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The Government of the Republic of Serbia

In the service of citizens

Foreign investment in Serbia to reach $2 billion this year

Belgrade, 16 March 2006

Serbian Minister of International Economic Relations Milan Parivodic said today that a record $1.5 billion in foreign investment was achieved in 2005 and voiced hope that by the end of this year foreign investment will exceed $2 billion.

Speaking at a press conference at which results of the Ministry's work in the past two years were presented, Parivodic said that this Ministry coordinated more than $700 million in foreign aid to Serbia.

He said that it is very important that the Strategy for boosting foreign investment was adopted, which comprises a detailed plan of further reforms for improvement of Serbia's business environment.

According to him, Serbia's business environment improved in the past two years, which was confirmed in the reports of the World Bank and the European Bank for Reconstruction and Development, according to which Serbia is a leading reformer according to the speed of reforms.

This was additionally confirmed by the fact that the US Department of Commerce proclaimed Serbia the most attractive market in January 2006.

As for the legislative activity, Parivodic said that at the Ministry's proposal, the Serbian parliament adopted the laws on foreign trade operations and mortgage. He stated that the laws on arbitrage and on the efficient protection of intellectual property have entered parliamentary procedure, while the laws on industrial and technological parks and factoring are in preparation.

Parivodic reminded the public that the Ministry had a coordinating role in the conclusion of the contract on concessions, worth $170 million, with the world's second largest conglomerate, Rio Tinto.

Parivodic said that the Ministry is conducting active negotiations on Serbia's accession to the World Trade Organisation (WTO) and is preparing lists of goods for negotiations with the EU. He announced that the talks on the unification of the free trade zone through a single contract will begin in April.

Milan Parivodic

According to Parivodic, by passing the Decree on Euro-3 being the standard for the import of motor vehicles the import of foreign motor vehicles has become easier.

Parivodic said that quicker and essential systemic reforms are the key to Serbia’s success and specified that they mainly concern privatisation of city construction land, construction regulations and further liberalisation of external trade.

Parivodic said that the major task of the Ministry in 2006 is a complete change of Serbia’s image. He added that the project “Branding Serbia” will be adopted by the Serbian government at its session today. The project is designed for promoting Serbia as a foreign investment destination, promotion of Serbian exports and tourism, and economic diplomacy.

According to Parivodic, there is still work to be done in attracting major investments, mainly for the construction of the Horgos-Pozega motorway also towards the Greek and Bulgarian borders, for improvement in telecommunications, privatisation of the energy sector, mainly the Oil Industry of Serbia (NIS), and introduction of export incentives.

He expressed his expectation that the Stabilisation and Association Agreement (SAA) will soon be concluded, and Serbia-Montenegro will get the status of a candidate country, and that during 2008 the process of Serbia’s accession to the WTO will be concluded.

He said that intensive bilateral cooperation with major economies such as Germany, France and Japan, as well as cooperation with neighbouring countries and traditional markets, is very important, and added that one of the priorities is also the perpetuation of developmental support of donation.

He said that the Ministry will be the organiser of the Vienna Economic Forum, which will gather prime ministers of all countries in the region in Belgrade from June 11 to 12.

He said that foreign investments are of essential importance for Serbia because they will raise living standards, create new quality jobs, increase the number of experts, and increase exports, turning the Serbian economy into a modern and competitive one.