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The Government of the Republic of Serbia

In the service of citizens

Economic development of southern Serbia precondition of stability

Belgrade, 16 March 2006

Head of the Coordinating Body for southern Serbia Rasim Ljajic today said that by the end of 2000, a total of 4.7 billion dinars or €500 million was invested by state and foreign investors in southern Serbia. However, these investments are still not enough since infrastructure in that area is devastated.

Rasim Ljajic

Author: FoNet

At a meeting with representatives of the US Chamber of Commerce, Ljajic pointed out that without economic development of the poorest area in Serbia it will not be possible to preserve political stability. He added that the Coordinating Body for southern Serbia has earmarked 713 million dinars for building and reconstructing infrastructure in that area.

Ljajic recalled that Serbian Minister of Agriculture, Forestry and Water Management Ivana Dulic-Markovic visited the area last week and said that the Serbian government has set aside 2.5 billion dinars for short-term loans in that part of the country.

Ljajic announced a forthcoming meeting with representatives of SMEs, where one of the topics for discussion will be privatisation of socially-owned companies in southern Serbia, which should be completed by the end of 2006.

He said that out of 13 socially-owned companies in Bujanovac, only two are doing business without incurring losses, but that interest in them still exists.

Ljajic also mentioned the readiness of the local community to take an active part in economic development, which creates a positive climate for foreign investors. The policy of economic development is based on development of infrastructure, SMEs, agriculture and privatisation.

According to Ljajic, the Serbian Development Fund planned to invest 200 million dinars in the form of favourable loans with 1% interest rate in southern Serbia. However, only 23.5 million dinars was advanced because companies could not get bank guarantees.

Ljajic pointed out that regardless of the future status of Kosovo-Metohija, Serbia must be ready to prevent incidents in the region and secure free movement of people, goods and capital between southern Serbia and Kosovo-Metohija, since a great number of ethnic Albanian businessmen in southern Serbia cooperate with companies in Kosovo-Metohija.