"British want to take part in Telekom privatization"
Chairman of the British-Serbian Chamber of Commerce Sir Paul Judge says "British experts are very eager to be consultants in the sale of Telekom Srbija."Source: Tanjug
In an interview for Tanjug, he also did not rule out the possibility that British companies might be potential investors in the Serbian telecommunications company.
"It is a good idea of the government to privatize Telekom and British experts would eagerly assist the government in ensuring that the process is completed to the benefit of Serbia, regardless of the way in which you would like to sell it, entirely or partially," he says, adding that the experts would give the best advice in terms of the price that could be secured and regulations that need to be changed for investors to come.
"The British mobile telephony is strong. Vodafone is a major British company, and it would be logical that they would be the one in that case, but we do not know whether they are interested in that purchase or not. There are many companies that would be potential buyers of the state assets in Serbia, if conditions are fair," Judge said.
He underscored that there was a certain number of investors in the construction industry who were interested in taking part in projects in Belgrade, but also noted that the government should provide favorable business conditions in order to attract money.
When asked about foreign investors' take on the arrest of major businessmen in Serbia, suspected of various frauds, tax evasion and similar crimes, he said it was a very good signal for foreign investors, as they did not like when the country was corrupt.
“The most important element for any country is the rule of law. We do not know whether they are guilty or innocent. If they are guilty, it is exactly right for the government to crack down on them, as corruption is the most debilitating thing for any economy,” he said.
One year is not enough for a country in transition to tackle corruption, but the problem could be pretty much resolved in five years, he says.
He observed that the government was trying hard, but the real effects could not be seen yet as it was not a long time since it had been set up.
“There has been some real action - the decision to privatize over 500 companies in the restructuring process- that is a clear move forward. I understand that around 400 companies have had offers made for them, which is great,” he said.
Judge says that investors are taking positive note of the arrangement with the International Monetary Fund (IMF), since this arrangement will guarantee financial stability, as it obliges the government to take certain steps to make spending cuts.
He also says that British investors, like British American Tobacco, are well established in Serbia, despite the political and economic situation being difficult for the last few years.
He points out that many companies, when they are looking at investing in a country, look at the World Bank's Ease of Doing Business Index, which ranks more than 180 economies, where Serbia is about half-way.
Serbia does well on some things, Judge says, but on others, like taxation and construction permits, it does not do very well.
“The (Serbian) government is very well aware of this. We've talked to the government about it, they know. They are trying to organize the laws to improve it. But there are those sorts of barriers, and a company wishing to invest would look at a whole series of countries where it might put its factory or its office or its headquarters,” Judge says, pointing out that it is up to Serbia to make itself as attractive as possible to people who wish to invest as “there's no shortage of money for investment.”
Asked about what he saw as positive aspects of Serbia as an investment destination, Judge pointed to low labor costs, among other thing, as good from an investor's point of view.
Asked if there was a way for Serbia's workers to start getting more money for their work while keeping the country attractive for investment, he said the answer was in economic growth, but it could not come overnight.
“If it (growth) is one percent, it takes 70 years to double the wealth. If it's five percent, it takes about 14 years to double the wealth, less than a generation,” Judge said. “A country with the resources that Serbia has, if it gets itself well-organized, can move towards that five percent level we would hope. And that's how the people benefit.”
Asked whether he thought the British visa system posed an obstacle to doing business, Judge said it had gone through a lot of change in the previous few years and the situation was not satisfactory.
“Serbia is particularly hurt by it because the applications now are not even made in Serbia. The decisions are made in Poland,” and for the moment, it takes three or four weeks to get a visa, Judge said. “So it is unfortunate, and you can't defend it from a business point of view. It's got tied up with a whole lot of politics in Britain.”
He expressed the hope, however, that the visa requirements would be relaxed as Serbia moves towards EU accession.
Asked if the sum of around one hundred million euros, which had been talked about in public at the time of his election as Sheriff for the City of London, had been made available to Serbian companies, Judge said it was hard for companies in Serbia to get the finance, because the banks here found it quite difficult to finance small and medium sized enterprises in particular.
“The concept is to raise, say, a hundred million euros in London, and then to have a little group here who can use that money and give it to companies which appear to be successful and wish to expand. It is very hard for Serbian companies to get the money from the banks,” said Judge.