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The Government of the Republic of Serbia

In the service of citizens

Investing in Serbia good business in the long term

Belgrade, 13 June 2006

Serbian Prime Minister Vojislav Kostunica addressed the 10th International Economic Forum in St. Petersburg, and called upon investors to enter the Serbian economy, remarking that it is good business in the long term.

Author: Tanjug

The Serbian government’s official website presents Vojislav Kostunica’s speech in full.

"Honourable Mr. President Putin, distinguished leaders, respected ministers and dear friends,

It is with special pleasure that I greet our hosts today, and convey heartfelt felicitations to them on the occasion of their national holiday, with the best of wishes for Russia for new successes on its way to progress.

The 10th economic forum in St. Petersburg coincides with a time when we are under the strong impression that Russia is achieving extraordinary economic successes and has firmly established legal order. I believe that we all share the common conviction that a stable and prosperous Russia has a crucial and important role in the overall process of establishing peace, freedom, progress and universal, internationally accepted values and principles.

This is of special importance for my country as well, considering that Serbia greatly values the sincere support of Russia in safeguarding peace and stability in our region, which is support for the consistent respect of principles that guarantee the inviolability of borders and the sovereignty and territorial integrity of internationally recognised states.

The determination of free and democratic states to develop mutual economic relations is an important purpose which has brought us together here at the forum in St. Petersburg. But the realisation of such aims demands – as I have said – full freedom, respect for human rights, and most importantly, consistent respect for international law and democratic principles.

Unfortunately, in my country, in the very heart of Europe, in Kosovo-Metohija, Serbs and other non-Albanians are daily made victims of violence. We have said many times that Serbia sincerely wishes, and possesses the will and ability to find a historically just and compromise solution for Kosovo-Metohija. With the same determination Serbia rejects any attempt of forcing a solution, because it would in effect lead to the division of Serbia and the seizure of part of its territory. It is clear the Serbia supports compromise, justice, and respect for the principles of international law and order, as it is obvious that these principles are essentially superior to any form of legal violence

All democratic countries in the world defend the principles on which international order rests without compromise, when it comes to issues concerning them. They reject all ideas of legal violence, forced solutions and the use of force in general as invalid arguments. The power of the principles of international law lies in their universality, because they are of value only if they are implemented universally, otherwise they do not exist. I would like to recall the principles for solving the future status of Kosovo-Metohija have already been established in the UNSC Resolution 1244, and those principles are the respect for the sovereignty and territorial integrity of Serbia, while providing substantial autonomy to our southern province.

It is a well known fact, dear friends, that relations between Serbia and Russia have a long and rich tradition, deeply founded in history, marked by spiritual and friendly bonds between the people of the two countries. The close similarities of culture, friendship and warmth between the Serbian and Russian nations are indeed a firm and secure foundation for advancing the overall relations between our two countries. It is upon this firm foundation that we must build our relations, above all strong economic ties, which have become the most important form of cooperation in the modern world.

It is because of this that Serbia gives special importance to constant advancement of economic relations with Russia, which implies that there should be maximum activity of Serbian companies in the Russian market and maximum presence of Russian investors in Serbia. The Serbian government particularly wishes to encourage such cooperation.

The government that I lead gives its full support to investors and entrepreneurs who wish to enter our country to conduct business. During the past two years numerous laws have been adopted to facilitate the work of companies, provide incentives to free trade and create conditions for the further development and advancement of Serbian economy.

The advantages of investing in the Serbian economy are more than significant. Serbia is the only country outside the borders of the Commonwealth of Independent States which has signed a free trade agreement with Russia. At the same time the expansion of a common market in Southeastern Europe is continuing with the ultimate aim of creating a free trade zone, and on January 1, 2007 a single multilateral agreement on free trade will be formed, covering a market of 55 million consumers. Apart from that, advantages for foreign investors in Serbia include the simple and stimulating tax policy with one of the lowest profit tax rates in Europe, tax relief for newly employed, as well as significant customs duties relief.

It is known that my country has significantly stabilised its economy, which is confirmed by the recent report by the World Bank and the European Bank for Reconstruction and Development, who proclaimed Serbia the country with the fastest economic reforms in 2005. It is a fact of special importance that foreign direct investment in Serbia in 2005 was worth $1.6 billion, with a trend of further growth in this year.

In the upcoming period the Serbian government will continue with comprehensive economic and administrative reforms with the aim of controlling inflation, realisation of a budget surplus, completion of privatisation, establishing transparency, predictability and stability in the business environment, and improving the quality of products and competition. To put it shortly – Serbia aspires to build a modern and dynamic economy based on democracy and the rule of law, and it has indisputably come close to achieving that aim in the recent period.

Russia was Serbia’s leading partner in external trade, according to exchange of goods in 2005, but I am firmly convinced that it is necessary and possible to take mutual cooperation to a higher level. By strengthening economic relations we can realise the well being of our nations and provide a significant incentive for consolidating mutual relations and for preserving and cherishing precious traditional values which are common to the Serbian and Russian people.

Dear friends, I will use this opportunity to call upon investors to enter the Serbian economy, because it is in fact good business in the long term. With best wishes for participants of the 10th St. Petersburg International Economic Forum for success in their work, I thank you for the attention with which you have listened to me.”