International Information Centre for Balkan Studies

FIAT Chrysler Automobiles sends staff on paid leave

September 19, 2019

FIAT Chrysler Automobiles is sending its employees on vacation to the end of September, the factory union told the Beta news agency.

Production of the FIAT 500L is scheduled to resume on October 1. “We have been informed that a new break is coming, ie paid leave, up to October 1 when the workers are due back at the factory,” Independent Union leader Zoran Markovic said.  

He said the management decided on the break to bring production into line with demand. The break comes less than three weeks after the plant sent its workers on collective paid leave. That break lasted some seven weeks and staff went back to work on September 3.  

Markovic said that a total of 416 cars were made in September.

Source:  http://rs.n1info.com/English/NEWS/a527105/FIAT-Chrysler-Automobiles-sends-staff-on-paid-leave.html

Montly income lower than expenses, Serbian Statistics Office says

September 16, 2019

The average monthly income for households in Serbia in the second quarter of 2019 stood at 63,348 Dinars (1 Euro – 118 Dinars) while expenses stood at 66,576, the Republic Statistics Office said on Monday.

The press release said that the average household income rose by 5.6 percent in the second quarter of 2019 compared to the same period a year earlier while expenses rose by 3.9 percent. Compared to the first quarter of the year average household income was 0.7 percent higher while expenses were 0.8 higher.  

Most of the average household income is from salaries (49.7 percent) followed by pensions (32.4 percent) , earnings from farming, hunting and fishing (3.7 percent), other income (2.9 percent and social security payments (2.7 percent).  

The biggest household expenses are for food and non-alcoholic beverages (34.4 percent) followed by housing costs and utilities bills (16.7 percent), transport costs (9.4 percent), clothing and footwear (5.4 percent) communications (5.2 percent, recreation and culture (4.8 percent), alcoholic beverages and tobacco (4.8 percent).  

The statistics office polled 1,610 households.

Source: http://rs.n1info.com/English/NEWS/a526181/Montly-income-lower-than-expenses-Serbian-Statistics-Office-says.html

Southeast Europe Transport Community opens HQ in Belgrade

September 13, 2019

The agreement on the headquarters of Transport Community Treaty Permanent Secretariat has been signed in Belgrade on Friday, the European Union Delegation to the Republic of Serbia, said in a statement.

It quoted the EU Delegation head Ambassador Sem Fabrizi as saying that the “decision to have Belgrade as the seat for the Permanent Secretariat of the Transport Community represents a great opportunity and responsibility for Serbia”.

“Today’s signature of the Headquarter agreement is another important step in implementing this Decision, and I congratulate the interim Director of the Permanent Secretariat of the Transport Community Alain Baron and the Deputy Prime Minister Mihajlovic for their commitment”, he said.

Fabrizi added that “establishment of the Transport Community is of significant importance for the integration of transport markets of the South-East European partners into the EU transport market.

“It is a part of the ‘connectivity agenda’ improving transport, energy and digital links within the Western Balkans and with the EU, which has been endorsed and supported by the EU from the start. This is a key factor for growth and jobs and will bring clear benefits to the region’s economies and citizens”.The statement quoted him as reminding “that only in the past seven years, the EU has made up to five billion Euros of investments in the transport sector in the Western Balkans, of which the construction of the new Zezelj bridge and the on-going modernisation of the Nis-Dimitrovgrad railway are among the last most emblematic and visible successes in Serbia.”

“But it goes much further than that: great impacts of EU – Serbia and Western Balkans cooperation is when we deal with technical standards, interoperability, safety, security, traffic management, social policy, public procurement and environment, progressively aligning practices within the region and with the European Union highest standards. This is what the Transport Community will deliver and it will have crucial impacts on speed, quality, price and effectiveness of transport for citizens and businesses”, Fabrizi was quoted as saying.

The agreement on opening the Headquarter was signed by Serbia’s Deputy Prime Minister and Minister for Construction, Traffic and Infrastructure, Zorana Mihajlovic and the newly appointed interim Director of the Permanent Secretariat of the Transport Community Alain Baron.

The statement added that the Community was established in October 2017, following the signing on a Treaty on its creation on October 9, 2017. Its aim is “The development of transport network between the EU and countries of Southeast Europe – Albania, Bosnia and Herzegovina, Former Yugoslav Republic of Macedonia, Kosovo*, Montenegro and Serbia.

The seat of the Permanent Secretariat of Transport Community is expected to open physically in a few months.

Serbia’s Prime Minister said that the Community Headquarter “yet another symbol of Serbia’s progress it made together with the whole region and confirmed our region place in the heart of Europe.”

Mihajlovic said “the transport is not only asphalt, stone and connection speed, but it is also the most powerful tool in helping us to have a better life, to have more investments, stable peace and prosperity… To get closer to the Europen Union.”

The Transport Community Treaty was signed during the Western Balkans Summit in Trieste in July 2017 within the Berlin Process’ meetings.  

Source: http://rs.n1info.com/English/NEWS/a525417/Belgrade-becomes-HQ-of-the-SE-Transport-Community.html

Kosovo outgoing FM congratulates Serbia for building Nis – Pristina motorway

September 13, 2019

Behgjet Pacolli, Kosovo’s outgoing Foreign Minister, said on Friday that the signing of the agreement on building the motorway linking Serbia southern city of Nis to Kosovo’s capital Pristina was “a great step forward to reconciliation with Kosovo,” the KoSSev website reported.

He congratulated Serbia’s Government and President Aleksandar Vucic for securing the money to build the motorway.

"The continuation of the Nis- Merdare -Pristina road is a big step toward peace with Kosovo. Peace is the only way to build a bright future, Paccoli wrote on his Twitter account.

The motorway should have been constructed by 2020, but part of the funds was secured on Thursday from the European Investment bank.    

Source: http://rs.n1info.com/English/NEWS/a525411/Pristina-welcomes-new-Serbia-s-motorway.html

Fin Min: Minimum monthly wage in Serbia up 11.1 pct

September 10, 2019

Sinisa Mali, Serbia’s Finance Minister, said on Tuesday the monthly minimum wage in the country would rose by 11.1 percent to reach 255.4 Euros, N1 reported.

That means the minimum earnings per hour increased to 1.47 from 1.32 percent, Mali has said.

The current minimum wage per month is around 230 Euros.

The Government had to decide on how much the minimum wage would go up since the Social-Economic Council could not reach a deal with the unions demanding an increase of 24.5 percent and the employers offering five to six percent.

According to the country's’ Statistic Office, the workforce in Serbia numbered 2,166.500 people in the second quarter of this year.

Some 350,000 will live on a minimum monthly wage.

In May 2019, an average consumer basket cost 609 Euros a month, while a minimum one was some 317 Euros , according to the Ministry of Trade, Tourism and Telecommunication.

Source: http://rs.n1info.com/English/NEWS/a524581/Minimum-monthly-wage-in-Serbia-increases-11.1-percent.html

Serbia’s public debt 51.9 percent of GDP

September 4, 2019

Serbia’s public debt stood at 51.9 percent of the GDP at the end of July this year, the Finance Ministry said on Wednesday.

The statement said that the public debt amounted to 23,84 billion Euro and increased by some 300 million Dinars (1 Euro – 118 Dinars) compared to June.  

The public debt stood at around 23 billion Euro at the end of 2018 or 53.8 percent of the GDP and at 23.2 billion Euros or 61.5 percent of the GDP at the end of 2017. The public debt stood at 24.8 billion Euro or 71.9 percent of the GDP in December 2016 and at 24.8 billion Euros or 74.7 percent of the GDP at the end of 2015.  

Serbia’s public debt stood at 14.17 billion Euros or 201.2 percent of the GDP at the end of the year 2000. The lowest public debt was in 2008 when it stood at 8.78 billion Euros or 28.3 percent of the GDP. The law on the budget system limits the public debt to 45 percent of the GDP.

Source: http://rs.n1info.com/English/NEWS/a522934/Serbia-s-public-debt-51.9-percent-of-GDP.html

Russia considering ban on Serbian fruit imports

August 15, 2019

Russia is considering temporary limits on fruit imports from Serbia following the shipment of diseased fruit, the Sputnik portal reported.

It said that the Russian agriculture authorities informed the Serbian Agriculture Ministry that it was concerned over 12 shipments of diseased peaches, nectarines and plums in July.

A statement said that the Russian authorities said that it is keeping open the option of temporarily banning fruit imports from Serbia if more shipments of diseased fruit are found.

The Serbian ministry said it would investigate all the shipments of diseased fruit, adding that four have been banned from exporting to Russia.

The Russian authorities banned imports of some fruits from Serbia last year after finding some shipments of diseased fruit. The ban was lifted in May this year.

Source:  http://rs.n1info.com/English/NEWS/a508118/Russia-considering-ban-on-Serbian-fruit-imports.html

Data on Serbia’s GDP growth not published yet

August 15, 2019

The publication of the national estimates of GDP growth for the second quarter of 2019 are 15 days late with the Serbian Republic Statistics Office telling N1 on Thursday that the data has not all come in.

    Economy experts told N1 that the data is not being published because the government does not want to publish bad results.

Opposition politician Borko Stefanovic said in a statement that the country has had two quarters of weak economic results with Serbia ranking last among the 16 countries of central and eastern Europe in terms of GDP growth. He said the drop in industrial production continued in the second quarter with a drop in exports reported in June. “Why are you hiding the fact that Serbia is continuing to sink to the bottom of the European living standards ladder in 2019, that we will be passed by North Macedonia this year and by Albania and Bosnia-Herzegovina soon,” he said.

The Statistics Office said it has an excuse for not publishing its estimates. “This indicator has not been published because of problems with data which prevents us from correctly calculating the GDP. The correct calculation of GDP trends for the second quarter of 2019 is due on September 2,” the Statistics office said.

Danas daily journalists Milos Obradovic said that economists are skeptical about that explanation. “They think the reason why the estimate has not been published lies in the fact that the economic results are worse than expected. The National Bank of Serbia (NBS) has published its data for the second quarter which says that growth stands at 3.1 percent. Add to that the first quarter growth of 2.8 percent and the annual growth of 3.5 percent is in doubt,” he said. According to Obradovic, the NBS said its data is in lie with its predictions, adding that it expects growth to stand at up to four percent by the end of the year.

Source:  http://rs.n1info.com/English/NEWS/a508082/Data-on-Serbia-s-GDP-growth-not-published-yet.html

Can a “Turkish Stream”-TAP collaboration exist?

August 14, 2019

The scenario of the two gas pipelines – TAP and Turkish Stream- which are expected to cross the Balkans in the near future, interconnecting is, according to the expert from the Russian company Sperbank, Andrei Gromadin, a possibility Moscow could consider in the future.

However, these are two projects with a completely different “geopolitical” mentality…

As the expert himself points out, and as the Russian media report, according to the existing planning, the Turkish Stream pipeline is expected to supply gas to Turkey and to a part of the Balkans, namely Bulgaria, Serbia and Hungary.

“The possibility of collaborating with other infrastructure projects, such as the TAP pipeline, is not foreseen at the moment, but our take on this is that it may be possible in the future, provided that the demand for natural gas in the markets targeted by the Turkish Stream pipeline is lower than projected”, he notes, referring to the likelihood of demand falling in Western European countries, as “it is in any case Germany and Austria the countries on which the Russian Gazprom is based”.

The consortium that manages the TAP pipeline, as reported, is currently examining the interest of countries and prospective buyers, in order to determine the quantities of gas it will be required to transport, once TAP is put into operation.

The Turkish Stream pipeline’s construction process appears to be moving forward undisturbed, as the first section of the 403 km long project within Serbia has been completed.

The division extends from the Bulgarian border all the way to the Serbian town of Cuprija.

At the same time, construction work continues at the second section reaching the Danube River.

It is noted that the third division will have its starting point at the Danube River and will reach the town of Gospogjinaca, while the fourth and final section’s starting point will be the town of Gospogjinaca, and will continue all the way to the Hungarian border, at the town of Horgos.

According to the existing planning, all four parts of the project are planned to be completed by the end of the year, comprising a 900-million-dollar investment by the Russian company Gazprom. /ibna

Source:  https://balkaneu.com/can-a-turkish-stream-tap-collaboration-exist/

Economy expert says Serbia’s economic growth under two percent

August 14, 2019

Economy expert Dragan Vujadinovic told N1 on Wednesday that Serbia has had an average growth rate of less than two percent a year since 2012.

“Our growth rate between 2012 and 2019, including this year’s 3.4 percent, is 13.7 percent cumulatively, or 1.7 percent a year which is insufficient. We are bringing down the average in the region which has a growth of around three percent,” Vujadinovic said.  

According to him, one of the main reasons why Serbia’s economic growth is not better lies in the fact that decision makers don’t understand the economy. “Whoever has not lived through the 15th of the month when VAT is due and the 25th when salaries are due does not understand the economy. Wages can’t grow faster than the GDP,” Vujadinovic said.  

Commenting the fact that the Financial Times has ranked Serbia 1st globally in terms of foreign direct investments, he said that only underdeveloped countries are on the index. “They only rank the most underdeveloped countries. We appeared in 1st place even though our economic results are not even close to our neighbors. We call ourselves leaders but our economic parameters take us to the back of the line,” he said.

Vujadinovic said that domestic investments are better than foreign investments for economic growth because there is always the possibility of all the profits being taken out of the country instead of being reinvested. “Potential domestic investors are being called tycoons and thieves while foreign investors are being met with cameras, hugs and primarily with huge subsidies which reached the level of 26,000 Euros per employee in some cases,” he said.

Source:  http://rs.n1info.com/English/NEWS/a507780/Economy-expert-says-Serbia-s-economic-growth-under-two-percent.html

NBS: Inflation in Serbia will be two pct this and next year

August 14, 2019

The inflation in Serbia has been low and stable for the last six years, standing at some two percent, and is expected to remain at the same level this and next year, Serbia’s National Bank’s Vice Governor Zeljko Jovic has said on Wednesday, the Beta news agency reports.

According to him, a sustainable way was found to service the “inherited problematic credits”, and their level was reduced for over 70 percent in the last four years, while their participation in all loans was lessened to 5.2 percent.

“In 2019, favourable macroeconomic trends continue in Serbia; the inflation is low and stable, macroeconomic and financial stability preserved, financial costs remain low what increases the economic and investment activities, Jovic said, presenting the report on inflation.

He added that “interest rate for personal loans in national Dinar currency were twice and for companies three times lower than in 2013.”

Jovic said those interest rates contributed to the increase of investments, which substantially helped the economic growth.

“Positive fiscal trends and 0.7 surpluses in GDP the first half of the year are the results of successfully implemented fiscal consolidation and full coordination between the monetary and fiscal policies,” Jovic said.

He added those positive steps were made despite f unfavourable influence of outside factors like slowing down of the global economic growth due to additional protectionist measure and worsening geopolitical tensions.    

Source:  http://rs.n1info.com/English/NEWS/a507624/Inflation-in-Serbia-two-percent-this-and-next-year-NBS-says.html

BIRN Fact Check: Is Serbia a World Leader for Foreign Investment?

August 13, 2019

Serbia’s prime minister said her country has been declared the ‘world champion’ for attracting foreign direct investment by the Financial Times – but how accurate is the claim?

Serbian news agency Tanjug reported on Monday afternoon that according to a ranking in the Financial Times, Serbia is first in the world for attracting foreign direct investments in relation to the size of its economy.

This rapidly became national news and the claim was republished by most Serbian media and commented upon by Serbian officials, who credited their own policies for the apparent success.

Serbian Prime Minister Ana Brnabic told Tanjug that “the decision of the respected British Financial Times to declare Serbia the world champion in attracting foreign direct investment for the second time in three years is the result of reforms implemented and confirmation that Serbia is a completely different country today than the one found by this government [when it came to power] in 2012”.

President Aleksandar Vucic took up the theme on Tuesday, saying that this means that companies around the world will now check out the conditions for investing in Serbia.

“Now you have got confirmation in the most respectable newspaper in the world that is working on this topic, which means that there is no serious world or European company that will not look at what is the situation in the country, how are the subventions [given by the government], how much state support [is offered] and how is the workforce,” Vucic told state broadcaster RTS.

He added that last year 3.6 billion euros were invested in Serbia from abroad and that in 2019 there will be even more.

However, as officials boasted of their economic success, commentators on social media started to find flaws in the Serbian media’s reporting of the story.

BIRN took a closer look at the issue to see if any of the claims were fully grounded in reality.

A ‘Financial Times ranking’?

Even though Serbian media and officials referred to the Greenfield FDI Performance Index 2019 ranking as having been produced by the Financial Times newspaper, the information actually came from another part of the Financial Times Group – fDi Intelligence, a consultancy firm that says it helps “investment promotion agencies, economic development organisations and other governmental bodies attract inward investment”.

fDi Intelligence describes itself on its website as “a specialist division from the Financial Times Ltd established to provide industry-leading insight into globalisation with a portfolio of world-class products, services and business tools that allow organisations such as economic development organisations, companies, service providers and academic institutions to make informed decisions regarding foreign direct investment and associated activities”.

The annual report on foreign investment produced by fDi Intelligence was published on its own website, not the Financial Times newspaper website.

The methodology of the report                          

The fDi Intelligence analysis looked at inbound greenfield investment in 2018 relative to the size of each country’s economy.

The index uses a methodology devised by UN trade and development body Unctad for overall foreign direct investment and applies it to only greenfield foreign direct investment – excluding mergers and acquisitions, intra-company loans and other forms of cross-border investment.

A greenfield investment refers to a type of foreign direct investment in which a company establishes operations in a foreign country. In a greenfield investment, the company constructs new facilities (such as a sales office or manufacturing facility) cross-border from the ground up.

The fDi Intelligence analysis shows that Serbia, with a score of 11.92, is attracting almost 12 times the amount of greenfield foreign direct investment that might be expected given the size of its economy.

Serbia took first place on the samelist for 2016 as well and took second place a year later.

In 2017 and 2018, Serbia had a very similar score – 12.02 in 2017, and 11.92 in 2018.

The number of greenfield foreign investment projects announced in Serbia was 77 in 2016, 81 in 2017 and 107 in 2018.

Serbian President Vucic said on Tuesday that he did not want to compare Serbia with the rest of the region because Serbia is more successful, but he omitted to mention that right after Serbia on the fDi Intelligence list is Montenegro, with just 0.43 fewer points.

Best in the world?

Data published by other international organisations should also be taken into account when comparing Serbia with other countries in the region.

In the United Nations Conference on Trade and Development, UNCTAD report for 2018, it was noted that inflows in Serbia grew by 44 per cent to $4.1 billion and that Serbia became the second-largest recipient of foreign direct investment among transition economies.

“Serbia’s economy is the largest in the subregion and is relatively diversified. The country’s strategic location facilitates logistics investment, such as the Vinci Airports (France) stake in Nikola Tesla Airport in Belgrade. Its natural resources (especially copper) are also attracting resource-seeking firms. The Zijin Mining Group (China), for example, acquired RTB Bor’s copper production,” the UNCTAD report said.

The fDi Intelligence list is one of several economic rankings published annually.

The World Bank’s Doing Business global ranking, which ranks economies on their ease of doing business, put Serbia at number 48 in the world – above Montenegro and Croatia but four places below Kosovo.

Forbes magazine’s Best Countries for Business list for 2018 ranked Serbia at 56, four places below Croatia.

Source:  https://balkaninsight.com/2019/08/13/birn-fact-check-is-serbia-a-world-leader-for-foreign-investment/

Foreign investors being bribed to come to Serbia, economists say


August 13, 2019

Economy experts told the Beta news agency on Tuesday that subsidies are being used to bribe foreign investors and bring them to Serbia but warned that the lack of domestic private investments means that there will be no significant economic growth.

Investment consultant Milan Kovacevic said that foreign investments are high but that this shows the lack of domestic investments. “The high amount of foreign investments in Serbia are the result of bribery,” he said, adding that foreign investors are being offered subsidies for each cheap employee, free land or cheap power and other infrastructure. He said the owners of the Tiger Tyres plant in Pirot and Cooper Tyres in Krusevac should be asked about the consequence to their businesses of the decision to grant subsidies and free land to the Shandong Linglong tyre factory in Zrenjanin.  

Kovacevic said the authorities are not releasing official data on overall foreign investments but added that estimates are that they stand at about 38 billion Euro to date or 80 percent of the GDP. “That is how much foreigners own because we have given them a lot of things and are doing nothing to stimulate domestic private sector investments,” he said and warned that the investment climate is not attractive for domestic investors because public sector salaries (which should be followed by private sector wages) are being raised and local business people don’t have funds left over for investments.  

Economist Jurij Bajec said the large amount of foreign investments were attracted by subsidies, cheap labor and reputation since one company attracts others. He said the crucial issue is why the private sector is not being motivated to invest. According to him, high growth rates can be achieved through domestic investments. He said that public investments account for between three and 3.5 percent of the GDP annually, adding that they should stand at about five percent which means investments of another 400-500 million Euros.  

“If foreign investments account for 6-7 percent of the GDP, that leave some 14 percent for investments by the domestic private sector which would take investments to about the level of 25 percent of the GDP, pushing Serbia to higher growth rate levels,” Bajec said. He said that the government should turn to the private sector.  

Economist Srboljub Antic said that the large amount of foreign investments is the result of a large amount of cheap money in Europe among other things. “Serbia’s main problem is the fact that private investments are low because they are not protected by any embassy and if we don’t have domestic private investments there will be no economic growth,” he said. Every smart country develops on domestic investments but in Serbia there are no savings, everything goes into expenses.

Source:  http://rs.n1info.com/English/NEWS/a507456/Foreign-investors-being-bribed-to-come-to-Serbia-economists-say.html


Turkey appears poorer by 202 billion dollars!

August 12, 2019

Turkey has become poorer by 202 billion dollars over the last five years, a fact that raises concerns in the country’s financial headquarters.

According to data from the Turkish Statistical Service published by Cumhuriyet newspaper, in 2013 Turkey’s Gross Domestic Product (GDP) had reached a record high of 950 billion dollars. In 2019, the GDP plummeted to 748 billion! This decline by 202 billion comprises a major issue, since for the Turkish people Recep Tayyip Erdogan’s political success has been identified with the increase in wealth he had achieved, as the GDP has been tripled since 2002.

Every Turkish citizen became poorer compared to 2013, as the GDP per capita in 2019 dropped to 9076 dollars, whereas in 2013 it had even reached 12500 dollars!

Turkey’s economy size lost 4 levels, as it dipped from the 16th place to the 20th.

According to Birgun newspaper, youth unemployment rose from 16% to 26%, while inflation, from 2013’s 7%, has now surged to almost 20%. The country’s Finance Minister Berayt Albayrak promises that over the next months the state of the economy will balance, in order for a new beginning to be launched. /ibna

Source:  https://balkaneu.com/turkey-appears-poorer-by-202-billion-dollars/

Zaev announces €5 billion investment cycle, opposition reactions

August 07, 2019

Prime Minister Zoran Zaev  announces the forthcoming investment cycle of about five billion euros.

– One billion on roads, one billion on rail, one billion on energy, new Clinical Center, investment in agriculture and rural development, new treatment plants, regional waste collection and treatment plants, sewage and water supply systems, schools and kindergartens… real projects for real needs of all citizens. Our country is on a good path, Zaev said in a video message on his facebook profile.

But, VMRO-DPMNE President Hristijan Mickoski warns that the five billion EUR investment package announced by Prime Minister Zoran Zaev will turn out to be the largest theft in Macedonia’s recent history. Mickoski has already warned that Zaev is deliberately slow-rolling infrastructure investments in order to have more cash at hand in early 2020, when the election campaign should be in full swing.

Zoran Zaev is about to announce investments worth five billion EUR without offering an plan or strategy. The same Zoran Zaev who promised 500 kilometers of new highways, an average salary of 500 EUR and 5 percent annual GDP growth. Who promised he will fight corruption and now mires the country deeper into it, Mickoski said.

Former Finance Minister Xhevdet Hajredini says it is an unrealistic promise of propaganda goals. You remember that similar promises were made by former prime ministers, Vasil Tupurkovski and Nikola Gruevski, after the independence of the country, Hajredini said. These promises come at a time when debates are now being held for early elections./ibna

Source:  https://balkaneu.com/zaev-announces-e5-billion-investment-cycle-opposition-reactions/

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