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The Government of the Republic of Serbia

In the service of citizens

Kosovo can develop economically only within Serbia

Belgrade, 3 March 2007

Head of the Economic team for Kosovo-Metohija and southern Serbia Nenad Popovic said that an independent Kosovo would be economically unsustainable and that it can have a stable development only as a substantial autonomy within Serbia.

Popovic said in an interview to Beta news agency that Kosovo-Metohija, as part of Serbia, would enter the European Union at least 20 years earlier than as an independent state.

He said that Kosovo has the lowest GDP in Europe - $1,100 per capita and its budget is based on donations that are getting smaller year in year out.

However, Kosovo market has 2.1 million people and is a great potential and chance for Serbia's economy, he said and added that the state has to create infrastructural foundations for investing into the province - electricity, roads, telecommunications and utility services.

According to him, the greatest obstacles to economic development of Kosovo are lack of safety, organised crime and corruption, as well as unresolved legal status.

He said that €32.6 million was earmarked by the National Investment Plan for development of the Serbian communities. In addition to projects already planned, the Economic team received as many as 1,500 requests for incentives worth from €5,000 to €10,000 for small Serbian enterprises in Kosovo.

Popovic said that the Serbian negotiating team at the talks in Vienna was very well prepared and made a number of objections to the proposal of UN Special Envoy Martti Ahtisaari.

When it comes to Kosovo's foreign debts, Belgrade requested that the principle of final user be applied. As for the payment of debts, it should be taken into account that interests and opportunity costs should also be paid, apart from the capital amounts which have already been repaid.

He said that Belgrade cannot accept under any condition the proposal that public companies in Kosovo-Metohija become property of the province because those companies were established by UNMIK's decision to separate them from their mother companies whose owner is Serbia.

Therefore, Serbia submitted an amendment that annuls every decision to form companies by separating them from Serbia's public companies because that practically means seizing part of Serbia's property, which is contrary to all conventions on human rights.

He said that Belgrade had already requested from UNOSEK to place a moratorium on privatisation process in Kosovo, but Ahtisaari declared himself incompetent on that issue.

Popovic said that the situation in southern Serbia is stable which was shown by parliamentary elections held on January 21 at which, after several year of boycott, ethnic Albanians from Presevo, Medvedja and Bujanovac also took part.

As for the economic development, southern Serbia will be the most attractive spot for investments in next couple of years, Popovic said and added that around €50 million will be invested in that area from the National Investment Plan this year.