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The Government of the Republic of Serbia

In the service of citizens

National strategy of economic development based on re-orientation to exports

Belgrade, 4 April 2007

Assistant Minister at the Sector for competitiveness and cooperation with international institutions at the Serbian Ministry of Economy Mihailo Vesovic said today that one of the main ideas of the National strategy of economic development to 2012 is reorientation of the Serbian economy to exports.

Speaking at a meeting of the Board for international economic relations of the Serbian Chamber of Commerce, Vesovic said that that is possible only with an adequate inflow of foreign direct investments.

He said that he does not believe that Serbia will maintain last year's level of investments which it obtained mainly through privatisation, stressing that Serbia above all needs greenfield investments that will spur employment.

Productivity started to grow owing to renovation of technology, but the unemployment rate of 21% is still very high, Vesovic said and added that that rate will not drop significantly by 2011 because there will be many layoffs in the public sector, and some 120,000 people will find jobs.

The development scenario envisages that the share of investment in GDP increases from last year's 20.5% to 25.8% in 2012, and of exports from 25.4% to 45%.

At the same time, it is necessary to reduce the foreign trade deficit from 20.4% to 6% and that public expenditures reduce their share in GDP from 38.2% to 35.3%, Vesovic said.

The Assistant Minister said that the Strategy is based on exports, with the stress on export of services and better use of preferential rates with the European Union, Russia and the free trade zone of southeastern Europe.