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The Government of the Republic of Serbia

In the service of citizens

EBRD representatives assess reforms in Serbia as crucial

Belgrade, 28 May 2005

Serbian Minister of International Economic Relations Milan Parivodic spoke about the Annual Meeting of the European Bank for Reconstruction and Development held in Belgrade from May 21 to 23 for the weekend edition of the Danas daily. The official Serbian government website presents parts of this interview.

Milan Parivodic

What were the impressions of the EBRD guests of Serbia?

The general impression, mentioned by EBRD President Jean Lemierre, is that the country has made considerable progress since his visit in 2001. It was stated that the implemented reforms were of crucial importance, and that some challenges remain but that there is a democratic potential and readiness of the Serbian government to overcome them. The country is on a steady democratic course. The economy is expanding, it is much better than before, as is the legal framework. There are problems mainly concerning defining land ownership rights, as well as building permits. Reform and strengthening of the judicial system are also issues which we will continue to face. However, I am certain that Serbia’s image in the world is improving. The positive assessment of the feasibility study and the EBRD Annual Meeting in Belgrade are two huge steps on the path towards creating a positive image of Serbia.

The EBRD strategy entails a shift of interest from the Balkans further east, to countries of the former Soviet Union, so what can Serbia expect?

We expect investments in Serbia to increase. The European Bank for Reconstruction and Development is a market oriented bank. It is a development bank, but works for profit which is why its investment policy will depend on how secure it feels in our legal and economic climate. Of course, the EBRD is currently facing great challenges such as Ukraine, which needs strong support. There are political challenges in Uzbekistan, as well as Kyrgyzstan and Mongolia. The bank funds are limited but the size of the Serbian economy and the country itself are not so great as to significantly endanger the EBRD balance sheet, considering that these are small projects compared to Russia, Ukraine or Kazakhstan.

Have EBRD funds been sufficiently utilised?

They have been utilised a great deal, because from April 2001, about €600 million were mobilised. We could have done much more, since Croatia for example, received about €1.3 billion. It is through this that I see Serbia’s chance of increasing the amount that it will have at its disposal. We can receive EBRD funds for development of infrastructure that is railways and roads, as well as small and medium enterprises. From experience, I know that President Lemierre’s reasoning is to give money to those he trusts, not those with the proper documentation. He also insists very much on the development of small and medium enterprises. We must have large companies as they bring in large profit and affect export, but small and medium enterprises open new jobs, and are more flexible and market oriented.