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The Government of the Republic of Serbia

In the service of citizens

Dinkic, Lalovic and Ilic present entrepreneurship development programme in Kragujevac

Kragujevac, 13 May 2005

Serbian Minister of Finance Mladjan Dinkic said in Kragujevac today that the government will offer favourable loans to entrepreneurs in Kragujevac, Bor, and Vranje to expand business and tackle unemployment as part of its programme to support economic development in the three cities.

Dinkic told businessmen in Kragujevac that loans will have a 0.5 percent annual interest rate and a grace period of 12 months.

According to him, several hundred million dinars will be set aside from the Serbian budget towards this programme.

He added that the Ministry of International Economic Relations is preparing an international investor conference in Kragujevac, adding that potential investors will be offered extremely favourable terms for opening factories.

The city of Kragujevac will provide free of charge construction sites for factories as well as utilities, with the money being reimbursed to the city from the state budget, Dinkic explained.

He announced the passing of a law on industrial parks with tax rates lower than the current 10 percent, adding that one such park will be opened in Kragujevac.

Dinkic recalled that the government used to subsidise large factories that had lost market positions, such as carmaker Zastava, which has received 11.4 billion dinars, or some €150 million, in subsidies since 2001.

He added that Kragujevac has received 520 million dinars in loans from the Development Fund to encourage entrepreneurship.

Minister of Labour, Employment, and Social Policy Slobodan Lalovic, who accompanied Dinkic to Kragujevac, said that the situation in the economy will be very difficult in the next two or three years due to the upcoming privatisation of ailing socially-owned companies.

For this reason, according to Lalovic, the government has prepared a micro lending programme for firms that take on redundant workers from restructured companies.

Dinkic also announced that the government has disbursed five billion dinars to support agriculture development this year through short and long term loans, recalling that some 400 farms across Serbia have received these loans.

President of the Serbian government team for stimulating production and creating new jobs, Minister of Capital Investment Velimir Ilic said during his visit to Kragujevac that problems of large business systems in Kragujevac, Bor and Vranje must be resolved on a long-term basis.

This is necessary because subsidies and strikes are not the way to solve accumulated problems of factories, Ilic said. He added that without a strategy for long-term problem solving, those cities cannot be relieved of the large number of unemployed persons, which is why the government has appointed a special team to help stimulate production and create new jobs.

Economic problems affect the entire state, as well as the cities and factory managements which must realise that they should produce only that which can be sold, Minister Ilic pointed out in talks with city leaders and business people.

He emphasised that each ministry would do everything in its power to help Kragujevac solve it economic problems, but local self-government can also contribute by offering construction sites free of charge to investors.

In talks with workers of the Zastava arms industry in Kragujevac, Ilic promised that their severance packages will include €250 per every work year, which is what Jat Airways employees received. During his meeting with business people in Kragujevac, he announced an emergency 100 million dinars for infrastructure, including sections of the Batocina road.