ECONOMY

Serbia urged to decide how open its economy will be to foreigners

BELGRADE – Serbia should decide if it wants to grant unrestricted access to foreign investors or if some sectors of the economy are off limits, Slovenian retailer Mercator said. Zoran Jankovic, head of Mercator’s board, was presenting its offer to take over Serbia’s biggest retail chain C-Market, which has met with protests and a call for government protection from the Serbian Chamber of Commerce. «The state must now decide what to do… either you are open for all foreign investments or you are only open to some branches. The state should take a stand and I am not inclined to interfere,» Jankovic said. About 100 C-Market employees protested outside, displaying banners saying «Serbia is stronger and bigger than you,» and «This is our firm, no Slovenians allowed.» Slovenia seceded from Yugoslavia in 1991, the start of a bloody conflict that engulfed Croatia and Bosnia as the Serb-dominated federation collapsed. Mercator opened Serbia’s first Western-style hypermarket in Belgrade in 2002. Jankovic said it would invest 200 million euros in Serbia over the next five years regardless of the outcome of this offer and had purchased six more hypermarket locations. It is offering about $60 million for C-Market, whose 213 small stores are located mostly in Belgrade, valuing the shares at $298 each. The bid expires on October 24. No more easy life Croatia’s leading food company Podravka also ran into resistance with its offer on Tuesday for 30 percent of Serbian food producer Centroproizvod. Both face hostility from local firms who fear the advent of foreign investors and accuse them of seeking «to destroy» the Serbian economy and local Serb brands. The Association of Retailers at the Serbian Chamber of Commerce urged the government on Monday to block the arrival of foreign retail chains and let the chamber rather than city authorities issue licenses to foreign trade firms in the future. Jasna Matic of the Investment and Export Promoting Agency said the resistance was to be expected. «There was a period of easy life for years. During the sanctions and isolation there was no need to compete with the world,» she said. Non-privatized companies should expect a dramatic rise in competition, Matic added, because they will not be able to match wage levels, working conditions or technology. But «after initial hostility and distrust, foreign firms tend to develop good relations with their workers,» she said. Jankovic said he believed the protests would calm down and small shareholders would ultimately decide to sell or not. Mercator planned to keep the C-Market brand name, keep the work force and buy from domestic suppliers.