of "Triumph", as people from that property growth fund announced, will remain the same after the merger with "KD Ekskluziv", and that is high level of returns on invested funds, that is, high level of growth of net property and value of investment unit.
The decision on merger was preceded by the analysis of economic justification that showed that the merger of funds was in the best interest of the investors of both funds.
In addition, the merger will contribute to increase in the profitability of the fund created through the merger since overall fixed costs will be reduced.
"Citadel", a part of international finance group "Citadel Asset Management", manages four funds in Serbia - "Triumph", growth fund "Focus premium", property preservation fund "Focus cash fund" and closed-ended investment fund "Triumph Elite".
There are 14 open-ended investment funds in Serbian market, 8 of which are property growth funds, 3 funds are property preservation funds, and 3 funds are balanced funds.

USAID Partners and SEIPA Bring 2000 jobs to Prokuplje

Belgrade, Dec.10th (Source USAID) - The cooperation from key partners the two key partners USAID established Local Economic Development (LED) and the Serbian Investment and Export Promotion Agency (SIEPA) has made a significant contribution to the Serbian job market, and brought a windfall to the residents of Prokuple by bringing in two thousand jobs.
A job fair was held where the applications of approximately 500 people will be chosen to work at a new factory. Five hundred more should be hired by the end of 2010 and then eventually another 1,000.
Leoni, a German manufacturer of automotive cables and wiring, had agreed to invest 15 million Euros in Prokuplje to buy and convert the defunct Fiaz brake factory into a modern car wiring plant. But how Prokuplje managed to come out ahead in competition with other locations in Serbia and the region is one of the best economic development stories of the year.
Leoni’s decision to invest in Serbia, despite strong competition from Bulgaria owes much to the USAID-established (LED) Office of Prokuplje and the (SIEPA).
“SIEPA called in October saying that the German company Leoni is inquiring about locations in Serbia, and said he had referred them to our municipality’s website, on which our office had put all information relevant to potential investors in our municipality. Soon after, representatives at Leoni made its first visit to Prokuplje, and I think that we had an exceptional presentation,” recalls Sveta Budjic, Head of the LED Office at the time, according to a USAID news release.
The LED office in Prokuplje together with the National Alliance for Local Economic Development (NALED), met with the Minister of Economy and Regional Development Mladjan Dinkic. This meeting lead to the government agreeing to offer a significant stimulus “carrot” to ensure that Serbia would not miss out on such a job creation opportunity.
The critical support from LED appears not just to have been the advocacy with Leoni, nor even the financial incentive provided by the government, but some quick response to some deficiencies at the Fiaz plant.
“We got in touch with the State Secretary at the Ministry of the Environment and Spatial Planning and people from USAID’s project. They helped us resolve this issue, which would have cost us the investment. Experts from USAID provided professional and technical support and recommendations, based on which the Ministry invested 300,000 Euros to clean and decontaminate the site”, says Sveta Budjic from LED.
Smaller businesses will be getting a significant shot in the arm the arrival of Leoni. Business Incubator in Prokuplje, which had provided technical assistance to the LED office, has already drawn up a contract with Leoni to lease them some office space and to provide consulting services, a local textile company will supply worker’s uniforms, and a carpentry manufacturer will be involved in replacing doors and windows for the new factory.
This Business Incubator, which opened in 2007, with the support of USAID is one of the most successful in the country – employing about 80 individuals in 15 companies. Almost 70% of the businesses which started there have survived on the market and are now expanding their activities.

Besna Kobila: Southern Serbian Skiing

By: Bojana Jankovic
Vranje, Dec.8th 2009 (Serbia Today) - The public company “Ski-resort Besna Kobila” announced that will be open for the New Year. Besna Kobila is picturesque mountain with great snow conditions the year round. It has recently begun to develop its slopes and the skiing facilities with the help from the Serbian Government.
“Thanks to the Ministry of Economy and Regional Development access roads are completed and the main lodge for the mountain, which has a capacity of 56 beds and 3 apartments, will be ready for our big opening this New Years,” said Mr. Dejan Manic, director of ski resort Besna Kobila.
Located in Southern Serbia, just 42 kilometers away from city Vranje, Besna Kobila is part of the beautiful mountain ranges that typify the region. The new investment in this region promises to open up previously undiscovered terrain.
“Ski-resort Besna Kobila was opened 20 years ago with just one ski lift. This was the starting point for the winter tourist center in the region, but demand was not so great at the time. With the completion of the Besna Kobila Lodge we have come a long way,” said Manic.
Manic sees great things for this humble ski center, and believes that the beauty and the terrain will help to make Besna Kobila a draw for future investment and more winter sports fans.

Russian Loan Deal Reached

Belgrade, Dec. 7, 2009 (Source: Serbia Today) Serbian PM Mirko Cvetković said a Russian loan of 200 million dollars for the budget has been agreed upon, but not formalized yet.
The interest will be around 3.6%, the second lowest after the one from the World Bank or the EU, he told Novosti.
The public debt forms 31.6% of the GDP and includes old foreign currency savings, so the state debt to foreign creditors actually amounts to some 20% GDP. The total foreign debt is 72.2% of the GDP, as it includes debts of Serbian firms with foreign creditors.

Support for Development Projects in Uzice

Belgrade, Dec. 7, 2009 (Serbia Today)– First Deputy Prime Minister and Minister of the Interior Ivica Dacic said today after talks with Uzice City authorities that he advocates equal development for all of Serbia.
Dacic stressed that he supports development projects in the Uzice region, including construction of a road network, an airport, a free trade zone, a regional waste depot etc.
Dacic and Uzice Mayor Jovan Markovic visited today the building site of a development center, which is being financed by the Uzice authorities and the Interior Ministry.
The facility, which will provide 620 square meters of office space, will accommodate certain city administration departments and citizens’ organizations, while the police will also acquire space for some of its departments.
Speaking about the latest outbreak of fire at the Prvi Partizan ammunition factory, Dacic stressed that special attention must be paid to the issue of who takes responsibility in such cases.
“I feel concerned over the fact that another fire broke out in the factory after the tragic accident of September 3 which killed seven workers. Fortunately, this time there was no harm done to life or property, but we must establish why the fire broke out,” said Dacic.
He confirmed that the police have submitted to the court their report on the causes and consequences of the explosion in September and that the Prosecutor’s Office has initiated proceedings.

Serbian and Chinese Chamber of Commerce Sign Agreement

Belgrade, Dec.5th, 2009 (Serbia Today) - The Serbian Chamber of Commerce has signed an agreement on cooperation with the Chamber of Commerce and Industry of China fior for the export and import of machinery products.
The Serbia-China Business Forum the Memorandum of cooperation between the Serbian Chamber of Commerce and CCI China for the export and import of machinery produce.
The President of the China Chamber of Commerce for export and import of machinery products Zhang Zuing and President of the Serbian Chamber of Commerce Milos Bugarin, signed the memorandum of cooperation with the aim to promote and expand the trade and investments between machinery and electronic industry of Serbia and China.
Both countries will help each other to exchange the machinery and electro products and services, to provide information on the cooperation and to create possibilities for the partnership among their members. The chambers will organize visits of business delegations from both countries, research markets and organize business seminars together.
China and Serbia will provide information on main international exhibitions and fairs being organized in their markets with a view to promoting bilateral trade and services of machinery and electronics.

Energy sector investments expected in Kostolac

Belgrade, Dec.5th, 2009 (Serbia Today) - The Development of a new a new thermoelectric plant is expected to be built in Kostolac with the help of a loan from China, announced Interior Minister Ivica Dacic and Energy Minister Petar Skundric.
The project is plans for the increasing technical efficiency and a restoration of the Drmno mine for the production of 12 million tons of coal yearly, which is a prerequisite for building a new bloc of thermoelectric plants to produce between 350 and 600 megawatts.
Interior Minister Ivica Dacic and Energy Minister Petar Skundric said that the credit arrangement that is being negotiated with Chinese partners would secure funds for new projects in Kostolac. The project is estimated to cost EUR 850 million, according to Serbian news service B92. Skundric said that the investments which are to be coordinated between the Serbian government and the Chinese investors would be worth close to EUR 1 billion.
“Next year, we will begin the largest investment project in the Serbia electro-system in Kostolac. We have done everything that was necessary and created the conditions for reaching an agreement for securing funds for these projects,” Skundric said.
Dacic said that the Serbian government has formed a working group headed by the Energy Minister, which would lead the negotiations for securing the credit that would finance these projects in the energy sector.
“There is an interest being shown by potential Chinese partners that could secure as much as EUR 850 million in the revitalization and construction of new capacities. I think that about EUR 600 million is expected to be needed for the construction of the new mine and plant. I hope that the negotiations will be completed as soon as possible,” Dacic said.

NBS: Easier Loan Approval Now

Belgrade, Dec.4, 2009 (Serbia Today) - Vice Governor of the National Bank of Serbia, Mira Eric-Jovic, announced at the Fifth Annual Financial Services and CFO Forum, that this institution would relax refinancing loan regulations.
“The regulations being prepared by the NBS will provide free banks to have no obligation to create additional reservations for refinancing loans, which means that they shouldn’t be more expensive,” Eric-Jovic.
The Vice Governor underlined that the existing reserve for loans in domestic banks are far higher than the current level of unsecured loans.
“Even if the level of default claims increased to 30%, the banking sector wouldn’t have capital adequacy lower than 16.4%, which shows that domestic banks are highly solvent, especially when compared with banks of countries in the region,” she said.The current level of loans with collection periods of longer than 90 days – amounts to about 10%.
Commenting on the announcement of KBC Bank regarding its intention to withdraw from the domestic market, the Vice Governor said that a potential owner would have to obtain approval from the NBS, which means it is a mere name change, which will not affect clients.
“It means that debtors have to pay their obligations, and that depositors can collect their deposits whenever they want,” she said.

Russia, Serbia in Nuclear Plant Talks

Belgrade, Dec.2, 2009 (Serbia Today) - The governments of Russia and Serbia are in negotiations to build a nuclear power plant in Serbia, the Russian ambassador to Belgrade says.
"The construction of a nuclear power plant in Serbia is being given serious consideration," Aleksander Konuzin was quoted as saying this Monday.
He stated that Serbia wishes to export electricity, and added that the country has the resources to do so.
"Russia is prepared to help Serbia with this intention through partnership and joint investments," the Radio-Television of Vojvodina (RTV) reported.
Konuzin reminded those present that Serbia had recently reached agreements to build hydro electric plants with Germany and Italy, and that Russian experts are currently working on modernizing the Djerdap 1 (Iron Gate) plant on the Danube, and that Russia is also ready to build more hydro electric power plants in Serbia.
The ambassador also noted that the construction of several natural gas heating plants has already been agreed.

Bridge Over River Drina

Belgrade, Dec.1, 2009 (Serbia Today) - Uzice Mayor Jovan Markovic’s has launched an initiative to build a 90 kilometer highway from Pozega in Western Serbia, across the Drina River, to Visegrad, in the Serbian enclave of Bosnia-Herzegovina, according to Belgrade daily Danas.
Prime Minister of Republic Srpska (RS) Milorad Dodik and Serbian Prime Minister Mirko Cvetkovic has accepted Uzice Mayor Jovan Markovic’s initiative to build Pozega-Visegrad highway.
Serbian Prime Minister supported the idea after their recent meeting in Banja Luka.
It is estimated that the investment would be worth approximately EUR 250 million and the governments of Serbia and Republic Srpska would provide the investment.
Experts have proposed two routes for the future highway, one, favored by Markovic and Dodik, that would go from Pozega, Uzice, Kotroman to Visegrad and Podromanija.
The second route would run from Pozega and Uzice, through Bajina Basta, Fahovici and Han Pijesak to Podromanija.
“The highway must be a government issue and I am sure that the Serbian government will support our initiative. Since connecting the two countries is of utmost importance, the size of the investment should not be an obstacle,” said Markovic.
Dodik stated that this project is a “great chance for development for both Serbia and RS, that is, Bosnia-Herzegovina.”
The initiative to build the highway was also supported by Visegrad Mayor Tomislav Popovic.
“The construction of this highway would connect Visegrad and Serbia and bring us closer to Europe. The town would become a tourist destination because we have a lot to offer and the highway would attract foreign investors, from which not only Visegrad would benefit, but also RS and Bosnia-Herzegovina,“ said Popovic.
Infrastructure project such as bridges and highways are already contributing to Serbia’s economic recovery, and it was announced the unemployment in Serbia decreased by 1.36 % in October compared to September’s rate, according to the National Employment Service.
Of the total number of unemployed people in Serbia actively looking for work, of which there are 727,000, more than half are women, according to Serbian news service B92.
Of the total number of unemployed, 64 % have been unemployed for a long period of time, which means that they have been looking for a job for over a year.

IBRD Loan for USD 200 Million Signed

Belgrade, Nov 30, 2009 – Serbian Minister of Finance Diana Dragutinovic said on Friday that the Serbian government signed the USD 200 million loan agreement with the International Bank of Reconstruction and Development (IBRD), and finalized this phase of the planned budget stabilization program.
Dragutinovic said at a press conference that the World Bank gave final approval for the USD 500 million loan to Serbia on November 17, and the document was finally prepared for signatures this last week.
The USD 200 million installment of the loan will be provided this year. Dragutinovic said that the Serbian Parliament is expected to ratify the bill concerning the loan by the end of this year.
Dragutinovic explained that there are two loan agreements, one of which concerns funds for supporting the private and financial sector and the other is part of the program loan for supporting public financing and stabilizing the budget.
The loan has annual interest rate of 1% and is to be repaid over the next 20 years.
Head of the World Bank Office in Serbia, Simon Gray, said that the loans for assisting the Serbian budget have been approved in order to help the public sector reform process and to create better conditions for the development of the private sector.

Corridor 10 Open

Belgrade, Nov.30, 2009 (Serbia Today) - The fruit of foreign and Serbian investment can finally be enjoyed now that both sections of a ten kilometers stretch in the Corridor 10 freeway are open for traffic. Ecology and Spatial Planning Minister Oliver Dulic said that the completion of these sections has set the standard for the functioning of public works in Serbia.“What I can proudly say is that this is the first time a highway was built under the new construction licensing procedures, within the budget, and under the new quality standards for Serbia’s highways,” said Dulic.
Dulic said that all section of highway from Horgos to Belgrade will be complete by the end of 2011, according to Serbian news service B92.
“The fact that there were no problems during the construction of the roads is an important sign. There were no problems with payments to workers and the construction companies are satisfied with their participation in the project, which is important for future cooperation,” Dulic said.
Work will begin in the spring on another 20 kilometers of highway between Horgos and Belgrade, and once it is finished there will finally be an updated highway linking Belgrade and Subotica.

EUR 5 Billion for Infrastructure by 2012

Belgrade, Nov.28, 2009 (Serbia Today) - The recent formula of working with international lenders and builders to take on large scale infrastructure projects has done much to stimulate the economy and forge closer economic ties with world economic leader such as China, Germany, and Russia.
In recognition of the importance of such projects in bolstering the Serbian economy, Prime Minister Mirko Cvetkovic announced that Serbia will invest more than EUR 5 billion in developing its road, railway and energy infrastructure by 2012.
"We will invest more money than we have in infrastructure, because that is an investment in Serbia's future," Cvetkovic stressed an article published in Belgrade weekly NIN.
This would increase the country's economic activity significantly, said the premier, and announced that the budget deficit would be "eliminated within four years," said Cvetkovic, according to Serbian news service Tanjug.
Describing the government goals for 2010, Cvetkovic stated that the chief aims were a fast economic recovery and an increase in the standard of living.
He put macroeconomic stability and financial discipline as the goals of the 2010 economic policy.
"One of our first aims will be to balance the budget, meaning to eliminate the budget deficit within four years," said Cvetkovic.

Automotive Industry Reduces Trade Deficit

Belgrade, Nov 27, 2009 (Serbia Today) – Serbian Deputy Prime Minister and Minister of Economy and Regional Development Mladjan Dinkic said today that the automotive industry might be the chief support for reduction of the foreign trade deficit in the middle term.
Speaking at the conference "Improving the approach to international market for producers and suppliers in the automotive industry in Serbia", Dinkic said that in light of the new investments that are being planned, the Ministry of Economy and Regional Development is sure that that it will generate exports of over EUR 1 billion per year.
He said that over 150,000 people live from the automotive industry and that there are 86 companies in that field right now, of which one third are foreign - mostly from Slovenia, Germany and Italy.
The Deputy Prime Minister said that agreement with the Italian company Breda Menarinibus will be signed in December, for the production of buses in the Ikarbus factory.
Speaking about producers who have already announced that they will begin production in Serbia, Dinkic said that these are German company Drexel Maier, Slovenian Grah Automotive, which has already positioned itself on the Serbian market and Dutch VDL Bus Chassis which will make buses with Novi Sad-based Neobus and export them to the EU market.
Dinkic said that Fiat's investment will be the biggest and further large investment is expected to be released by the end of this year.
Speaking about incentives for those who wish to make production in Serbia, he said that the state is paying between EUR 3,000 and EUR 5,000 per new workplace and financing training through the National Employment Service, which is EUR 900 per trainee.
Participants in the conference agreed that the formation of the car cluster in Serbia in 2005 and its putting into work in 2007 has led to significant results, such as quicker deliveries, higher worker productivity and lower costs.
Director of the Serbian automotive cluster Igor Vijatov said that Serbia's automotive cluster has 39 members, 34 companies and five faculties and scientific institutions.
A cluster means a network of companies and institutions with the common aim of increasing competitiveness and attracting better suppliers to the sector.

Serbia, Kuwait Boost Bilateral Relations

Belgrade, Nov 26, 2009 (Serbia Today) – Serbian Prime Minister Mirko Cvetkovic and Kuwaiti Prime Minister Sheikh Nasser al-Mohammed al-Ahmed al-Sabah met earlier this week in an effort to establish closer cooperation and increased economic ties.
Following the meeting with Al-Sabah, Cvetkovic told the press that the door to prospective Kuwaiti investors are open in Serbia, adding that economic cooperation between the two countries is the best way to overcome the global economic crisis.
Cvetkovic noted that Serbia and Kuwait have had satisfactory relations for quite some time, voicing his belief that talks in Belgrade will strengthen the political dialogue and cooperation in the economic, financial, investment and cultural sectors, military industry and other spheres.
Cvetkovic noted that the overall trade between the two countries, although much greater in the past, stood at less than US $500,000 in the first half of 2009, adding his hopes that it will increase in the future.
Al-Sabah, who is heading the Kuwaiti delegation on its official visit to Serbia, voiced his gratitude for Serbia’s support during the Iraqi occupation of Kuwait led by former Iraqi strongman Saddam Hussein.
You stood by our side in the international arena during those events, you were devoted to international law and we are deeply grateful for that, the Kuwaiti Prime Minister said.
He said that Serbia and Kuwait have close political, economic and cultural ties.
After the meeting, Serbian Culture Minister Nebojsa Bradic and Kuwait’s Foreign Minister Sheikh Mohammad al-Salem al-Sabah signed a Program of Cultural Cooperation between Serbia and Kuwait.
An agreement on tourism cooperation was signed by Serbian Minister of Trade and Services Slobodan Milosavljevic and Kuwait's Commerce and Industry Minister Ahmad al-Haroun. Another agreement on economic and technical cooperation was signed by Serbian Minister of Labour and Social Policy Rasim Ljajic and Kuwaiti Finance Minister Mustafa al-Shamali.
A an agreement concerning civil aviation was signed by Director General of the Civil Aviation Directorate Nebojsa Starcevic and Head of Kuwait’s Civil Aviation Favaz Abdul Aziz al-Farah.

Galenika’ to be Sold Next Year

Belgrade, Nov.26, 2009 (Serbia Today) - Pre-qualification tender for the sale of ‘Galenika’ shall be announced by the end of the month, announced Vladislav Cvetkovic, Acting director of the Privatization Agency.
“We shall call on the investors to express their interest in a letter of intent in which they shall be expected to present their development plan for the company. ‘Galenika’ is an established company and the Government expects only qualified bidders,” said Cvetkovic, in an interview with Serbian daily ‘Blic’.
Q: Is your optimism based on any concrete reason?
“At the moment the list of potential serious investors in 'Galenika’ is rather long. We want to choose a the best buyer of ‘Galenika’ not only in the view of money but in the view of the long term investment plans as well.”
Q: Recently you announced privatization of public enterprises in the next year?
“We expect strategy for privatization of public communal enterprises to be finished soon by the Ministry of economy and regional development. The model of privatization shall not be sale of those enterprises but securing investors and their capital for them’.
Q: What about privatization of sport clubs?
“The existing situation in these clubs is not in the interest of either the State, the citizens, or the clubs. The equity division in these clubs is very complicated and should be determined first. The State shall not tolerate such situation to continue. It shall not be the classic way of privatization but one that shall secure development of sports and quality management”
Q: Is any big privatization planned in 2010?
“Privatization of Telecom Serbia, JAT, Nikola Tesla Airport, or EPS should not be expected to take place in the next year”
Q: About one fifth of privatization contracts have been cancelled. Isn’t that too many?
“It is important to say that there is large number of companies we tried to sell several times. Privatization has been going on for a long time and had it been quicker and more efficient we would have been more ready for the potential buyers. Nothing was invested in those enterprises in the past 20 to 30 years’.

NIS Accepts Auditing Reports

Belgrade, Nov.25 (Source - B92) Serbian Oil Industry (NIS) managing board on Monday confirmed that the company had losses of RSD 8billion in 2008.

The losses will be covered from the budget, said member of the board Dusan Petrovic.

Two credible auditing firms calculated that instead of the reported RSD 2 billion profit, NIS in fact lost RSD 8 billion (EUR 85 million) before 51% of the previously state owned company was sold to Russia's Gazprom in early 2009.

Petrovic told B92 that a decision on how to cover the losses will be made in the first half of next year, but that he was convinced the money would come from the state budget.

"The citizens have no reason to worry because I am convinced that as soon as in 2010, NIS will make progress and a serious profit," said he.