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ECONOMY: Serbs, Croats and Slovenes Revive Old ‘Kingdom’

Vesna Peric Zimonjic

BELGRADE, Apr 8 2011 (IPS) - Two decades after former Yugoslavia fell apart, leaders of the newly created nations of Serbia, Croatia and Slovenia met earlier this month to agree on joint economic strategy, putting some of the effects of wars of the 1990s finally behind them.

The meeting between Serbian President Boris Tadic, Croatian Prime Minister Jadranka Kosor and Slovenian Prime Minister Borut Pahor took place in Smederevo, some 40 kms east of Belgrade, at the former residence of one of Serbia’s kings.

It was immediately dubbed by the media as “the economic rebirth the of Kingdom of Serbs, Croats and Slovenes (SHS in local languages),” which was the first name of the joint nation that became Yugoslavia in 1929 and died in the bloody wars of the 1990s.

“Politically, the Kingdom of SHS is long dead”, analyst Misa Brkic told IPS, “but economically, it can be re-vitalised in a modern form, to the benefit of all.”

The three leaders signed an agreement that listed the defence and construction industries, food and wood processing, transport and communications as areas for joint business ventures in third nations. The next step is the creation of joint representative offices in third market countries and the promotion of joint projects among the three nations by their diplomatic missions abroad.

Well informed sources confirmed to IPS that Russia, Turkey, the Middle East and North Africa are regions of joint, particular interest. One of the first goals will include Serb, Croat and Slovene construction companies bidding jointly for construction contracts in Sochi, Russia, where the next Winter Olympic Games are to be held in 2014.

For years now, Serbia has had a special economic agreement with Russia that the other two do not have. The agreement could serve as the basis for all three to enter that big market and win the contract in Sochi.

“It makes sense for us to cooperate in areas where we used to work together,” said analyst Miroslav Zdravkovic, editor of the Makroekonomija.org web site specialised in economic issues. “When you are a small country, it’s logical to join forces with someone else,” he added. Serbia has a population of 7.5 million, Croatia of 4.5 million and Slovenia of under two million.

“The three economies, separately, are not competitive enough for individual performance on world markets,” Ivan Jaksic from the Serbian Chamber of Commerce told IPS. “However, our economies remained complementary, so we should use all potentials that we have together.”

Talking to journalists, Croatian Prime Minister Kosor said in Smederevo that joint efforts may include defence and infrastructure projects in Libya and the Middle East “once the situation stabilises there, which we hope will be soon.”

The first step in this direction will be Serbian President Tadic’s visit later this month to Kuwait.

Serbian Defence Minister Dragan Sutanovac confirmed to local media that during the visit, the contract for a major overhaul of 149 tanks made in former Yugoslavia will be discussed. The contract is worth 400 million U.S. dollars and defence companies from Slovenia and Croatia will join, possibly with some from Bosnia-Herzegovina as well.

“What we see is the new approach,” Brkic said. “One has to bear in mind the fact that Slovenia is the only ex-Yugoslav nation that has become a European Union (EU) member so far, ready to help others introduce their products to that market. On the other hand, Serbia’s special agreement on trade with Russia opens the doors for others to that vast market,” he added.

There is also the CEFTA (Central Europe Free Agreement), which represents the first multilateral agreement in the region made up of Albania, Bosnia-Herzegovina, Bulgaria, Croatia, Macedonia, Kosovo, Moldavia, Montenegro, Romania and Serbia since 2006.

“One should not forget that this successful effort (CEFTA) has brought clear benefits to all member nations, and with the trilateral meeting (Serbia, Croatia, Slovenia), there are certain possibilities for improvement of the economy and economic cooperation,” economy expert Goran Nikolic said.

However, there is also scepticism. Croatian and Slovenian media shared Serbian optimism only to a certain degree, as political memories of wars, particularly in Croatia, are still very strong.

For prominent expert Vladimir Gligorov, “there is a lack of concrete ideas.” In his widely popular column in the daily ‘Blic’ Gligorov said that “re-birth of cooperation is a very popular subject. However, it is not clear who would finance any of a number of joint projects, as possibilities for credits and investments in all the three economies are very limited at this time.”