ECONOMY

Serb Democrats vow to privatize

KIEV – Serbia’s Democratic Party will speed up privatizations if it manages to form the country’s next government and plans mass street protests if it doesn’t, former Deputy Prime Minister Bozidar Djelic said on Sunday. Democrats are in talks to form a coalition government after an inconclusive general election earlier this month gave Djelic’s party 39 percent of the vote, but left it well short of an absolute majority in the 250-seat parliament. Djelic, mapping out an economic agenda of stake sales in the power and telecoms sectors in a Democrat-led government, told Reuters the party would lead mass protests if opposition parties managed to form a coalition that hampered economic development. «If the investment slows down, if the exchange rate goes down, we will have no trouble to command huge street protests,» he said on the sidelines of the European Bank for Reconstruction and Development’s annual meeting in Kiev. Insults have flown as leaders of the diametrically opposed democrat and nationalist camps have wrestled to form a government. The nationalist parties want Serbia to shun the European Union because a majority of EU states recognize the independence of Kosovo, the Serb province whose 90 percent ethnic Albanian majority declared independence three months ago after nearly nine years under UN administration. EU membership The pro-EU bloc says Serbia must pursue EU membership – the Democrats aim to be admitted by 2012 – a goal favored by most Serbs which they say does not imply accepting the loss of Kosovo. Both blocs are battling for support from the Socialist Party of the late autocrat Slobodan Milosevic, which shrank dramatically after he lost power in 2000 and became widely discredited. «Mathematically (nationalists) can do it (form an opposing coalition), but it goes against the mood of the people. We have legitimacy. Legally they can do it, but it’s not legitimate,» Djelic said. Milosevic, a founder of the Socialist Party, died in 2006 while facing trial in The Hague for crimes against humanity and genocide, allegedly committed during the wars in Croatia, Bosnia and Kosovo in the 1990s. Uneasy coalition talks His political heirs have lashed out at Europe for recognizing Kosovo’s independence in February, and have nuzzled up to Moscow instead. The Democratic Party’s failure to win an absolute majority in the vote means they will need to form an uneasy partnership with the Socialists to form a government, Djelic said. EU officials had hoped to see Serbia quickly form a pro-European government to bury the threat that a key state in the Balkans would turn openly hostile. Djelic said Democrats had powerful support for its economic program, as sales of stakes in state-owned firms had made investors of half the Serbian population. He said there would be a push for privatizations in key industries, including agriculture, telecoms, real estate, shipping and energy where there would be tenders for two power plants of 700 megawatts and one of 400 megawatts in hydropower. «We have created a pressure group of 4 million people, which is half the population of Serbia, which will lead us into opening the equity of those companies over the next three years,» Djelic said. «The first one on the block will be most likely in the first quarter of 2009 – the telecoms service. So it’s going to be the first big IPO.» «We will also have a tender for a cargo center in Belgrade,» he said. The money raised from these sales will be spent on ambitious infrastructure projects and national development, on which the government will spend 10 billion euros per year. «The goal, the projection is 10 billion euros of investment every year, one-third from the budget, one-third from (private) investment, and one-third will be loans,» Djelic said. Serbia’s sovereign debt now stands at 27-28 percent, meaning that by the end of the year the government will comfortably be able to take on more loans, which will be spent on infrastructure projects, such as a highway to the border with Montenegro, Djelic said.