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The Government of the Republic of Serbia

In the service of citizens

15,241 students to be enrolled in first year of state-funded academic studies

Belgrade, 15 May 2008

Serbian Deputy Prime Minister Bozidar Djelic said that the Serbian government decided at its session today that 15,241 students are to be enrolled in the first year of studies funded by the Republic of Serbia, in the academic year of 2008/2009.

Bozidar Djelic

5,170 students will be enrolled in the first year of state-funded short-term higher education studies.

The government adopted today the Memorandum on the budget and economic and fiscal policy for the next year, with projections for 2010 and 2011, which gives strategic directions for Serbia’s development.

The Serbian Deputy Prime Minister explained that the aim is to reduce last year’s 10.1% inflation rate to 4% in 2011, which would bring Serbia to the level of the EU.

Another aim is to further reduce the share of public spending in GDP, from 43.8% to 40% of GDP.

In that way, public finances will be balanced, with a small surplus at the end of the period. If such a course of economic policy is confirmed, Serbia will not have a debtor’s crisis, Djelic said.

That will enable Serbia to pay off its debts more easily, while the public debt will be reduced to 20% of GDP, which is one of the lowest rates in Europe.

Djelic said that the envisaged rate of economic growth for 2009 and 2010 is 6.5% and that acceleration to 7.5% is planned for 2011.

We expect that such an economic growth will lead to an increase of GDP per capita, from $5,400 that we had at the end of 2007, to $9,300 in 2011, which is a 70% increase, Djelic specified.

The Memorandum also envisages that some €10 billion will be invested in Serbia every year.

A third of these investments will be secured from public finances, and the intention is to use that money for Corridor 10, a motorway to Montenegro, ring road around Belgrade and construction of bridges, Djelic added.

He said that part of the funds will be provided by direct investments, while the remainder will come as loans from international financial institutions.

Djelic said that ministers at the government’s session today were informed about the decision by EU finance ministers to approve an investment framework for the West Balkans, which among others, will allow funds to be allocated from the EU budget and financial institutions under European control for financing infrastructure projects in Serbia.

Mladjan Dinkic

Minister of Economy and Regional Development Mladjan Dinkic said that the Serbian government adopted today a memorandum on strategic cooperation between the companies Zastava and Fiat.

Dinkic said that work begins tomorrow on the finalisation of the agreement which will make Kragujevac a centre of car industry in South East Europe.

He explained that the first step is to convert all Zastava’s debts into capital and transform it from a socially owned company into a state owned one.

According to Dinkic, following this a contract will be signed on joint investment with the Italian company Fiat, and Serbia will have a 30% ownership stake in the newly formed company for a minimum of 10 years while Fiat’s share will be 70%.

Serbia will have representatives in the management and supervisory board and will be obliged to monitor investments by Fiat, which has announced an investment worth €700 million, said the Minister and added that Serbia will invest €50million in Zastava this year, €20million the next year, the same amount in 2010 and €10million in 2011.

Fiat’s investment will be realised by the end of next year, since the company plans to launch its new A- class model in 2009 in Kragujevac, said the Minister, adding that the investment period will be a bit longer for Serbia.

The Minister said that an Italian delegation will arrive in Serbia soon, comprised of Fiat executives and their suppliers, in order to hold talks on the construction of a components factory.

He said that he talked today with Russian Ambassador to Serbia Alexander V. Konuzin about the possibility of including the import of cars in the free trade agreement between Russia and Serbia.

The proposal is that Serbia should be able to export cars to Russia, and Russian car producers should also have the right to export to Serbia, said Dinkic and added that efforts will be made to reach similar agreements with Ukraine and Belarus.