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Government priorities – stronger economy, faster economic growth
Belgrade,
9 July 2008
Serbian Deputy Prime Minister and Minister of Economy and Regional Development Mladjan Dinkic stated today that government priorities will be a stronger economy and faster economic growth, which will be attained through larger investments in infrastructure and foreign direct investments.
Mladjan Dinkic
At a press conference on the new government’s economic and regional development plans in, Dinkic said that €5 billion will be invested in traffic, and that investments in the energy sector and telecommunications will be increased.
He stressed that in the next several years Serbia will need between five and eight billion dollars of foreign direct investments a year. He added that by removing the political risk and acquiring EU candidate status, Serbia will become the most attractive investment target.
He reiterated that at the same time, several roads will be constructed, though the completion of Corridor 10 will remain the priority.
Dinkic explained that funds will be provided from EU pre-accession funds which will increase from €1 to €3 billion in the next five years, as well as from privatisation revenues, loans from international financial organisations and issuing of Eurobonds.
He announced that a set of tax laws will be adopted in the autumn envisaging an income tax cut from 12% to 10% and an increase in the non-taxable portion of salaries from RSD 5,000 to RSD 8,000.
According to him, a progression in taxation on the rich will be introduced in order to disburden the economy and medium and lower categories of population.
He announced a reduction of import tax on automobiles, which should be halved as of next year, and abolished in 2010.
As for the new government’s budget plans, he said that the majority of EU countries have a budget deficit and that by the year’s end Serbia’s deficit should not exceed 0.5% of GDP. The plan is to keep the deficit below 3% GDP each year, he added.
Dinkic stated that Prime Minister Mirko Cvetkovic authorised him to coordinate the work of economic resources, cooperation with international financial institutions and work on infrastructure projects.
He explained that he is also authorised to conduct the restructuring and privatisation processes in public companies together with the Prime Minister, as well as to conduct a comprehensive project of regulation reform.
Dinkic also announced that early next week there will be intensified talks on strategic partnership between Zastava and Fiat and pointed out the importance of that investment for Kragujevac, and apart from investments in the factory itself, it will include investments in road infrastructure and environmental protection.
The Minister said that another international car maker has voiced readiness to start production in Serbia, adding that there will be talks about this in the second half of August.
According to him, Fiat will be one of the first beneficiaries of the decree envisaging a granting of incentives to investors in information technologies, the car industry and electronics.
For investments exceeding €200 million and employment of 1,000 people, they will get non-repayable funds of up to 25% of the total investment, as well as free construction land, he specified.
He also announced that a public invitation for participation in the prequalification of bidders for the Mining and Metallurgical Complex RTB Bor will be announced on July 11 in the Financial Times and in Serbian newspapers.
According to him, by September 30 it will be known who applied for the tender and who is interested in RTB Bor.
Dinkic said that by end-July other tenders will also be announced, for example for Prva Petoletka from Trstenik, Methanol and Acetic Acid Complex Kikinda, Mostogradnja from Belgrade, Genex hotels on Mt Kopaonik and FAP from Priboj.
A tender for Jat Airways will be announced by the end of the month, and the deadline for submitting bids is end-September, said Dinkic and added that advisor for the initial public offer for Telekom is to be chosen by the end of the month.
The privatisation model for Galenika is to be changed; he said and announced that 350 companies are to be offered at auction sales and 40 companies at tender sales by the end of October.
He said that three very serious bidders have applied in the prequalification for the largest tourism investment project in Serbia – the construction of the tourist resort on Stara Planina Mt.
Companies from Germany and Austria have applied, as well as Serbian company Energoprojekt, specified Dinkic and announced that the priorities of his Ministry in the next four years will be modernisation of spas.
He specified that the modernisation model envisages that parks, wells and rehabilitation sections remain state-owned, whereas a portion of spas will be offered to strategic investors who will build modern swimming pools and similar.
One of the first spas to enter the process will probably be Banja Koviljaca, he concluded.
He stressed that in the next several years Serbia will need between five and eight billion dollars of foreign direct investments a year. He added that by removing the political risk and acquiring EU candidate status, Serbia will become the most attractive investment target.
He reiterated that at the same time, several roads will be constructed, though the completion of Corridor 10 will remain the priority.
Dinkic explained that funds will be provided from EU pre-accession funds which will increase from €1 to €3 billion in the next five years, as well as from privatisation revenues, loans from international financial organisations and issuing of Eurobonds.
He announced that a set of tax laws will be adopted in the autumn envisaging an income tax cut from 12% to 10% and an increase in the non-taxable portion of salaries from RSD 5,000 to RSD 8,000.
According to him, a progression in taxation on the rich will be introduced in order to disburden the economy and medium and lower categories of population.
He announced a reduction of import tax on automobiles, which should be halved as of next year, and abolished in 2010.
As for the new government’s budget plans, he said that the majority of EU countries have a budget deficit and that by the year’s end Serbia’s deficit should not exceed 0.5% of GDP. The plan is to keep the deficit below 3% GDP each year, he added.
Dinkic stated that Prime Minister Mirko Cvetkovic authorised him to coordinate the work of economic resources, cooperation with international financial institutions and work on infrastructure projects.
He explained that he is also authorised to conduct the restructuring and privatisation processes in public companies together with the Prime Minister, as well as to conduct a comprehensive project of regulation reform.
Dinkic also announced that early next week there will be intensified talks on strategic partnership between Zastava and Fiat and pointed out the importance of that investment for Kragujevac, and apart from investments in the factory itself, it will include investments in road infrastructure and environmental protection.
The Minister said that another international car maker has voiced readiness to start production in Serbia, adding that there will be talks about this in the second half of August.
According to him, Fiat will be one of the first beneficiaries of the decree envisaging a granting of incentives to investors in information technologies, the car industry and electronics.
For investments exceeding €200 million and employment of 1,000 people, they will get non-repayable funds of up to 25% of the total investment, as well as free construction land, he specified.
He also announced that a public invitation for participation in the prequalification of bidders for the Mining and Metallurgical Complex RTB Bor will be announced on July 11 in the Financial Times and in Serbian newspapers.
According to him, by September 30 it will be known who applied for the tender and who is interested in RTB Bor.
Dinkic said that by end-July other tenders will also be announced, for example for Prva Petoletka from Trstenik, Methanol and Acetic Acid Complex Kikinda, Mostogradnja from Belgrade, Genex hotels on Mt Kopaonik and FAP from Priboj.
A tender for Jat Airways will be announced by the end of the month, and the deadline for submitting bids is end-September, said Dinkic and added that advisor for the initial public offer for Telekom is to be chosen by the end of the month.
The privatisation model for Galenika is to be changed; he said and announced that 350 companies are to be offered at auction sales and 40 companies at tender sales by the end of October.
He said that three very serious bidders have applied in the prequalification for the largest tourism investment project in Serbia – the construction of the tourist resort on Stara Planina Mt.
Companies from Germany and Austria have applied, as well as Serbian company Energoprojekt, specified Dinkic and announced that the priorities of his Ministry in the next four years will be modernisation of spas.
He specified that the modernisation model envisages that parks, wells and rehabilitation sections remain state-owned, whereas a portion of spas will be offered to strategic investors who will build modern swimming pools and similar.
One of the first spas to enter the process will probably be Banja Koviljaca, he concluded.
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