$2 bn of foreign direct investment in 2005

Serbian Minister of Finance Mladjan Dinkic said today that he expects foreign direct investment in Serbia to be $2 billion by the year’s end.

Speaking at a conference “Four Years of Transition in Serbia”, organised by the Centre for Liberal-Democratic Studies, Dinkic said that foreign direct investment in the first eight months of 2005 totalled $1.1 billion.

Having stressed that reforms of the banking system in this period have been among the most successfully implemented, Dinkic said that Serbia now has around €2 billion of citizens’ new foreign currency savings deposited in banks, and that approximately 70 percent of the banking system has already been privatised, adding that the process will be fully completed by the end of 2006.

Though the inflation rate in Serbia is high and it must be reduced through economic measures, Dinkic voiced hope that the increase in foreign trade will help to reduce Serbia’s high foreign trade deficit.

According to Dinkic, Serbia’s public debt has been considerably reduced against the debt inherited from the year 2000, and that it now stands at 55-56 percent of GDP. It is expected to be further reduced to around 50 percent of GDP by the year’s end, Dinkic added.

He said that apart from actively working on the reform of the pension system, reform of the health system is also being prepared and it will imply cutting the number of employees as well as improving technical facilities of health centres.

Reforms have resulted in a considerable reduction in public spending, Dinkic said adding that a lot more could have been done to prevent this had there been stronger political will.

Serbian Deputy Prime Minister Miroljub Labus said that Serbia has covered two-thirds of the road towards the EU, however ahead of it are still harder tasks than those already accomplished in the transition process.

Labus said transition is the other side of the medal for approaching the EU, and Serbia is carrying out this process at an average speed in relation to the countries which have completed it.

According to Labus, the second stage of transition is ahead and it is a shorter though tougher road, and that the International Monetary Fund and other international institutions Serbia cooperates with are its allies on this road and not enemies.

Serbia knows exactly what it has to do to join the EU and this only depends on time and our readiness to accept it, Labus said.

At the end of this road there waits for us a life with a much higher standard of living, more investments and less unemployment, Labus concluded.