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The Government of the Republic of Serbia

In the service of citizens

Strengthening economic relations with Russia a priority

Belgrade, 23 April 2007

State Secretary at the Serbian Ministry of International Economic Relations Vlatko Sekulovic said today that priority of the future Serbian government must be strengthening economic relations with Russia by pulling in the investments not only through privatisation, but through greenfield investment as well.

Sekulovic said at the traditional encounter between the Russian Ambassador to Serbia Alexander Alekseev and businessmen of Belgrade that the greatest problem in trade with Russia is a deficit of $1.8 billion, created because of large imports of oil and gas from Russia, worth $2.15 billion.

Sekulovic said that the trade between the two countries has increased from $300 million in 2000 to more than $2 billion in 2006.

Speaking about Russian investments to Serbia, Sekulovic said that since 2001, they have been more than $550 million, of which the largest part goes to the privatisation of Beopetrol. Investments have been made in the metal processing industry as well.

The state secretary also explained that the CEFTA agreement and free trade agreement with Russia are Serbia's advantages in the European Union's preferential measures, which enable exports from Serbia under special tariffs.

Alekseev announced that at the end of this week Serbia and Russia will sign an agreement on clearing debt of the Soviet Union in the amount of $288 million.

He expressed expectation that the agreemenet will be signed on April 26 or 27, during the visit of Russian Emergencies Minister Sergei Shoigu to Serbia.

The Ambassador also said that the mentioned agreement will settle the Serbian debt for gas from 1994 to 2000 in the amount of $188 million, adding that Russia will finance reconstruction of the Djerdap hydral plant and Vinca nuclear institute.

He expressed satisfaction with the development of economic cooperation between Serbia and Russia as foreign exchange between the two countries reached $2.5 billion last year.

Russia is very interested in greenfield investment in Serbia, especially in the banking sector, Alekseev said noting that the Bank of Moscow will open a representative office in Serbia.