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The Government of the Republic of Serbia

In the service of citizens

Serbia can attract €3–5bn of investment this year

Belgrade, 29 July 2008

Serbian Prime Minister Mirko Cvetkovic stated today that this year Serbia may attract €3–5 billion in foreign direct investment and added that it will not have problems securing another €1–1.1 billion for the completion of the two branches of the southern part of Corridor 10.

In an interview to the Tanjug news agency, Cvetkovic said that €3–5 billion of foreign direct investment is not an unrealistic goal, adding that at the meeting of prime ministers from south-eastern Europe in Salzburg, he held bilateral meetings with representatives of investors who showed an interest in investing in Serbia.

According to him, Serbia has been given a chance to attract foreign investors and added that now that the new government is formed, a large contract with Italy’s Fiat is in its final stages.

Speaking about rebalancing the budget, which Minister of Finance Diana Dragutinovic announced for end-September, Cvetkovic said that he will accept the rebalance proposed by the Ministry of Finance.

He noted that rebalancing must be carried out in such a way as to ensure a balance between a socially responsible state and society’s developmental needs, all the while keeping an eye on the level of public spending.

We must not let the current public spending eat up our future, but we also cannot have people starving for a brighter future. This will be the main task of the budget, that is, the Ministry of Finance and this government, he stressed.

He noted that attention must be paid to certain social contributions already agreed upon and given as pre-electoral promises. He added that this matter will be further discussed.

Speaking about road infrastructure in Serbia, Cvetkovic said that the completion of the two branches of the southern portion of Corridor 10 will cost €1–1.1 billion, adding that Serbia can secure these funds through loans from international institutions (European Bank for Reconstruction and Development, European Investment Bank and the World Bank), as well as from the budget.

This is not huge money for us, said the Prime Minister and recalled that Serbia’s public debt is relatively small and stands at around 25% of GDP.

Cvetkovic said that in the next four years, the motorway sections from Nis to the Bulgarian border and from Leskovac to the Macedonian border could be completed through loans from several foreign sources and budget funds.

In case talks about loan arrangements begin soon, Serbia could get funds for building these two sections by the end of the year, he said and added that there is also the problem of the land through which the road will be built, as owners of plots are trying to blackmail investors by asking for unduly enormous sums of money.

We can proceed by establishing general interest, remove them from the land and build, and later take the blackmail and disputes before the court so as not to waste time, explained Cvetkovic.

When it comes to Corridor 10, which overlaps with the Horgos-Pozega section of the motorway, terms of construction will be decided after resolving issues with concessionaire Alpina-Porr, said the Prime Minister.

He recalled that by March 31the concessionaire for construction of the Horgos-Pozega motorway did not manage to meet conditions set in the agreement signed, after which Serbia agreed to extend the deadline, but the concessionaire came up with proposals in the meantime which alter the basic elements of the agreement considerably.

According to Cvetkovic, the concessionaire is basically changing what was agreed upon, which is unacceptable for Serbia. Meanwhile, Serbian government representatives have been invited to a meeting, at which the concessionaire will present a different proposal. If the concessionaire abides by the original agreement then we can remove this problem from our agenda and concentrate on the two parts of the corridor in the south.

Cvetkovic said that he will meet with representatives of the concessionaire soon to hear new proposals, and added that they are still under obligation to implement the original existing agreement, and we are still obliged to accept the agreement as it is. As long as they accept to abide by the existing agreement, we have no reason to withdraw, said the Prime Minister.

He explained that in case an agreement cannot be reached, there are two possibilities – that the agreement is terminated with joint consent and as a sign of good will the concessionaire is given back the guarantee of €10 million, or that Serbia waits until the end of the year and the expiry of the deadline for implementation of the agreement, establish that the concessionaire has not fulfilled obligations from the agreement, claim the €10 million guarantee and then look for another option for construction of the motorway.

In his interview to Tanjug, Cvetkovic called on the opposition to stop obstructing parliament’s work so that documents can be ratified and laws adopted as they are in the interest of all Serbian citizens, including the supporters of the opposition.

He stressed that the opposition actions are not supposed to bring down the government, but that the opposition also has a responsibility towards its voters and their interests.

Therefore I invite the entire opposition to come back to parliament and discuss the items on the agenda. The rest they should leave for other times and other discussions, said the Prime Minister.

He explained that this is not about the government’s goals only, but also about the goals and needs of the entire people, and stressed that he does not understand why anyone would want to prevent the adoption and ratification of documents important to the state, such as the resolution on Kosovo-Metohija, the Stabilisation and Association Agreement with the EU and the energy agreement with Russia.

According to him, there are 10–15 documents awaiting ratification in the Serbian parliament. These are very specific financial documents envisaging funds for the ring road around Belgrade, clinical centres, roads and bridges throughout Serbia and other projects.

I would really love if one of those people, who wish to obstruct parliament, came out now and told the people why they are against any of the abovementioned, said Cvetkovic.

The Prime Minister also thinks that the behaviour of opposition parties might have been provoked by the fact that the new government has demonstrated efficiency and determination from the very beginning of its mandate.

He said that in the first twenty days of its mandate, the government has already shown results which are close to what was expected of it to do within 100 days, and added that this is why the opposition is so dissatisfied.

The Prime Minister recalled that in the first week of its work, his cabinet revoked all documents which were waiting to be ratified by parliament, and then sent key agreements back to parliamentary procedure.

Cvetkovic noted that in the next ten days, the government showed cooperation with the Hague Tribunal, as well as its firm commitment to the defence of its sovereignty and territorial integrity, and voiced expectation that an agreement will soon be signed with Italy’s Fiat.

In light of these results, I can see that there is commotion among opposition parties. I do not think much of it, but I nevertheless do not underestimate it, because all MPs were elected by the people and it goes without saying that they can have certain stances which do not have to be identical with those of the ruling coalition, he said.

He rejected accusations by the opposition that the government is not following a principled policy, rather the policy of accepting blackmail and pressure as baseless, and said that the government is in absolute control of all matters under its jurisdiction, and there are principles behind the government’s activities.

He particularly stressed that this concerns not only the new Serbian government’s goals, but also the goals and needs of the entire nation.

I can understand if opposition representatives have a different opinion on details of how to express certain things, but here we have an altogether different matter where an MP is reading out quotations from sessions which are not remotely related to parliament or the agenda of the parliament session, which is how they think one should engage in a political struggle. I think that this is bad, said the Prime Minister.

He rejected the possibility that the government will resort to non-parliamentary means to resolve problems in parliament by, for example, governing through decrees if it becomes impossible to adopt laws due to obstruction by the opposition.

Serbian citizens will be able to get very precise proof of the government’s efficiency, since many things in politics and economics can be expressed in numbers, such as kilometres of roads constructed or reduction of the unemployment rate, said Cvetkovic.

Speaking on the issue of cooperation with the Hague tribunal, the Prime Minister said that this question must be looked at in the context of respecting international obligations and law, on which Serbia is also insisting in the fight for safeguarding Kosovo-Metohija within its borders.

He explained that for the new government cooperation with The Hague tribunal and the question of defending Kosovo are indeed two different matters which overlap in one single principle, and that is the principle of respecting international law.

We cannot say that we believe international law must be upheld in order to defend our sovereignty in Kosovo, and at the same time not wish to abide by international law when it comes to the Hague tribunal. The fact is that even the previous government never expressed any doubts about full cooperation with the tribunal because of this very principle, recalled Cvetkovic.

According to Cvetkovic, it is only by insisting on the universal principle of respecting international law that Serbia can hope to find a better solution for the Kosovo issue, and this is why anyone who advocates terminating cooperation with the Hague tribunal is presenting all those who are against Serbia’s sovereignty in Kosovo with a great argument.

Serbia, he stressed, will continue with the policy of discouraging countries that have not recognised Kosovo’s independence from doing so, and will make efforts that the UN General Assembly asks the International Court of Justice for its opinion on whether Kosovo’s unilaterally declared independence is in accordance with international law or not.