ECONOMY

Serbia to buck Kosovo debt?

BELGRADE (Reuters) – Serbia should stop servicing Kosovo’s foreign debt now that the territory has declared independence, and instead spend the money on the Serbian communities there, Economy Minister Mladjan Dinkic said yesterday. Serbia lost control of Kosovo in 1999 but has continued to service the region’s debt at a cost of some $150 million a year as part of efforts to maintain its claim on the territory. Dinkic, a liberal in a government dominated by nationalist Prime Minister Vojislav Kostunica, said Serbia had to agree with international creditors to stop servicing the debt after Kosovo’s ethnic Albanian majority declared independence on February 17. «Under the circumstances, Serbian taxpayers’ money will go to Albanians… That’s insane,» he told a news conference at his party’s headquarters. Dinkic conceded the government was not unanimous on what to do with the debt, which the Serbian central bank calculated at some $1.3 billion at the end of 2007. The money is owed mainly to the World Bank and was allocated to Kosovo in the 1980s when it was an autonomous province of Serbia within what was then Yugoslavia. Dinkic said the issue would be discussed with World Bank officials, due in Belgrade next week. «It would be the only rational decision,» Dinkic said. «We should save the money and redirect it to strengthen the Serbian communities in Kosovo.» Kosovo’s Serb-dominated north has vowed to keep looking to Belgrade as its government. Dinkic said Belgrade would «establish fiscal sovereignty» over Serb areas, subsidize Serb enterprises and finance job creation.