CorD magazine No.7

interviews | opinions | news | comments | events July 2004

Editor in Chief: Biljana Stepanovic editorial@cma.co.yu Assistant Editor: Rob Dugdale r.dugdale@cma.co.yu Editorial: Milan Culibrk, Dragan Bisenic, Nina Nicovic, Nebojsa Kotlajic, Jelena Grujic, Maja Vukadinovic,Vesna Musulin, Zoran Milosavljevic, Slobodan Kostic, Dragan Novakovic, Ron Davies, Nebojsa Grabez, Jelica Putnikovic, Lela Sakovic Editorial Assistance: Mary Gibson, Mark Pullen and Clare Zubac Translators: Milos Milosavljevic, Igor Adzic, Zoran Milosavljevic, Dejan Zubac Photo: Danka Ninkovic, Dragan Milosevic, Djordje Popovic, Zoran Sinko Photo Agencies: FoNet, Tanjug and Beta Special Thanks to: Misa Mustapic, Nikola Nikolic, Stevan Niksic Art & PrePRESS Director: Branislav Ninkovic b.ninkovic@cma.co.yu Marketing Director: Jasmina Kamidzorac j.kamidzorac@cma.co.yu Advertising: Milos Krstic m.krstic@cma.co.yu Aleksandra Djokic a.djokic@cma.co.yu Office Manager: Sonja Rados sonja.rados@cma.co.yu General Manager: Ivan Novcic i.novcic@cma.co.yu Director: Ana Novcic ana.novcic@cma.co.yu Printing: Politika AD CorD is published by CMA (Consulting & Marketing Agency), Kneginje Zorke 11a, 11000 Belgrade, Serbia & Montenegro.

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CorD | July 2004

08 POLITICAL STABILITY NEEDED Boris Tadic Serbian President-elect

14 I WOULDN'T LET THE WEST BE LORDS Tomislav Nikolic Serbian Radical Party Vice-president

24 CONCRETE INVESTMENT George Bobvos President of the Lafarge BFC Management Board

contents 50 SPOTLIGHT ON MONTENEGRO Lars Goran Engfeldt Ambassador of Sweden to Serbea & Montenegro

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36

GOVERNMENT STEPS ENCOURAGE INVESTORS Christoph Greussing

SERBIAN-SLOVENE CO-OPERATION

President of FIC

Dmitar Polovina Director of the Slovenian Chamber of Trade's Belgrade

49 PUTIN HOSTS KOSTUNICA Serbian Prime Minister Vojislav Kostunica flew to Russia for talks with President of the Russian Federation Vladimir Putin

28 A UNIQUE SITUATION John Goodish U.S. Steel Executive Vice-President

A GLIMMER OF HOPE FOR THE FUTURE Olympic preview

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Comment

SERBIA CHOOSES EUROPE There is no doubt that the genuine victor of the first ballot and the favourite for the second round of these presidential elections is Democratic Party candidate Boris Tadic. This is a victory for a reformist, democratic and pro European Serbia which was, at one time, personified by late Prime Minister Zoran Djindjic, and which, during the last few months, was beginning to lose pace.

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the last parliamentary elections as well as fewer than Nikolic himself received in the previously unsuccessful presidential elections in Serbia bears, witness to this.

Truthfully speaking, Mr. Nikolic showed his own awareness of the fact that Serbian voters are no longer attracted by the nationalistic option by making considerable changes to his political rhetoric this time. He made great efforts to present himself as a good European, as a politician Stevan Niksic who is willing to cooperate with the international community and talked more about the economy than politics. Instead of the idea of a "Great Serbia", he also promised the voters a better standard of living and greater employment.

If, in the final analysis, the largest number of votes for those candidates who represent a democratic and European Serbia on one side and the fall of the popularity of nationalistic parties on other was indeed only to be expected, that does not mean that the first ballot of the presidential elections in Serbia went off without any great surprises. The element of surprise was provided by controversial businessman Bogoljub Karic, who has finally decided to involve himself in politics. Despite the very recent announcement of his intention to establish his own political party, in his 27-day long electoral campaign, he managed to achieve a very strong third position. In other words, he has succeeded in placing himself in front of the governing coalition candidate and in imposing himself as a serious political factor, with whom everyone on the political scene will have to contend.

There is no doubt that the genuine victor of the first ballot and the favourite for the second round of these presidential elections is Democratic Party candidate Boris Tadic. This is a victo-

erbia did not obtain a new president in the first ballot of the presidential elections which took place on 13th June 2004.

This means that, in the second round, voters will choose between not only the two candidates who qualified for the second round, Tomislav Nikolic (The Serbian Radical Party) and Boris Tadic (The Democratic Party), but also the main political stream this country will follow in the future.

These elections have once again shown what voters in this country really want a democratic, Europe oriented Serbia. The candidates who are in favour of democratic and European values together gained the greatest number of votes by far.

In other words, for the simple reason that a democratically, pro-Europe oriented Serbia was Tomislav Nikolic made great efforts to present himself unable to agree on one joint candidate at the begin- as a good European, as a politician who is willing to ning of the presidential campaign, the country did not get a president in the first ballot who would cooperate with the international community and talked more about the economy than politics. embody all those values.

If we talk in numbers, the best individual result ry for a reformist, democratic and pro-European Serbia which was gained, as all public opinion polls predicted, by Serbian was, at one time, personified by late Prime Minister Zoran Radical Party candidate Tomislav Nikolic. Nikolic has been on Djindjic and which, during the last few months, was beginning the Serbian political scene for a long time and has a recognisable to lose pace. identity. This is an identity mainly created by party President By voting in much higher numbers for Tadic than for Vojislav Seselj, currently in The Hague awaiting the beginning of Kostunica's minority government candidate Dragan Marsicanin, his trial before the Tribunal for War Crimes in the Former that majority - which represents a democratic and pro-European Yugoslavia. The traditional political orientation of this party is Serbia - has sent a serious warning and timely reminder to Prime usually linked with the radical, nationalistic option, which was Minister Vojislav Kostunica. His cabinet is facing great chalfully expressed during the years when it formed part of the govlenges and they will have to choose quickly: either they will erning coalition led by Slobodan Milosevic. return to the reformist and pro-European way, which means It is obvious, however (and the numbers prove this) that the continuing what Djindjic started, or they will, by relying on popularity of the nationalistic option is on the decrease in Milosevic's Socialists and periodical flirts with various decrepit Serbia. The fact that the Serbian Radical Party’s presidential canpolitical options, commit political suicide.• didate gained far fewer votes this time than his party received at Stevan Niksic, journalist of weekly NIN CorD | July 2004

New President Boris Tadic,

Serbian President - elect

POLITICAL STABILITY

NEEDED T

he presidential elections are over and Boris Tadic has been confirmed as the new President of Serbia. As expected, the race was tight and no landslide was forthcoming. However, regardless of percentages, the election result marks a victory for democratic forces in Serbia and, perhaps, signals a new age of political stability and a fresh start for democratic reforms in the state.

Whether the result will encourage more and more foreign investors to hedge their bets on Serbia remains to be seen; as does the future of the Radical Party and their massive support.

But for now the country's foreign companies and democratically minded voters can breathe a sigh of relief as Serbia drags herself back on the road to Euro-Atlantic integration.

Speaking immediately after the election result was confirmed, Serbia's President-elect said: "My election victory serves as confirmation that Serbia's path towards European integration was irrevocably determined on 5th October 2000, though it has been marked by huge obstacles.

"The election has also shown the unity of Serbian democracy and it is possible to recognise decisions of historic significance, as this is right now. Serbia's has had enough of the politics of violence, illusions and lies. This is a victory over that kind of politics;

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CorD | July 2004

the politics that have no place in this century and have now gone.

"Today it is more possible to rely on other modes of communication and culture, which are in the foundations of our people and our national values. We just need to rejuvenate them."

Also speaking after the confirmation of the result, Radical Party candidate Tomislav Nikolic said his party would continue to fight for a "new victory" at the upcoming local elections and the inevitable parliamentarian elections. He added that he was satisfied with his personal results at the elections, despite final defeat.

According to the Radical Party deputy leader, Tadic won the election thanks to the votes of national minorities. However, he is confident that, with some hard work, the party can turn the result around at the parliamentarian elections he expects to be held in the next few months.

"Therefore", he said, "heads high Radicals, I congratulate you all. At almost all voting stations in Serbia we won, except the places where religious leaders threatened to cut off the hands of their followers if they voted for me."

CorD’s Milos Teodorovic and Dragan Bisenic spoke to both candidates prior to the elections in order to get the low-down on the men behind the campaigns.

By Milos Teodorovic, Photo Andy Dall

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ccording to public opinion researchers, the greatest threat to your success at the elections is a small voter turnout. How much did you consider this during your presidential campaign?

In principle, it is not the task of a candidate to lead a campaign encouraging the public to vote. That is, rather, the job of people's institutions, NGOs and the Republic Election Commission.

In many European countries passing through transition there has been a negative trend of low voter turnout. For example, at the last European parliamentary elections there was a low response from the public, particularly in those countries that had just entered the EU. When they were confirmed as members, citizens celebrated on the streets. However, afterwards they chose not to continue to be involved in the formation of European institutions. Every election provides the opportunity for a country to define its future and demonstrate which road the nation wants to take.

evaluations gave a positive assessment of our work in the MoD because we are not in a position to evaluate our own work.

What sort of political signals did you receive from Brussels regarding the current government of Vojislav Kostunica?

All the EU officials I spoke to agreed wholeheartedly with my comment after the first round of the elections that political stabil-

Yet you believe the second round of the presidential election will see a reversal of that trend?

I expect so, yes. I believe the seriousness of the situation will motivate people to get out and vote.

What makes you think the situation is so serious?

The situation is extremely serious. Every election result sends a message to the international community and today the world's public are holding their collective breath while they wait to see what direction Serbia will choose to take. The 5th of October represented that line of demarcation. My opponent Tomislav Nikolic said that 5th October was a day of slavery. I say that it was a day of liberation. We see that date in completely contrasting ways, but I maintain that it was a day that sparked democratic change and signalled the European orientation of Serbia.

The international community sent a very clear message that victory for Nikolic would result in deep isolation for Serbia. The impression is that the international community has shown greater support for your election campaign than they did for Prime Minister Vojislav Kostunica. Do you think you have more international support that Kostunica?

Every March the EU and their authorised commissions sit down and define what each country has done positively, or negatively, towards achieving EU integration. These assessments are without mercy. It is, essentially, a test for which the criteria are very well known.

The EU gave a very positive evaluation of the changes we made to our defence system [while Tadic was SCG Defence Minister], reorientation towards a modern and well-organised

ity is needed. Repeating parliamentary elections or renegotiating the structure of the government at this moment would endanger the political stability of Serbia. As far as I am concerned, reconstruction of the government now would be a very bad move.

Therefore you would be willing to be president of a state whose government exists thanks to the support of Milosevic's Socialist Party of Serbia? Is that the stability you are to?

Just because the President of Serbia is not a referring I made myself a presidential candidate with member of one of the government's parties it complete awareness that the government was does not mean he will automatically obstruct the formed as a minority administration, which does not include the Democratic Party; and that we [the government. That would be irresponsible behaviour. government and the president] would have to coexist despite representing differing political options. However, that doesn't mean we won't be able to work army with civilian control and the protection of fundamental together to resolve problems. human rights. Reforms throughout that sphere were assessed Just because the President of Serbia is not a member of one very positively. of the government's parties it does not mean he will automatically obstruct the government. That would be irresponsible What, if anything, did the international community behaviour. Besides, the international community would not assess negatively about the work of the Serbian Government? support such behaviour and we would again move further away They negatively evaluated reforms regarding the police and from the EU. Thus we have to pass tests set for us by that old the justice system. That was said to me in Brussels and was also institution - Europe. publicly announced. It was important for me that the March CorD | July 2004

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New President So, to be clear, if you win the election you won't go to Kostunica on Monday and begin negotiations for the Serbian Government and the Democratic Party to form a majority government?

That is correct.

Regarding Hague cooperation, you said recently "I don't like The Hague either, but I consider cooperation with that tribunal to be a necessity". That is more or less the attitude of PM Kostunica. He is a big critic of the tribunal, but in recent weeks he has described cooperation with the ICTY as a necessity. As president, what could you do to hasten cooperation and fulfil those commitments?

As well as myself, Kostunica and many citizens of this country, a lot of world politicians have remarked on the work of The Hague Tribunal negatively. I have no reason to hide that fact.

Nevertheless, we have to cooperate with that court because it is an institution of the United Nations. Hiding our obligation to cooperate with them would be even more dangerous.

Agreement, and they were the first to extradite our citizens? If they had to respect reality, then surely so do we. We should not delude our citizens.

What do you actually mean when you say you will "cooperate with the government" regarding Hague cooperation?

What can you do from the office of the president to, for example, deliver the three army and police generals indicted for war crimes in Kosovo, who have mysteriously disappeared?

As president I could always raise my voice regarding Hague cooperation. I don't have executive authority. I am not in the police force and I am not part of the government. The institution of the President of Serbia does not have constitutional authority in that area, but I have moral responsibility and I can apply that sort of pressure. Quite simply, it would be better for me, personally, to remain silent about The Hague, but that is not fair and not the

moral thing to do. I will always express my opinion about each individual case.

Still, this doesn't mean that The Hague is infallible and cannot improve its work, particularly the principles of its operations. No institution is protected to the extent that it cannot be criticised and, with this in mind, I am prepared to share responsibility with the government for cooperation with The Hague.

Moreover, if we don't cooperate with The Hague we will immediately find ourselves with a hole in the budget. This will lead to a decrease in pension payments, which will, in turn, result in unsatisfied citizens taking to the streets.

It is important for our citizens to know that if they complain about The Hague and call for non-cooperation they are saying that we shouldn't have sufficient pensions or satisfactory salaries for professors. That is very dangerous.

That sounds distinctly like blackmail?

It is not blackmail. It is reality. The world has agreed, through the UN, how The ICTY should work and how our government should cooperate. Need I remind you that Slobodan Milosevic and his government were actively involved in the formation of that tribunal, in accordance with the Dayton

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You spoke with EU senior official Chris Patten regarding The Hague, regulating trade relations between Serbia and Montenegro, and key problems associated with finalisation of the EU Feasibility Study. Do you still believe it is possible for Serbia to join the EU by 2007, as previously stated by your party colleague and former PM Zoran Zivkovic?

I never speak about specific dates, particularly with regard to some processes, and I am certain that absolutely nobody wants to say something like that at this moment. Circumstances are changing and we can get ourselves closer to the EU in the next year and then give a more realistic assessment of when we will be members of that European society. This year we took a backwards step while Croatia, for example, moved closer.

What mistakes did the government make to move Serbia further away from the EU? As I said earlier, Serbia didn't receive a positive assessment of police and justice work in the fight against organised crime.

You have to keeping taking forward steps and showing that you are ready to confront the problems shared by the EU. Could your appointment as president help improve the work of the police and the justice system?

President of the Republic is not Minister of Justice or Minister of Police, but with his initiatives and suggestions he can help the situation improve in all areas. Not only justice and crime, but visa regimes and much more. As an example, visas

are a complex problem because our citizens don't know why they find it so hard to obtain international visas. I would like to explain to citizens what the problems are and what needs to be done. Our citizens don't know that we have to implement a whole host of laws regarding emigration; that we have to construct holding facilities for those arrested whilst trying to cross borders of countries not in the EU or not on the White Schengen list, etc. There are a lot of problems that need to be solved. Serbia is a long way from finding solutions, but we have to start somewhere.

interests and the rights of our compatriots from other countries.

So, balancing political relations with the EU, the U.S. and Russia are key to solving our problems. Do you think it would be easier for us to solve our problems in Kosovo with or without full partnership with the EU and the U.S.? Of course it would be easier.

Those calling for us not to cooperate with European institutions are actually hindering the interests of our citizens, wherever they live. We have heard in Serbia politicians saying that we should not cooperate with Javier Solana. I find it simply

Re, The Hague: Need I remind you that Slobodan Milosevic You promise that memberand his government were actively involved in the formation ship of the EU will provide a better life for our citizens. of that tribunal, in accordance with the Dayton Agreement, What sacrifices will the people and they were the first to extradite our citizens? of Serbia have to make if they want to be part of the EU? We have to adjust our industry to European standards. The EU amazing that a politician in this country can express such irrehas a specific market system and it has no reason to accept a consponsible attitudes. Solana will be EU Foreign Affairs Minister trasting industrial system that will only be a problem for it. Rather, or President of the EC and will have a direct hand in deciding we must create a system that can be easily merged into the EU. whether Serbia will receive support. This year, for example, the EU will decide whether or not to give us â‚Ź270million to fill the gaps in our budget. Why would they support us if we don't Do you fear implementing moves that will achieve that, cooperate with them? Again, this sort of attitude endangers the considering that citizens of Serbia have already paid a high livelihood of Serbia's people. I will cooperate with whomever is price for transition, for example, a third of our workforce is appointed to represent the EU, for the well being of our citizens. currently unemployed?

That is a political move. We can make one of two decisions: Serbia is about to get a president at the fifth time of askto bravely confront the problems we have to solve, or give up ing. Are you tense? and remain a permanently isolated country. I think the majoriNo. No more than when waiting to compete in a sporting ty of the country wants to be a part of Europe and its instituevent. That is a good kind of tension. That is not to say that I tions, but we are like a patient that is ill: we can decide to take don't fear anything, only pathological liars claim not to have painful treatment or die. Quite simply, we, as a country, have to fears. Fear is an essential quality for confronting problems and decide whether to take our medicine and cure ourselves of the you have to overcome problems by facing them head-on and disease - in the case of organised crime and corruption this is litdealing with them. eral - or whether to rot slowly.

I am a human being, just like everybody else, and I have fears, courage, shortcomings and good qualities. However, I feel PM Kostunica described you as having "balanced relaI've done everything I could in this election campaign and I am tions with the EU, U.S. and Russia". What does that mean? awaiting the results with great pleasure, like a student who preWe have three essential foreign policy sectors, which will pared well for his exams and only wants to find out how he will determine the future of this country and the quality of life for be evaluated.• each and every citizen. These include our legitimate national 12

CorD | July 2004

Interview

I WOULDN'T LET THE WEST BE LORDS

Tomislav Nikolic, Serbian Radical Party Vice-president of

By Dragan Bisenic, Photo Andy Dall

Tomislav Nikolic has been actively leading the Radical Party of Serbia since party founder and president Vojislav Seselj voluntarily surrendered to The Hague tribunal. CorD spoke exclusively to Nikolic prior to the second round of the presidential elections, regarding his intentions if successfully elected to lead the country from the president's office.

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hat motivated the letter you sent to the foreign ministers of EU member countries?

I am aware that there exists in the west a pillar of opinion that Serbia has bad politicians and bad people, and that the West has given support to everybody who opposes Serbia's national interests. Apparently the West knows what I will do so, accordingly, they support somebody else. I wrote a clear letter to the EU's ministers of foreign affairs explaining what I want to do in Serbia and what kind of Serbia I want to create.

I deal in politics because of citizens. I need their support and I don't want to influence Serbian citizens by saying "maybe I'm bad, but I have the support of this and that". No! I ask Serbian citizens what kind of man am I? I don't need any other support.

If you are elected president of Serbia it will be your constitutional authority to represent Serbia internationally.

What kind of politics will you adopt then?

I would accept reality, but I wouldn't accept interference in our business, particularly not in the elections. I would do my job

as president of the Republic in the best interests of the state and her people. Everybody who wants a meeting with me will get a meeting. We would restore relations with every state with which we don't have good relations or diplomatic links.

However, I wouldn't ask, beg or plead. Also, if the Prime Minister wanted me to I would work together with him to make Serbia better.

Are you or are you not an anti-West man?

I am neither anti-west nor anti-east. I am opposed to nobody. I seek only to, somehow, help our poor and feeble Serbia. I know we need the West and I know we can't annoy them, but I wouldn't let them rule. If the price for that is never to win then so be it. But I know what is happening when their puppets come to power. Within two years we would all be down in the slavery of debt, the West would pull out and let us fight each other before sending some peacekeeping forces to Serbia.

We are constantly getting into debt and accepting outdated and backwards commitments. Some politicians pass by, bragging about how much credit they managed to receive, but I would rather they bragged about how great production is. They can never achieve the levels of 1998. What will happen in two years time, when Serbia has to return 1.4 billion? What will I be able to do then? Go out on the street and beg people not to smash windows or use rocks to ask for bread?

If you won, what would be your internal political programme?

Serbia would no longer have internal political problems if I won. I have represented myself throughout this campaign as a politician who doesn't create conflict among politicians or people of differing religion or nationality. In terms of economics, I would direct the Serbian Government to do what is best for the people. I cannot, as some suggest, say that I would develop the economy that needs to be done by the government. However, I wouldn't stand idly by and say that the government is bad, but I can't interfere.

I can interfere by highlighting what jobs they have done badly.

It is a fact that there is great potential in Serbia and human resources could be used more rationally and more effectively than has been the case to date.

That is something different all together. But look, if we win with DOS in power to lead this situation, which came to power in much better circumstances four years ago, what will we say in another four years? They are all the same people.

What would happen if that were so?

The pseudo-revolution would continue and that party state would function in its multi-party system. We had a single party system and one party was leading the state. Now we have a multi-party system and each party individually leads a party state. So, you have the Ministry for Capital Investments, run by so-called "New Serbia"; you have the Ministry of Foreign Affairs, in which everybody is from the Serbian Renewal Movement. Meanwhile the Prime Minister has to remain silent or he won't receive their support. That method will be very bad for our future, which is why I offered to form a two-party government with Kostunica. Two serious men who lead two serious parties can cooperate.

How would you assess the platform of media tycoon Bogoljub Karic during the first round of the elections?

I am not talking about Karic's platform. I am talking about the condition of our society. I couldn't say the things he said because I am a serious politician with a serious party. We would come to power and somebody would I have only promised to do that which I know I could do; ask why these factories aren't being re-opened. things the Constitution permits me to do. But citizens want Those who are in politics for fun, more. I could not and would not exceed constitutional luxury, leisure or a wish to be in the parliament can promise all kinds of authority and I wouldn't want to lie to win. things. Bogoljub Karic went way Nowadays DSS [Democratic Party of Serbia] has a big dilembeyond the limits of presidential authority with his promises. He ma and I totally understand those people. I assume they have represented himself as a man who would employ the entire counalready clarified their attitude towards cooperation with us, but try. Many people believed him because he provided a glimmer of they will listen to what the president has to say. That would be hope that rescue is possible. like SPS [Milosevic's Socialist Party of Serbia] - listening, listening and listening until your approval rating drops too low.

Yes, but isn't that what the people want and expect?

The break in the trial of Milorad Ulemek [Lukovic "Legija"] The people do expect that, but authority has to be classified. is indicative of that. Suddenly a man like that is ill?! It's not true.

What would happen if Karic and his political party ran in the They were waiting to gauge DSS's attitude. He will not testify parliamentary elections and won? He would have to classify against DS [Democratic Party] anymore. Until yesterday he was authorities. That is the difference between large political parties, accusing them, but since DSS has given support to DS he will no great politicians, small parties and diminutive politicians. longer accuse or question that party.

I have only promised to do that which I know I could do; things the Constitution permits me to do. But citizens want What advantages do you have over your rival? more. I could not and would not exceed constitutional authority My life experience is my absolute advantage. I have watched and I wouldn't want to lie to win.

CorD | July 2004

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Hague? I won't accept that. Besides, it's not the responsibility of the president to decide whether or not to send somebody, but rather the responsibility of this Prime minister who is supporting Boris Tadic.

Does that mean you wouldn't like to talk about the potential for sending General Ratko Mladic to The Hague?

Who is the president of the republic to talk about transferring anybody to that tribunal? There are police, legislature and government. I can provide my views, but I can't arrest or liberate anyone. Kostunica should explain why he doesn't respect the law that he wrote about extraditing Serbs. He works like Milosevic - making promises to the West, then whispering to us "well we won't really do that". That cannot last forever. The only saviour for him now is that I could win these elections and so the West is keeping silent. Serbia has trembled enough in fear of the blackmails of Vojislav Kostunica and Boris Tadic. Well now somebody with a greater love for Serbia than either of them has appeared on the seen and that is a greater danger for Europe. Is that really so?

You recently said that you wouldn't have made statements about Zoran Djindjic regarding Vojislav Seselj's extradition to The Hague if you knew he was about to be assassinated. And you also said you weren't sorry that journalist Slavko Curuvija had been murdered. Would you like to comment on that?

I said that thing about Djindjic [quote "Tito also had a problem with his leg just before he died"] in a totally honest way, but What could the West expect if you became president? on the worst possible radio in Serbia - Radio B92. I had a special Normal behaviour. Totally normal behaviour, which friendship with Djindjic and I would never have said that about includes that I know they are weak and that Europe and the a man who would lose his life a few days later. It really wouldn't European Union can only pretend to be strong in Serbia. They cross my mind. If I had a clue what was to happen I would never have serious problems. The EU was formed by serious counhave said that. tries, but now many poor countries have been integrated and the Regarding Slavko Curuvija, I said loud and clear "I am sorry rich countries want to get out of there. that a man has been killed, but I am not sorry for him". I rememEurope is not ready to give us $10million. It is not ready to ber when Vojislav Seselj was in the position to beat Milan give us jobs for ten million. They gave us money for the Sloboda Milutinovic. The election countdown had begun Kostunica should explain why he doesn't respect and media silence should have been in place.

Slavko Curuvija's newspaper appeared the law that he wrote about extraditing Serbs. He Then with the lead story "Vojislav Seselj slaughters works like Milosevic - making promises to the West, woman". I will never forget that. They can cruthen whispering to us "well we won't really do that". cify me because I don't feel sorry for somebody, but I really don't feel sympathy for him. Of course, I am opposed to any loss of life or attack and even Slavko Bridge in Novi Sad, but a German company had to be engaged.

Curuvija had the right to be safe and secure in life. However, Now the entire bridge has moved. It has gone. That is Europe. whether I pity someone or not shouldn't be used to mount politWhenever they interfere they have to take half the profits. ical battles against me. I am not a man without feelings.

I am interested in production in Serbia, not national recipes.

Help for the media is unnecessary, help for democracy is unnecWhat sort of special relationship did you have with Djindjic? essary, but help for production is a necessity. If Europe is incaThe first time I met Zoran Djindjic's wife was at the celebrapable of seeing that they don't need to bother addressing me. If tion marking the 160th anniversary of the Military Medical they think they should torture and torment us for four more Academy. We met and I said to her "Now I can offer you my conyears, and then say who will win elections before they are dolences. That was not possible earlier". She said she understaged, they are gravely mistaken. stood. I said that I wouldn't allow myself to be pushed away like Kostunica had been pushed away and not allowed to give his How would you approach The Hague tribunal? condolences.

I don't understand how Europe can give support to Boris I asked her if she know what kind of relationship I had with Tadic and his party when they haven't sent anybody to The Zoran Djindjic and she said: "that was a specific friendship. He Hague this year. What does that mean now? If Nikolic wins we told me everything and I know everything". will raise the question of The Hague, but if the others stay in power we won't say anything? A year has passed since the Finally, should Serbia expect parliamentarian elections soon? request was made for four generals to be delivered. The Yes. You cannot hold on to power by force. Serbia cannot be Democratic Party didn't send anybody for eight months. Is led by people who have only 50,000 supporters.• everybody waiting for Tomislav Nikolic to take care of The for a year-and-a-half while DS arrest people just because jailed criminals accused them. The entire "Sabre" operation was led by the statements of convicted criminals. What now? He [Tadic] can believe criminals and can even arrest citizens, but I can't trust someone because he was accused by criminals?

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CorD | July 2004

Revision of privatisation

a backwards

step

By Milan Culibrk

D

espite the public hullabaloo surrounding the announcement of on-off Economy Minister Dragan Marsicanin that, "for beginners", around 80 dubious privatisations would be probed, passions have been quelled by the confirmation that there will be no mass cancelling of privatisations.

Marsicanin, also deputy leader of the governing coalition's Democratic Party of Serbia, had stated that, by the end of April this year, the ministry of the economy had issued "reassessment" orders against 10 previously privatised companies. Top of the list was the much-scandalised sugar industry and its four refineries of which one, Crvenka, was bought by Greece's Hellenic Sugar, while the others were purchased by Miodrag Kostic's domestic company MK Komerc.

Kostic, who maintains he had no involvement in the re-packing sugar scandal that saw the EU suspend Serbia's sugar-trading privileges, has since had a brief spell on the run before being arrested by an interior ministry unit and charged for two counts of abusing his official position. He was then released.

Next under the spotlight were two pharmaceutical companies: Leskovac-based Zdravlje, which had been sold to Icelandic firm

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CorD | July 2004

After a barrage of accusations branding privatisation as having a "thieving" character, the Serbian ministry of the Economy ordered that the privatisations of only two companies be cancelled - Nis-based Nisa and Zrenjanin's Jugoremedija. Both were privatised in accordance with the now repealed law on privatisation, with unlimited distribution of shares.

Farmako, and Zrenjanin's Jugoremedija, 42% of which had been sold on tender by the Serbian Government to Macedonian jaka 80.

The ministry also issued orders for increased control of sale and purchase contracts, and the procedure preceding privatisations, against Putnik and Hempro from Belgrade, Delises from Vladicin Han and Nis-based leisure company Nisa.

Despite the build-up of tension for the past two months, and claims that the list would be appended with more companies (some media outlets have published the names of a number of companies suspected by the Anti-Corruption Council of being privatised with irregularities and corruption) deputy departmental minister Zora Simovic announced in mid-June that supervision orders would be issued for only 12 privatisations.

The whole affair may prove troubling to Serbia's foreign investors, but welcome news to Serbian Finance Minister Mladjan Dinkic. When allocating this year's budget funds Dinkic did not foresee that government funds might have to be returned to buyers of companies whose privatisations are to be cancelled. So far, only representatives of Jaka 80 are seeking compensation, to the tune of â‚Ź40million. Reiterating that the Serbian Economy Ministry would issue oversight orders for only 12 cases where irregularities and inappropriate procedures are suspected,

Simovic insisted that the firms in question equated to an "inconsequential figure", considering that more than 1,000 companies have been privatised. However, he noted that the announcement that there would be a mass revision of privatisation was far from inconsequential; particularly bearing in mind that Serbia was already classed as one of the 'risky' countries for foreign investments.

Though foreigners were not clambering over one another to get to Serbia, with first quarter direct foreign investment standing at $230million, the past few months - since the privatisation review was announced - have seen an even greater slowdown.

Asked why such criticisms were levelled against those administering the privatisation process if only two contracts have since been cancelled, minister Dinkic said the government's harsh ini-

prior to U.S. Steel's purchase, but that now "all chimneys are smoking" for the first time in 20 years; this year's steel exports will yield $250million and over the course of the next six years annual steel income could grow to between $700million and $1billion.

Prior to Sartid's sale, discussion had been held on whether to sell the company as a functioning industrial complex or as a factory fit for scrap. Deputy PM Miroljub Labus is sure the right decision was made. He told CorD that U.S. Steel - Serbia had managed to boost annual production from 400,000 tonnes to 1.1million tonnes and that in the next two years the facility would be running at full capacity and producing some 2.2million tonnes.

Labus said he'd been reassured during a recent visit to Berlin

tial evaluation was a response to the sales of companies through that many German companies are interested in investing in Serbia, the bankruptcy and liquidation procedure and the dubious operalthough they were awaiting the results of the presidential elecations of the Trading Courts, under whose authority such sales tions before making a final decision. He added that media coverwere administered. However, Dinkic insisted that official tender or age of the privatisation review had also been a "disturbing factor". auction procedures, regulated by the Privatisation Agency, had rarely been subject to irregularities. Though foreigners were not clambering over one He added that amending the conditions of the trad- another to get to Serbia, with first quarter direct ing courts was one of the highest priorities.

The possibility of abusing flawed bankruptcy foreign investment standing at $230million, the and liquidation legislation had also been a concern past few months have seen an even greater slowdown of the DOS administration. Former privatisation and economy minister, Aleksander Vlahovic, submitted a proposLabus said: "It is important to everybody that privatisation al to parliament for a new law to be implemented in this sector last procedures are conducted without corruption. However, suspiyear, but as yet the legislation has not been ratified. cious cases must be properly investigated and dealt with, and Dinkic concluded that all those involved in corruption should other companies should be left to function normally. We certainbe brought to bear, before turning to the brighter side of privatisaly cannot allow ourselves to throw the kid out of the window tion and the case of Sartid - bought by U.S. Steel. The G17 Plus along with the dirty water. Those responsible for corruption have deputy leader insisted that U.S. Steel had shown itself to be a gento be punished, but Serbia cannot afford to chase away strategic uine strategic partner by massively increasing Sartid's output and partners like U.S. Steel or LaFarge." making the Smederevo steelworks one of Serbia's biggest exporters.

Turning to the issue of the disputed sale of Jugoremedija to Economic Institute Assistant Stojan Stamenkovic shared Jaka 80, Labus said that the sale contract did not include a clause Dinkic's assessment and noted that Sartid had never been viable stating that the buyer should provide financial guarantees for the CorD | July 2004

19

Revision of privatisation required investment programme. The G17 Plus leader wondered whether this should now result in the cancellation of the privatisation, or whether such a guarantee should be annexed to the sale and purchase contract. Besides, he noted, the aim of this government is not to halt privatisation, but rather to remedy all dubious cases.

Meanwhile, Aleksander Radovanovic - General Director of Jugoremedija - confirmed that Jaka 80 has filed charges against Marsicanin and the heads of the Serbian Share Fund, the Privatisation Agency and the Anti-Corruption Council for illegally authorising the cancellation of the purchase of the Zrenjanin pharmaceutical factory.

Radovanovic said that the Share Fund had put the Zrenjanin plant and its 41.93% stake of Jugoremedija's capital up for sale in 2002 at a price of 175million dinars. Jaka 80 had fended off stiff competition and eventually bought the factory and Jugoremedija shares for 959.9million dinars, or around â‚Ź15.7million.

In March 2003, after conversion of $4.7million of company capital, Jaka 80 increased its share of the company to 61.02% and the Court of Trade refused to accept the complaint of the society of minor shareholders who requested the stock-share conversion be cancelled in order for them to maintain their majority stake of the firm.

According to Radovanovic, Jaka 80 made several formal inquiries to the Privatisation Agency requesting to be informed to whom they should deliver their financial guarantees - the main reason now given for the cancellation of the sale.

Radovanovic and jaka 80 majority owner Jovica Stefanovic insist that the real cause of the cancellation of the privatisation relate to the fact that Jugoremedija has already commenced production of 50 new products, is awaiting registration of another 12, and has increased its share of the Serbian pharmaceutical market from 3.5 to 11%. The Serbian Parliament's Privatisation Board has recommended that the Serbian Ministry of the Economy and the Share Fund reach an interim compromise to minimise damage.

Head of the Board, Milko Stimac, said that he has suggested the government "contribute to the solving of numerous problems that have arisen and improve the entire process by making the aim of future privatisations the development of industry and not simply budget contributions."

He continued: "One suggestion is that following a second failed auction of a given company a third sale offer should not be made and instead the shares be distributed to company employees or the liquidation process should immediately commence.

Such a move would stop tampering of auctions, decrease expenses and speed up the privatisation process.

"We also suggested that a special state body be formed to control the work of auditors. The body would have the power to monitor the process and revoke licences in cases where regulations have not been adhered to. That should allow for greater precision of company stock evaluation and assist in the compiling of a list of companies of strategic importance that should be privatised through special procedures."•

Finances

WHO OWNS SERBIA'S

BANKS?

By Milan Culibrk

A

t the end of May this year the Serbian Government announced the launch of an international tender for the sale of 88% of Jubanka shares. Interest in Jubanka has been high and, according to National Bank of Serbia governor Radovan Jelasic, this is because the bank has an estimated value of â‚Ź115million, spotless balances and has been well prepared for privatisation.

Once the Jubanka privatisation has been completed the state will begin privatisation procedures for Novosadska, Continental and Niska banks, and will eventually sell its 12% stake in Eskim and its 1.5% share of AIK Bank. The full process of privatising the banking sector is expected to be completed by the end of 2004.

The privatisations of the remaining few state-controlled banks represents a final chance for foreign operators to break into the Serbian financial market for the time being because, according to Serbian Finance Minister Mladjan Dinkic, the National Bank does not grant "green-field" licenses for the opening of new banks anymore.

Serbia's banking sector is essentially controlled by the state and foreign companies that we used to believe were established, at least partly, by domestic capital. With the exceptions of

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CorD | July 2004

The privatisations of the remaining few statecontrolled banks represents a final chance for foreign operators to break into the Serbian financial market for the time being because, according to Serbian Finance Minister Mladjan Dinkic, the National Bank does not grant "green-field" licenses for the opening of new banks anymore. With the dust finally beginning to settle on the country's financial sector, CorD's Milan Culibrk investigates just who owns Serbia's banks.

Finances The state also enjoys indirect control of JP PTT Srbija and Postanska Stedionica, and is the biggest single shareholder of Komercijalna Banka, Cacanska, JUMBES, Agrobanka and Privredna Banka Beograd, while it is minority shareholder of Nacionalna Stedionica, Eskim and AIK Banka.

As is to be expected, banks established with foreign capital are not domestically owned. For instance, the National Bank of Greece and Athens' Alpha Bank A.E possess 100% of shares of their Serbian branches; Hypo Alpe-Adria Bank owns 99.28% of shares in the Serbian bank of the same name and Bank Austria AG owns 99% of HVB Bank Belgrade. Raiffeisen International has a 90% share of Raiffeisen operating in Serbia, and the remaining 10% is controlled by Washington-based IFC (International Financial Cooperation) ProCredit Bank, formerly Microfinance Bank, is split between a number of owners. Austrian Osterreichische Volksbanken AG has 14.54%, Comerzbank owns 16.67% and the remainder is divided amongst German-owned Kreditanstalt fuer WKFW and International AG IMI - Frankfurt; London's European Bank EBRD, Washington's IFC and Dutch FMO. The one exception to this pattern of foreign ownership is LHB Bank, formerly Prva Preduzetnicka. LHB International only holds a controlling share of 50.96%, while more than 5% each is owned

by Maksima Holding, Emona Maximarket and Tink, Ornag und Handelsges. Eskim Banka is also well divided, with EBRD the biggest shareholder and other owners including SEEF Holding Ltd. Walkers, Futura Investment ltd. and Germany's DEG 13.50.

Other so-called domestic banks are dominated by foreign companies: the eight biggest shareholders of Atlas Banka are Budapest-based Buco Kft, Vancouver's Direct Wholesalers, Vienna-based Aleks Trade, Macedonia's Koncar Ing Skopje and Hemargo London. Alco Banka's co-owners are EMG Holdings Ltd. - Limassol, and U.S.-based companies Glendyeni Inc. and Societe Generala, Yugoslav Banka and Raj Banka, all 46 banks Mirafiori Inc. operating on the Serbian market have submitted their ownership Perhaps most surprising of all is the ownership structures of structures to the National Bank of Serbia. Though this should Zepter and Delta banks. 91.84% of Zepter's shares are held by clarify ownership structures, it seems we are no closer to unveilHome Art&Sales Services AG, Woler, while 86.35% of Delta ing the secret owners of the majority of banks operating here.

Bank's capital is held by Hemslade Trading Ltd. From the Financial experts also find it interesting that co-owners of these Cypriat capital Nikozia. organisations remain shadowy firms with complete anonymity.

Not one of Meridian Bank's six biggest shareholders - Dimont ad Ltd., Magnolia Finance Tortola (British Virgin Islands), RCS Shadowy shares Trading Co., Arious Ltd. Douglas, T&D Ltd. London and Yuco Cyprus Ltd. Limassol - has an office in Serbia. And less than 30% Before the mystery can be laid to rest, it is also necessary for of DDOR Bank's capital is controlled by shareholders from banks to convince their shareholders to provide details to resiSlovenia - Zavarovalnica Trgilav, Publikum and Trgilav RE. dents of Serbia. However, it is hard to imagine that such a thing New Bank is the only bank to have four private individuals could happen because the very existence of offshore companies among its six shareholders. The anonymous bankers own a is aimed at hiding owners' identities. combined stake of 30% of the bank.

The information provided by commercial banks for the The most divided ownership structure can be found in Metals Bank, of which the two biggest The information provided by commercial banks for the shareholders are domestic companies with a five per cent of shares each.

National Bank of Serbia has confirmed that the state mere The active balance of the Serbian banking remains the majority owner of 13 domestic banks. sector totals 363.25 billion dinars (around â‚Ź5billion) and that total depends on the willNational Bank of Serbia has confirmed that, following converingness of some foreign banks to bid for the tender of 88% of the sions of commitments to old foreign currency savings and state's shares in Belgrade's Jubanka. trustees of the London and Paris Clubs, the state remains the The list of Serbia's top five banks is also statistically interestmajority owner of 13 domestic banks, of which two ing. With available capital of 44.16 billion dinars, Komercijalna Vojvodjanska Banka and Jubanka - are among the five biggest Banka is a whisker ahead of Delta Banka, which boasts 43.94 biloperators, according to their active balance of payments. lion dinars. Vojvodjanska Banka is third with 39.83 billion Other banks that the Republic of Serbia has majority control dinars, Raiffeisen Bank is fourth with 31.74 billion dinars and of include Pirot Banka, Serbian Banka (formerly Yu Garant Jubanka fifth with 15.39 billion dinars.

Banka), Continental Banka, Niska Banka, Panonska Banka, The only other banks with more than ten billion dinars of Novosadska, Credy bank, Srpska Regionalna Banka, Privredna active credit are Postanska Stedionica (12.72 billion), Societe Banka Pancevo, Jubanka / Jubanka Kosovska Mitrovica.

Generala (12.24 billion) and AIK Bank Nis (12.36 billion).•

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CorD | July 2004

Interview In 2002, the Serbian Government decided to fully privatise the country's cement production. Serbia's three cement factories were sold to private firms and control of this strategic product was taken out of state hands. French company Lafarge bought into Serbian cement with the acquisition of Serbia's truly historic cement factory at Beocin, close to the Vojvodinan capital of Novi Sad.

By Biljana Stepanovic

B

eocin has been producing cement since industry pioneers Adam Clark, an English engineer, and Josif Cik, a craftsman from Apatin, selected the site for its rich mineral deposits in 1839. The factory is the oldest on the Balkan Peninsula and one of the oldest in Europe. Among many other feats of engineering, Beocin's high quality cement has been used to build skyscrapers in London and New York, the Suez Canal and Budapest's Chain Bridge.

Considering the factory's rich history and well-earned reputation, CorD's Biljana Stepanovic spoke exclusively to George Bobvos, President of Lafarge BFC's Management Board, to find out what the future holds in store for Beocin.

Lafarge initially planned to invest a total of €35 million in the Beocin plant. However, you now plan to invest a total of €50 million by the end of the year. Is this for capacity expansion, factory modernisation or just to pay unforeseen expenses?

When we came here about two-and-a-half years ago we were obliged to invest €35 million over the initial five-year period.

However, we have sped up the process and thus by the end of

George Bobvos,

CONCRETE

President of the Lafarge BFC Management Board

INVESTMENT this year our technical investment will amount to €54 million.

The factory has three production lines at the moment - one dry line and two wet lines.

We want to simplify production into a large, unique line.

This will allow us to increase annual production levels of the dry line to 1.5 million tonnes of cement, which in turn will enable us to shut down the other two wet lines - which are actually the main sources of pollution.

How much capital, to date, has been invested in the Beocin cement factory?

When we bought the factory there were three elements of the privatisation - payment of $51million for a 70% ownership share; an obligatory €35million technical upgrade investment over five years; provision of around €16million to cater for the plant's social programme, over five years. We initially paid the price of the capital, invest around €54million by the second half

24

CorD | July 2004

of 2004 and more-or-less satisfied all social programme investments in the first year. Thus everything that had been required for the first five-year period was done after only two years or so.

It has been said domestically that Beocin was sold cheaply - even cheaper than Novi Popovac's smaller cement works, despite expectations to the contrary. Bearing in mind additional investments, do you think the price was fair?

Lafarge has dedicated a great deal of time and energy to this project and we have thus far fended off rivals two or three times at international tenders - the last one being in 2001. I think that, worldwide, purchases are considered from the point of view of the additional investments necessary to keep production levels high and not from a purchase price perspective. In that respect, I think we paid a lot. If one compares Serbia with neighbouring Central European countries then it becomes clear that Lafarge would not pay as high a price elsewhere for the capacity gained here.

Interview However, if one takes the whole package into account, our view is that we won the race to purchase Beocin because we came up with the best possible offer and we completed everything expected of us in a shorter period than promised. It is a fact that Lafarge, as a global operator, sees great potential in the industrial development of Serbia.

We hope to generate more profit than is currently possible when the market becomes larger and more developed.

indeed the entire area - lived from the income generated by the cement factory. When a private company takes over the rules of the game inevitably change. I am of the opinion that we are finally on course to reach a mutual consent, although things must be done both in the factory and within the surrounding community.

Prior to the privatisations of the three cement factories, the industry itself was in complete disarray: the black and grey markets ruled and it was impossible to legally purchase cement at acceptable market prices. How has this situation progressed, and has legality been restored?

I believe this process is well underway. Lafarge BFC has made excellent progress, although I think this has been easier for us, on the Vojvodina market, than it has for those operating in Southern Serbia. I can only imagine the situation in Novi

Problems have surfaced between Lafarge and local authorities of the Beocin area. The council requested the company pay environment, or eco-tax to the tune of around â‚Ź7million this year, which you branded as "attempted racketeering". In response, Deputy PM Miroljub Labus described the council's move as unacceptable conduct that could prove the best way to chase foreign investors away. What Lafarge, as a global operator, sees great potential in really happened? the industrial development of Serbia. We hope to The story is still ongoing and I hope we will reach agreement with the municipal authorigenerate more profit than is currently possible when ties soon. The point is that privatisation of the market becomes larger and more developed." heavy industry in any country includes a "transitional period", during which buyers can complete the technical modernization procedure in accorPopovac, which is close to the Kosovo border. dance with old regulations and then meet new standards at Two crucial factors are that we do not have an adequate staa later date. In some countries that period can last three, five tistical system able to monitor the product flow to customers, or seven years, but in Serbia the transition period simply and that this cement market is extremely profitable for some doesn't exist. people who do not pay sales tax (20%) thus re-creating the black I think the first mistake is in the legal system, which market for cement. did not take into account the time required for all investments to be made according to plan. In this instance, it is not about ecology, but rather about the municipality's desire for extra money. The money they seek is not part of the social programme, as funding for that programme has already been set aside for cooperation with local government.

In the past two years the municipality has gained around â‚Ź5.7million from the privatisation of BFC, through taxation, donations or state hand-outs. However, this has become more of a political issue: municipal authorities, or any other state institution, must know the rules of the game, as it were, and we, as taxpayers, must know precise taxation bases and levels in advance. We are currently working on making a clear distinction between ecological taxation and donations.

I must admit that our shareholders have become embroiled in this matter because it became such a problem that we had to explain the situation to them. I sincerely hope a solution can be found soon. I also think that the fact situations like this can arise is, in and of itself, a very bad sign.

Do you think this is actually to do with a fundamental misunderstanding of the situation and a case of people in Serbia not realising that new private owners operate in a different way to old state firms, or is this simply an isolated case?

I think, unfortunately, the latter is the case. As president of the factory's management board and president of the Serbian Cement Industry Association (CIS), I am well acquainted with the current economic situation, nationally. We have openly stated that this is a clash between two systems: the Western system, that wants only to do business in an open and transparent environment, and the other system that still cannot quite grasp this new concept.

For example, we are by far the biggest employer in the Beocin district and therefore it is vital to both sides that we have a good relationship with the municipal authorities. Yet prior to privatisation, naturally, the municipality - and

CorD | July 2004

25

Interview The Serbian Government were heavily criticised for selling all three factories and thus placing the entire production of this strategic product in private hands. Were they right to depend on private firms?

Unfortunately, the cement factory did not function properly under the state and some traders earned far too much money as a result. The first thing we did was retain the factory's revenue to prevent anyone profiting from the outside.

If one takes price as a main indicator, then it must be noted that the price of cement has actually decreased since privatisation. For example, in 1999 a tonne of cement cost between 170 and 200 Deutschemarks (€85-€100), certainly on the black (i.e. real) market. Today, Lafarge, Holcim and Titan have been on the Serbian market for two-and-a-half years and the current exworks price is around €59, with no dual pricing. That is an average price for the region and, considering purchase capacity, Serbia has European cement prices; and soon we will introduce world-class technology. I believe we now have a serious market here, with serious competition among the three producers. It is quite logical that we wish to make profits.

Lafarge sees great potential in the industrial development of Serbia

From all you've said, could we conclude that you have no regrets about investing in Serbia, despite the problems confronting you?

We knew it will be difficult and that privatisation would cause many things to change. Nevertheless, we have adapted accordingly in a short period and managed to organise ourselves. A complete turnaround has been achieved and, thanks to all the technical investments, most elements of our operations will be at the global level of the Lafarge Company very soon. Moreover, the state and the local environment have their own logic and we have to follow it: we are also, after all, a truly local company.

Cement cannot be transported hundreds of kilometres because of the extremely high freight costs. Therefore every cement factory has its own natural market within a 200-kilometre radius. Serbia's cement factories are very well spread and each has its own natural market. I am optimistic that when we see more investments in infrastructure and the state is in a better position to co-fund large scale projects, we will be ready to contribute. After two-and-a-half years I can say that we've reached the levels initially envisaged by the business plan and we are satisfied.

The fickle and unstable political scene is a cause of apprehension among investors. Has that been the case with your factory, or are political events not affecting your success?

This factor does have a negative impact on the market. For example, last year we hoped to kick off We have openly stated that this is a clash between two sys- comprehensive investments in infrastrucby working on the Belgrade-Novi Sad tems: the Western system, that wants only to do business ture motorway, which runs through Vojin an open and transparent environment, and the other vodina to Hungary, but the projects were slowed down. system that still cannot quite grasp this new concept.

As a result we are concerned about politprogress with accurate statistical data regarding levels of import, ical stability. However, we are out of the political domain and export, and distribution. must function on this market by adapting to the Serbian culture Those relying on the "tax-free" market are not producers, and way of thinking. but rather cement traders who are perhaps connected to a We have achieved extensive development and now control greater system. All three privatised cement factories are doing around a 50% share of the Serbian market. During this year, and their best to combat this problem, but the only way to precisely particularly next year, we are expecting large-scale projects and monitor buying trends is implementation of the notorious and large investments to be forthcoming. Motorways, bridges, much promised VAT (value added tax) law.

Corridor 10 - all have to be built and fortunately for us, all need Cement product quality is also an issue. Serbian cement is cement. Technical investments will be completed soon, Lafarge high quality and it is essential we protect the local market from BFC is now well-positioned to take full advantage of Serbia's low-quality cement coming from some neighbouring countries. future development!• As we are the only branch of heavy industry with all production in private hands, we have the chance to begin introducing industry standards through association and to gradually

26

CorD | July 2004

Thomas Kelly, General Director, U. S. Steel - Serbia

By Mirjana KneĹževic

O

ver the past two years, U. S. steel's representatives have familiarized themselves with the equipment, staff and business environment of Serbian metal production.

According to U. S. Steel Serbia's general director, Thomas Kelly, production levels, quality and plans to increase the international and domestic client base have made significant progress.

You are planning further production increases in the longterm. How will this be achieved?

Our long-term plan is to develop the steel plant to the point where it can produce 2.2 million metric tons of steel yearly, that is to say, to the full usage of capacities. One blast furnace is currently out of production and has been since 1987. This greatly limits production at Smederevo, and affects everything in the plant - our hot rolling mill, our cold reduction mill etc. We need to resume production on this blast furnace. This will require rebuilding the

PRODUCTION

tripled furnace and we hope to start on that project sometime next year.

With both blast furnaces operating, we have the capability to produce 2.2 million tons of steel annually. We are intensively working on all this, but the schedule is always subject to change because of market conditions in SCG as well as Europe and other world markets. Our business and investment plans will always be driven by world demand for steel products.

Are you anticipating an increase in sales of steel on the local market, considering the current state of the Serbian metals industry?

Depending on market development, when we increase production, the ratio of sales on the local and international market is likely to remain the same, but it is really difficult to tell.

Production of 1.1 million tons of steel this year does not satisfy the requirements of the local and foreign market. Increasing production to 2.2 million tons per year would entail an increase in consumption on the local market. Direct Foreign Investment will be crucial for that growth."

How has media publicity about the Anti-Corruption Council investigation into the Sartid purchase affected operations at U. S. Steel Serbia?

All the publicity prior to the election was a bit of a distraction for our people. We cooperated with the government investigation, providing the documents investigators requested. We are a company with a 103 year history of honest and ethical business. We proceeded in the purchase process in an entirely ethical manner, adhering to the bankruptcy laws not only of Serbia, but the U.S. as well. We are progressing through an immense recovery project. We intend to succeed in that effort and catapult U. S. Steel Serbia into a position of respected leadership in the world steel market.

After taking control of Sartid, you faced a strike that only ended with the endorsement of a collective contract, which, according to many, favoured the workers. What is the current relationship between the management and the workforce?

The relationship is very good. We have great respect for our workers and everything they have achieved since last September.

They increased production and productivity. They have improved product quality and service to the customers. There has been an improvement in safety. Production records have been achieved. All in all, we are making significant progress throughout the operations.

We will continue to develop better relations and mutual confidence with our workers. In this, time is of the essence. The contract we signed last autumn is truly historic. It was the result of an ethical and transparent bargaining process between management and union representatives. The contract is good for the workers and creates a positive framework for a joint effort aimed at achieving great competitive progress in the steel market.

The purchase agreement specified that you would not make redundancies in the next three years, but rather the number of employees would be reduced strictly by retirement, voluntary leave or dismissal resulting from disrespect of working discipline. Have there been any such cases so far?

No one has been laid off to reduce the total number of employees or because they held a redundant post. Some of the workers have voluntarily taken early retirement and there have been some cases of violations of the company's work policies.

Today, U. S. Steel Serbia employs around 9100 workers, approximately the same number of workers that were here when we came. This is because we have employed 440 workers in accordance with a contract previously signed with the unions of four Smederevo enterprises, which were not initially bought by U. S. Steel. Meanwhile, in Kucevo, we brought back to work formerly employed workers.

U. S. Steel Europe has recently raised the price of steel to â‚Ź130 per ton. How much has this latest trend on the world steel and metal market impacted on operations in Serbia; have profits increased?

The price increase directly affects the market. Demand expands worldwide and prices of steel go up. On the other hand, the prices of raw materials essential for the production inflate rapidly. This has resulted in price increases of products from the steel works in Smederevo and Sabac. However, we cannot raise prices of steel quickly enough to respond to the increase in prices of raw materials. Our ambition is to boost production and quality, as well as invest in training of workers and commercial marketing aspects of the business. The employees are loyal to the company, they want it to thrive and reach the level of production that will be profitable, in order to take part in their profit sharing provisions of the new contract. We have not achieved profitability as yet. But I know that day is coming, hopefully soon.•

CorD | July 2004

27

Interview

John Goodish, U.S. Steel Executive Vice-President

U.S. Steel - Serbia has been the talk of the town on New York's Wall Street for quite some time. The Serbian branch of the U.S. giant, which has operated in SCG since buying the former Sartid steelworks in Smederevo, has become an important player in the development of the Serbian economy and the country as a whole.

SUCCESS IN SERBIA

By Dragan Bisenic

S

peaking to press, U.S. Steel President John Surma said that Wall Street attention had been sparked as soon as interest in Sartid had been expressed. "Financial experts were initially rather reserved, but we can now say that we are satisfied with all that has been achieved".

The management of U.S. Steel and the former owner of the Sartid steelworks visited Smederevo and Belgrade last week, at which point the U.S. Steel President announced an investment worth $150million would be made to develop factory equipment and machinery over the course of the next five years.

The visit also marked the opening of U.S. Steel - Serbia's Belgrade-based Economic Development Centre, which has been established with the objective of encouraging direct foreign investment and economic growth in Serbia.

Established in 1901, U.S. Steel has been an American flagship company for over a century. It was the first American corporation with capital in excess of $1billion and today the company boasts an annual turnover of $10billion, with a 10% share of all steel production in America.

U.S. Steel first branched out into the former Eastern Bloc four years ago by purchasing Slovakia's Kosice steelworks. The American giant finalised its purchase of Serbia's Sartid factory in 2003, although American management were installed at the steelworks a year prior.

CorD spoke exclusively to U.S. Steel executive vice-president John Goodish about how the steel giant can contribute to economic growth in Serbia.

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CorD | July 2004

"There are many companies now operating that came here after we did and have invested $60million and created the possibility of 1,000 vacancies within three years," Mr. Goodish explained. "Our investment was a stepping-stone. If you invest a dollar, a few more dollars will follow for activities and services in the surrounding area. We are a great catalyst for economic development.

"When we came to Serbia we already knew that the factory had very professional personnel. We understood that there were many possibilities here. We began working with the staff and productivity substantially increased. We pay the bills and funds are allocated for road maintenance, gas, electricity, suppliers of our company etc. Those who were previously unemployed can now operate by relying on cooperation with us. By creating prospects for current steel production the possibility also arises for money to be invested in other branches of industry and for business to be expanded, as is the case here."

What would you say has been U.S. Steel's greatest achievement since coming to Serbia?

"The most important thing is that the company was producing half a million tonnes of steel annually prior to our arrival, but this year it will produce 1.1million tonnes. The quality of products has also been enhanced enormously. Before we came our section in Sabac had been using only 10% of its total capacity.

Now 93% is used. This was made possible only because of the great contribution of our employees in both sections, who work excellently in unison with our managers."

How can U.S. Steel - Serbia contribute to the economic development of the country?

Interview "For a start, new machine maintenance and final production workers will be employed. If you visit Slovakia you will see the country's emerging modern automobile industry. Here in Serbia it does not have to be an automobile industry, it can be agricultural machinery or something completely different. Regardless, it will definitely strengthen the economy."

vived regardless of the political conditions. Secondly, we see ourselves as helping the government by providing employment.

The state can now concentrate on other problems and not worry about securing wages for employees, as this is now the responsibility of the private investor."

Considering Serbia's poor image, even in Washington, can your engagement here improve the image of the country?

"We are constantly talking about our enterprise. President Suma and President of the Management Board, Tamash, have

Bearing in mind the Slovakian example, can this base industry really nurture the revival of the entire mechanical sector in Serbia?

"Of course it can; although I would not The company was producing half a million tonnes of agree that it is a base industry - electrolytes from Sabac are a hi-tech product used in highly steel annually prior to our arrival, now it produces sophisticated production methods. Moreover, 1.1million tonnes. The quality of products has also the Sabac section now has an extremely sophisbeen enhanced enormously. ticated laboratory, which was, perhaps most importantly, installed by Serbian workers. As steel producers, we can attract other investors to come, spent a great deal of time in Washington talking to Senators, particularly as we are now the biggest exporter in Serbia."

Congressmen and White House officials about our business here. We have a governmental relations office in Washington How ambitious is U.S. steel in Serbia? and we are informing the U.S. Government about how the "The machine sections are capable of producing Serbian people are taking care of us and how our operations are 2.2million tonnes per annum and we want to achieve this going here. One result of such efforts that can be singled out is level of production by 2006." the normalising of trade relations between the USA and SCG, which happened between September and October of last year.

Other suppliers are set to join U.S. Steel here. How We discussed this in great detail with our government because soon will that happen? this is something that helps us and other companies that will do "As I mentioned before, In Kosice it took three years business with us, or in relation to us. for eight companies to appear on the market. It is crucial "We also invited Ambassador Ivan Vujacic to Pittsburgh for that people are convinced the country is stable and that talks with companies who would like to come to Serbia, and they do not envisage risk when investing. That is what we these efforts will continue in the future. I would like to say that are doing in the case of Serbia." our 22,000 employees are now all working for Serbia."• Potential foreign investors have cited political instability as a reason for hesitating with investments in Serbia, and indeed the country is far from a shining beacon of political stability. How come you were not afraid to invest?

"The reasons for that are twofold. Firstly, during our initial visit to the machine sector we saw that there existed a very skilled and highly qualified workforce that had sur-

SCG Relations

CUSTOM

TARIFF

HARMONISATION

By Milan Culibrk

Belgrade and Podgorica's proponents of a separate path towards the EU for SCG's partner states have ceased publicly debating the issue of dissolving the state union after receiving several scoldings from Brussels.

However, they still hold out hope that the EU will "acknowledge the reality" that economic harmonisation is unviable and make a policy u-turn accordingly.

H

armonisation of the economic systems of Serbia and Montenegro has stood at a virtual standstill since the Harmonisation Action Plan was ratified by the parliaments of Serbia, Montenegro and SCG back in August 2003.

This ten-month lapse in activity points to a genuine lack of political will, in both Belgrade and Podgorica, to implement the Action Plan and satisfy international requirements. Deputy Serbian PM Miroljub Labus and Serbian Finance Minister Mladjan Dinkic - both of independence-orientated G17 Plus - are garnering increased support for a wait-and-see policy by encouraging the Serbian Government to wait for this autumn's expected change of personnel in the European Commission's leadership. Such a strategy is based on their belief that the Commission's new leadership will be more receptive to proposals for negotiating separate paths to the EU and thus separate

30

stabilisation and association agreements for the respective Serbian and Montenegrin Governments.

Independence-minded representatives of both republics are aware of the futility of attempting negotiations aimed at dissolving the state union while Javier Solana - signatory of the Belgrade Agreement that paved the way for the formation of SCG - remains the EU Commission's High Representative for Foreign Policy and Security.

In the meantime, great efforts are being exerted to create the illusion that something is being done to harmonise the two economic systems, while the reality is that Serbia & Montenegro is no closer to signing the EU's much-lauded Stabilisation and Association Agreement.

During the short post-Djindjic mandate of PM Zoran Zivkovic, the government publicly promoted the notion that Serbia could join the EU in 2007, along with Bulgaria, Romania and Croatia. However, with no internal progress made and the

In Serbia, PM Vojislav Kostunica's government claims that everything that could be done has been done and that now the entire process is dependent on "the good political will of Podgorica". long overdue Feasibility Study still not concluded, the prospect of accession prior to 2010 looks increasingly fantastical.

Serbia's accession process remains in "phase zero" and even reports that the EU Feasibility Study could be ready for submission by March of this year proved overly optimistic.

In many ways the harmonisation process, or lack there of, is the key to the failure of the state union partners to progress towards the EU. European Commission representatives have repeatedly warned that a positive evaluation of both the Feasibility Study and the Stabilisation and Association Agreement requires harmonisation of 56 strategic agricultural products, yet the respective partner governments have not moved an inch towards achieving this end.

In Serbia, PM Vojislav Kostunica's government claims that everything that could be done has been done and that now the entire process is dependent on "the good political will of Podgorica".

While in Montenegro, PM Milo Djukanovic continues to repeat his claim that the dispute is not a political issue, but rather an economic obstacle. He noted that raising taxes on Montenegrin food products to the levels of Serbia - an initiative recently proposed by the Serbian Government - would be reason enough for the Montenegrin Government to step out of office.

The proposal was made to representatives of Podgorica and Brussels during the recent Belgrade visit of EU Senior Representative Chris Patten. According to Deputy Serbian PM Labus, the government is still awaiting a response to their "reasonable offer" and, as such, he said "I cannot confirm whether the issue

has been harmonised or not". He added that they were proposing an alternative formula that could prove acceptable to the EU. Labus declined to reveal details of the proposal, insisting it was senseless to discuss new initiatives until both Brussels and Podgorica had approved them. However, it seems that the new proposal is a modified version of the plan drafted by Zivkovic's administration, but not presented to Djukanovic because of the loss of parliamentary majority and their reluctance to make such a crucial move in the final days of the DOS mandate.

The crux of the plan was that Montenegro raise customs tariffs on the 56 agricultural products to Serbian levels, and in return Serbia would be obliged to satisfy Montenegrin demand for these products.

Finance Minister Dinkic confirmed that the revised proposal boils down to the same concept by stating that customs taxes for these 56 products should be in line with the current level in Serbia and that the Serbian state would then supply the goods to Montenegrin importers, who would be refunded the difference between the old and new customs tax rates by the Montenegrin budget. Dinkic explained that this would have the two-fold effect of safeguarding current production levels in Serbia and cushioning the blow to Montenegrin consumers.

Enthusiasm for the proposal is not so high on the coast. The Montenegrin Government's official stance is that the plan was paigns in recent weeks. As an example, Dinkic's statement that flawed from its inception because Montenegro would be forced he would request the government rethink the Action Plan and to import food from abroad if the agricultural industry has an off raise taxes to combat the country's enormous foreign debt, season - as it did last year - and Montenegro would be forced to caused by the harmonisation process and the resulting tax pay higher taxes on the imported goods, which would have a decreases, has been all but forgotten. serious impact on standards of living.

In Podgorica, Montenegrin Minister of Agriculture Milutin Moreover, Podgorica's officials and economists argue that Simovic said the republic's government would be willing to disMontenegro's already overstretched budget would be unable to cuss harmonisation of the 56 troublesome products, but only cope with the additional strain of refunding such tax increases once the Serbian Government had made a clear statement of and that PM Djukanovic's consent to such an initiative would whether it supports Dinkic's proposal to modify taxation levels affect a budget deficit that is already close to critical. Should of previously harmonised goods. they implement the tax rises, but not refund the importers, a Simovic said that such support would ensure that harmonisprice surge would undoubtedly occur and Djukanovic, who faces ing customs rates for the 56 would be a waste of time because a host of other problems, is unlikely to allow that to happen.

Montenegro, which neither produces nor intends to produce the Nobody in Kostunica's government is prepared to discuss the alternative - a tax decrease Podgorica's officials and economists argue that on these agricultural products in Serbia Montenegro's overstretched budget couldn’t cope with because it is widely felt that such a move would further imperil an agricultural industry the additional strain of refunding such tax increases that has already been seriously damaged by and PM Djukanovic's consent to such an initiative stiff international competition. would affect a budget deficit already close to critical.

Public opinion seems to be on the side of the Serbian Government, as witnessed by the unparalleled support for media mogul Bogoljub Karic's suggesdisputed goods, would have to protect its interests. tion that the import of lettuce be banned.

PM Djukanovic explained that the fact the republic does not Since the signing of the Constitutional Charter paved the way produce the goods is the very reason Montenegro insists on low for the creation of the state union, SCG has been spinning taxation of these products, since they ensure reasonably cheap motionless in a vicious cycle that cannot be broken until someimported food can be provided for Montenegrin citizens. thing changes. Montenegro cannot raise taxes, Serbia cannot Reeling from the exorbitant costs of harmonisation, Labus lower taxes and Brussels cannot accept an interim solution that explained to Chris Patten and chief of the European would see the harmonisation process go on for the next three to Commission's delegation to SCG, Jeffrey Barrett, that the Action five years.

Plan is proving far too costly for Serbia. Foreign trade deficit has Meanwhile, harmonisation of the remaining customs taxes is increased 45% since customs taxes were lowered in August much more important to Serbia because the government cannot 2003, reaching $2.3billion after the first quarter of 2004. In conclude an agreement with the EU on free exports of textile return, Serbia has gained nothing because the EU has still not products until the process has been successfully concluded. signed the Stabilisation and Association Agreement and thus the Problems do not end with harmonisation, of course.

Action Plan cannot be revised and customs tariffs cannot be According to Labus, Brussels has requested that Serbia impleraised, particularly bearing in mind that Serbia has been given ment European and other non-domestic regulations regarding preferential tariffs allowing the country to export 97% of its the origins of goods bound for the EU market; and the Union products to the EU without taxation. also wants to see wider jurisdiction granted to the SCG customs Labus explained that privileges do not come without obligaoffice, which will grant it authorisation to control the activities tions and it has been agreed that Serbia cannot increase taxes of the customs bodies of the two republics. on EU products. If this should happen the EU's preferential Despite its importance to relations with the EU, Action Plan treatment of Serbia would be revoked and Serbia would lose debate has been sidelined in favour of presidential election cammore than it would gain.• CorD | July 2004

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Interview

TOGETHER

WORKING IN CONTINUITY H.E Ryuichi Tanabe, Ambassador of Japan to SCG

Since rising from the ashes of the Second World War, Japan has become one of the world's most economically powerful nations. Whilst managing to maintain a constantly growing economy, Japan endeavours to be heavily involved in charitable work and programmes assisting countries traversing economic or political transition.

By Nina Nicovic, Photo Andy Dall

T

hrough its Belgrade-based embassy to the state union, Japan has donated in excess of $69million and established a wide range of programmes to help schools, hospitals and restoration of a hydroelectric power station; provided expert training and even buses for the capital. These facts ensure that Japan is one of the largest and most consistent donors to SCG. Current Ambassador of Japan to Belgrade, H.E. Ryuichi Tanabe, has spent the past 30 years serving Japan in countries experiencing historic changes. He witnessed the fall of the Berlin wall and the subsequent reunification of Germany; spent the Gulf War in Riyadh, followed the conflicts of the former Yugoslavia from Vienna, was in India during their nuclear weapon testing and in Washington on 11th September.

Having witnessed such dramatic events, the ambassador's basic message is that the world must embrace a new kind of philosophy for the 21st century - one that will make this "small planet" a peaceful and more prosperous place. To that end, we must support each other and learn about each other's differing cultures in an effort to recognise the truth that the most important things are "invisible".

Why is Japan exerting such great efforts to promote economic cooperation between your country and SCG? Serbia & Montenegro is now in the process of democratisation and economic reconstruction. Japan is a democratic country with a market economy and so one could say that we share the common values of free market economy and democracy.

That is why Japan is here to work with you.

A ministerial conference regarding the consolidation of peace and economic development of the West Balkans was held in Tokyo in April of this year. This proved a crucial opportunity for SCG to discuss major issues with its neigh-

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CorD | July 2004

Cooperation based on shared values The Embassy of Japan has developed many projects and bours and further relations with Japan. How successful was provided a lot of donations that have been of great help to the that meeting, from a Japanese point of view? people of SCG. What kinds of projects can we expect in the Following the visit from Tokyo of our Deputy Foreign future?

Minister, we began intensive preparations to hold the conference Serbia & Montenegro is now going through the difficult in Tokyo. This was the first such conference to be staged in process of reforming its economic structure. In the coming Japan and the event, which was attended by representatives of months and years I would like to place more emphasis on 39 countries and 13 international organisations, was co-chaired human resource development and we would like to bring more

by Japan and the EU. technical experts to this country.

The conclusion of the conference was an agreement for us to Over the course of the past three years we have invited more work together in promoting stability and democracy and to furthan 60 local experts to Japan for training courses in economics, ther bolster regional cooperation aimed at enhancing economic production, hospital management, etc. I would like to see development. We also expressed our unwavering determination experts come here from Japan in the fields of small and medito ensure the positive trend in this region is irreversible. um-sized enterprise management, trade, investment, tourism Japanese Foreign Minister Kawaguchi used the opportunity to promotion and so on. This is the next phase of our economic explain that the consolidation of peace and post-conflict nation building are pillars of Japanese foreign policy. She insisted that Japan Companies face many challenges during the initial stage of would continue to contribute activeforeign investment, which is why such an enterprise should ly to the region of the West Balkans, be encouraged by the government of the recipient country based on the three principles of consolidating peace, economic cooperation. However, I also want to say that I would like to condevelopment and regional cooperation. She stressed that consoltinue our "Grassroots Grant Assistance" projects, such as school idation of peace and economic development were two sides of the restructuring and emergency hospital projects. same coin - each being highly relevant to the other.

This conference proved to be extremely successful and timeMontenegrin company DIADO Metal, Kotor, represents ly, particularly in consideration of the Kosovo unrest in March. the first direct Japanese investment in SCG. How did that venPrior to the event, I suggested to my government that the conferture go, according to the experiences of the Japanese ence should be action-orientated and thus we are to implement investors? some tangible follow-up programmes in the coming months.

The company, which was established in 2001, is a factorybased producer of special plain bearings for car engines. Last What will these follow-up programmes consist of? I am year they produced 4.2 million pieces and exported more than led to believe that there are hints of cooperation in the field of 99% of their products to Europe. Thus the factory contributes tourism? greatly to the Montenegrin export trade.

One programme will include the staging of a workshop on I hope the firm will continue to prove successful because all promoting tourism on a regional basis, which will probably be of Japan's businessmen who study the potential for investment held in Montenegro this coming autumn. Of course, West in Serbia & Montenegro look at this company to see whether or Balkan countries are expected to participate and I have asked my not it is succeeding. government to send a delegation from Japan, which will comCompanies face many challenges during the initial stage of prise officials and representatives of tourism companies. foreign investment, which is why such an enterprise should be We are also planning to organise an investment seminar for encouraged and supported by the government of the recipient Japanese businessmen working in Europe, in order for them to country. I was told that DIADO Metal invested in Kotor because receive the latest information about this area.

CorD | July 2004

33

regard Romania or Bulgaria as the next targets for investment. It is imperative that this huge gap in information be rectified by the efforts of the Serbian & Montenegrin side. An active PR campaign is a necessity. Emphasis must be placed on dissemination of information to Japanese investors in Europe and their Tokyo headquarters.

Considering that Karate, one of your national sports, has many disciples here and that one of our most famous footballers, Predrag "Pixi" Stojkovic, played and gained much respect in Japan, it is evident that a bridge for sporting and cultural cooperation can be built. Are any programmes being developed to that end now?

I was very impressed to see that an annual kendo tournament is held on the outskirts of Belgrade. As you know, many young people practise kendo, judo, karate and aikido here. Last year we organised a large Budo (martial arts) festival and this should become an annual event.

Mr. Stojkovic is very popular and very famous in Japan and he also participated in the West Balkan conference. He gave a wonderful speech about the possibility of achieving reconciliation through the promotion of sporting exchanges. It is also pleasing to see that many students are learning the Japanese language and it would be very good to hold a speaking proficiency contest in the Japanese language. As you know, we opened a Japanese garden in central Belgrade a few weeks ago, which included an exhibition of bonsai trees and proved very popular.

There are a great deal of people showing a strong interest in Japanese culture and sport. To us, these people are invaluable to the strengthening of our friendly relations. However, more efforts need to be made to promote our sporting and cultural exchanges.

What are the most important things that the leaders of SCG need to know about the current relationship with Japan, in order for that cooperation to progress?

In the last year, since my arrival, six of Serbia & Montenegro's ministers visited Japan and we have had extremely productive Sport & culture to strengthen friendly relations consultations in Tokyo. I now hope that parliamentary cooperation can be promoted because Serbia & Montenegro will face many challenges in the implementation of reform policies. they found a good workforce with technical knowledge and I would be very pleased if the post-World War II experiences lower labour costs than other parts of the region. They brought of Japan could prove helpful and encouraging to this country. It in the latest technology and equipment from Japan and, as far as is hard to imagine how poor Japan was in 1950. At that time, per I know, only two Japanese men are working there. I am extremecapita income was $138, compared to the U.S. figure of $1,882; ly impressed with the achievements of this company. in 1970 Japanese income had risen to around $2,000 and U.S. income stood at $4,800; by 1990 the average Japanese salary had As Ambassador of Japan you are surely apprised of the grown to $23,000, while U.S. citizens earned $21,000. impressions of visiting businessmen from Japan. With this in Japan does not have any natural resources. We import every mind, what kind of impact has SCG had on them? resource we need and have to make high quality products for In April this year an economic delegation, consisting of 22 export. Education is one of the key factors of economic developJapanese businessmen who currently operate in Europe, came ment and after the Second World War we faced a tremendous to Vojvodina, Serbia. They cited low labour costs, transport challenge. infrastructure, motorway In such a situation it is always access and the experiThere is a huge information gap. European vital to create a national consensus ences of previous indus-based Japanese investors had never among political leaders, business trial activities as very heard that such potential existed in Serbia circles and citizens. It is crucial to positive factors. set a common goal for the nation, They were extremely such as economic prosperity and the protection of fundamental interested by these factors because they had never considered human rights. Once such a consensus has been achieved, the Serbia as a future investment country. However, after their visit country has to work together as a team and ensure those policies they had the impression that Serbia, and particularly Vojvodina, are set in stone. would be an interesting alternative for their investments. There In 1960 Japan announced a plan to double income within ten seems to be a tremendous information gap because Europeanyears. We worked very hard and reached the target by 1967. Thus based Japanese investors had never before heard that such a "consensus building", working together with continuity of polipotential existed in Serbia. cies and political stability were the main factors ensuring the This country is still suffering terribly from its recent image successful reconstruction of my country.• as a conflict area. On the whole, Japanese investors tend to

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CorD | July 2004

Serbian-Slovene Co-operation

THE

ADVANTAGES OF A SHARED PAST

Dmitar Polovina,

Director of the Slovenian Chamber of Trade’s Belgrade representative office

"We understand that which is incomprehensible to others because, until relatively recently, we were parts of the same country. And we are aware that the process of getting on this market should be sped up because when the big multinational companies arrive there won't be any space for Slovenia's small and mid-sized companies", said Dmitar Polovina, Director of the Slovenian Chamber of Trade's Belgrade representative office.

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CorD | July 2004

By Sonja Lukic, Photo Andy Dall

S

lovenians are not only familiar with Serbia's language, people and way of operating, but also have the advantage of intimate knowledge of the current economic and political period, having gone through the same process of reform and growth in 1991.

The experience of SCG's former countrymen demonstrates that the transition process in Serbia & Montenegro should be hastened because commercial and industrial enterprises are collapsing on a daily basis and the only way to tackle the problem is to reach a consensus among political and business spheres.

According to Mr. Polovina, exchanges of experience between business operators are invaluable: "No Slovene will tell you that you made this or that mistake without giving you prior warning of a mistake they made, which you should not repeat. The models of others should not become the entire base of your actions and you should be weary not to discover the previously discovered.

"It is a fact that business breaks all barriers and proof of that lies in the fact that Slovenia currently exports goods to the total of €5,000 per capita. By slightly shifting the entire society I believe Serbia could also achieve the same position.

"We entered the EU as the country with the best "preparatory work" and therefore there is almost no area with which we cannot help Serbia & Montenegro. The EU even empowered Slovenia to help the countries of the former Yugoslavia move closer to the EU in the shortest time possible and Dr. Janez Potocnik - the man who brought Slovenia into Europe - has been appointed as one of the ten commissars."

Annual trade figures between Slovenia and Serbia stood at €3billion 15 years ago. Today they have fallen to a mere €410million. In Slovenia it is hardly referred to as a mutual exchange, rather a one-way street that sees Slovenia export six times more than Serbia and boast 200 representative offices and company branches in SCG, as proof that enterprises from all sectors have already made their mark here.

Mr. Polovina explained: "many would be surprised to note that among the top ten products that Slovenia sells to Serbia there isn't a single food item. The old story about Slovenia taking away all cheap raw materials, processing them and returning with expensive goods has become a thing of the past. Gorenje is attractive businesses, while others had had to offer more realisthe biggest seller of merchandise, but they offer a great variety tic prices, which the market will regulate. of products. No comprehensive information is available, but to "As examples of the co-operation between our countries, I date over €150million has been invested here. would to note Impol and Seval, which both had excellent results "I was fascinated to discover in a recent issue of CorD that we after just a year. Previously, 1,100 workers were producing 900 are, along with Austria, the biggest investors here - not counting tonnes of aluminium and now 800 workers produce 3,500 tonnes. multinationals that have 140 firms here, while we have 200 com"Kolinska successfully moved in to Palanacki kiseljak with panies operating in Serbia and Montenegro. an initial investment of €5million and now they successfully Having so far purchased 11 companies during the privatisaexport goods all over. tion process in Serbia, Slovenia is ranked second The models of others should not become the Slovenians maintain consolidated social prograon the list of national entire base of your actions and you should be mmes in both companies to investors. Polovina noted that the figure would weary not to discover the previously discovered. the letter, though the model is unusual. Security guards, probably be higher if receptionists, couriers and general legal departments are dismany companies hadn't been going through the privatisation solved because it is more rational to engage such services on the process since the 1990s; and the question of compensation is also basis of specific need, rather than to permanently hire them. an issue because it is clear, he insists, that nobody has invested Another example of that sort of thing is to be found in Kiseljak, in these floundering companies for the past 14 years. where the company's drivers were all officially made redundant, The Slovenian Chamber of Trade official explained that it only to receive company vehicles on lease the very same day. would be a very simplistic interpretation to say that some compaNow they work for themselves as company contractors. ny had been bought cheaply, because literally everything within "I believe that moves like this are good for everyone, but the that firm may have to be changed. best examples lie in the results of business. We are a country He said that Slovenian investors had not changed the operawith less than two million inhabitants, but we make an annual tions of any company purchased, but that the majority of busiincome of €25million purely from exporting goods and raw matenesses had been bought principally for their office space. He rials. Our maxim is that there is nothing that isn't exportable."• added that it had proved relatively easy to find buyers for the CorD | July 2004

37

Investment Scandal

Serbian

Minister scandals fuels bribe

DOS officials accused of accepting bribes from foreign oil companies

By Sijka Pistolova

Serbian Minister for Capital Investments, Velimir Ilic, has ignited a new corruption scandal by accusing foreign oil companies of bribing officials of the former DOS government in order to obtain attractive locations for new petrol station chains.

40

CorD | July 2004

I

lic, leader of government coalition party New Serbia, chose the Slovenian capital of Ljubljana to announce that his ministry was investigating whether DOS officials had been paid to give preferential treatment to foreign oil companies operating on the Serbian market. The former government officials mentioned by Ilic have denied the allegations, while fuel industry experts insist the possibility cannot be discounted because foreign operators are pushed into this kind of behaviour by the complicated and drawn out procedural requirements for obtaining building permits in Serbia.

The Serbian Minister explained that his ministry, which shares responsibility for overseeing the construction of petrol stations along Corridor 10 with the Serbian Roads Directorate, has formed a commission to investigate the issue. He added that they had identified several instances where differing oil companies had been granted building permits for the same locations.

According to anonymous TV B92 sources, the petroleum companies in question are Greece's Hellenic Petroleum, Russian company Lukoil and Austria's OMV. Amongst the officials allegedly involved, Ilic named former Serbian PM Zoran Zivkovic, and claimed to have recorded proof of the bribery.

In response, Zivkovic insisted: "I don't recall Lukoil asking for permits to build new fuel stations. As far as I remember, Lukoil acquired Beopetrol with a privatisation tender bid that was 10 or 15 million Euros higher than that of the nearest contender, which proves that there were no irregularities in the privatisation process. However, if Mr. Ilic has some kind of recording I would like to see it so we can get this ridiculous argument over with".

Belgrade representatives of the three foreign oil companies were shocked by Ilic's accusations. Georgios Apostolopulos, managing director of Hellenic Petroleum's Serbian subsidiary Eko YU, refused to respond directly to the allegation, saying only: "Eko Yu has a five-year investment plan that the company made known to the public last year. Our company is aware of the fact that there is a future on the Serbian market and it's only natural that we want to build filling stations and expand our retail

Borislav Radosavljevic.

Investment Director OMV - Yugoslavia

Privatisation News

LOOK OUT LUKOIL! Uncertain future for Russian oil giant's investments Nine months has passed since Russian oil company Lukoil purchased Serbia's Beopetrol. However, with none of the promised investments yet forthcoming, Lukoil's future on the Serbian petroleum market could be in doubt.

By Sijka Pistolova

W

hen Lukoil chose to purchase Beopetrol last September it accepted the terms of the sale contract, which included a first-year obligation to invest $70million for the consolidation of the company. According to the management of the time, the money had been earmarked for modernisation of existing petrol stations and construction of 50 new garages.

However, since endorsement of the sales contract not a single penny has been invested.

Investment Scandal

network. Accordingly, we are looking to purchase locations for these retail units through transparent public offers".

Maja Zikova, Lukoil spokeswoman for South-East Europe, rebuffed Ilic's claim, saying: "We do not know of any instances where our company bribed anyone in Serbia".

Implying that the Serbian Government official could face civil charges for defaming Lukoil, the Russian company's vice-president, Dimitri Nikolajevic Tarasov, told reporters that he would not comment on the accusations because it is Lukoil's policy to respond to lies with legal charges and not public denials.

OMV has regularly faced stiff media reactions to the locations of its petrol stations in Serbia. Two years ago, for example,

Revision Commission. Moreover, the Commission has 17 members and it is often extremely difficult to get them all together to approve a project."

Owners of Serbian petrol stations, who wished to remain anonymous, were reluctant to discount the possibility of corruption during the sales of state-owned plots, or the issuing of building permits. The owners cited protracted and complicated procedural requirements - leading to a significant increase in building costs - as a possible cause.

Ljubinko Savic, Secretary of the Serbian Chamber of Commerce's Energy Association, told CorD that foreign investors faced a barrage of obstacles when attempting to build petrol stations in Serbia. explained that satisfyZoran Zivkovic: "‌if Mr. Ilic has some kind of recorded proof I would He ing the eight Republic and like to see it so we can get this ridiculous argument over with". municipal levels of spatial and urban plans was the AD Nafta's Radomir Ristic accused the Austrian firm of propfirst hurdle, which was in itself a time-consuming barrier further ping up retail units near Velika Plana without the necessary percomplicated by the fact that many areas have no such plans to mits. The oil company responded with a flat denial. begin with.

According to Borislav Radosavljevic, Investment Director of He noted that the procedure had been partially simplified OMV - Yugoslavia, the Austrian investors were, thankfully, not after a number of oil companies lodged official complaints, mentioned by Ilic as one of the firms paying bribes to officials to though the simplification had made no significant difference. obtain development sites.

Savic added that the regulations had been much better defined Insisting that OMV has a strong company code of conduct for those wanting to erect stations along Corridor 10 because and that no company representative has paid backhanders to "fuel stations belong to the category of 'mandatory accessory hasten the approval of building permits, Radosavljevic admitted content' on the motorway corridor. Their basic function is to that he is frustrated by the complicated procedure for obtaining provide fuel of all types, spare parts, services and similar". various permits in Serbia.

Regulations for constructing garages along Corridor 10 He explained: "there is a distinctive problem of traffic conspecify that individual stations must be 20-30 kilometres apart, nections for petrol stations. For instance, if a petrol station has a accessible from both directions and by local roads as well as the direct road connection to only local roads then a municipal motorway, and the stations must not cover more than 1.5 to 3.5 license is sufficient. However, if the garage has a direct connechectares. Savic explained that a further hindrance was that station to a motorway or regional road then the process is complitions planned for the stretch of road must also satisfy European cated because approval must be granted by the local municipalstandards, although specific requirements to achieve such stanity, the Serbian Ministry for Capital Investments and the Special dards have not been detailed.•

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CorD | July 2004

Privatisation News According to representatives of the Russian company, the ny but domestic oil refiner MOL from supplying the Hungarian delay in investments has come as a result of bureaucratic setmarket right up until the country's 1st May EU accession. backs in Serbia and the complex process of issuing licenses to Moreover, he noted, the Hungarian state had only a 25% stake in legalise a large number of existing petrol stations and construct MOL, whereas the Serbian state is exclusive owner of NIS and new outlets. thus has even more reason to protect the interests of the compaSpeaking to Serbian journalists in Moscow recently, Lukoil ny and prevent the liberalisation of petrol importation. senior vice-president Vladimir Tarasov complained over the Also responding to Lukoil's explanation of the investment communication standstill between the company's management delays, Serbian Privatisation Agency director Branko Pavlovic and Serbian authorities, particularly with regard to construction said the state would tolerate minimal extensions to investment sites and technical requirements enabling the construction of deadlines detailed in the sale contract, but it would certainly not new filling stations. permit any reduction of the figure specified.

However, anonymous Serbian Government sources insisted Pavlovic insisted that the mistake made by the agency's prethat the Russian oil giant was According to representatives of the Russian company, the delay in conditioning investments by obtaining import licenses for investments has come as a result of bureaucratic setbacks in fuel from its Burgas oil refinSerbia and the complex process of issuing licenses to legalise a ery, allegedly because Pancevo petrol does not meet Lukoil large number of existing petrol stations and construct new outlets. standards. This despite the fact that importation of oil derivatives to Sebria is prohibited until vious management - which allowed Greek firm Titan to invest 2006, when the country is expected to have recovered from only $17million of an agreed $43million in the Kosjeric cement NATO's heavy bombardment of local refineries, which are curfactory - would not be repeated. He warned that Lukoil's failure rently being reconstructed and upgraded. to invest the contractually obliged $70million would result in Energy sector union UGS "Nezavisnost"(Independence) has serious penalties. reacted strongly to Lukoil's attempt to gain approval for imports.

Lukoil fought off strong competition from Hungary's MOL According to Sava Blagojevic, president of the union, "Lukoil's and Greek firm Hellenic Petroleum to buy Beopetrol. They paid a desire to sell its own oil derivatives in its own petrol stations is grand total of $117million. The contract detailing the privatisation quite logical, but our wish to protect the production of oil derivobliged the Russian company to invest a total of $85million, atives in Serbia is far more justifiable". $70million of which would be forthcoming in the first year.

Blagojevic drew upon the example of Hungary, which had Lukoil is also contractually obliged not to make any redundancies protected its own oil refinery products by preventing any compaof Beopetrol's 1,500-strong workforce for the next five years.•

Campaign "spreading like a contagious disease"

Buy domestic, rebuild Serbia

By Sijka Pistolova

Serbian Minister of Trade, Bojan Dimitrijevic, has expressed his delight with the early results of the "Buy Domestic" campaign, aimed at boosting sales of Serbian-made products.

However, leading market analysts insist that the campaign will only be supported by a third of the nation; and foreign companies already present on the Serbian market - such as Coca Cola, Kolinska and Skopska Brewery - do not feel threatened by the initiative.

A

the topic of a recent Belgrade conference of international marketing agencies. Participants concluded that consumer ethnocentrism is commonly defined as a consumer belief that purchasing domestic products is morally binding and represents an act of patriotism.

A project presented last year by the Strategic Marketing Agency, under the title "Consumer ethnocentrism and observing the quality of domestic and foreign products", concluded that the primary goal of the marketing industry was to develop a brand image, which depends on a whole host of factors - the most important of which is perhaps the perception of product quality.

Yet ethnocentric consumers, who believe that buying a product manufactured abroad will damage the national economy and is thus unpatriotic, often offset the relation between product quality and buying trends.

According to a survey of 1,500 people, carried out by Hannah David and Tamara Tapic, a third of Serbia's consumer population is highly ethnocentric and only buys domestic products.

Speaking to CorD, Tapic said that this group "firmly believes that Serbian products are superior in quality". She added that the remainder of the country is either moderately or scarcely ethnocentric and that the "Buy Domestic" campaign could rally

Serbian Government initiative aimed at boosting the gross domestic product and reducing foreign trade deficits has been launched under the slogan "Buy Domestic - Rebuild Serbia".

Presenting the campaign and its early results to media at Belgrade's Que Pasa restaurant, Serbian Trade Minister Dimitrijevic said the primary aim of the campaign was to modify consumer trends in the country. Calling for domestic banks, trade unions, professional associations and guilds to join the drive, the minister said that he was pleased to say that the government campaign had "spread like a contagious disease" Dimitrijevic is confident that the drive will prove successful, backing up his optimism with the results of a survey by the Ministry of Trade, Tourism and Services, which shows that over 60% of the population fully support the campaign, while a further 19% gave the The minister said that he expected the campaign to have idea partial support. the greatest impact on citizens between the ages of 18 The minister said that he expected the campaign to have the greatest impact on and 29 who, according to previous surveys, are generally citizens between the ages of 18 and 29 less concerned with "patriotic issues" when shopping. who, according to previous surveys, are generally less concerned with "patriotic a small number of supporters among moderately ethnocentric issues" when shopping. He explained that a mere 45% of citiconsumers. zens in this age bracket give preference to domestic products, According to the survey, ethnocentric consumers conform to compared to 80% of older citizens. the idea that foreigners are taking advantage of the Serbian econHowever, market analysts claim that the campaign will omy, which causes the fear that the country's economic selfreceive the bulk of its support from consumers who already give reliance is being jeopardised. The largest proportion of those surpreference to domestic products because of patriotic sentiments. veyed expressed the belief that foreign companies were exporting Thus foreign companies operating in Serbia do not feel threatlow-quality goods to Serbia that had been rejected by consumers ened by the campaign. on their own markets.

Consumer ethnocentrism - perspectives and limitations, was

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CorD | July 2004

CONSUMER ETHNOCENTRISM Consumer ethnocentrism is considerably higher among the older section of the population, but is present among the youngest group in over 50% of cases Strategic Marketing , SMMRI grupa SEEMAR '04, Beograd, Maj 2004

Tapic explained that a Strategic Marketing survey had shown domestic products were the main preference of older and less educated consumers. She elaborated: "These consumers believe they would find it hard to adapt to a market environment with foreign competition and would have difficulties in finding work in the event of losing their current jobs.

"They are simply more concerned about their future with the prospect of foreign companies entering the market, while young and more educated people are less intimidated by this possibility."

Nevertheless, ethnocentrism is present in more than 50% of the consumer population aged between 18 and 29. The perception of the quality of products from foreign countries is linked to the intensity of consumer ethnocentrism: the population with high ethnocentrism gives low ratings to imported products and rates Serbian-made merchandise as the best; with the exception of food and cigarettes. The less ethnocentric section of the population rates Western European, US and Slovenian products as the best; moderately ethnocentric consumers give preference to

Serbian and Croatian goods, while Slovenian products are often compared to US products.

Foreign companies operating in Serbia have responded indifferently to the campaign. Expressing awareness that such initiatives are launched by governments of both developed and developing countries, foreign operators deem such drives as desirable, provided they are not subject to institutional frameworks and do not stifle competition.

Slovenian firm Kolinska could actually benefit from the initiative thanks to its brand of local mineral water, Karadjordje.

However, sales of Kolinska products produced elsewhere could be dented by the drive.

According to Petar Rajacic, managing director of KolinskaBelgrade: "When we enter a shop we rate and buy products comparing their price, quality and service. I think these are key factors that determine what we buy and where we buy it".

Natasa Djurdjevic, Coca Cola's development sector supervisor, noted that foreign products are often not as foreign as they

Campaign "spreading like a contagious disease" seem, nor are all domestic products quite so domestic: "Many goods produced in Serbia are made using foreign resources.

Conversely, there are foreign companies that have been present on the Serbian market for a long time and, despite bearing a foreign name, employ local workers, own a sound taxpaying record and invest in the country. All of this raises the question of how one can discriminate between differing groups of companies".

The Skopska Brewery's drive to break into the Serbian market has coincided with the "Buy Domestic" campaign, but they remain undaunted thanks to a similar experience in neighbouring Macedonia. According to the brewery's management, who insist that there are enough consumers on any given market to support both domestic and foreign goods, a similar campaign in Macedonia boosted sales of a foreign product that was accepted as a homemade brand.

Snezana Ivanovska, head of the brewery's development programme, explained: "Taking the example of beer, the Macedonian Government's two-year "Buy Homemade" campaign was a total success for us, mainly because it resulted in Amstel Beer being treated as a domestic product two years after Skopska Brewery began producing it."

Researchers of the Strategic Marketing Agency believe the campaign is unsuitable, as it does not reflect the economic reality of Serbia. According to their surveys, there are an insufficient number of products of varying quality in Serbia for consumers to choose from.•

Commerce

SERBIA'S

IMPORT

TRADE

Slobodan Milosavljevic, former minister of trade and tourism and current director of the Serbian Chamber of Commerce, has evaluated that imports to Serbia are unjustifiably high and include products that it is not necessary to import - such as food products, textiles, leather, footwear, furniture, building materials and ceramics - because domestic industry can be competitive in all these areas.

By Gordana Pesic

S

erbia's foreign trade deficit increased by 37% during last year, achieving an all time high of $4.85billion. While imports have reached record annual levels of $7.3billion, export has achieved only modest growth over the course of the past three years, last year making a total of $2.47billion. As a result, current exports only counter 33.8% of the import trade a drastic decrease and a cause for concern.

Professor Mladjen Kovacevic, of Belgrade's Economics Faculty, told CorD: "the huge import levels and trading deficit would not be a problem if it mostly involved import of technical equipment, technology and knowledge. However, the last three years have seen the greatest growth in imports of mass consumption products, and last year, with levels three times higher than in 2000, these consumer items comprised 48% of all imports".

According to Kovacevic, the huge growth trends and high import levels are a direct result of the dinar being overpriced with prices of domestic products on the up, imported goods become more competitive. Moreover, he insisted that the country's import lobby was also a key factor: "During the past three years the power of the import lobby has grown and grown and it is now far superior in power and influence when compared to

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the export lobby. This has contributed to a sharp increase in registered and unregistered imports and has even seen products of dubious quality imported in to Serbia".

Over the course of the past year Serbia has imported mostly crude oil, natural gas and reproduction materials; medicine, electricity, new and used cars and buses, telephones, coffee, bananas and cigarettes. And, according to Milosavljevic, Serbian food producers have not taken advantage of the opportunity to introduce domestic products to foreign markets through supermarket chains Mercator, of Slovenia, and Veropulos, of Greece.

Milosavljevic contended that: "they [domestic producers] didn't exert enough effort to slightly adjust the quality of some products to the standards of these trading chains. In many cases this was about really small things like packaging and a lack of barcodes."

While last year's agricultural foreign trade exchange was marked by a $69.4million deficit, with import-export coverage at 89%, the situation in the textile and leather-manufacturing industry is even worse. Millions of Dollars have been spent on importing 3.283 tonnes of second-hand clothes, though it is possible that these were in fact new clothes simply marked as second-hand.

The foreign trade deficit in the textile industry stood at $364million last year, with exports accounting for $212million

Commerce

and imports costing $576million. According to Blagomir Jovanovic, secretary of the Textile and Leather Industry Society, "it has been evaluated that a large quantity of extra products are imported on the black market, which means that our payment deficit is greater by that amount".

Members of the Textile and Leather Society claim that more than half of the products imported from the 'West' are of lesser quality than those produced by domestic manufacturers.

Moreover, detailed analysis of some products - including shoes, leather goods, socks, nappies, sanitary materials and even compressed gauzes used by hospitals - have shown that the quality is so bad that it could endanger health by causing allergies and skin disorders.

The Society spokesman added that ridiculously low import tariffs are also a major problem. According to Serbian Customs

hygiene products and cosmetics, while domestic producers of high quality goods have seen their share of the domestic market cut from 70% to 20%. As a result, domestic manufacturers from these sectors are demanding that the Serbian Government take all possible measures aimed at protecting domestic industry and decreasing levels of unnecessary importing.

Deputy Serbian PM, Miroljub Labus, assured manufacturers during a recent meeting that the government would take all possible measures to protect domestic industry with more effective quality control of imported goods and implementation of antidumping measures and other regulations that are in harmony with the standards of the World Trade Organisation.

In response, Dejan Trifunovic - executive director of the Serbian Chamber of Commerce's Industry and Agriculture division - said that domestic production should have been protected a long time ago, particularly considering that It seems a certain inertia exists at a federal level all developed countries already use the measoutlined by Labus. because implementation of these technical rules is in ures Trifunovic said that the country should protect their domain. We prepared technical regulations and itself from imports of low-quality products by formed a joint commission, but that was all rejected. introducing high technical standards. He gave two reasons for this: to protect the market from management, 21 million pairs of shoes were imported last year, "defective merchandise", and to assist domestic producers in with an average marked retail price of between $1.66 and $2.2. competing on foreign markets. He explained: "It seems a certain Domestic producers presented customs officials with a single inertia exists at a federal level because implementation of these slipper and asked how it was possible that customs officers technical rules is in their domain. We prepared technical regulacould be so naive and badly trained that they believed it was tions and formed a joint commission, but that was all rejected." worth only half a dollar. They explained that the sole of the slipImplementing measures aimed at protecting domestic proper was worth $2 and that the customs price was even lower than duction should provide for export of more quality merchandise, the price of the thread needed to produce the slipper. Serbia's which would in turn reduce the foreign trade deficit. However, clothing manufacturers believe the only solution lies in stricter Milosavljevic believes the only way to reverse the export-import controls on imports of shoes and clothing, particularly from balance is by attracting more foreign investors and multinationTurkey and China. al companies that will produce quality products here for export "When you compare import levels to exports of raw materito foreign markets. "Privatisation of the tobacco industry will see als and finished goods not made in Serbia, as well as imports of imports in that sector reduced by between 15 to 20 million finished products permitted because of expansion of trade and Dollars per year. Last year more than $63million was spent on European standards of quality, you can see that last year prodimporting cigarettes, but now some of those cigarette brands are ucts to the value of $450million were unnecessarily imported," being produced here. The more foreign companies that come, said Boris Sarenac, secretary of the Chemical, Rubber and the easier it will be to balance the foreign trade exchange and Pharmaceutical Industry Society. $143million has been spent on integrate into European and global economies."•

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CorD | July 2004

PUTIN HOSTS KOSTUNICA

By Dragan Bisenic

Serbian Prime Minister Vojislav Kostunica flew to Russia for talks with President of the Russian Federation Vladimir Putin last month.

According to PM Kostunica, talks between the two leaders centred on economic relations, Kosovo issues and military cooperation

T

he talks, held at the Russian president's private holiday villa in Socije, covered alternatives for clearing national debts, repair and restoration of the Djerdap hydroelectric power plant and the possible involvement of Russian companies in the Serbian privatisation process, particularly the entry of Russian banks to the port policies it disagreed with deeply. He added that the presSerbian financial market. ence of Russian forces during the March events would probably After talking for more than three hours in private, the two prehave made little or no difference. miers made statements to the gathered media. The Russian presiAlso addressing media, Kostunica said that this meeting had dent used the opportunity to announce a greater involvement of been called specifically because the international community Russian firms on Serbia's fledgling open market, before offering had, of late, adopted a policy of ignoring a Russian role in solvfull support to the Serbian Government's suggestion rePutin said that Russian forces were withdrawn from Kosovo because garding a solution for the the country could no longer actively support policies it disagreed troubled province of Kosovo. with deeply. He added that the presence of Russian forces during According to Putin, Kosovo's the March events would probably have made little or no difference March atrocities only served to support Russia's earlier warning that violence against Serbs has been going on in Kosovo ing the question of Kosovo's status, instead choosing to authofor decades and the international community have simply been rise "closed bodies" to prepare the groundwork for the final ignoring the facts. political status of Kosovo & Metohija.

The Russian leader proKostunica later told CorD's correspondent that military indusposed a link between the try cooperation had been agreed because the SCG Army's arsenal Serbian breakaway province includes strategic weapons and aeroplanes of Russian origin. and Muslim extremism by The Serbian PM confirmed that a second delegation would insisting: "If the unjustified visit Russia in the near future to finalise the discussions and bombing of Serbia, because of devise operational procedures.

Kosovo, hadn't happened, we Journalists in attendance at the Socije meeting were given would have a totally different the opportunity of meeting the President of the largest state in situation in Iraq today". the world. Putin signed CorD correspondent Dragan Bisenic's Putin said that Russian copy of the biographical book "First Person", which chronicles forces were withdrawn from the Russian premier's unparalleled rise to power.

Kosovo because the country Noting to one of the book's authors - Russian journalist could no longer actively supAndrej Kolesnjikov - that such a meteoric political advance was a difficult achievement, Dragan was told that Putin's career had yet to emulate that of his grandfather, who had been head perPutin’s signature sonal chef to both Lenin and Stalin - a feat which, at that time, adorns Dragan Bisenic's was more difficult than becoming Chief of State.• copy of "First Person" CorD | July 2004

49

H.E. Lars Goran Engfeldt,

Ambassador of Sweden to SCG

SCG: A SWEDISH

PRIORITY The Swedish Embassy is preparing to relocate from its current premises near Kalemegdan. During the glory years of the former Yugoslavia, the Embassy had half as many employees as they have now, and their premises have consequently become too small. This tells us something about how active Sweden is in numerous fields in Serbia & Montenegro.

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CorD | July 2004

By Dragan Bisenic

S

wedish Ambassador Lars-Gรถran Engfeldt has a long background in matters pertaining to the protection of the environment and during his career with the United Nations he worked on numerous documents and issues concerning this global problem. This is one of Sweden's priorities in Serbia, which will serve to facilitate SCG's future membership of the European Union.

The country is in a period of transition. It is clear that this will take some time and we have to understand that it may take longer than we had previously thought a year and a half ago. Political stability and a clear embracement of European values are essential in order to speed up the process of accession to the European

Interview Union. The speed at which this is achieved will, of course, depend on the political choices of the people, and the government's actions. Any postponement or delay could be very costly and we are here to do what we can to help the whole process. In essence, I am an optimist.

How are you helping this process?

Politically we try to help mainly through the EU, here and in Brussels. Bilaterally, in 2001 we started bilateral development cooperation and the plans for the next three years have now been drawn up. The main fields of activity will focus on the development of institutions, reforms within the public sector, human rights and democracy, the development of the private sector and the protection of the environment. We are talking about a figure of around 160 million Swedish crowns for this year. There is also our support for the CARDS programme. What these programmes make clear is that we are doing all this in order to facilitate your integration into the European Union.

We are also engaged in, for example, the development of public management, a reform of the juvenile correction system, the protection of the environment, the heating system project in Belgrade and we have just signed an agreement with the Serbian Road Directorate, which supports improvements to road safety.

The systemic issues we would like to deal with are the reform of public management, environment and sustainable development, and gender equality. We are also very involved in the fight against corruption. Considerations are also under way about a possible investment in the defence reform efforts.

Which Swedish companies are the most active in Serbia?

We have a long history of trade cooperation which goes back as far as the 1920s . Companies such as SKF, Atlas Copco and ABB (Asea Brown Bowery) have been on this market for a very long time. There are around 60 companies on the Serbian market and their number has increased during the last two years. What is important is that through their activities those companies conPositive signals highlighted tribute to the country's economic growth. They pay taxes, make investments, transfer knowledge, carry out staff training and the entire transport sector, the electrical and mining industries, have important experience. We have metal refining, programmetal refining, forestry, textiles, food, telecommunications as ming of computer software, and companies such as Ericsson, well as techniques for the protection of the environment and eduTetra Pak, Volvo, IKEA, Korsnäs and Oriflame. We export vehication. As you can see there is great potential for cooperation. cles, telecommunications equipment, machinery and paper and we import food, machinery and furniture. The current trend has Apart from Ericsson, IKEA is probably one of the most shown a certain drop in our exports and an increase in our famous Swedish trade marks. Currently people from Serbia imports, which is positive for the trade balance. have to go to Budapest to shop at this big store. Is IKEA planThe Embassy has a representative from the Swedish Trade ning to open a store in Belgrade soon?

Council, whose main task is to maintain contacts and help our IKEA was ready to open a store here several years ago, but companies with further business development. From time to time, we organise seminars about business opporThe systematic issues we would like to deal with are tunities. The last one was on information and communication technologies and the ones before about the protection of the environment, the equality of sustainable development and road safety. the sexes and the reform of public management. We When we add everything up, the signals are encouraging. Serbia should be able to achieve politare also very involved in the fight against corruption. ical stability, continue the reform process, stamp because of the situation in the country those plans were put on out corruption in business and establish positive, transparent hold. Last year IKEA contracted local suppliers to manufacture conditions for the financing and functioning of the state union. furniture for them. This is good work, which will, I believe, be continued.

Have any Swedish companies encountered corruption here?

Yes. Some companies have experienced such problems, but I What about Ericsson? do not think it would be very constructive to discuss that here. We Ericsson is one of our most important companies on the marare in contact with the Serbian authorities regarding such cases ket. It maintains its leading position in areas of mobile telephone and I believe that those problems will be eliminated very soon. systems.

Which areas of the Serbian economy do Swedish compaConsidering that you recently celebrated Swedish nationnies consider to have the most potential? al day, what has happened lately to the so-called “Swedish - They have pinpointed those areas and made a list. The list Model� of a prosperous state? includes the infrastructure and all activities connected with it, CorD | July 2004

51

Interview have several to support ourselves and that is why we need competitive companies. We are a country which is greatly dependent on exports and which deals on a global level, thus a competitive economy is a must. The challenge has been to find a reasonable balance between these requirements.

Sweden was not always so highly developed. What was the main engine of change and permanent progress in Swedish society?

This is a combination of several lucky factors including enterprising, inventive companies. On the political side there were reforms instead of revolution, which, indeed, took place very early on. Education also played a major role. After the depression in the 1930s it was possible to achieve harmonious labour market relations on the basis of agreement between employers and employees. This guaranteed the workers peace during the main years of development. The fact that Sweden was a country with common values was also important. The globalisation of the economy as well as the inclusion of many immigrants in our society has exerted a considerable influence in recent years, serving to enrich our society. The direction for the future is an increase in specialist, high quality products, a sharper continued development of the service sector and maintaining a high level of education. When I was at school, agriculture made up 30 % of our economy and now it is only around three per cent. This is a completely new world. For a country like ours, with nine million inhabitants, hard work is the key to achievement. This must involve a strong ability of our economy to adapt. All those things demand persistent work. Nothing in this world is free.

No “crude liberalism” for Sweden We experienced some problems during the nineties. We had made a suit which was too expensive for us and some essential changes and savings in public expenditure had to be implemented. Stabilisation followed after a few years. "The prosperous state" still exists, but with some modifications. One very important reform which was carried out was in the sphere of pensions.

Pensions are now more closely linked to the country's economic achievements. The former system was much more generous.

Sweden was a neutral country for a long time and became a member of the European Union as late as 1995. What are Sweden's experiences of this membership?

It is very positive to be part of the decision making process as regards the future of Europe. Even if we were not a member, the decisions adopted in Brussels also concern us. If you conduct yourself well, you are able to exert a considerable level of influence. Apart from that, it is also important to be able to act jointly with your partners from Europe. At the same time it is a fact that for parts of our population Brussels has remained distant.

We are not part of the euro zone, and the referendum last year resulted in a clear ‘no’. Our government has pledged active efforts to bridge this gap.

You do not, therefore, regret becoming an EU member?

Absolutely not. Serbia & Montenegro also belong to Europe and they should be part of it. The sooner, the better.

Serbia and Sweden are, unfortunately, linked by the murders of two politicians last year. By pure chance, the Serbian Prime Minister was scheduled to meet the Swedish Foreign Minister, Anna Lindh on the day he died. She was murdered several months later by a young man of Serbian origin. Were there, in Sweden, any assumptions regarding the joint cause of those two unfortunate events? Were there any "conspiracy theories"?

No. Both cases are very tragic. This is a special kind of symbolism. Anna Lindh was having a meeting with Foreign Minister Svilanovic when the assassination occurred. She should have met Prime Minister Djindjic a few hours later. When Anna Lindh was murdered, the Swedish media stated from the very first day that this was the act of a young man with an unhappy past. No "conspiracy theories" were ever developed.•

For a country like ours, with nine million inhabitants, hard work is the key to achievement. This involves a high level of education as well as the ability of our economy to adapt. All those things demand persistent work. Nothing in this world is free.

Those measures were implemented with the support of all political parties. All in all, if we make comparisons with other European Union countries, I think that the results are satisfactory.

Sweden, like the rest of Scandinavia, has remained an island where the sermons of banal liberalism have not succeeded in penetrating. How has such civil based development managed to survive in Sweden?

Our main development has followed the line of civil needs.

The basic characteristics of the civil "prosperous state" still exist as they suit the psychology of our people. At the same time we

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CorD Club MERCEDES

New General Director

A

s of 1st June, Mr. Rudolf Weinmann has replaced Hartmut Maier as General Director of Daimler-Chrysler Serbia & Montenegro. Mr. Maier held the position for the last five years.

Daimler-Chrysler Serbia and Montenegro (DC SCG) has existed under this name since the merging of Chrysler, Jeep and Mercedes-Benz in February 2003.

In addition to 60 locally based employees who have conducted Mercedez-Benz's operations in SCG since 1996, DC SCG has a current workforce of 200 and is consistently seeking to increase employment levels and operations.•

the new A-Class. Christina Aguilera will present "Hello" live for Mercedes-Benz.

The song's message reflects the heart of the new Mercedes marketing campaign, "Follow your own star." This adage is the motto of the A-Class and its customers: stay true to who you are, be self-confident, know that you are unique and remain firm to your ideals and your vision. "Follow your own star." This is what distinguishes true character, as is shown by Christina Aguilera.

"Follow your own star" has been at the heart of Aguilera's success and is the message of her new song "Hello." The U.S. pop star and the A-Class are both committed to following their own star in their own, confident and unique way.

CEO of Deutsche Lufthansa AG - Wolfgang Mayrhuber - was delighted to announce that Lufthansa had managed to post an operating profit of €36million for 2003, despite sustaining record losses in the first quarter of last year.

He noted: "We righted the ship and withstood market pressures. We demonstrated stability at a turbulent time and simultaneously took important steps to shape the future direction of the Group".

However, Mayrhuber, presiding over his first AGM, stressed that the burden of additional taxes and charges, envisaged by the German Government, "would be lethal for Germany as an aviation location".•

EUROPEAN UNIVERSITY

Graduation Celebration

G

MERCEDES

Follow your own star

S

tuttgart - World Premiere: When Mercedes-Benz presents the new AClass in late June, the world will hear one voice rising clearly above the fray: that of American singing sensation Christina Aguilera.

The American pop diva's latest song, a rocking number called "Hello" will exclusively accompany the launch activities of

"The A-Class underlines the importance of believing in success in order to truly achieve it. Aguilera lives and breathes this philosophy and truly follows her own star. Nobody could have translated this motto into music as well as Christina Aguilera," noted J. Justus Schneider, Director of Worldwide Marketing Communications for MercedesBenz & Maybach.

An instrumental version of "Hello" can be heard now on www.follow-your-ownstar.com, and the original single, complete with vocals, will be available to hear online from 28th June.•

raduating students of the European University in Belgrade were awarded their diplomas at a celebratory function held in the Rector's Hall of Belgrade University on 2nd June.

Professors of the European University awarded degrees to graduates of International Business management, while university rector, Prof. Dr. Milija Zecevic, awarded diplomas to M.Sc.'s in International Management, Ph.D.'s in International Management and Business and Ph.D.'s in International Relations.

Addressing the gathering, Prof. Dr. Zecevic expressed his wish that graduates gain success in their private and professional lives, and that graduating international business managers enjoy fruitful careers for both domestic and international companies.•

LUFTHANSA

Lufthansa prospects flying high

G

erman airline Lufthansa held its Annual General Meeting in Cologne on 16th June. Addressing company shareholders, Executive Board chairman and CorD | July 2004

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Faces & Places 2ND ANNIVERSARY OF THE AFRICAN UNION On 25th May 2004. H.E. Gen. Filipe Felisberto Monimambu, Ambassador of Angola to SCG and Dean of the Diplomatic Corps, hosted a reception to celebrate the 2nd Anniversary of the African Union.

The reception held at the City Assembly was attended by a number of accredited diplomats, many representatives of the SCG government, illustrious figures of Belgrade's cultural and social life, numerous friends of Angola and other respected guests.

Ambassadors representing the African Union

"HELLO EUROPE" The Office of the European Commission's Delegation to SCG has organised the quiz "Hello Europe" for the second year in a succession.

Senior school pupils from across Serbia & Montenegro took part in the quiz.

H.E. David Gowan, Ambassador of Great Britain to SCG, participated in the staging of the event alongside ambassadors of other EU member states. First prize in the quiz went to pupils from the Montenegrin resort town of Budva's Danilo Kis High School,.

During a reception hosted by H.E. David Gowan on 15th June at the British Embassy in Belgrade, the first prize was presented to the Montenegrin pupils. The two-part prize included computer equipment for their school and the chance to come to Belgrade to "Be ambassador's for a day".

Following their pleasant appointment with the ambassador, the young pupils were treated to a formal visit with Serbia & Montenegro President Svetozar Marovic at the Federal Palace.

H.E. David Gowan with Montenegrin pupils

THE LIFE AND WORKS OF FRIDA KALO A series of lectures, poster exhibitions, publication presentations and film projects dedicated to the life works of famous painter Frida Kalo have been organised by the Mexican Embassy in Belgrade.

Ambassador of Mexico to Serbia & Montenegro, H.E. Carlos Rodriguez y Quezada, opened the project on 14th June at the Beton Theatre.

Visitors to the event had the chance to familiarise themselves with Kalo's works through film projections, dance performances and a radio drama entitled Frida.

H.E. Carlos Rodriquez y Quezada addresses quests at the unveiling of the project

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Faces & Places BELGRADE VENUE FOR SWEDISH GOLF TOURNAMENT Belgrade Golf Course was the venue for the Scandinavian Masters golf tournament on 6th June.

The event, sponsored by some of Sweden's largest companies - Tetra Pak, Ericsson and Volvo - was a sporting way of marking the Swedish National holiday of that date.

The event is to become a regular annual tournament, which will be staged on the closest weekend to 6th June.

The one-day tournament included three teams, representing each sponsor, and was supported by the Swedish Embassy to SCG. Ambassador Lars-Goran Engfeldt personally participated in the tournament.

H.E. Lars-Goran Engfeldt takes a putt, watched

by Tetra Pak’s Jérôme Bayle

TORONTO - BELGRADE - TORONTO After a break of more than 12 years, direct air transport between SCG and Canada has been re-established. The license for direct flights between Toronto and Belgrade was granted to Toronto-based Sky Service Airlines by official licensing authorities of Serbia & Montenegro. The maiden flight of the new service brought Canadian passengers to Belgrade's Surcin Airport on Friday 15th June. The launch of the service was marked with a reception in Surcin Airport's VIP lounge, which was hosted by Canadian Ambassador to SCG, H.E. Donald McLennan, and attended by representatives of the SCG and Serbian Governments, Belgrade City Council, local media, tour operators and airport officials.

H.E. Donald McLennan and his wife greet passengers of the inaugural flight of the new Toronto-Belgrade service

HARRISON SOLICITORS AND AMCHAM Every month one member of AmCham (American Chamber of Commerce) hosts a Business After-Hours Cocktail party, with the aim of networking with fellow AmCham members and others in an informal environment. As AmCham members, the responsibility this month fell to legal firm Harrison's Solicitors, who staged their informal reception on 3rd June.

Guests at the event included H.E. Ruben Madsen, Ambassador of the Royal Danish Embassy, Roderick W. Moore, Deputy Chief of Mission - U.S. Embassy, David Webb, Commercial Secretary - British Embassy, Patrick Hughes, Commercial Secretary - U.S. Embassy, Keith Simmons, Head of USAID, Antoine Kuruneri-Millet, OECD, Joseph Antoline, U.S. Steel, Edward Andrews, Hyatt, Marek Lorinc, EBRD and Yiorgos Christodoulopoulos, OTE. Left to right: MOBTEL General Director Patrick Harpur, Mark Harrison, of Harrison’s Solicitors, and Richard Danicic, Director of AMCHAM CorD | July 2004

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Faces & Places NATIONAL DAY OF PORTUGAL H.E. Antonio Augusto Russo Dias, Ambassador of Portugal to SCG, hosted a reception at his Belgrade residence to mark the National Day of Portugal on 10th June.

Guests included many representatives of the SCG Government, ambassadors and others members of the diplomatic community.

It is noteworthy that the date of 10th June does not have any historical significance to Portugal, but is rather a mark of respect for Portugal's greatest writer Luis da Camoes.

Portuguese Ambassador, H.E. Antonio Augusto Russo Dias, with Royal Norwegian Ambassador Hans Ola Urstad

NATIONAL DAY OF SLOVENIA On 23rd June the Slovenian Embassy in Belgrade celebrated their country's national day in the cosy atmosphere of the Koling Club garden. The sunny afternoon reception was attended by a number of Belgrade-based diplomats, including British Ambassador, H.E. David Gowan, Bulgarian Ambassador, H.E. Dr. Yani Milchakov, Croatian Ambassador, H.E. Tonci Stanicic, Macedonian Ambassador, H.E. Viktor Dimovski and U.S. Ambassador, H.E. Michael C. Polt.

Many other Belgrade socialites and people from public and cultural circles attended the event.

Left to right: Milan Cvikl, Slovenian Minister for European Integration, Davorin Senicar, Minister Plenipotentiary of the Slovenian Embassy, German Ambassador H.E. Kurt Leonberger

ITALIAN NATIONAL DAY The Italian Ambassador to Belgrade, H.E. Antonio Zanardi Landi, and Mrs. Zanardi Landi, hosted a reception at the Italian embassy to mark the National Day of Italy on 2nd June.

The event was attended by many of Belgrade's political, social and sporting elite, who were entertained in the embassy's garden by the Italian Military Orchestra.

Italian Ambassador to SCG, H.E. Antonio Zanardi Landi, greets Serbian Patriarch Pavle

NATIONAL DAY OF RUSSIA The National Day of Russia was marked by a reception at the Russian Embassy in Belgrade, which was hosted by Ambassador of the Russian Federation to SCG, H.E. Vladimir Ivanovskiy.

The event was attended, amongst others, by presidential candidates Boris Tadic and Tomislav Nikolic, the Socialist Party of Serbia's Ivica Dacic and ambassadors of Norway, Mexico, Greece, et al.

Russian Ambassador to SCG, Vladimir Ivanovskiy, welcomes SCG Foreign Minister, Vuk Draskovic

PUBLIC OPINION

OPINION POLL GAUGES CITIZEN SENTIMENTS

QUEEN’S BIRTHDAY

Lord David Owen converses with British Ambassador to Belgrade, H.E. David Gowan

The British Embassy in Belgrade marked the official birthday of Queen Elizabeth II with a reception at the Belgrade residence of H.E. Ambassador David Gowan.

The event was attended by many Belgrade socialites and political figures, including Serbian Finance Minister Mladjan Dinkic, EU Commission representative Jeffrey Barrett, Canadian Ambassador Donald McLennan et al.

NATIONAL DAY OF SWEDEN Ambassador of Sweden to SCG, H.E. Lars-Goran Engfeldt, hosted a reception with wife Christina to mark the National Day of Sweden on 7th June.

The event, staged at the Ambassadorial residence in Belgrade, was attended by H.E. Hasan Servet Oktem, H.E. Yaffa Ben-Ari, H.E. Hans Ola Urstad, H.E. Petrit Bushati, H.E. Maurizio Massari, and many representatives of the SCG Government.

NORWAY PROVIDES SOFTWARE FOR CHEMISTS The first software applications for use by chemists in Serbia have been installed at the "Dr. Matej Ivanovic" pharmacy. The software was provided by way of the Serbian Health Ministry's project "Improving the computer-communication systems of the Apothecary Institute of Belgrade", supported by Norway.

In attendance at the official launch of the project were Serbian Health Minister Dr. Tomica Milosavljevic, Ambassador of Norway H.E. Hans Ola Urstad, Director of the Serbian Health Insurance Bureau, Svetlana Vukajlovic, and others.

Royal Norwegian Ambassador, H.E. Hans Ola Urstad, discusses the project with Serbian Health Minister, Dr. Tomislav Milosavljevic, and pharmacists

The Friedrich Ebert Foundation and Belgrade's Centre for Policy Studies have conducted an opinion poll of SCG citizens to gauge confidence in the state, employment and integration aspirations, Kosovo status and the state union's existence.

The survey, carried out in July 2003 with the support of the United Nations Development Programme (UNDP), involved 1,628 adult respondents from SCG, excluding Kosovo.

Results show that 51% of Montenegrin citizens and 48% of Serbian citizens are willing to access the EU, although they doubt the ability of the establishment to get them there.

In Serbia, 25% of those questioned do not believe that any institution in the country is capable of championing their interests, 21% believe in the Serbian Parliament, only 10% trust political parties and a mere four per cent have faith in the court system.

In Montenegro, 19% of those questioned do not trust anybody, and an equal percentage believes the Montenegrin Parliament represents their best interests.

Over a fifth of all respondents do not consider political parties favourably 24% of those questioned in Serbia and 21% in Montenegro said that they "cannot abide" political parties. Understandably, 54% (Serbia) and 64% (Montenegro) responded to the question of which kind of society they would like to live in by saying "a society with a decent standard of living".

A slight majority is in favour of preserving the state union. In Serbia 54% were for the union and in Montenegro 52%.

Regarding Kosovo's fate, 44% of Serbian and 51% of Montenegrin respondents were in favour of granting autonomy to the province, although only four per cent were in favour of accepting independent status for the troubled Serbian province.

In terms of employment, 52% (Serbia) and 53% (Montenegro) felt that the most desirable model of employment was "a secure job in a state company".

Private employers were favoured by 20% of those surveyed in Serbia and 17% in Montenegro and only 12% felt employment would be most secure in a foreign company.

The research also showed that, three years after the overthrow of Slobodan Milosevic, the SCG "brain drain" has not stopped. 20% (Serbia) and 34% (Montenegro) expressed their desire to permanently leave the country should the chance arise, while 4% of those surveyed have firm plans to emigrate.

M.T. CorD | July 2004

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Interview

By Ana Filipovic, Photo Dragan Milosevic

STEPS

GOVERNMENT ENCOURAGE INVESTORS "The Serbian Government has implemented around 80% of the Foreign Investment Council's recommendations incorporated in the White Book and related to the banking sector, and has thus confirmed its wish to continue the reform process", said President of the Foreign Investors Council in Serbia, Christoph Greussing.

Christoph Greussing,

President of FIC

T

he Foreign Investors Council has around 100 members and their investments are worth about â‚Ź1,6 billion, which exceeds half the total of investments in Serbia - said Greussing, who is also Director of Belgrade's HVB Bank.

Greussing, who is to leave Serbia in September to take up a new position in the Czech Republic, insisted that the focal point of the FIC was quality and not quantity, to the effect that it is important for them that internationally recognised companies, which are important investors, become members: "Our members are satisfied with the results achieved in Serbia and they are determined to remain on this market".

How do foreign investors assess the work of the government since the publishing of your White Book and to what extent have your proposals been accepted?

"The Government has accepted many of our recommendations and adopted our proposals, especially in the banking sector. However, there is still a lot to be done, especially in the field of institutional reforms - such as the work of the courts.

Additionally, it is necessary to pass VAT legislation, which has been talked about a lot lately, then the Law on business registration. It is also vital to revise some existing laws, such as the Law on labour and the Bankruptcy Law. "I would like to point out that the Council wishes to bring to the fore the need to amend the Law on labour, which protects the interests of workers to a great extent and although this is good it should be balanced with the protection of employers' rights. In that respect, existing legal provisions are not harmonized with European regulations and our recommendation will be to implement this harmonization. The previous legal solution was good, but this new one represents a step backwards because, to some extent, it can discourage foreign investors from setting up companies in Serbia. However, it is undoubtedly essential to design a strategy for attracting foreign investments and clearly define policy, which will contribute significantly to the creation of a better investment environment."

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What do investors expect of the Serbian Government?

"Political stability is of vital importance for foreign investors' inclination to invest in a country. The study of OECD has showed that that issue is critical for foreign investors. Unless Serbia reaches satisfactory level of political stability, it can do all other things to attract foreign capital, but its inflow will not be substantial. The Government of the Republic of Serbia must be aware that new investments in economy are dependent on it, without which there is no substantial economic development of the country.

"The Government must work on reduction of foreign debt in the future, and the best way to achieve this end is definitely foreign investments. Moreover, Serbia needs to clearly mark off its advantages as compared with other neighbouring countries. It can promote its cheap workforce as an advantage, in addition to other factors that are very competent here. However, I would like to state again that finding a solution to the political crisis is of the utmost importance."

What is your view on the current political situation in Serbia?

"The Government is unquestionably committed to effecting reforms, but one must bear in mind that it is a minority government and it must often make compromises in order to fulfil its objectives with regard to the passing of laws in parliament. This results in scepticism among foreign investors.

"We will be happy with any option that follows the course of reforms, because we want better conditions for business; we want our investments to be safe because we came to Serbia with the intention of staying here long term."

Could the latest decision of the IMF's board of directors, regarding trenches of credit, contribute to the creation of a better image for Serbia among foreign investors?

"This IMF decision is certainly a very valuable achievement of the Government and it will definitely contribute to improving the foreign investment environment, but I would like to state once again that it will not be pivotal for the decisions of foreign investors who, above all, expect the restoration of political stability in the country.

"It is a positive sign for foreign investors, but the overall political situation is still the essential factor for attracting new investors. I do not think that foreign companies will so easily close their doors and leave Serbia, regardless of the results of presidential elections, but we positively favour a candidate who will continue reforms and cooperation with foreign investors.

Investors may become more cautious when it comes to new investments in Serbia, but I do not think that many of them will decide to abandon this market altogether."

comparison with other countries in the region, which are also aspiring to attract foreign investments."

You have stated that the greatest achievements of the current government have been in the banking sector. Does this mean that your HVB Bank will participate in the upcoming privatisation of Serbian banks?

"HVB Bank is definitely interested in taking part in the privatisation of certain banks in Serbia, but it has not yet been specified in which way it will be done. When buying a bank, it is nec-

What other recommendations Political stability is of vital importance for foreign investors' have you made to the government? inclination to invest in a country. The study of OECD has "People in Serbia are fed up with politics and they are losing faith that showed that that issue is critical for foreign investors. the country will get back on its feet.

This is a difficulty the Government is facing and it will have to essary to establish many facts, for example, its market share and undertake all necessary measures that will contribute to quicker what is generated by the purchase. HVB Bank has extensive development. Of course, it is not easy and these problems - such experience in taking over banks in neighbouring countries, as it as reducing foreign debt - cannot be solved overnight. Yet the has participated in privatisation of the sector in Bosnia & government must understand that time is not on Serbia's side Herzegovina, Croatia, Bulgaria and Poland. and it must define the medium-term development strategy as "HVB Bank was extremely satisfied with the previous year's soon as possible. results, which exceeded our expectations. In 2003, the bank "The route has already been set, but paths on that reform made a ₏43 million profit, but the balance sum reached ₏130 course should be more clearly delineated. Besides, the issue of million. Our plans are to continue development of customer the London Club also needs to be resolved in order to let this relations, as well as to support small and medium-sized entercountry out on the international financial market. prises. We also plan to open new offices in the provinces and to "That said, Serbia is still a very important region for foreign expand our network of regional offices. Our wish is to be one of investments, but it must highlight the advantages it offers in the leading banks on this market."• CorD | July 2004

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Integrating through investment

INEVITABLE GLOBALISATION Globalisation is considered unavoidable, and so here at CorD we have chosen not to avoid it. This month Dragan Novakovic takes a look at the investment trend of the region and the prospect of SCG conquering the world of multi-nationals, corporate buyouts and fast-food franchising.

By Dragan Novakovic

S

ome analysts and foreign investors claim that a country's openness and exposure to the processes of globalisation, foreign trade and investment can be measured by the number of McDonalds restaurants it possesses. If that is indeed so, Serbia should be declared as extremely open and genuinely globalised, as there are seven McDonalds' restaurants in Belgrade alone.

However, the "McDonalds" criterion could prove misleading in the case of Serbia & Montenegro because the American fastfood giant established its first Eastern European restaurant in Belgrade in 1988, prior to the fall of the Berlin wall, and unfortunately the great wave of foreign investment and globalisation of the former eastern bloc that happened in the '90s steered well clear of SCG because of the UN sanction-imposed isolation of the country and the violent break-up of the former Yugoslavia.

Since the instigation of democratic reforms following the velvet revolution of 5th October 2000, the SCG state union has managed to attract foreign investment and last year Serbia received more than a billion dollars of U.S. capital - the largest American investment in the region to date.

The new coalition government in Serbia recently lowered taxation levels for foreign investors, markedly increasing the attractiveness of Serbia for potential investors. However, it is evident that a lot more will have to be done before neighbours who are already in the EU can be caught.

In today's global world village, foreign investment is considered a great means of attracting capital, technology and know-

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how; as well as creating new jobs and enhancing an economy's export capability. If a country does not prove attractive to foreign investors, it is invariably politically unstable and isolated, or does not have an efficient legal system capable of upholding the rule of law. Moreover, such countries are generally viewed as having undeveloped legislative and administrative systems incapable of gaining the confidence of potential investors seeking safe, predictable, stable and secure environments.

Naturally, competition to attract foreign investment to the region is fierce and each country is vying to convince would-be investors that their nation provides the best conditions for investing capital. As capital is a timid beast, foreign investors make careful studies before investing and the slightest sign of political or economic instability will cause them to shy away and take their capital elsewhere.

The American Overseas Private Investment Corporation recently staged a conference in Bucharest on investment opportunities in southeast Europe. In attendance were representatives of Romania, Bulgaria, Bosnia & Herzegovina, Croatia, Albania and Serbia & Montenegro.

Not surprisingly, the local countries all declared the attractiveness of their markets and insisted that they represented the gateway between Central and Eastern Europe and the Middle East; that they controlled key transit corridors and boasted a well qualified and inexpensive labour force. Displaying awareness of the relatively small size of their countries, the representatives also focused on the fact that the region is in the process of establishing a free trade zone which will be home to some 60 million consumers.

brunt of if they are to avoid being passed over by investors and As such, any potential investor would have to look beyond left to fester without foreign capital. Doubtless, Coca Cola-isathese shared local factors and delve into the particular legal and tion has its negative aspects, but nowadays there are only a few business structures of each country: the attractiveness of taxaplaces in the world where you can't buy Coca Cola and they are tion levels, stability and the rule of law, infrastructural developpretty sad countries. ment levels and communications.

It is worth noting that the United States has a significant antiNaturally, potential investors, as with most people, can be globalisation movement, which sees strong protests from workswayed by first impressions. The state of airport facilities, efficieners' unions who oppose American commercial tactics of investcy and honesty of taxi services, quality of hotels, availability of ing in production facilities in countries with cheap labour - sointernet access and bureaucratic sophistication are just a few of called outsourcing - at the expense of American jobs. The prothe factors that can effect a decision to invest, and negative first impressions usually ensure that investors don't take the time to furEach country is vying to convince would-be investors that ther explore the intricacies of the their nation provides the best conditions for investing capital. local investment climate.

Opponents of globalisation insist As capital is a timid beast, foreign investors make careful that an influx of foreign capital can studies before investing and the slightest sign of political or endanger a country: raw materials economic instability will cause them to shy away. can be exploited, a danger of environmentally unsafe materials being testors insist their livelihoods are being sacrificed in the name of dumped arises and a country's culture can even be threatened corporate profit. For instance, outsourcing has caused the virtuby the Americanisation factor. When McDonalds first decided to al destruction of the American textile industry. open restaurants on Paris's Champs ElysÊes, Parisians were up The phenomenon is an issue that will be fought over during in arms, protesting publicly against the symbol of unsophisticated fast food that represented an affront to the traditional excelthe upcoming election campaigns in the U.S. and Democratic lence of French cuisine. candidate John Kerry has promised to protect U.S. jobs by capAnti-globalisation groups - usually comprising environmenping the outsourcing trend. Regardless, it is inevitable that capitalists, anti-capitalists and anarchists - have mounted vociferous tal will go to the places where the greatest profits can be made. protests at every major conference since the now famous disrupIssues of pour working conditions and the exploitation of child tion of the World Trade talks in Seattle, Washington a few years workers in the third world must be addressed, but surely stopping globalisation in its tracks is impossible. ago. Nevertheless, the Champs ElysÊes is choc-a-bloc with It is no longer a question of whether or not to globalise, but McDonalds' restaurants and other American fast food outlets rather a question of how to reap the rewards and minimise the and, as such, it is clear that the wave of globalisation is an downsides of globalisation.• unstoppable tsunami that states must dive under and bear the

The Torlak Institute for Immunology and Virology

EXPORTING IMMUNITY The Torlak Institute for Immunology and Virology in Belgrade could easily become one of the most profitable enterprises in Serbia. To achieve this the institute will need support from its current owner, the state, and several million euros of investment, providing ample opportunity for private investment.

S

ome investors have already shown interest in investing in the institute and all we ask of the state is to remove the legal barriers for such investment, - Torlak Managing Director, Ranko Dakic, told CorD. Torlak has been producing vaccines and serums since 1930, and the basic activities of the institute are in the fields of infectious disease prevention, treatment and monitoring.

Today, the institute complex stretches over 17,000 square metres, with facilities for producing biological preparations, laboratories for diagnostics and research, a farm for breeding laboratory animals, and a facility for animal serums located in Brgule, near Belgrade. It also provides medical services to citizens with

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By Marica Vukovic, Photo Andy Dall prescriptions, analysing viral and allergic ailments. This is important as no similar institution exists in Serbia. Furthermore, in the region, only one such institute exists in Zagreb and others located in Bulgaria and Romania, as well as the Hungarian National Institute, were taken over by multinational companies during transition.

"Vaccines are our main source of income. We make vaccines for the mandatory immunisation programme and their production is regulated by law. These include vaccines against infantile paralysis, combined vaccines against diphtheria, tetanus and petrussis, a combination for diphtheria and tetanus and special vaccines for tetanus, the flu and tuberculosis", Dakic explained. Flu does not fall into the category of mandatory immunisations; the vaccine is only applied to more vulnerable categories of the population, in terms of age or type of disease. Torlak has an arrangement with the state to produce 300,000 vaccines for citizens who are immunised free of charge each year, while the rest can get the vaccine at the regular market price.

There are two distinct periods in Torlak's business profile prior to the sanctions, imposed by the international community on FRY in the 1990s, and after. Up until the sanctions, vaccines produced by Torlak were exported to 120 countries, mainly via UNICEF, and sent mostly to underdeveloped countries. After sanctions were imposed, the vaccines were sold on the free market to the countries satisfied with the quality and price of the institute's products.

Turkey is one such country that Torlak has managed to cooperate with to a considerable extent. The institute has recently delivered 3,750,000 doses for infantile paralysis, and a tender for another 11 million doses is in the drafting process. Dakic is hopeful that Torlak's tender will be selected.

"We are doing everything we can to restore our position on the world market and we can do that only if we receive a certificate from the World Health Organisation, introduced while Serbia was under sanctions. Our key product for the world market is the vaccine against infantile paralysis. We can produce 100 million doses a year and Serbia needs only 800,000, less than 1% of our production capacities. The rest can be exported to foreign markets and bring the institute between 9 and 10 million euros per annum", Dakic said.

In order to be granted the certificate, Torlak needs to overhaul certain production facilities to meet current WHO standards. However, neither Torlak nor the state has the financial assets to carry out the necessary adjustments.

"We have received a â‚Ź2million loan from the European Investment Bank, as part of the aid provided to health institutions in Serbia. The European Agency for Reconstruction has donated money for drafting the basic design that has to be evaluated against current W.H.O. standards, as well for consultation services", Dakic said.

He also stressed that in addition to this programme, the institute would also expand its capacities for producing the influenza vaccine. However, according to Dakic, the state is not expected to invest in this project, becouse the vaccine would be exported to a number of countries not producing it themselves. There Dr Ranko Dakic, has been a lot of interest for the vaccine in the past few years in Torlak Managing Director light of the danger posed by the SARS virus.

Torlak’s top man has revealed that investors and banks interested in supporting the new programmes are hindered by The institute recently forged a deal with Aventis Pasteur, a domestic regulations. So far, there have been no instances of Lyon-based multinational company, to produce four vaccine private capital entering institutes of national importance where variants against influenza. The institute has also started negotithe sole owner is the state. Dakic says all investors, and espeations with a foreign company over an agreement to produce cially ones from abroad, diagnostic compounds used in want to ensure their investThough the institute cannot be fully microbiology, and there is a posment is safe and that no of a joint venture. privatised, since vaccines are products of sibility obstacles exist to further Another significant project is a profitable investment, even strategic interest to the state, a certain vaccine against herpes that has if the state continues to be shown promise among a percentage of private capital, domestic recently the majority owner of the group of volunteers. of foreign, should be allowed in. new company, or owns a Developed by a university prospecialised facility in the fessor in Belgrade, in trials it has complex. He maintains there is no need to change regulations, produced good results in disease prevention and, unlike other the government can merely pass a decision that would define similar medications produced worldwide, also displayed a curaconditions for private investment. Though the institute cannot tive effect, says Dakic. In fact, American companies have already be fully privatised, since vaccines are products of strategic intertried to buy the patent, but the owner refused these offers, since est to the state, a certain percentage of private capital, domestic he wants profits from the vaccine to remain in Serbia, and the or foreign, should be permitted.

Managing Director of Torlak has proposed that the project could Dakic says it is realistic to expect certification for the vacbe supported by private investors. cine against infantile paralysis in a year if the state provides its "We are doing everything we can to restore our position on share of support. The procedure is important not only because the world market, and we can do that only if we receive certificaof the need to co-operate with UNICEF, but also because most tion from the World Health Organisation, introduced when Serbia countries stipulate imported vaccines must carry a certificate was under sanctions. Our key product for the world market is the issued by the WHO. There are 25 producers of vaccines against vaccine against infantile paralysis." As previously mentioned, infantile paralysis worldwide, but only four have been issued "the institute cannot be fully privatised, since vaccines are prodthe certificate. Torlak was among the world's leading producers ucts of strategic interest to the state, but a certain percentage of of vaccines before the sanctions. private capital, domestic or foreign, should be allowed in."• CorD | July 2004

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Three perfect days in Serbia

THE

ENCHANTING

BRIGHTNESS

By Jelica Putnikovic

Wide, open faced sunflowers, various shapes of pumpkin, golden drops on the willow trees by the canals and ponds... is this a painting by a naive artist or is this a picture to be taken home and cherished in the visitors' memory? Come to Vojvodina and see for yourself!

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A

n abundance of history and culture, hospitable people, soothing landscapes with rivers, ponds and canals, bird sanctuaries, a paradise for fishermen, rich local cuisine and excellent wines.

These three days have to be experienced so as to take their rightful place among those "to be remembered".

Vojvodina's fields of grain are slowly ripening and turning various shades of yellow. You can take a leisurely stroll past them through the oasis of green unspoilt nature followed by lunch accompanied by a refreshing wine before facing the challenge of exploring the little villages which have preserved the spirit of ancient times making it possible, without the help of a time machine, to become acquainted with those who settled in this prairie in the time when the Panonian sea flowed through

the Djerdap Gorge with the Danube on its way to the east. And all this within reach of the metropolis, Belgrade. Here amidst this somewhat idyllic existence, you will find the ideal place for a vacation and rest from the stresses and strains of modern life.

Determined, by means of this Panonian magic, to introduce those who are not able to remember by themselves to get away from the big city and enjoy the pleasures of nature every now and again, the Serbian Tourist Organisation in cooperation with USAID have organised a selection of tourist programmes under the working title of "Three Ideal Days in Serbia".

"Vojvodina - The Fascinating Warmth of Yellow" is the programme recommended by Zepter Passport Tourist Agency to all those willing to seek a cosy nook for relaxation and rest. You can cruise Vojvodina with their organisation but those whose explorer's soul commands them to go off exploring by themselves will not be disappointed either. Only 49 kilometres from Belgrade, in the spacious Vojvodina prairie lies the idyllic village of Kovacica.

Thanks to its naďve art, Kovacica's fame spread far beyond our borders a long time ago. This centre of naďve art is mostly populated by Slovaks, who have lived here for more than two centuries.

The next stop on your journey through Vojvodina in search of the beautiful yellow tones, is in the middle of the Banat province. Tsar's Pond is situated between the Tisa and Begej rivers. This is genuine unspoilt nature. UNESCO has classified Tsar's Pond on the list of swamp areas of international importance. But yet, before you go exploring even a small part of the 1,600 hectares of fields, willow and poplar woods with little lakes ponds and swamps, where at this time the water lilies are

equipment although fishing is, of course, only permitted in certain areas. A fisherman can expect to find carp, pike, catfish, perch or sturgeon at the end of his rod. Botanical amateurs could pack a real wealth in their herbariums since this is a unique area not only in Europe, but on the whole planet.

Those who still have not had their fill can bring this day to an end by visiting the Fantast Manor built by the famous Vojvodina master, Bogdan Dundjerski. On the way to Zrenjanin, 15 kilometres from Becej, there is a complex of extraordinary architectural value, an unusual mixture of Baroque and Roman neoclassical architecture. The Castle is made of two circular and two dome-shaped towers, and the largest one, which dominates the building, was built according to the towers of medieval castles. These days, the castle is a modern hotel, and the tourist The father of Serbian literacy, Vuk Karadzic, and the first Serbian centre includes a stud farm, a author to write about his travels, Dositej Obradovic, both small castle, a chapel and a park. chapel next to the castle was learned their first letters in some of Fruska Gora's monasteries. The built in Neo Byzantium style, and the iconostasis, of priceless value, was painted by our famous artist, Uros Predic. in full blossom, you should stop for refreshments. At the entry Those not in the mood for riding can take a stroll through the to Tsar's Pond you will find the Sibila Hotel, where, of course, park or play tennis. There is a small runway which forms part of you should try the fish or some local specialities and it goes this complex so you can also come to Fantast by plane. without saying that it would be a sin not to complete this joy After breakfast, which is traditionally large in Vojvodina, with a good local wine. since you should never take a trip on an empty stomach, you can Not a single step through this unique eco system should be continue getting to know the Panonean prairie by travelling made without a camera. However, the best way to see Tsar's through Kikinda, Senta and Kanjiza, where you should pop into Pond is with an old boat. You do not need to be an expert to the spa of the same name. Between Palic and Hajdukovo, close manage to "catch" one of the 240 bird species and some of them to Ludasko Lake, which is a paradise for bird lovers, there is an are a real rarity. Or you can just take photos of the magnificent estate which houses the Gilyas Czarda restaurant, an ostrich sunset. Fishermen should not visit Tsar's Pond without their CorD | July 2004

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Three perfect days in Serbia

The holiday centre on Palic Lake is of unique architectural value and is surrounded by beautiful parks. In the shadows of hundred-year-old trees you will find hotels and rustic restaurants among which are Mala Gostiona and Riblja Carda. The atmosphere and architectural style dating back to the beginning of the last century, when this resort was the rival of popular resting places in Europe such as St. Moritz, Karlovy Vari or Opatija has been preserved in Palic. At that time the lake was divided into separate male and female beaches since communal swimming between the sexes was forbidden.

On Palic you can rent a bike or a horse and carriage and go sightseeing around town or you may wish to visit the zoo and park or even venture as far as Ludosko Lake. There is a sports centre too, and those who yearn to experience something original can visit some of the authentic local farms or wine cellars near by. It goes without saying that here, like elsewhere in Vojvodina, good food plays a major role.

Novi Sad is not only the administrative and cultural centre of Vojvodina, but it is also a tourist centre. Thanks to its mixed origins, Novi Sad has many cultural and historical monuments. The town symbols are Petrovaradin Fortress and Sahat Kula (the Watch Tower), set aside from other timepieces because the big hand shows hours and the little one minutes. This was done to enable seamen to tell the time from the Danube.

Petrovaradin Fortress is a masterpiece of military construction dating back to the eighteenth century and the underground military galleries and the Novi Sad Museum are the most visited places in the state. The largest artists' colony in our country, the Serbian Monmartre is to be found inside the fortress.

farm and a mini zoo. This is the first ostrich farm in Serbia and Montenegro. The farm hosts are prepared to show their visitors young birds which have just hatched, and they also have original handcrafts made of ostrich skin and egg shells for sale. In addition to the new arrivals, the zoo also hosts mouflon, deer, wild boar, buffalo and birds, while the lake is full of ducks, geese and swans. The specialiPetrovaradin Fortress is a masterpiece of military ties in the Galyas Czarda restaurant are made construction dating back to the eighteenth century. of ostrich, wild boar and ostrich eggs and Hungarian cuisine is also on offer.

The underground military galleries and the Novi Sad The town of Subotica in the northern part Museum are the most visited places in the province. of Vojvodina should not be missed. The City House is the most beautiful building in town.

There are 17 Orthodox Monasteries on Fruska Gora, so it is It is the union of architecture and handicraft, decorated with also often called the Serbian Athos, our Holy Mountain. ceramics, woodcarvings and stained glass. In the Great Town Vojvodina's largest mountain was home to 40 Serbian monasterHall the stained glass of Francis Joseph and Maria Theresa stands ies which for centuries served to educate the local inhabitants. out. The details for the interior and exterior design were made in The father of Serbian literacy Vuk Karadzic and the first Serbian the famous Zolnai ceramics factory in Pecuj. The Secessionist author to write about his travels, Dositej Obradovic learned their masterpiece is Rihl's Palace, richly adorned with Zolnai ceramics first letters in some of Fruska Gora's monasteries. In the workfrom Pecuj which these days houses the Likovni Susreti Gallery. ing monasteries, during prayer time you can hear the chants Subotica has one of the most valuable synagogues in Europe, an ringing out of oblivion. In 2002, a copy of the magical Three example of bold, modern architecture, adorned with stained Handed Holy Mother of God icon from Athos was brought to glass windows with stylized petals of roses, lilies, carnations and Grgeteg monastery to become the powerful protector of Holy peacock feathers. The symbol of Subotica is the Nepszinhaz (the Fruska Gora and all her monasteries.• national Theatre) with its neo classical facade.

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Performing arts

Konstantin Kostyukov,

ballet dancer

I

By Slobodan Kostic

t is more common to meet ballet dancers of Konstantin Kostyukov's rank on well known European stages, rather than on the boards of Belgrade theatres. After winning the title of World Champion in Osaka in 1991, Kostyukov himself could have chosen anywhere in the world to continue his dazzling career, but this Ukrainian, born in Kiev in 1967, decided to sign a contract with the National Theatre in Belgrade. Since then this artist has not stopped delighting local audiences, making even those who would usually give such places a wide birth cross the threshold of this well-known address. The numerous awards that ensued were further confirmation that leading roles in Giselle, Don Quixote, Swan Lake, Sleeping Beauty, Carmen and Spring Devotion are not just a thing of fashion and trend.

Besides leading roles on the home stage of the National Theatre in Belgrade, Kostyukov also dances the leading roles in the ballet Nizhinsky - Golden Bird at the Madlenijanum Chamber Opera in Zemun and performances of Zorba the Greek and Mayerling at the Serbian National Theatre in Novi Sad.

Though he could have chosen any international stage on which to build his career, during the nineties the well known dancer settled in Belgrade. Kostyukov says: "I have never regretted this decision.

For me this is a spiritual centre".

What connects you to the authors of the works in which you have performed, whether they be Dostoyevsky, Chekhov, Shostakovich, Verdi or a modern author whose characters you have had the chance to play?

Every performance carries a message. It is especially significant in these modern times when people search less and less frequently for an aim in life. Even if some partial goals are found they are usually only material values with no trace of the spiritual. Sadly, life has become a matter of mere survival. That is

DANCE IS ETERNAL

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why I try to remind people of forgotten values and neglected messages, perhaps in the way artistic work used to be created.

This has mostly been preserved in literature. As performers of this kind of artistic work we have to do everything we can to return those where we live to the path of forgotten spirituality, as everything else is only an illusion, a shadow of real life.

Is there a general message in the numerous performances you have given?

There are several, but love takes first place. One of the messages is that we have to nurture world originality and its naturalness, which is slowly being ruined by modern civilization.

Emotions that are held back more and more are also some sort of message. We have to preserve what previous generations have handed down to us, building on that in the continued quest for meaning. Even this little trail which remains in our wake says that our existence made sense.

Which characters from those you have played on stage came the closest to this ideal? Which one was your favourite?

I would not choose any one character in particular. When I work on something, I literally identify, become the spirit of that person. It is like a sort of full identification, forgetting you speak the words of another. I stop being Konstantin and become Don Juan, Nizhinsky, Don Quixote, Rudolph or someone else. If I were not able to do that then the performance would be false.

me a centre is a place of creation, a place of imagination, spirituality, where something new is searched for constantly, where there are always new challenges and premieres are held every month. That is a centre for me. Belgrade is not the centre of political stability, economic prosperity and comfortable middle class life, but that is not the fault of these people, but rather that of politics. Others are responsible for what has happened to this country. I am sorry that this state, with all its potential, has found itself in such a deep economic crisis, but I think that in the spiritual sense it is not on the margins. Look at the new dramas, operas, ballets and literature. To artists such values are much more significant than overflowing shops. Belgrade is in any case a cultural metropolis.

If this city and its people were not creative, imaginative and spiritual, then I would have reason to criticise them. However, the situation here is the exact opposite: the people have projects, imagination and creative energy, but no material security.

However, this is not always the most important thing. As far as creative strength is concerned, if I could choose again, even knowing what this country would have to go through, something I could not even have imagined when I came here to live, I would choose this theatre and the life I have lived here again.

You have toured Spain, Germany, France, Portugal, Canada, Switzerland and Japan. To what extent does the local ballet scene keep in touch with current world interests?

We have a large, wonderful repertoire that could be the envy Is it hard to achieve these numerous transformations from of any theatre. It is very wide and has a large diapason ranging one character to another, if you enter each part so deeply? from classic, neoclassic to modern. The audience can be satisfied because we do not run the same performances again and It is certainly not easy, but when you enter the essence of a piece and the hero's way of thinking, again. The pieces are both things tend to unfold by themA performance cannot exist without technically difficult and selves. However, to enable this demanding. We have manemotions, as that would not be ballet aged to do a great deal thanks to happen, a transformation must occur within us first. If it but bare movement. However, if there is to young talent following trends, but this time is absent, the words you say on no movment representing a terrible modern the poverty within the counstage are empty, hollow and physical effort, there is no dance. try does take its toll. As far as false, as if you were simply quality is concerned, we can mechanically repeating the multiplication tables. In ballet you must be what you are presentcompete with big international ensembles, but as regards capacing so that your dancing and acting are convincing. ity we are lagging behind as there are no funds. Young people are simply not given the chance to work and show what they Can it be said then that in your dance emotions play a know. For this reason many members of the younger generation greater role than movement? are going abroad and these spiritual values are used by someone else.

A performance cannot exist without emotions, as that would What would you change on the local ballet scene? not be ballet but bare movement. However, if there is no movement representing a terrible physical effort, there is no dance, it I would introduce some discipline and would change something in the way younger generations are given the chance to becomes an ordinary monologue on stage. This is where the advance, as sometimes some standards are underestimated. challenges of this profession lie, uniting technique, emotions Often everyone is given the chance to perform and roles are and aesthetic experience. Ballet is one of the arts which unites given away like cigarettes. Not all players can be soloists; even several artistic disciplines thus satisfying all the senses. It is a by the law of nature this is not possible. sort of perfect synchronization in which it is impossible to differentiate what is of greatest importance.

What is the perspective of ballet at all, bearing in mind This means that somewhere at the core of your dance lays modern theatrical trends which mean more dancing even in the toughness of the Russian school of classical ballet? dramas?

It is based on it. It is the starting point on which we can build Drama has realized its shortcomings. If a person is on stage, elements that are not classical, but only when you have that base why should he only speak a text when he has a body, arms and are you able to build. As in architecture, foundations exist everylegs. There is body language. We are not static in real life. The where. Different building styles can be above them - baroque, real revolution occurred in the theatre when they realized that rococo, modernism, but the foundations remain the same. movement is a part of acting, like some sort of annex making a performance more beautiful, emotional and stronger. This is the As you could have chosen any international centre in way to express feelings and emotions where the audience can which to build your career, have you ever regretted choosing understand in the right way. It had to happen in the end as the Belgrade? whole body participates in emotions, not only parts of it, so it I came here at the beginning of the nineties considering was simply a question of the day when theatre directors accepted this inevitability. Dance is eternal and no art on stage will be Belgrade to be an international centre. What is a centre anyway? possible without it.• Where there is money, where living is easy and comfortable? For CorD | July 2004

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‘

Opera

A SUCCESSFULL

SEASON Dejan Savic, the Director of the Belgrade Opera House

By Maja Volf, Photo Misa Mustapic, FEP

The outgoing Director of the Belgrade Opera House, Dejan Savic, has announced the participation of many guests from abroad in A Masked Ball and certain other operas. “Some of the world's greatest names, with whom we are trying to make direct contact in order to avoid their heavy agency fees, will make guest appearances.

We will hear sopranos Celetina Vasileva and Nela Mircoju, baritones Vasilij Gerel and Vladimir Cernov, tenors Marko Boricheli and Salvatore Ricita and the head conductor of the Bolshoi Theatre, Aleksandar Vedernjikov will also conduct”.

T

his season, the Belgrade Opera House offers the inhabitants of our capital city a rich repertoire including the celebration of twenty years since Nabucco was first brought to the stage here. Carmen, Tosca, La Traviata, The Magic Flute, Rigoletto, Cinderella and other famous operas are all in the schedule. The season is marked with two premieres: Donizetti's The Elixir of Love and Verdi's A Masked Ball.

Dejan Savic told us that The Elixir of Love was directed by Bulgarian director, Plamen Tatalov.

"Tatalov is a great name by European standards. This opera will make a guest appearance in Sofia. The performance was both musically and directionally immaculate. There was a major shift in the directing sense, based on the legendary Cinderella by Jagos Stojanovic. Tatalov made the ensemble, soloists and chorus dance by giving everyone a role. The imaginative stenography was provided by Boris Maksimovic and the costumes by Ljiljana Orlic", said Savic.

Since its first appearance on stage, A Masked Ball has seen many successful performances. This opera achieved great success in Belgrade in 1978 under the direction of Dejan Miladinovic and in September this year Belgrade will see a new premiere of A Masked Ball, this time directed by Ivana Dragutinovic.

longer. This is a big performance involving the participation of almost the entire operatic ensemble. The role of Emilija will be played alternately by Vjera Miranovic-Mikic, Visnja Pavlovic and Svetlana Nestorov. Jelena Vlahovic, Natasa Jovic and Olja Savic will take turns in the role of Ulrike the role of Ricardo will be performed Such music connoisseurs will have their pleasure even and

by Dusan Plazinic, Nikola Kitanovski and further extended with this year's premiere of The Elixir Goran Rajkovic. Renato will be sung by Gligoric, Aleksandar Manevski, of Love and A Masked Ball and the recently announced Goran Miodrag Jovanovic and Nikola Maljevic premieres of Aida and The Flying Dutchman. and Oscar will be played by Sanja Kerkez, Gordana Tomic, Ivanka Rakovic and Aleksandra Stamatovic", said Miladinovic.

"We had planned to stage this opera in co production with In a directing sense this performance will not be at all prethe Greeks, but things became too complicated so we had to give tentious and it does not present a step towards anything new. It up this idea. Then we came to the idea that A Masked Ball is in the style of a positive tragedy, which will also make it easy should be staged by the Belgrade Opera House itself, which is to stage in other theatres and opera houses. The premiere will be not a bad idea, because that means it will stay in the repertoire

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a new experience in traditional forms, because it is well organised and lucid and divided in the way Verdi imagined, into three acts and six scenes.

The audience are able to enjoy the excellent stenography of the renowned designer and stenographer, Sasa Zlatovic and the Director of the Belgrade Opera House, Dejan Savic told us that many guests from abroad would appear in A Masked Ball and certain other operas in the near future.

"Some of the world's greatest names, with whom we are trying to make direct contact in order to avoid their heavy agency fees, will make guest appearances. We will hear sopranos Celetina Vasileva and Nela Mircoju, baritones Vasilij Gerel and Vladimir Cernov, tenors Marko Boricheli and Salvatore Ricita and the head conductor of the Bolshoi Theatre, Aleksandar

Miladinovic and the return of Wagner to the stage with his opera the Flying Dutchman. The latter will be produced in cooperation with Turkey, with Ankara's Opera House. This opera will be sung in German and it is planned to exchange soloists, conductors, stenographers and costume designers.

"Wagner's music has been present on the world's opera stages for years, which was not the case with the Belgrade Opera House", Savic told us.

"Two generations in our country have not had the opportunity to gain further insight into Wagner's creative work. He should be returned to our operatic stage as soon as possible since Lohengrin, Tannhauser, and The Flying Dutchman were all regularly performed here in the past. For the very reason that we have not heard Wagner here for a long time, significant innovations are to be expected."

As regards the entire repertoire of the Belgrade Opera House, its director told us that productions such as The Barber of Seville and Hansel and Gretel are performed in Serbian. They are targeting the domestic public and the company tours around Serbia and Montenegro with them. Such performances include Nabucco, La Traviata and Carmen since the chorus parts are sung in Serbian.

However, a chain of excellent operas such as Eugene Onegin and Faust in French, then a chain of operas in Italian, for example the entire work of Puccini, remain in their original form.

"We try our best to keep to European standards in all our productions. There is lot to be seen in our opera, everything is a matter of affinity", considers Savic.

Judging by the permanently ‘sold-out’ performances, a new generation of operatic audience has reached maturity in Belgrade. Such music connoisseurs will have their pleasure even further extended with this year's premiere of The Elixir of Love and A Masked Ball and the recently announced premieres of Aida and The Flying Dutchman.•

Who is Dejan Savic?

T

Vedernjikov will also conduct for us. These guest appearances are planned for next season, so evidently Belgrade's Opera House will, in future, be in vogue", said Savic.

PLANS AND NEW PREMIERES "Great cooperation with the Norwegian Royal Opera lies before us. We have agreed to work together on Mozart's opera The Abduction from the Seraglio. This is a great project because the year 2006 will mark 250 years since Mozart was born and that is certainly something which should be celebrated. This opera will be sung in Serbian in Serbia and in Norwegian in Norway.

The co production was conceived so that the Norwegians will finance the costumes and stage sets in Serbia, which will considerably lower their costs and be of great help to us" said Savic.

Savic also told us that the National Theatre is preparing two new premieres for next season. Aida, directed by Dejan

he portrait of former Director of the Belgrade Opera House, Dejan Savic, could be summarised in a few words: successful in everything he does. He was born in Belgrade to an old and prominent family and he started his education in Sarajevo, where his father was the editor of the local radio station and his mother the youngest assistant professor at the Musical Academy.

"I came very close to graduating from the Faculty of Civil Engineering, but gave up with only three exams to go. I graduated instead from the Music Academy, the conducting section, and went on to complete my post graduate studies in Novi Sad. I started as a freelance artist, then became the head conductor of the Nis Symphonic Orchestra, followed by the head conductor of the Belgrade Symphonic Orchestra and I am now the director of the Belgrade Opera House. I have been living in Belgrade since 1993 and became the director of the Opera House in 2001."

Dejan Savic is a well known conductor in the world of music. He has performed throughout Europe, in Moscow and in New York. These days he still spends a great deal of time working abroad, in countries such as Norway, Italy and Bulgaria and is currently negotiating his appearance in the Bolshoi Theatre, where no conductor from our country has appeared in the last 60 years. He is also planning to perform in Staatsoper (the Vienna State Opera House) and Volksoper (the Vienna Folk Opera House). Savic told us that all those plans are for serious appearances and that his aim is not to appear there only once, but to become a regular guest.•

CorD | July 2004

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Bitef Theatre

NO VISA

REQUIRED

By Nebojsa Kotlajic, Photo Dragan Milosevic

T TRAVEL THE WORLD IN THE BITEF THEATRE The relaxing atmosphere of a Wednesday evening in Belgrade's Bitef Art CafĂŠ transforms into a virtual trip abroad after nine o'clock, when the local Culture Association kicks off the evening's entertainment by handing out "free visas" to patrons.

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he Culture Association, in cooperation with foreign embassies and domestic diplomats, organises cultural and musical events, dancing, fashion shows and the presenting of national dishes and souvenirs from myriad countries around the world.

The weekly Bitef night of entertainment was the brainchild of Belgraders Slavica Imsiragic and Olivera Koricanac, who decided to present distant cultures to local citizens and foreign visitors alike in an effort to overcome the cultural and general isolation forced on Serbia for far too long.

The programme commenced a year ago and is currently in its fourth cycle. Using their colourful imagination and free spirits to bring contrasting cultures and customs to Bitef's converted church in central Belgrade, this cultural voyage of the senses has so far transported the minds of Bitef patrons to the Congo, Angola, Nigeria, Zambia, Guinea-Bissau, India, Indonesia, China, Japan, Cuba, Mexico, Brazil, Argentina, Peru, Bolivia, Spain, Ireland, Tunisia, Morocco, Lebanon, Libya, Israel, Turkey, Hungary, Greece and Cyprus.

When the fourth cycle of the programme began in March, Bitef Art CafĂŠ was packed to the rafters - such was the demand to see the belly dancers performing that night as part of the Moroccan experience. Oriental music experts say the Moroccan version of the dance is the original and truest form of the art, but

that night it was a Frenchwoman, Aleksandra Gruden, who caught the eye of many. Mrs. Gruden learnt the belly-dancing basics during her stay in Morocco. But since marrying she has made her home in Belgrade and opened a dancing school.

Many were left out in the cold that night in March. They had all come to experience a country of their dreams, at least for a couple of hours, but the interest in the Bitef event was such that they simply couldn't get past the door of the crowded cafĂŠ.

The Mexican night was another raving success organised by the World Cultures programme, with traditional music of the Central American country performed by local artists. Everything

No passport is required for this kind of trip, just good will and a smile is enough was in place for a complete Mexican experience: tacos, tequila, quessadillas, tortillas, the mariachi, Ksrmanac soloists complete with their Jalisco dance and posters of Frida Callo. The formula proved so successful that other countries with embassies in Belgrade are planning to present their own cultures and customs within the Bitef programme.

At present the programme does not enjoy financial sponsorship, but the events continue to be staged thanks to the enthusiasm and energy of the World Cultures Association members, who share their love of foreign cultures and world nations with friends, associates and fellow Belgraders once a week.

No passport is required for this kind of trip, just good will and a smile is enough to appreciate the contrasting cultures presented. Music and dancing is the key to appreciating another country's culture and bypassing the barrier of language to achieve a greater understanding of other peoples around the world.•

Olympic preview After a lengthy barren spell, the Serbia & Montenegro team have brought a degree of success to the state union by finishing runners-up at the recent under-23 European Football Championships and thus securing the right to represent the country at the upcoming Athens' Olympics.

OF

A GLIMMER FOR THE HOPE FUTURE

By Zoran Milosavljevic

F

ootball is far and away the most popular sport in Serbia & Montenegro, despite the state union being among the world's best in basketball, volleyball and water polo. However, the taste of soccer success has evaded the country since Red Star Belgrade won the European Cup in 1991, but the prowess in the performances of SCG's up and coming young team at the tournament in Germany have helped restore the faith and sense of belief that the country can resurrect its position as a force to be reckoned with in world football, capable of challenging the leading nations.

The outstanding achievement of finishing runners-up exceeded all expectations and provided a glimmer of hope for the future of the game here. The result also means that the SCG team will travel to Athens for the Olympics - a right given to the top three teams at the tournament - and have the chance to bring home a medal.

Speaking after the nail-biting penalty shout-out win over Sweden in the semi-finals, SCG team captain Danko Lazovic said: "Taking part in the Olympic games is every athletes dream and we are thrilled we are going to be there. It means we'll have a very short summer break, but who cares? I would give up a lot more to be competing in Athens.

"I would love to carry our flag at the opening ceremony. That would be a great honour. The Olympic soccer tournament is a kind of under23 world cup and winning a medal there would be quite fantastic."

Few expected the SCG team to make it to the Olympics, but domestic Football Association president Dragan Stojkovic said: "They showed will power, lots of character and mental strength - all the virtues our soccer has lacked in the past decade and a half. This is a tremendous result and we must build on it immediately."

SCG's tournament opened with a tough test against their former countrymen of Croatia, which they won 3-2. Next came a narrow 2-1 defeat against eventual winners Italy. The match saw the state union team left frustrated after Lazovic was denied a perfectly good goal in the dying minutes, thanks to an erroneous offside call. The first glimpse of a new team spirit came during the match against Belarus.

At halftime the SCG lads found themselves 1-0 down and facing an early exit from the tournament. However, a spirited second-half performance turned the tide of the team and match eventually secured a 2-1 victory. Next came the epic semi-final against Sweden. The teams were

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Ever since the famous World Cup win against the U.S. Dream level at 1-1 at the end of normal time and, with no goals forthTeam two years ago, basketball fans in Serbia & Montenegro seem coming in the extra time period, the match went all the way to prepared to accept only one outcome: beating the Americans. the drama of a penalty shout-out. Both teams dispatched their However it will be a lot tougher this time as the U.S. team has penalties with deadly accuracy and it took an excellent fingertip learnt that no one is invincible. World champions SCG should save from goalkeeper Nikola Milojevic to save the day for SCG. keep that in mind too, as Lithuania, Spain, Italy and Argentina will Milojevic went from hero to villain in the 3-0 final defeat be tough nuts to crack en route to an expected heavyweight conagainst Italy, fumbling the ball weakly to gift the Italians their test with the NBA superstars. NBA top shooter Predrag Stojakovic first goal and set them on their way. Even after they had a man will lead the team, and the likes of Milos Vujanic, Dejan Bodiroga sent from the field for two bookable offences, the SCG team kept and Vladimir Radmanovic are certainly capable of going all the battling and searching for an elusive equaliser. However, the way. Yet last year's disappointing sixth-place finish at the calm professionalism of the Italians - sitting on their lead and European championships in Sweden, albeit with a second-string defending as only Italians know how - paid dividends for SCG's team, showed that our team can take nothing for granted.

Aegean rivals. With the young SCG team run ragged for 80 minZeljko Obradovic, who won a haul of medals with the nationutes, fatigue crept in and two goals in a matter of minutes gave a comprehensive victory and the European title to the Italians.

Taking part in the Olympic games is every athletes dream Not one to rue defeats, Lazovic preand we are thrilled that we are going to be there. It means ferred to look to the positive outcome of we'll have a very short summer break, but who cares? the tournament: "We have made t to the Games after 16 years. The last time we al team during the last decade, took over for his second spell in won soccer medals at the Olympics was when we won the charge after the Sweden fiasco and made it very clear what is bronze at the 1984 Los Angeles Games. We would do well to required to win more honours: "I alone cannot make a differemulate that success, although we always aim for top spot. ence without a proper approach and hard work. I will not write The Olympics will not be a walk in the park for the SCG lads. off any player, but only those prepared to play their hearts out The Italians, of course, will be in the way; South American repfor the national team will be taken into consideration as candiresentatives Argentina and Paraguay will provide fierce compedates for the Olympic team". tition and the talented African nations of Ghana, Mali, Morocco The team will not include veterans Vlade Divac and and Tunisia will pose a threat with their flair and skill.

Aleksandar Djordjevic, two living legends who have gracefully While a soccer medal may be viewed as a welcome bonus, retired from international basketball and paved the way for top honours in three other team sports would mean merely livyoungsters such as Vujanic, Radmanovic and Darko Milicic to ing up to expectations of a nation accustomed to nothing but keep the fire burning. Like the volleyball team, Obradovic's success in basketball, volleyball and water polo. dozen have a mountain to climb, as winning any medal other The most unenviable task rests on the shoulders of the than gold would be merely acceptable, while not winning one at men's volleyball team, the defending Olympic champions. all would be considered unforgivable in a country where basketThere will be very few changes to the side led by inspirational ball has set such high standards for itself. captain Nikola Grbic and the world's best hitter Ivan Miljkovic, Perhaps water polo is our best chance of a gold medal. Serbia who led the team to glory at the previous games in Melbourne & Montenegro are the reigning European champions and by four years ago. Since then, however, Serbia & Montenegro have many people's accounts the best team in the world. Italy, been pegged back by fierce competition and rivals eager to get Hungary, Croatia, Spain, Russia, the U.S. and hosts Greece might even - a runners-up spot in last year's World League finals the have something to say about that and one could also argue that only notable result after missing out on the medals in the World finishing in the top three will be just as tough as in the basketCup and the European Championship. ball, soccer or volleyball tournaments.

"It is important for us to do well in this year's World League Some athletes representing our country in individual sports and boost our confidence ahead of the Olympic games," coach also stand a chance of challenging for the honours, others will Ljubomir Travica said shortly before the opening two matches be there simply to make up the numbers and have the honour of against Cuba. "We have to raise our game and be at our best competing against the world's best in athletics, swimming and because everyone will come out with full force against us in many other events eagerly awaited throughout the world.

Athens," he added. To say that a medal is a must is an understateSo let the Games begin.• ment, even though it's easier said than done.

CorD | July 2004

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Out of town

A

By Ljiljana Matejic

Palic is a haven for those enjoying a more active holiday. Tourists who like to be on the move can rent bicycles or take a horse and carriage ride. Both the "Park" and "Jezero" hotels boast fitness clubs, and one can also enjoy the exquisite tennis courts of one of the oldest tennis clubs in Serbia & Montenegro.

round 200 kilometres north of Belgrade, on the Novi Sad motorway near the northern town of Subotica and a mere stone's throw from the Hungarian border, you will find the small, romantic, fairy-tale resort of Palic.

Palic became famous as a spa and tourist destination in the 19th century, when the wealthy lords and ladies of AustroHungary chose to holiday there. Nowadays the intimate resort's four-star hotels - Park and Jezero - are protected in the name of the preservation of architectural heritage. The border resort attracts domestic tourists, Hungarians, Austrians, Italians and anyone else who enjoys being awoken to the sound of the dawn chorus and the scent of dewy grass and fresh flora.

It is no accident that Palic is one of the most visited tourist destinations in Serbia. People come purely for the beauty and

Every July the International Film Festival, whose biggest sponsor is Elitte - Palic, takes place on the Summer Stage in Palic Forest. tranquillity of the place, and to behold the architecturally characteristic splendour of the houses lining the grass-trimmed streets that cut through the luscious centennial forest; the thick, colour-rich flower beds of the forest and the healing views of placid Lake Palic, after which the resort and area were named.

FOOD FOR THE SOUL

Adorning one side of the lake is the so-called "Men's strand" or "men's beach", which is packed with thousands of summer sun-seekers on lazy summer days and provides plenty of space for sunbathing or swimming.

Nearby is a naturally heated thermal swimming hole, which has been known to reach temperatures of 58°C, and the requisite restaurants, cafes, cake shops and open spaces for picnics and barbecues.

On the opposing bank of Lake Palic lies the "ladies' beach", complete with a well-preserved and recently renovated 19th century wooden pavilion. As the name suggests, the ladies' beach was reserved for the fairer sex a hundred years ago and so the area is well hidden from curious passers-by.

Along the tree-lined bank of the lake one will find the Sailing Club jetty and, in the heart of the park, lies the eco centre and one of Serbia's most attractive zoos.

During the summer months Lake Palic is a festival of fun for holidaymakers. As well as being perfect for swimming and paddling, small boats and pedaloes are available for hire, sailing trips can be enjoyed and fishermen seeking solitude can find a place in the sun, far from the hustle and bustle of the beaches.

Palic is also an irresistible lure for lovers of good food and wine. The extensive menus and wine lists of the lakeside Elitte, Mala Gostiona and Riblja Carda restaurants, as well as the Pizzeria next to the tennis courts, are comparable with any of the world's great culinary centres. Food lovers from Belgrade, Novi Sad, Sombor and Zrenjanin, as well as those from neighbouring Croatia and Hungary, come here for the renowned Sunday lunches - made up of 80 different kinds of food from Vojvodinan, Serbian, Hungarian, Mediterranean and international cuisines and accompanied by wine directly from the barrel.

After years of neglect, there are today places in Palic for even the pickiest of guests. In 1994 Palic-based company Elitte was established with the aim of bringing tourists back to the traditional resort. Elitte now manages most of Palic's hotels and restaurants, which have been renovated and restored to former glory. Five modern, well-equipped halls have been constructed to add to the resort's appeal and the completion of an indoor swimming pool, scheduled for the New Year, will provide the finishing touches to the resort.

During the summer you can swim in the lake, or hire a pedalo or small boat. Many people choose to go sailing on the lake and fishermen too are able to find their place in the sun far away from the hustle and bustle.

Those with a love for cultural events can also find fulfilment in Palic. Actors from Subotica's National Theatre stage performances for children in Palic most Sundays, after the traditional family lunch, and every July an international film festival, sponsored

by Elitte-Palic, takes place on the summer stage in Palic Forest.

Summer in Palic is never dull and events, such as the 1st May festival, traditional harvest fare, tennis tournaments and culinary competitions are staged throughout spring and summer.

Autumn is reserved for the so-called "gathering days", when everyone, both hosts and guests alike join in the grape picking.

The festival of "Days of Love and Wine" which takes place in this multicultural society on 14th February, which is both St Trifun's day (the protector of winegrowers), and St Valentine's, represents a genuine example of how to live, work and be happy in places were Serbs, Croats, Hungarians, Rumanians, Slovaks, Jews, Catholics, Muslims and members of the Orthodox Church all live together in harmony. Their mutual consideration and unity also seem to be one of the many attractions which lures tourists to this area.•

Pakistan

WINDOW

TO A

LOST

When one looks beyond the surface of this vast land, it becomes clear that Pakistan is a beautiful sprawling country of great geographical and cultural diversity.

Encompassing some 803,940 km2, this mysterious land of rivers and lakes, mountains and coasts, forests and deserts, has been home to a variety of civilizations over the course of its 5,000 year history.

By Ljiljana Vukosavic

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akistan's three northern mountain ranges - the Karakorams, Hindu Kush and Pakistani Himalayas - boast some of the highest peaks on the planet, including the world's second tallest land mountain, K2, which towers some 8611m (28,250ft) above sea level. The area, which has the densest concentration of towering peaks anywhere, also includes the largest glaciers outside of the polar regions.

Pakistan's rich history has seen the development of ancient civilisations and, in fact, as many as five completely contrasting

Pakistan's ancient treasures are the heritage of all of mankind. civilisations have called Pakistan home and left their mark on the land. The country is one of the oldest lands known to man and its ancient cities prospered long before Babylon was conceived; the people of this land practiced the art of good living

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structing the two later cities had employed methods first developed in Kot Diji.

In the north of the country, Buddhist stupas, monasteries and the temples of Taxila, Swat and Peshawar show evidence of the classical artistic traditions of Gandhara architecture and sculpture - Buddhist expression manifested by the artistic concepts of the Greco-Roman world.

Taxila, which lies some 35km north of modern Rawalpindi, ranks as one of the world's greatest and most revealing archaeological finds. Taxila was once the hallowed heart of Buddhism, a centre of learning and culture, and is the birthplace of Gandhara sculpture. Sculptures unearthed at Taxila include renderings of Buddha himself, likenesses of King of the Macedons Alexander the Great, famous Buddhist king Asoka and the great Emperor Kanishka. The monuments and statues of these great men of antiquity virtually litter the ancient religious city. and corporate citizenship some 4,000 years before the European According to history, Taxila once administered the home Renaissance. province of the powerful Achaemenian Empire, before falling to One such civilisation was that of southern Pakistan's Indus Alexander's conquest in 327BC. The city grew in size and Valley. Modern archaeological excavations at Moenjodaro, stature under the guidance of the Mayryan dynasty and reached Harappa and Kot Diji have revealed a highly developed society, its peak as an urban centre during the reign of King Asoka. which flourished some 2,500 years before Christ.

The Mayryan dynasty gave way to the Indo-Greek descenDiscovered in 1922, Moenjodaro was once a metropolis of dants of Alexander's conquerors, who ushered in the most cregreat importance and today, after years of careful excavation, ative period of the kingdom of Gandhara, before the establishing the city has been revealed as one of the most magnificent of of the Kushan dynasty the ancient world.

Moenjodaro's sister city of The people of this land practiced the art of around 50AD. During the 200 years that followed, Harappa was discovered in 1923 good living and corporate citizenship 4,000 Taxila became renowned as in the Punjab region. Greater in a centre of learning, philosize than Moenjodaro, sadly, years before the European Renaissance. sophical thinking and art, much of Harappa was plunwhich attracted pilgrims from as far away as China and Greece. dered by brick-hunters searching for ballast during the construcThe final demise of the city came in the fifth century AD, tion of railway tracks between Lahore and Multan. However, when the White Huns laid waste to the city and slaughtered the cemeteries which escaped the attentions of the raiders have last generation of the civilisation that had held sway over the revealed a rich and sophisticated Harrapan culture. It is unclear region for centuries. whether Moenjodaro and Harappa enjoyed a shared leadership, Exploring today's Taxila is a revealing meander through the but these prehistoric urban centres were certainly splendid tapestry of the diverse development of antiquity. The Exquisite metropolises in their own right. and rich variety of art catches the eye, and the endless images of The Harappa excavations unearthed material pre-dating the Buddha in stone and plaster, coupled with panels depicting city that reveal strong links with a find at Kot Diji, in the scenes of the great sage's life, evoke images of this, perhaps the Khairpur district of Sind. greatest, man of peace the world has ever seen.

The discovery of Kot Diji's ruins was of added archeological Today, the precious archaeological finds scattered across significance because the city pre-dates Moenjodaro and Harappa this ancient land are not merely a treasure of Pakistan, but the by some 300 years - thus extending Pakistan's history to around heritage of all of mankind.• 2800BC - and was found to contain evidence that those con-

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Gardos

SUBTLE

CHARM

By Maja Vukadinovic, Photo Andy Dall

If Zemun is "the town within the town", then Gardos is exactly what gives it its unique, somewhat tarnished look.

Enjoying a cappuccino in one of the small cafes on the cobbled streets with a view of the river ahead is the ritual we warmly recommend, especially in the summer, when this area captures all the visitors senses.

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arrow, slightly steep cobbled streets, small, picturesque houses, restaurants and cafes with just a few tables and chairs, silence and the scent of the river -this is Gardos, one of Belgrade's more unusual cosy nooks.

If Zemun is "the town within the town", then Gardos is exactly what gives it its unique, somewhat tarnished look, like Saint Andrea in Hungary. The resemblance between the Hungarian town where Serbs have lived since ancient times and Zemun's hill is not at all accidental, although Gardos, in contrast to the commercialised town of Saint Andrea, is by some miracle still managing to resist the allure of becoming a potential tourist destination. This part of town would indeed be of great interest to foreign guests and tourists in general because it possesses everything that makes a milieu attractive: a historical story, architectural inheritance and a specific charm and way of life which is very different from the rapid, pulsating rhythm of the metropolis.

Archaeological discoveries bear witness to the fact that Gardos was inhabited as far back as Celtic and Roman times. It is mentioned as a Gothic medieval fortress in documents dating back to the 9th century, and its name was given by the Hungarians - by connecting the words "grad" (city) and the Hungarian suffix "os". The symbol of this area on the slope of Zemun's upper plateau, the Millennial Monument, was also erected by our northern neighbours. In 1896, to mark their thousand year rule of Panonia, the Hungarians erected a commemorative monument in Budapest, and four identical monuments were also erected in four towns on the furthest borders of their former Kingdom, by which they symbolically framed all sides of the world. Zemun, as the most southerly town under the Hungarian Crown, was one of those towns.

The Millennium Monument was erected on the most famous part of Gardos hill, in the ruins of the medieval fortress, the only one in the old part of Zemun, of which only the angle towers and parts of the defending wall still remain. The famous tower, a recognisable feature of postcards, was designed by Hungarian architects, and is a mixture of different styles, where the Roman is the most dominant.

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The construction of the Millennium Monument, better known as the watchtower was completed on 5th August 1896 and was accompanied by a solemn morning service in all of Zemun's churches. Soon after, the inhabitants of Zemun named the tower Sibinjanin Janko's Tower, and that popular name, despite having no true foundation in history, has remained in place until today. The Hungarian hero and fighter against the Turks, Janosh Hunjadi, better known as Sibinjanin Janko, did in fact die in the medieval fortress in Gardos, but that was some 440 years before the Millennium Monument was erected.

Time spent in this very special part of Belgrade will make the boiling hot summer pleasurable and life on the asphalt lightened and enriched by yet another lovely adventure.

According to local stories, the tower was used by Zemun's firemen as a watchtower for a long time, and in previous decades this idyllic environment has often changed purpose, although its cultural, historical and tourist potential has never been fully realized. Summer on Gardos - the event which attracts theatre and other artists, did not experience the continuity of BELEF (The Belgrade Summer Festival) and periodic attempts to revive the tower and surrounding area have also been short lived.

However, this has always been an ideal oasis for lovers of peace and tranquillity and couples in love, who spend their evenings in front of the tower enjoying magnificent views of Zemun and Belgrade. To everyone who has seen the city rooftops at least once, it is clear why this tower, since the appearance of the very first postcard from 1897, is one of the favourite

Gardos symbols of Zemun. Artists also know this, painters in particular, for whom Gardos, with its specific position and undeniable spirit, is a favourite source of inspiration.

And really, it is difficult to resist the impression that this part of town has a hidden bohemian flavour, completely different from the urbanised area of Skadarlija, which appears to have less and less soul these days. Zemun's little hill has preserved the distinctive charm of what once were the traditional residences of fishermen and boatmen, from whose little houses surrounded by pretty gardens, wafts the smell of fish broth on Sunday mornings.

Nowadays, during the summer, if you follow the twisting Gardos streets down to Zemun's quay you will encounter com-

Gardos is an ideal oasis for lovers of peace and tranquillity and couples in love, who spend their evenings in front of the tower enjoying the magnificent view over Zemun and Belgrade. To everyone who has seen the city rooftops at least once, it is clear why this tower, since the appearance of the very first postcard from 1897, is one of the favourite symbols of Zemun. petitions to make the best fish specialities as well as mini fairs selling fishing equipment. Views from many of the terraces of Gardos’ houses look out onto the river, where you can watch the boats sailing in frequent regattas and onto the improvised mari-

nas with lines of anchored boats awaiting their turn to sail off down the river.

A weekend morning spent in the relaxing Gardos atmosphere is definitely an excellent way to recharge your batteries in preparation for the busy working days ahead. A 15-minute bus ride from the town centre will take you to this place with its quiet streets where it seems that time has stopped and which can be walked in less than an hour. One of the pleasures which a visitor to Gardos should certainly not miss is observing the architecture, which is different from that in the other parts of Zemun. The walk over the hill leads to the orthodox cemetery, with Saint Dimitrije's Church and Harish's Chapel, built in SerbianByzantine style, from a design of architect Svetozar Ivackovic.

Enjoying a cappuccino in one of the small cafes on the cobbled streets with a view of the river ahead is the ritual we warmly recommend, especially in the summer, when this area captures all the senses. Along the quay, just next to Gardos, you will find all the best fish restaurants, cafes and pizzerias, and for night owls there is the legendary Reka - the obligatory night stop for all foreigners in Belgrade - as well as other clubs where well known city bands play late into the night.

Summer is the right time to discover all the charms of Gardos. Time spent in this very special part of Belgrade will make the boiling hot summer pleasurable and life on the asphalt lightened and enriched by yet another lovely adventure.•

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Bulletin SCG President meets OSCE chief

S

erbia & Montenegro President, Svetozar Marovic, held talks with Ambassador Maurizio Massari, chief of the OSCE's Mission to SCG, on 8th June. The

with Serbia once the presidential elections had confirmed the victory of democracy in the country and thus proved that Serbia has achieved complete political stability.

Markovic, of G17 Plus, and the ambassadorial representatives exchanged opinions and ideas regarding SCG's current political issues; and the Vysehrad Group's diplomats expressed their collective desire to provide all possible assistance to SCG's transition towards EU integration.•

Germany donates a million more to Serbia's police

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meeting was used to discuss current political processes in the state union.

President Marovic and Ambassador Massari agreed that there was a need for all political options within the state union to reach a consensus regarding the process of EU integration and the implementation of democratic standards to the political and social arenas.•

n 16th June, Serbian Interior Minister, Dragan Jocic, and Ambassador of Germany to SCG, H.E. Kurt Leonberger, jointly signed a protocol document confirming a German Government donation of €1million-worth of equipment to the Belgrade Police Narcotics Unit and Criminal & Technical Centre According to Ambassador Leonberger, projects of this kind serve to confirm that

Belgrade and Prague to improve industrial cooperation

H

.E. Judita Stouracova, Ambassador of the Czech Republic to SCG, has held talks with Serbian Deputy Industry Minister Zora Simovic, aimed at improving industrial cooperation between the two countries. The potential for involvement of Czech companies in the Serbian privatisation process was also discussed.

According to a Ministry of Industry statement, Mrs. Stouracova expressed her satisfaction regarding increased commercial trade between the two states, which grew from $60million in 1999 to $150million in 2003.•

Speaker speaks to ambassadors

S

peaker of the Serbian Parliament and Acting President of the Republic, Predrag Markovic, met ambassadors of the Vysehrad Group on 3rd June. The working lunch meeting provided the opportunity to discuss relations between Serbia and the country's of the group, which includes the Czech Republic (Ambassador Judita Stouracova), Hungary (Ambassador Jozsef Pandur), Poland (Ambassador Tadeusz Diem) and Slovakia (Ambassador Miroslav Lajcak).

The ambassadors expressed their joint intention to improve bilateral cooperation

investments in Serbia & Montenegro.

Ambassador Libaut said: "Business transparency is of utmost importance for foreign investments - one should know the legal framework and regulations important for specific sectors of activity, and exactly what can and cannot be done".

The Belgian Ambassador, who served as ambassador to four other transitional countries before coming to Belgrade, insisted that anyone requiring legal regulatory advice must be able to receive accurate and clear information.

He added that Belgium has become well known for its investments in Serbia, noting Apatin brewery's privatisation and smaller investments such as one in Vojvodina's Backi Petrovac.•

Davinic apprises NATO ambassadors

S

CG Defence Minister, Prvoslav Davinic, briefed ambassadors of NATO member states on 2nd June, apprising them of achievements to date in the reform and restructuring of the SCG defence sector and future plans for the process.

Davinic once again expressed Serbian & Montenegro's readiness to replace army border units with specialised border police as soon as financial conditions allowed.•

Norway joins OSCE in helping Serbian police

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both Serbia and Germany are placing a high priority on the fight against organised crime and drug trafficking. He added that the German Government's donations were aimed at contributing to the improvement of the security situation within Serbia & Montenegro.

This latest donation includes vehicles, radio equipment, bulletproof vests, digital cameras, surveillance equipment and more.•

orwegian Ambassador to SCG, Hans Ola Urstad, has formally agreed with OSCE mission chief, Ambassador Maurizio Massari, that cooperation in the fight against organised crime was an essential necessity, both within the European Union and the West Balkan region.

Reiterating that the Norwegian Government and the OSCE would continue to provide assistance to support projects of the Serbian Interior Ministry, Messrs Urstad and Massari presented special equipment for use in the fight against

Belgian Ambassador: regulations key to investment

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peaking in Kraljevo on 15th June, Ambassador of Belgium to Serba & Montenegro, H.E. Luc Libaut, insisted that the existence of legal regulations was the most important factor effecting foreign

human trafficking to the interior ministry's Border Police Directorate.• CorD | July 2004

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CorD Club RAIFFEISEN

Third anniversary Raiffeisen Bank celebrated three years of successful operations in Serbia & Montenegro on 24th June with a reception at Dom Garde Topcider. The event allowed guests representing the diplomatic community, SCG Government, banks & financial institutions, and Belgrade cultural life, to mingle and enjoy the ambience generated by Raiffeisen's success.

The bank's executives used the opportunity to present a recently published 'Euromoney' magazine assessment, adjudging Raiffeisen to be the best bank in SCG for the third consecutive year.

and Social Policy, City of Belgrade and Belgrade City Library jointly hosted the official launch of the Beautiful Serbia project, at the Belgrade City Library.

The Belgrade City Library is the first building to be refurbished as part of the "Beautiful Serbia", project of the Ministry of Labour, Employment and Social Policy (MOLESP) supported by the United Nations Development Programme (UNDP).

The aim of the project is to alleviate the urban unemployment impact of the economic transition until conditions for sustainable growth are established, and the Serbian economy is in a situation to provide jobs to those who are out of work.

Currently, Beautiful Serbia has started activities in the 3 largest cities of Serbia Belgrade, Nis and Novi Sad - but it plans to expand. In the three beneficiary cities approximately 30 sites will be refurbished.

The next buildings to be refurbished in Belgrade, also funded by the Canadian government, will be in Zeleni Venac.

The project is funded by the Canadian, Dutch, Austrian and Greek Governments, as well as the UNDP. The beneficiary municipalities of Belgrade, Nis and Novi Sad, as well as the Ministry of Labour, Employment and Social Policy, contribute a significant share of the project's overall budget, which totals over $ 2,2 million.•

Fresh & Co. was among 200 participating companies and individuals appearing for the first time this year, presenting its range of NEXT 100% fruit juices. The NEXT range was highly praised for its appeal, healthy and tasty fruit content and adjudged to be ideal for the best cocktails in the best bars. The NEXT stand's top bartenders left no doubt as to the quality of the juices as they quenched the thirsts of some of the event's 8,000 visitors.•

HEMOFARM

44-years-old and going strong

S

erbian pharmaceutical company Hemofarm celebrated its 44th anniversary on 1st June, which was marked by the firm's centres worldwide. However, the biggest celebration was staged in the Vojvodina town of Vrsac - birthplace of the then modest pharmaceutical factory that

FRESH & CO

BAR SHOW 2004

RAIFFEISEN

Property loans available

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udimir Kostic, president of the Executive Board of Raiffeisen Bank Belgrade, was joined by Miroslavka Marinkovic, director of the bank's Service Sector, for a press conference to launch new public sector services and improved credit conditions.

According to the Austrian bank, 20-year property mortgages of up to €200,000 will be approved for all Serbian citizens able to provide proof of assets. The loans will be available in two variants: by providing a dinar deposit totalling 20% of the property's value, with a variable interest rate of 10.5% and 1.5% APR, or with a foreign currency deposit of 20% with a variable interest rate of 8.5% and 1% APR.•

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omestic soft drink company Fresh & Co. presented their goods to British pub-goers at the popular London Bar Show, held from 8th to 9th June.

The Bar Show is the premier annual event of Britain's "bar business" and provides the chance for pub, bar, café and

UNDP

Official launch of the Beautiful Serbia project

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n 10th June, the UNDP, the Canadian Agency for International Development, Ministry of Labour, Employment

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club owners, food and drink producers, designers of bar paraphernalia and furnishings, DJs and others to present their work, products and ideas relating to the leisure drinking industry.

ambitiously set out to conquer the world.

Hemofarm's traditional birthday celebration included a press conference used to present the company's commercial results for the first five months of 2004.

According to the company, last year's growth trend has continued in all sectors of Hemofarm's operations. In comparison to the same period last year, sales grew 5.5% and the group's share of the domestic drug market grew from 44 to 46%.

Exports have grown by 31%, of which the largest growth was a 39% increase in sales on the Russian market.

According to Hemofarm, new products recently introduced to the market should contribute to an even greater increase in the near future. Much is expected of Cholipam®, the first local drug to lower lipide (cholesterol and triglocerides) levels in the blood.

Business partners and friends of Hemofarm were invited to a garden party in Hemofarm Park, which included an exhibition of stone sculptures and the obligatory firework display, which has become a trademark of Hemofarm's birthday celebrations.•

Techno Talk HP R707 www.hp.com/uk Having blithely made digital cameras accessible to everyone through competitive and faultless ergonomics, HP has turned its hand to a new market area: style junkies. The 'R' range of cameras is the result of letting designers mix with engineers at HP HQ: not a situation you want to stumble into. The first result is this neatly cornered 5,1 megapixel effort with a 3x optical zoom. Never likely to have the show stolen from them, the engineers have incorporated an in-camera red-eye reduction facility, as well as Adaptive Lighting for making the most of gloomy shots. The Panorama photo mode is another first, stitching together a series of landscape pics on the camera, instead of having to download them to a computer first. The style junkie cares not for a lengthy download and fiddley process, it appears, preferring to tweak in situ. Watch out Pentax Optio: HP cameras are shaping up.• Retail price : cca € 420

HP mp3130 www.hp.co.uk

The press blurb for this projector is flawed. It does have a bulleted list of features and everything, but it isn't until three-quarters of the way through that it mentions the vertical form factor, and nowhere does it say that after your boring office presentation, you might want to nick off home with it.

The small footprint, neat styling and DLP tehnology will make it as happy on the coffee table as in the boardroom. No native widescreen chip but XGA resolution, S-Video connection and image optimization should ensure a decent home cinema experience.• Retail price : cca € 2625

HP R707 www.mg-rover.com

Use this with At 175 mph you'll need more than sharp eyesight to spot speed cameras in time.

The GPS-equipped Morpheous Road Pilot will warn you in time to brake. And brake.

And brake.

The starling SV barely began rolling off the production line before MG announced this even more powerful SV-R version.

Power is up from 32hp to 400hp, thanks to a 5.0 litre version of the XPower quad-cam V8 engine, tuned by expert Sean Hyland.

No, we've never heard of him either but apparently he is the man when it comes to V8s.

Judging by the sub-five second 0-60 time and 175 mph approx top speed, he has the magic touch (that's 'approximately' 175 mph, as if science and engineering gave way to animal fear during testing). Statistics aside, the SV-R totally won us over with its aggressive shark-gill looks.• Retail price : cca € 124,000

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Techno Talk Tierney Rides T-Board www.born2ski.com Snowboarding is an expensive pursuit. At least, it is if you do it for real, on proper big hills covered in genuine snow. But here's another product that, for the price of a plate of chips on the mountain, offers to bring the feel and exhilaration of slope-surfing to your local park. The USP here is a "revolutionary" wheel and truck configuration: namely, one big wheel at both ends, used in conjuction with a torsion-ring arrangement. After a wobbly start, the T-Board becomes quite stable and allows for sweeping curves down any stretch of Tarmac… shortly before you suffer an unplanned meeting with what is know in the Alps as "un autobus". The T-Board is available in two lengths (for tricksy friskiness or cruisy curviness) and with either rubber or urethane wheels to favour grip or straight-line speed.•

NightOwl Illuminated Keyboard

Retail price : cca € 250

www.gadgetshop.com The British-designed NightOwl keyboard is the best solution for insomniac computer-users who don's want to disturb their loved ones by keeping the lights on in the small hours. NightOwl is the world's first designer range of illuminated keyboards and mice. They come in four fetching colour combos (aqua blue/lilac, bone white, grey/purple and clear) and feature five levels of illumination. The NightOwl's rubber keys mean the typing takes a little getting used to but the superb ergonomics make it easy on wrists. Oh, and it's splashproof, too…• Retail price : cca € 90

name: url: description:

price:

Canon 12x36 IS II Binoculars www.canon.co.uk Canon's IS II stabilization binoculars will resolve all your image-shake issues, thanks to a special VAP (Vari-Angle Prism) corrective system that sits between the binoculars' lens and prism. The VAP shape cunningly alters to refract the light path by precisely the right amount, which compensates for any vibration. Thay're not cheap, but the build quality is excellent and the precision optics deliver bright and sharp images, even at 12x magnification.• Retail price : cca € 1050

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Techno Talk Philips Mira Vision

www.philips.co.uk When electronics manufacturers have a big launch, they inevitably throw in some miracle concept to get tongues wagging and guarantee column inches in the tech press.

Come the following year's press launch, that magic product will have mysteriously disappeared from the calendar, to be replaced by some other flight of fancy. Not so Philips 2004, however. The world's first combined mirror and LCD TV has been tweaked and perfected since its announcement last year. The 23-inch model is due in the next few months, enabling us at last to combine watching TV and watching ourselves, watching....• Retail price : cca € 3750

Electrolux automower www.automower.co.uk The splendidly named Edward Beard Budding devised the lawnmower in 1830. Such classic inventions made this nation of ours great: Britain could have fought both World Wars with nothing but a large squadron of stiff-upper-lipped men pushing lawnmowers and would still have won. But little did old Beardy realise where it would all end. Based on the principle of a grazing animal, Electrolux's fully independent Automower cuts little and often, maintaining your lawn every day.

Using an onboard navigation system to find its way round your garden, it's kept from wandering off by a barely visible perimeter wire. All you need do is give it some suitable programming, crack open the Pimm's and relax. It even works in the rain.• Retail price : cca € 2250 name:

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IFBOT

www.ifbot.net/#start This cute little fellow is not concerned with household chores but with its human companions' mental health. Ifbot recognises up to 10 people and can converse, using a database of thousands of 'dialogue scenarios'. It is also able to recognise emotions and display its own via its LED mouth.• Retail price : cca € 3600

Techno Talk MPIO FD-100 www.advancedmp3players.co.uk The FD-100, available in 128MB and 256MB models, is for those who take pleasure in their music, and who always see the glass as half full. No cold-hearted silver or gothic, suicidal black for our MP3 player. Of course, there is always the possibility that the FD100 will be stolen by an equally cheerful girlfriend who discovers that it matches her lipstick. She might not appreciate its multi-codec support, FM radio, LCD remote control, Smartmedia expansion slot or 24-hour play time, so threaten to dump her before taking it back.• Retail price : cca € 210

Canon Digital IXUS i

www.canon.co.uk The IXUS i's retro styling will have your friends ooh-ing and aah-ing when you whip it out of your pocket. The antique feel of this beautifully crafted camera belies its 4megapixel capability. It also features a movie mode that can record up to three minutes of clowning around by your blissfully unaware friends. The IXUS i's bronzed good looks could result in much pouting from your subjects; their awestruck gaping might not make the most attractive pictures, mind, but that's the beauty of a deletable SD memory card.• Retail price : cca € 450

MEGA TEUTONIC-O-TRON

www.junghanswatches.co.uk The Germans are famous for their logical thinking. Here is a prime example: watch manufacturer Junghans specialises in hyper-accurate radio controlled watches. You wear a watch so you know what the time is when you are outside, and when you are outside you can tell what the weather is doing by looking up. Inside, where you have a clock to tell you the time, it is more difficult to judge the weather, so you need this clock with weather information: forecast, humidity, temperature and pressure. How efficient; we barely need tell you that the clock adjust automatically to suit any European locale and the changing of the seasons.• Retail price : cca € 170

Nokia 9500 www.nokia.co.uk Just when you thought Nokia's Communicator range had been put out to pasture, in sashays the 9500 looking resplendent in two-tone grey and pushing its Wi-Fi wares to the working masses. A colossal 80MB of user memory means you won't be pushed to find somewhere to store your Word or Excel documents and the rock-solid Symbian OS 7 won't let you down just as you're saving that vital report.• Retail price : tba CorD | July 2004

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Italian Cuisine

FOOD FIT FOR THE GODS D

oes the world have any greater hedonists than the Italians? When the Italians indulge, they give their all, body and soul. And that applies to food as much as anything else. Italian food has to be tasty, stylish and decorative.

When Italians eat, all their senses have to be contented. Italians seem almost instinctively conscious of aesthetics and their dishes, generally presented with three contrasting colours, are always pleasing to the eye.

Whether you're eating pizza, pasta or Italian sea food or game specialities, the taste and smell are always fresh and distinctly Mediterranean. The Italian diet is classically Mediterranean: rich in fresh and boiled vegetables, fish, dairy products and the obligatory olive oil. According to the World Health Federation, this diet is considered as one of the healthiest and most natural diets in the world. Italians have become so famous for their eating habits that their style of dining is almost always included in films depicting Italian or ethnic-Italian life - colourful descendants of the Latin tribe impatiently waiting for "mama" to finishing preparing a ton of pasta for her crowd of family and friends, who will eat for hours and hours.

The Italian mealtime ritual is as far from fast food as can be imagined. The Italians always manage to make time for a banquet and the hours pass by as the Italians slowly sip high-quality wine and savour every morsel of their meal.

The weekend is an extra special mealtime for Italians and they seldom dine at home on a Friday or Saturday night, preferring instead to indulge in the culinary delights of local restaurants.

As with elsewhere, Sundays are reserved for the family lunch, which involves five or six courses of traditional Italian fare. To start, traditional bread - of which the black, malt bread is undeniably the best - is served. This course is essentially an introduction to each other and the meal, as the Italians chat and nibble the bread with sprinklings of parmesan cheese and drizzles of olive oil. Next comes the cold appetizers of olives, cheese, fresh salad vegetables, Palma ham, fresh herbs and

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more olive oil. Once the gastric juices have begun flowing the warm starter, usually pasta, risotto or pizza, is slowly devoured.

The main course is up next and this can vary greatly depending on regional variations and personal taste. The one indispensable ingredient of most Italian main courses is polenta, but the meat can vary from fish and seafood, to veal, chicken or game.

Italian wine is amongst the best in the world and, as previously mentioned, mealtimes would not be complete without lashings of wine. The wine depends greatly on the choice of meat for the main meal - white for fish or white meat, red for red meat.

Italians rarely drink rosĂŠ wines, as they are considered as being made from lower quality grapes. After several hours at the table, those eating Italian food in the traditional manner are still not finished - sweet deserts and coffee are still to come. Overall, an authentic Italian meal can last all evening and, thanks to the lightness and variety of the ingredients, it will not leave the diner feeling uncomfortably full.

Those wishing to experience genuine Italian cuisine in the traditional Italian manner do not have to travel all the way to Italy, as Belgrade's Zemun Pier boasts fine Italian restaurant Bella Napoli, located at 35 Zmaj Jovina street.

The Danube may be no substitute for the Tirenne Sea, which Naples overlooks, but Bella Napoli's food is genuinely Italian.

The popularity of the restaurant is proven by the fact that it is always full, and the traditional ingredients and preparation methods of the eatery are complimented by the dÊcor and atmosphere of the restaurant, with its garden rich in plant life and adorned by a fountain, and the dining hall decorated like a typical Italian restaurant.•

Zmaj Jovina 35, Zemun Tel. 011/2198-162 www.bellanapoli.co.yu

TACCHINO CON CURRY E CAROTE (main course for one) Ingredients: 50g onion, 200gr turkey, 50ml olive oil, 50ml white wine, 1g curry powder,10ml sour cream, 200g carrots, 10g butter,1 clove of garlic, salt.

Preparation: Quickly fry the onion in olive oil, before adding the turkey (diced), salt and white wine. Add curry powder after a few moments and simmer until meat is tender. Simultaneously, fry the finely chopped carrot with garlic and serve as a side dish.

CAPRESE (cold starter for one) Ingredients: 100g mozzarella, 100g fresh tomatoes 2-3 olives, 50ml olive oil, oregano and basil to taste Preparation: Wash and slice the tomatoes into discs. Arrange on a plate and cover with slices of mozzarella, oregano, basil, and olives.

Drizzle with olive oil.

RISOTTO MILANESE (warm starter for one) Ingredients: 100g rice (preferably Valencia), 30g courgettes 10g parmesan 50ml olive oil, 50ml dry white wine, 1 clove of garlic, 1gr saffron, salt.

Preparation: Simmer the chopped garlic in olive oil for a few minutes, before adding the washed rice, wine and salt to season. Leave to simmer until the rice is almost soft. Cook until rice is soft and bloated. Serve with parmesan.

CREPES ala BELLA NAPOLI Ingredients: 2 pancakes, 50g vanilla ice cream, 2 oranges, 50g sugar,1 00g butter, 30ml Gran Marnier.

Preparation: Slice the oranges into discs and fry in butter.

Add the sugar, vanilla ice cream and Gran Marnier. Use as a filling for the pancakes.

Belgrade Directory ... get emergency repair or breakdown assistance?

• If you require help with a broken-down car or following a traf-

How to...

fic accident, the best option is to call the Auto & Motor Association of Serbia & Montenegro's International Touring Information Centre. Information, advice and roadside breakdown services are available 24-hours-a-day by calling (011) 9800 or (011) 241 9555. Additional information is available via the website at www.amsj.co.yu

... rent a boat for river cruises?

CorD's editorial staff will attempt to find and give answers to questions of current interest to our readers, so please send in your questions for future editions. In this issue, we reply to the most frequently asked questions amongst newcomers to Belgrade.

... become a leisure pilot?

• National airline company JAT Airways' educational centre is to organise a Summer School for pilots. The Vrsac-based school offers both basic pilot licences and the possibility of obtaining professional pilot credentials. Detailed information is available by calling (013) 812 185

• For an extraordinary and well-organised celebration, private party or business function, why not rent a luxury boat to cruise the Sava and/or Danube rivers?

Information on boat hire is available from the Belgrade Tourist Organisation. One hour's rental of a boat with a capacity of 25-40 persons costs 4,500 dinars (+/- €65). Information and booking is available at the Belgrade Tourist Information offices in Terazija Square (located in the subway near Albania Palace) and at 18 Knez Mihajlova Street, or over the phone: (011) 635 622 or (011) 629 992. Additional information is available via the website at www.tob.co.yu

... see a video montage about Belgrade? ... find a modern, business courier service?

• Inform your friends and business partners about Serbia's cap• Dispatch and distribution of mail directly from your address and other "business services", modelled on similar services provided worldwide, are now available from mail company Srbija.

Detailed information of services offered is available by calling (011) 3210 249 or via the website at www.posta.co.yu

ital with a short, informative video presentation of Belgrade. The two-minute plus video is available, in English or Serbian, for downloading from the Belgrade Tourist Organisation's website (www.tob.co.yu). A longer VHS or CD-Rom compatible version of the film can be ordered online. Details and further information are available via the website.

... have stationery delivered to your door? ... get accurate weather forecasts?

• A profusion of office supplies and almost all items and equipment necessary for any modern workplace can now be ordered from Office 1 Superstore's catalogue and delivered directly to your office, institution or department. Telephone orders and information are now available. Just call (011) 346 0600

... activate new options on your fixed phone lines?

• Local landline operator Telekom recently introduced additional fixed phone services for many users in the Belgrade area.

Among the new services on offer are call redirects and conference calling. The new services can be activated over the phone on (011) 319 4124 and additional information is available via the website at www.telekom.yu

... fly cheap from Budapest?

• Several international budget airlines, including SkyEurope, RyanAir and others, have recently introduced budget flight services from Budapest. Passengers making their own way from SCG to the Hungarian capital can purchase return tickets to Rome, Venice, London, Warsaw and other international destinations for as little as €25. Information on these super-cheap flights is available via the airlines' websites.

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• Accurate three-day weather forecasts are available thanks to the experts of SCG's private meteorological service. Detailed information can be forwarded directly to your mobile by calling 064 1010 and additional information is available via the website at www.meteos.co.yu

... visit swimming pools?

• Belgrade boasts several indoor and outdoor, public and private swimming pools to suit your bathing needs in the capital.

Information is available over the phone: Tasmajdan swimming pool 26 Ilije Garasanina, Banjica swimming pool 4 Crnotravska, 25. Maj swimming pool 63 Tadeusa Koscuska, 11. April swimming pool New Belgrade, Autoput 2, Kosutnjak swimming pool 72 Kneza Viseslava, Olimp swimming pool 11 Bjekoslava Kovaca,

(011) 324 0901 (011) 668 700/667 999 (011) 2622 866 (011) 672 939 (011) 555 461 (011) 412 353