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The Government of the Republic of Serbia

In the service of citizens

Export promotion strategy to be adopted by mid-year

Belgrade, 7 March 2005

Following a meeting with managers of companies that are major exporters in Serbia, Serbian Minister of Finance Mladjan Dinkic announced that the Serbian government will adopt a strategy for the promotion of export and protection of domestic production by the middle of the year.

Dinkic told a press conference that the participants in the meeting agreed that the Agency for Export Insurance and Financing needs to be established this year, with an initial capital of €30 million. The Agency will be founded by the Republic of Serbia, which will invest €25 million, and the Jubmes bank, which will secure the remaining €5 million.

Dinkic voiced hope that the Agency will start working by mid-year at the latest. He explained that it will ensure exports in the world market and finance the preparation of export and presentation of domestic companies on international markets, both through short and long-term loans for working assets.

According to Dinkic, the interest rate for these loans will range from three to six percent annually, a rate much lower than that for commercial loans. The point is to enable domestic exporters to compete with those from other countries.

Dinkic recalled that Serbia's foreign trade deficit in 2004 was very high and stressed that all measures must be taken to increase the country's exports.

Apart from favourable loans, domestic exporters can expect the introduction of various tax reliefs, Dinkic said.

The export strategy will be prepared by late March, following which it will first be confirmed by the group of people who gathered at today's meeting, and then on to the Serbian government for adoption.

Serbia must adopt a single concrete strategy and mechanisms for export promotion by April at the latest, Dinkic said and stressed that that strategy will be the result of an agreement with representatives of Serbia's major exporters.

The Minister explained that all companies who export more than 70 percent of their total production can apply for the assistance of the Agency for Export Insurance and Financing. He added that this rule will be applied regardless of the export's total value.

The participants in the meeting discussed the adoption of a law on free trade zones, whose aim is to reduce production costs, as well as tax rates on salaries of employees who work longer hours and weekend shifts for export companies.

He said that a new customs tariff is in preparation and that it will reduce duties for import of raw materials and intermediate goods, and increase duties on the import of 117 products.

Apart from Minister Dinkic and managers of Serbia's major export companies, the meeting was attended by Deputy Minister of Finance Vesna Arsic, Vice-Governor of the National Bank of Serbia Diana Dragutinovic, Director of CIS of the National Bank of Serbia Branko Hinic, Director of the Serbian Investment and Export Promotion Agency Jasna Matic, as well as assistants of the Minister of Finance Goran Andjelic, Natasa Kovacevic and Branislava Lukac.

Dinkic explained that invitees to the meeting were chosen solely on their company’s statistical data, meaning that those who brought the most money into Serbia were invited, regardless of the company’s specialty or ownership.

Today's meeting was attended by representatives of US Steel Serbia, Tigar, MSK, HIP Petrohemija Pancevo, Impol Seval from Sevojno, Tarkett Sintelon, Dijamant, Hemofarm Concern, Trayal Korporacija, Alfa Plam, Valjaonica Bakra Sevojno, Sojaprotein, Livnica Kikinda Cimos, Kuzman, Zemljoradnicka Zadruga Arilje, Fabrika Katrona Umka, Sirogojno Company, Apatinska Pivara, Concern Swisslion Takovo, Delta M, Metalac from Gornji Milanovac and Tetrapak Production.

The representatives of exporters said that they do not expect to be favoured by the state, but only to have easier access to loans with similar conditions as in foreign countries. They also expect the state to introduce a more restrictive import policy.