Serb privatization seen above target

BELGRADE (Reuters) – Serbian income from privatization of state assets and foreign direct investment will exceed previous forecasts for 2004, but still come in well short of what the country needs for sustainable growth, Finance Minister Mladjan Dinkic said yesterday. Dinkic told an Italian business delegation that receipts from privatizations and foreign direct investment should reach $890 million this year, $200 million more than previously thought. But the figure is below the $1.3 billion received in 2003 and only half what Dinkic said Serbia needs for ongoing growth and liquidity. Foreign investment is vital to help Serbia cut its foreign trade gap, which Dinkic said would exceed $6.0 billion in 2004. Independent economists expect a gap closer to $7.0 billion. «We want to encourage investment in export-oriented sectors. We need reputable investors with access to foreign markets,» he said. Italy is Serbia’s second-largest trading partner after Germany and its eighth-biggest foreign investor. The 400-firm delegation is the largest business group to visit Serbia in 15 years. The Italian government wants to encourage further business and banking investment in Serbia, Italy’s deputy foreign trade minister, Adolfo Urso, said. In an initial step toward improved business links, Italy decided to offer a 33-million-euro credit line to small and medium-sized firms in Serbia to buy Italian-made equipment. Serbia’s free-trade deal with Russia could be a springboard for Italian businesses who want to access Russia, Ukraine and Belarus, Urso said. He also said Italian companies could invest in infrastructure, energy, environmental protection, footwear and apparel sectors in Serbia. Dinkic said the government would call 15 tenders by year’s end for firms in the food-processing, metal-processing, chemicals, footwear and apparel industries.