JAT AIRWAYS IN WINTER
The JAT Airways winter season starting this weekend brings two new flights – Belgrade-Banjaluka in the Republic of Srpska and a direct flight for Tel Aviv. JAT General Manager Nebojsa Starcevic told a press conference that a draft strategy for privatization of the company should be completed by early November. Jelena Gligoric has more.
By end this year, JAT Airways will go beyond the planned number of travelers of 1.3 million and for the second year in the row have positive business results after 16 years of losses. During the winter season, by March 29, the Serbian company will fly to 25 Euro-Mediterranean countries to 34 destinations and with 255 flights a week. The most frequent destinations are Frankfurt, Vienna, Moscow, Zurich, Paris, London, Skoplje, Sarajevo, Podgorica, and Tivat.
Good business results are also expected of the flight to Banjaluka, as thus the Republic of Srpska travelers will have secured flights to all JAT destinations three times a week. This is significant contribution to promotion of the relations of the two countries, outlined Velimir Bobic, Director of the Banjaluka Airport.
«The flight is very significant to us, as our schedule currently does not meet requirements of the population. This will enable better connection of the Republic of Srpska with the world. «
JAT Airways is the property of the Serbian state, and so far Aeroflot and Air India expressed interest for its privatization. The US Company Rothschild was elected at the tender as a privatization advisor, General Manager Nebojsa Starcevic points out.
«At the moment, Rothschild is cooperating with the JAT’s expert departments that deliver all the necessary documentation and we expect Rothschild to submit the first draft of JAT privatization in early November already. Everything else will depend on whether the Government will adopt the proposal or not, Starcevic said adding that he expects a potential buyer to invest a lot of funds in renewal of the fleet.
RUSSIAN INTEREST IN SERBIAN POWER SUPPLY
The construction of the new Russian gas pipeline ‘Blue Stream’, which should link Russia and Turkey through the Black Sea and then further on to the EU should pass through Serbian territory as well. The investor, Russian Gasprom has characterized this as the biggest greenfield investment, worth over a billion dollars. This oil giant is not hiding its interest in privatization of the Serbian Oil Industry. More by Zorica Mijuskovic.
A delegation of Gasprom recently visited Belgrade. In talks with the Serbian leadership, the management of the Russian oil giant showed interest in investing in large infrastructure objects in power supply, above all the privatization of the Serbian Oil Industry, as well as the construction of an underground gas warehouse in Banatski Dvor, in Vojvodina. This could be, as assessed, a part of a joint and very important strategic project. Serbia is prepared to build this warehouse with a capacity of 2-3 billion cubic meters of natural gas, which would place it on the gas map of Europe. At the same time, it is open to participation of Russian capital in building power stations, running on gas.
The new branch of the Russian gas pipeline would pass from Turkey, through Bulgaria, Serbia, Croatia and then on to the EU. The length of the segment through Serbia would be 400km and would be of strategic importance for both its political and economic influence in southeast and central Europe. Serbia would also solve its problem of gas supply long-term, especially in winter months, when it is often forced to import fuel. The capacity of the gas pipeline is 20 billion cubic meters of fuel, which is ten times more than the annual consumption in Serbia. Also, by charging gas fees, the state budget would increase by at least 200 million dollars.
There is a good chance that the new branch of the Russian gas pipeline will pass through Serbia. The two countries signed a Memorandum of Understanding last year, planning its construction. Serbia’s territory, according to this project, is the shortest route for transport of Russian gas to European consumers. Gas would, in this case, pass near Nis in the south of the country, and then further to users in the EU.
The building of the new Russian gas pipeline ‘Blue Stream’, which was initiated in order to provide regular supply of oil and gas to Europe from the Caspian basin and Central Asia, could lead to serious redistribution of global power in the world. The main struggle namely, is over the most important resource of today – energy, between Russia, the US and the EU. On the table are two projects for a gas pipeline: the US ‘Nabuko’ and the Russian ‘Blue Stream’. They are competitors, and the victory of one will, without doubt, deepen the rivalry between the two energy blocs. The Russian investment into the ‘Blue Stream’, namely directly affects the economic, as well as the political interests of the US and its allies over control of oil resources.
TOURISM IN THE PLANS OF THE MINISTRY OF ECONOMY
This year’s summer tourist season was better than last year by the number of visitors and revenues are close to the figure of half a billion dollars which is by a quarter higher than in 2006. It is encouraging that this was accomplished with a better use of existing capacities. At the same time, new capacities must be opened parallel with the inflow of investments in tourism, said for our radio State Secretary of the Ministry of Tourism Goran Petkovic. More by Jelena Gligoric.
In the area of tourism, the Ministry of Economy and Regional Development promotes what we already have and deals with the planned development and expansion of existing capacities. The Agency for Promotion is full of catalogues of our spas, Kopaonik as a mountain resort, Belgrade, Novi Sad and other towns which already have tourist capacities. There are also maps of our archeological sites, cultural heritage, farmsteads in Vojvodina, and ethno centers in Serbia. With line and local services work is being done on completing necessary documents for what needs to be developed, underlined the State Secretary for tourism Goran Petkovic.
‘We are planning a large expansion of tourism, to triple our two million tourists in ten years, and in order to do so we must invest much. This is why it is important to prepare good projects and to prepare a good marketing strategy for investors. This is the strategic goal of the Ministry of Economy and Regional Development. Only investments in tourist capacities can really increase revenues in tourism.
The government is focusing on two activities – investment in plans which private investors can recognize, defend at their credit boards and then approve investment funds in Serbia. This means that we must make planned documentation, said Goran Petkovic. The second thing is that we have to work on preparation of infrastructure, as no one will come to a mountain without power, water or roads. This year on the Stara Planina mountain, for example, transport infrastructure is being completed, next year work will be done on power supply, and drinking water. When plans and documentation is completed, when the infrastructure is prepared, then it is logical that investors are interested in investments. Such work creates jobs, above all in construction, and then in tourism. Thus Serbia can sell high value services’.
As regards to preparations for the winter season our collocutor especially underlined the end of the revitalization of Tornik, a winter center on the Zlatibor mountain. The first six-seater in Serbia will be installed and ready for this winter season. Thus tourists in Zlatibor will be able to ski on the slopes of Tornik besides the usual walks and cafés. Petrovic says that main activity as regards to skiing will be expansion of capacities in Kopaonik as well as the Stara Planina mountain also a favorite with tourists.
BELGRADE IS OBTAINING A NEW FACE
The interest of foreign and local investors in building business, commercial and residential premises in Belgrade has been on a constant rise. A real boom occurred, however, when Belgrade was proclaimed the most prosperous business centre in southeastern Europe. Biljana Blanusa has more.
In the past six months, Belgrade has considerably changed its appearance and the greatest transformations occurred in Novi Beograde, where more than 1 million m2 of business premises has been built and as much is expected to be built in the following period as well. Many foreign banks have built their business premises in Novi Beograd and many companies have opened their branch offices there. Therefore we can say that this part of Belgrade is becoming the Serbian Wall Street. Several modern malls and residential blocks have been constructed.
Special attention has been focused on the construction of a business park – AIRPORT CITY BELGRADE, which houses the business premises of some world famous companies, such as TELENOR, ALKATEL, MOL, OMV, US STEEL, RENAULT and NISSAN. The modern park spans 12 hectares and has been the centre of public attention, although only one third of it has been built so far. The OECD has proclaimed it the most successful Greenfield investment in southeastern Europe for 2006. The investors of the park, multinational company Africa Israel Corporation and Tihtar Group, are planning to invest over EUR 120 million by 2013, by which year the entire project should be completed. At issue will be a city within a city. All the facilities will be available to users, such as car parks, communications, security, shops, restaurants, a walking area, etc. A luxurious hotel for business park users will also be built. In a park of sculptures, artists will be able to exhibit their works in the open air.
Belgrade has been hosting lately various significant events, but it lacks hotel capacities. The new owner of the former Federal Interior Ministry building, which was destroyed in NATO bombing, company Totally Holiday, and it strategic partner, Israeli firm Plaza Group, are planning to build a luxurious hotel on that site, with business premises and a modern shopping mall. The investment is worth some EUR 200 million. Investors expect the money to be returned soon, as the facility will be situated near motorway E75 and the international airport and downtown at the same time, commanding a wonderful view of the river Sava. They also announce a new and unusual architectural solution, which will fit in the surrounding area. The facility will be called the Golden Gate and one day it may become a new Belgrade landmark.
INTERNATIONAL ECONOMIC REVIEW
On the eve of the new round of talks on the final status of Kosovo-Metohija, due in Vienna on 22 October, the stands of Serbia and representatives of provisional Kosovo institutions in the southern Province remain unchanged, without prospects of any mutually acceptable agreement. More in the INTERNATIONAL ECONOMIC REVIEW, prepared by Zorica Mijuskovic.
The results of the meeting in Vienna will not be the determination of the status of the Province, as that cannot be done within such a short period, a member of the Serbian negotiation team for Kosmet, Aleksandar Simic, believes. According to him, that process will not be completed by Dec. 10 either, and that date will not be a D Day, as the UN Security Council cannot renounce its mandate entrusted to it by Resolution 1244.
The conflicts in the southern Serbian province are not only due to political and ethnic tension, but also to poverty, which affects most of people there, regardless of their ethnicity. One person in seven in Kosmet live in utter poverty and over 60% are unemployed. The best illustration of that is a multiethnic town of Prizren. Entire families in that town live on social aid, which does not exceed EUR 75. This seems as an impossible mission to people of Belgrade, who find it hard to make ends meet with average earnings of some EUR 400 a month.
Ever since the commencement of privatization in Kosmet, in 2002, the UNMIK civilian mission, with the Kosovo Agency of Trustees, despite the opposition of Belgrade, has been privatizing social firms in the Province. The latest example of that is the intention of scheduling a tender for the sale of ski-centre Brezovica, on Mt Sara, which should be completed before the beginning of this winter’s tourist season. Although there are problems with the ownership structure, due to which the Brezovica case is undergoing court proceedings, the Kosovo Agency of Trustees will not renounce this job.
The best way to overcome this and other conflicts is to be oriented towards transitional processes under EU control. Thus quote opposite stands of the Serbian and Albanian side can be gradually brought closer to each other and stability of the region and its sustainable development can be ensured. A new opportunity for that is the meeting of the negotiating teams and the mediating trio in Vienna, on Oct. 22.
MEDICAL CHAMBER OF SERBIA
After 62 years, on Dec. 20, 2006, the Serbian Medical Chamber renewed their work and has so far entered 10,000 doctors in its register. Jelica Tapuskovic talked to the Chamber president, Tanja Radosavljevic.
The Serbian Medical Chamber was founded in 1901 and ranked among the 12 in Europe. Its work was banned after World War II. Since 2006, it has been functioning as an association with obligatory membership, stipulated by the Law on Health Care. That rule applies to all doctors, whether employed privately or in state clinics and medical centres. The Chamber gives references to licensed doctors for concluding agreements with national and foreign insurance companies and provides them also with legal and financial security. Radosavljevic says that the state has transferred part of its authorities to this association, in terms of licences and registration and the foundation of courts of honour as a way for sanctioning unconscious work and introducing some responsibility in the medical profession. Thus any application filed by a civilian or an expert is examined. If it is well-founded, a board of experts decides if to allow further activities. People with Serbian citizenship employed abroad are also entitled to a licence, under the very same conditions. The Chamber is financed from its own budget, i.e. from registration and membership fees, and it covers all the liabilities stipulated by the State.
DEVELOPMENT OF TEXTILE INDUSTRY
Two years after the signing of the Agreement on Trade in Textile Goods with the EU, clothes manufacturers in Serbia have increased exports 2.5 times. According to assessments of economists, this year’s export of Serbian textile can generate profits of about 400 million euro. The revival of the Serbian textile industry was initiated by private capital, which in recent months has entered this business. More by Ranka Pavlovic.
Already in the first year of implementation of this Agreement, which has lifted restrictions on the import of textile products from Serbia, the value of exports exceeded 250 million euro. In order to reach productivity levels of their European colleagues, local textile manufacturers could with the existing number of employees, double their exports. According to the State Bureau of Statistics, in the first seven months of this year earnings were recorded which matched those for the entire last year.
The impulse for reviving this area, which by the quality of its textile products used to be among the leading European countries, was given by local and foreign capital. It has invested in known textile factories from Nis, Gornji Milanovac, Pirot and Vranje.
New factories have been built with foreign capital in Zrenjanin and Vranje. The Italian company Calcedonia has built an exclusive factory of women’s underwear in Sombor. The building of a factory has also begun in Vranje, which is the largest greenfield investment in southern Serbia.
Textile centers with original designs, besides Belgrade also exist in Novi Pazar, Arilje, Ada, Knjazevac and other towns in Serbia, and represent its fashion future.
Foreign investors are especially drawn by the fact that Serbia has a free trade agreement with Russia, and the status of the most favored nation in trade exchange with the US. Besides this, Serbia has of late become a full-fledged member of CEFTA, which allows free trade with countries of southeast Europe.
POVERTY IN SERBIA
Nearly 10% of people in Serbia live below the poverty line, while double that number is in the category of poor citizens. The region with the largest percentage of socially vulnerable groups is south-east Serbia, as well as western areas of the country. More by Ranka Pavlovic.
Among 118 countries, where the poverty level had been studied, Serbia is in 23rd place. The situation is worse than in Macedonia, Romania and Croatia, but somewhat better than in Bosnia-Herzegovina and Albania.
According to state secretary of the Ministry for Labor and Social Policy, Ljiljana Lucic, about 700 thousand people in Serbia live below the poverty level, which is according to official data for last year defined as something below 80 euro a month. Lucic stresses that poverty is closely linked with the level of education, as well as unemployment. Besides this, on average those above 65 years of age are considerably poorer as well as households with five or more members. Poverty in Serbia has become a rural phenomenon, as its index is twice as high among the rural population.
In the category of extremely poor are groups that are not sufficiently integrated, such as refuges and internally displaced persons, Roma, the disabled and women.
Poverty especially affects 300 thousand children and young people, said UNICEF director for Serbia Judith Reihenberger. She underlined that every fifth child was poor and that 50% of young people are unemployed.
As regards to those employed, a large number, especially in undeveloped municipalities, such as Bela Palanka, Vladicin Han and Lebane in southern Serbia are on minimum wage. At the level of Serbia it is 140 euro. Due to this the population in undeveloped areas is forced to resort to the grey economy. Having in mind that the ratio between the least and most developed municipality in Serbia is 1:15, which is far below the European standard, the government has decided to invest 100 million euro in regional development by the end of the year.
For realizing its development programs in Serbia, the World Bank recently donated half a million euro. These funds shall be used to encourage employment of the most vulnerable categories. Also, the UK government has supported the poverty reduction program with 2.3 million pounds. This will additionally stimulate the realization of the Poverty Reduction Strategy, which was made four years by the Serbian government. This document envisages that the number of the poor would be halved by 2010.
INTERNATIONAL DAY FOR POVERTY ERADICATION
International Day for Poverty Eradication is being marked today in Serbia, which is one of the poorest countries of Europe. According to the UN, there are some 850 million people struck by famine worldwide, 300 million of whom are children. Djuro Malobabic has more.
This day in Serbia is dedicated this year to young people as a special and very vulnerable category when poverty is concerned. The Committee for Labour, Combat and Social Issues of the Serbian Parliament, in cooperation with the UN Development Programme, has held a seminar on the topic of young people and poverty. The participants said that the poverty reduction strategy in Serbia, adopted in October 2003, represents a medium-term framework aimed at reducing key poverty forms by creating material and other prerequisites and by giving an opportunity to everyone to provide support for themselves and their family. Activities within that strategy are aimed at economic development and growth and at the prevention of new poverty incidences and care about traditionally poor groups, it was assessed at the seminar.
A participant in the seminar, the president of the Belgrade Fund for Political Excellence, Sonja Liht, tells our Radio that Serbia is one of the poorest European countries today. Some 300,000 children in Serbia are extremely poor, which is a number equaling the number of the population of towns such as Nis or Novi Sad. Poverty also entails a lack of sufficient education, she says. There are some 500,000 people in Serbia who have primary education only, or have not been educated at school at all, she warns. Some national minority groups, such as Roma, do not only live in extreme poverty, but are also aware they have no chance of leading a normal life, she says. She adds that other countries in transition had the same problem, but that Serbia has an additional problem of being late in transition and having feeble institutions and a poor educational system, which should be meant to help the poor overcome their problems. According to her, special attention must be paid to education, which represents the best and safest investment in future. Serbia cannot eradicate poverty by offering cheap workforce, but only by educating its people, as Ireland did at a time, she says. I am certain one of the ways to overcome poverty is bringing Serbia closer to the EU, she says.
The Red Cross National Organization has announced that in Serbia, on the basis of data from the Poverty Reduction Strategy, 20% people live under the absolute edge of poverty. The Red Cross asked of the Serbian government to help the realization of public kitchens programme in winter, for 20,735 users in 57 towns. Red Cross organizations will be conducting food collecting drives from local donors, in order to provide more meals for public kitchens. Joint dinners of potential donors and public persons with the users of this aid will be organized and so will various lectures and panel discussions.
In 1993, the UN established Day for Poverty Eradication, which is observed all over the world and is accompanying by the reading out of a solidarity message, with a symbolic act of standing up. The last year’s record of 23.5 million people who stood up to the solidarity message, is expected to be beaten today.
CORRUPTION HANDLED BY THE LAW
Serbia is successfully combating corruption, reads the latest report of Transparency International, which regularly monitors this transitional weak spot in 180 countries. Serbia has been ranked 79th in the list, which is an improvement compared to 2006, when it took 92nd position, together with Gabon and Surinam. Zorica Mijuskovic has more.
Serbia is in the middle of this list, which is headed by Denmark, Finland, New Zealand, Singapore and Sweden, while at the bottom of the list are Iraq, Haiti, Myanmar and Somalia. In order to overcome this dangerous social problem, Serbia has applied a step-by-step method, and the results are already visible. It has halved corruption since 2004, when it was at 143rd place. According to Transparency International, an even faster progress could be expected if the adopted laws were timely applied. Serbia has adopted a set of anticorruption laws, but it still lacks numerous regulations. In autumn, the Parliament should discuss a law on an agency for curbing corruption and organized crime. The adoption and implementation of such a law would strike a blow to the heart of the mafia, as it would narrow down the area for its activities. What is also necessary is full liberalization of economy, as well as the completion of privatization of social and public companies.
The reason for Serbia’s progress is also ascribed by Transparency International to the successful drives of the police and prosecution and the commencement of trials of organized crime in the field of economy. The officer in charge of information of public importance, Rodoljub Sabic, emphasizes that corruption cannot be quashed only by the police and the judiciary, but that the entire public should be involved.
Transitional Serbia is an ideal place for various corruption-based maneuvers. The local mafia has been successfully adapted both to the wartime surroundings and to the democratic changes. Each new criminal affair would cast a shade on the previous one and each contained the dirty tracks of model state executives. Thus the case of corrupted customs officers was soon overshadowed by the case of Kragujevac university professors, accused of selling examinations and diplomas. At the same time, the public expects to hear where the money allegedly hidden in Cyprus by Slobodan Milosevic’s regime actually is. They are currently bombarded with a story of the attachment of the C market trade to the largest sales network in the country, Delta Holding, which almost has a monopoly in Serbia and after which the Serbian market has remained without a healthy competition. It yet remains to be seen if this heralds a new corruption affair.
As for global circumstances, especially those in undeveloped countries, Transparency International blames corruption on multinational companies most. They are used to using and tolerating bribe and regard it even as a legitimate business strategy. No one in the world has managed to beat the octopus called corruption entirely, as it is tougher and more resistant than any power. States with well-established order have, however, appointed mafia to its particular place – the illegal domain. Serbia has not struck the octopus’s head yet, but meanwhile has been successfully dealing with its tentacles.
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