"Serbia could become Mecca for investors"

Slovenian daily Delo printed an article about Serbia’s chances of becoming an “economic tiger” in the Balkans. The newspaper writes that Serbia’s main obstacles, after separating from Montenegro, are the same ones that beset Ireland before its great economic boom. "Serbia could become Mecca for investors" These problems are high inflation rates, unemployment and a lack of competitiveness in companies, while the increase in GDP has limited fiscal policies with the goal of decreasing high inflation rates. Serbian industry growth, which is mostly supported by transport services, financial business and trade, was at a lower level than expected – five percent on a yearly level. Because of this, the daily writes, most of the growth was supported by foreign investments, the rise of which was attributable to a number of factors. Delo writes that increased investment helped to decrease taxes and encouraged progress in economic legislation, privatization and liberalization. Delo stated that Norwegian telecommunications company Telenor was the biggest investor in Serbia, with EUR 1.5bn, adding that there were many Russian companies and banks at the door, waiting to invest in Serbia. According to the Bank of Slovenia, the country is sixth in terms of foreign investment in Serbia, where its companies have invested over USD 450mn in the last six years and plan to invest USD 900mn. The Slovenian companies which have invested the most money in Serbia from 2001 to 2007 are Merkator, Cimos, Droga Kolinska, Merkur and Nova Ljubljanska Bank (NLB). Despite the appearance of favorable conditions for foreign investors, the daily writes that the investment atmosphere is still far from satisfactory. Political insecurity in the region, ineffective administration and a high level of corruption are the most significant factors in putting off potential investors. Serbia is also marred by legal irregularities which do not enable the development of a secondary market and the development of a stock exchange, which could liberalize market capital.

"Serbia could become Mecca for investors"

These problems are high inflation rates, unemployment and a lack of competitiveness in companies, while the increase in GDP has limited fiscal policies with the goal of decreasing high inflation rates.

Serbian industry growth, which is mostly supported by transport services, financial business and trade, was at a lower level than expected – five percent on a yearly level.

Because of this, the daily writes, most of the growth was supported by foreign investments, the rise of which was attributable to a number of factors.

Delo writes that increased investment helped to decrease taxes and encouraged progress in economic legislation, privatization and liberalization.

Delo stated that Norwegian telecommunications company Telenor was the biggest investor in Serbia, with EUR 1.5bn, adding that there were many Russian companies and banks at the door, waiting to invest in Serbia.

According to the Bank of Slovenia, the country is sixth in terms of foreign investment in Serbia, where its companies have invested over USD 450mn in the last six years and plan to invest USD 900mn.

The Slovenian companies which have invested the most money in Serbia from 2001 to 2007 are Merkator, Cimos, Droga Kolinska, Merkur and Nova Ljubljanska Bank (NLB).

Despite the appearance of favorable conditions for foreign investors, the daily writes that the investment atmosphere is still far from satisfactory.

Political insecurity in the region, ineffective administration and a high level of corruption are the most significant factors in putting off potential investors. Serbia is also marred by legal irregularities which do not enable the development of a secondary market and the development of a stock exchange, which could liberalize market capital.