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Serbia aims to change image

Thursday, October 31, 2013 - 02:34

Oct 31 - Serbia's looking to rebuild its image after its central role in the bloody wars that tore through the region after the collapse of Yugoslavia and expects to start EU membership talks in early 2014. As Joanna Partridge reports, with a well-educated workforce and low labour costs, it's hoping to bring in foreign investment.

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Italian cars - made in Serbia. 500L vehicles have been coming off the production lines at Fiat's factory there for over a year. In June, EU governments gave the go-ahead for the Balkan country to start membership talks in early 2014 - quite a milestone for somewhere that just two decades ago was fighting a bloody war after the collapse of Yugoslavia It's already started to pull in investment. The auto industry's been the most successful sector so far. But Serbia also wants to lure more foreign companies - by holding an investment conference in London. Ove Fredheim is CEO of Norwegian telecoms firm Telenor in Serbia. They're the single largest investor in the country - putting in over 1.5 billion euros 7 years ago. SOUNDBITE: Ove Fredheim, CEO Telenor Serbia, saying (English): "You could say that Serbia has been lagging behind over the last few years if you compare to an average in the Balkans or in central and eastern Europe. So from that perspective, you could think is there an opportunity, and when you see neighbouring countries entering into the European Union." Serbia boasts a well-educated workforce. But labour costs are still cheap - which the country of 7 million hopes will give it edge over neighbours like the EU's newest member, Croatia. There are challenges at home - a ballooning budget deficit and debt. New Finance Minister Lazar Krstic has announced a package of reforms. SOUNDBITE: Lazar Krstic, Serbia Finance Minister, saying (English): "We are the biggest country in the western Balkans, we are at the same time the country that has the biggest potential to grow in terms of on one end personal income and disposal income, the flip side of that is obviously therefore consumption, by implication GDP growth. We also have a labour force that is well-educated, that can be well-edcuated. We have a tremendous resource in terms of labour force both in the country and outside of the country that we could possibly bring. I'm referring to our diaspora." During its image reboot, Serbia's forging some unlikely alliances. It's recruited former IMF chief Dominique Strauss-Kahn as an government economic adviser. And it hopes a new relationship with the United Arab Emirates will give it access to cheaper finance - to upgrade its farming industry and revive military production. Along with EU accession talks - in the next decade the country might be able to get the rebrand it so desires. But it's not all plain sailing - there was no production at the Fiat factory on Thursday, after a strike and blockade by transport workers stopped supplies getting through.