FDI could reach €2.5 billion by end of the year

Serbian Minister of Finance Mladjan Dinkic said last night that he is convinced foreign direct investment (FDI) into Serbia could reach some €2.5 billion by the end of the year, of which privatisation proceeds will be a minimum of €1.3 billion.

Speaking for the Radio Television of Serbia, Dinkic said that the Serbian government plans to allocate approximately €400 million from privatisation proceeds in 2006 for projects of the National Investment Plan, and a sum of €1.1 billion in 2007.

He stressed that these investments are being supported by the International Monetary Fund (IMF), and added that the sale of the joint Serbian-Austrian company Mobi 63 is expected to bring a minimum of €800 million in privatisation proceeds, while the sale of Vojvodjanska Banka and Panonska Banka will bring around €500 million.

The Minister explained that if these privatisation proceeds exceed expectations, the surplus amount will be used for payment of external debts.

The Serbian government should adopt the National Investment Plan by end of August, and at the beginning of September the Serbian parliament will examine it, said Dinkic. According to Dinkic, the basic aim of the plan is to increase the rate of employment and secure long-term minimum seven percent annual growth of the GDP.

Dinkic said that the ministries of capital investment and finance will soon propose to the Serbian government that the company JAT Airways is offered to a foreign partner for management, on the condition that they invest in the purchase of new aeroplanes.

He explained that JAT does not have funds to buy new aeroplanes, neither does the state and that is why the two ministries will propose to the government that the JAT management is offered to a reputable international company.

The condition is that that company invests in the purchase of new aeroplanes, said the Minister, adding that JAT would remain a national company, with sharing of profit and joint investment.

Dinkic said that representatives of the Serbian government have been engaged in intensive negotiations for several months with major European and international companies on investment in new Greenfield projects in Serbia’s energy sector.

Speaking on the issue of Telekom Serbia, Dinkic said that for now there is no reason to privatise this pubic company, because it is conducting highly profitable business, and expressed his expectation that this domestic company will soon enter other markets.