Belgrade, Feb 27, 2004 - Serbian Minister of Privatisation and Economy Aleksandar Vlahovic said on Friday that Serbia can become the driving force behind the economic development in the Balkans if it is ready to recognise and adopt market economy standards and relentlessly continue to implement economic reforms.
Presenting a report on the Ministry's activities over the past three years, Vlahovic told a press conference on Friday that he is pleased to say that the Ministry has accomplished the bulk of its plans in such a short period of time. He recalled the Ministry's aim was to build an efficient, private sector-led economy and create conditions for a stable economic growth through privatisation, development of small and medium-sized enterprises (SME) and creation of a stable business environment.
The Ministry set out on its task by improving the legal framework and building institutions required for a stable economic growth, said Vlahovic, stressing that the parliament has adopted 35 laws drafted by the Ministry is due to debate a further five bills.
The setting up of the Privatisation Agency and the Share Fund allowed the country to embark on privatisation. Since April 2002, Serbia sold a total of 1,117 companies, raising revenues of more than €1.3 billion, the Minister said. New owners pledged investment of €775 million, with social welfare programmes amounting to €270 million. Privatisation efforts brought over 20 multinational companies, including Lukoil, Lafarge, Henkel, British American Tobacco and Philip Morris, to the Serbia market, Vlahovic noted.
When it comes to the SME sector development, the Ministry founded the Agency for Small and Medium-Sized Enterprise Development and its 14 regional offices, Vlahovic went on to say, adding that the government also prepared a SME development strategy in early 2003. The Minister also noted that the European Investment Bank (EIB) and the European Agency for Reconstruction (EAR) secured €20 million and €15 million respectively for Serbia's SME development.
Over the past three years, the government restructured 66 holding companies and some 450 subsidiaries employing over 155,000 workers. Social welfare programmes for over 55,000 surplus workers exceeded eight billion dinars.
Over the same period, the Serbian Development Fund disbursed 21.4 billion dinars in 2,775 loans, said Vlahovic, noting that 672 companies received subsidies totalling 16.3 billion dinars.
The Ministry also prepared two programmes for field machinery production and delivery and took part in drafting a project to settle internal debts. Its officials also participated in the work of the government's expert team that negotiated implementation of the action plan for economic harmonisation with Montenegro and helped the government prepare a platform for negotiations on free trade agreements as part of a trade liberalisation initiative.
Stressing the country should make efforts to further strengthen the legal and institutional frameworks for reform projects to improve the business environment, Vlahovic said that the parliament is due to debate bills on bankruptcy and registration of legal entities.
Once the two laws are adopted and a bill on trade associations is prepared, Serbia will have a complete set of corporate laws and better chances to attract foreign direct investment and develop the SME sector, the Minister concluded.
