ECONOMY

Serbia’s prospects good

BELGRADE (Reuters) – PricewaterhouseCoopers said yesterday it was confident about Serbia’s long-term prospects and saw project financing, and not privatizations, for municipalities and utilities as the key activity in 2004-05. A key near-term hurdle, the uncertain outcome of December’s general election was seen as putting investors off only temporarily, PWC partner Chris Butters told a news conference. He said long-term investors were looking instead for legal safety, a transparent tax system comparable to world standards, and efficient anti-monopoly structures before committing funds. «PricewaterhouseCoopers is confident about Serbia’s long-term prospects. The short-term political mess certainly slows investment but it doesn’t stop it,» Butters said. «As long as the momentum for change continues it’s fine. But if we end up after the election in a situation where important legislation like VAT, like the anti-monopolies commission does not get passed and that lack of momentum lasts for a length of time, then certainly there will be impact on the investment,» he said. Serbs are due to vote for a new parliament on December 28, choosing between a number of pro-Western democratic parties and ultra-nationalists, once loyal to Milosevic, who oppose reforms. Butters said the outgoing government had done well with privatizations. «Easy deals have been done – the bigger deals, the more complicated companies take more time to prepare. They need a more strict strategy,» he said. The outgoing government had planned to privatize parts of power and oil monopolies in the next couple of years and one of two mobile operators. While politics could halt privatizations, Butters said major tasks for consultants were to organize project financing for Serbian municipalities and utilities. «It’s very clear that a lot of Serbia’s and Montenegro’s infrastructure needs development, whether it’s electricity, water, waste water, gas, roads, railways, airports. And it’s not strictly privatization, it is project finance, where huge amounts of new money can come into the country,» he said.