A United Arab Emirates-based company announced the investment of around 200 million euros in Serbia's agriculture.
By Igor Jovanovic for Southeast European Times in Belgrade -- 19/01/13
Some Serbian farmers resent that they were not offered to lease the land under such favourable conditions as the Arab investors. [AFP]
An Abu Dhabi-based company's pledge to invest about 200 million euros in Serbia's agricultural industry is the latest example of investment of the United Arab Emirates in the Balkans.
Al Dahra's investment is expected to boost Serbian exports a year after drought caused damage of up to 1.5 billion euros. The country has a small area of irrigated land that limits the Serbian agriculture revenue, rendering it vulnerable to natural disasters.
"Al Dahra will invest 100 million euros in the new irrigation system in order to boost production, and 100 million in the takeover of 80 percent stake in eight state-controlled agricultural companies, of which Serbia will keep 20 percent," Mladjan Dinkic, finance and economy minister, said.
Experts said that Serbia would have to irrigate approximately 500,000 hectares of land. Currently some 150,000 hectares are irrigated, but the actual area is 40,000 hectares. The new investment should add another 14,000 hectares for irrigation.
Miladin Sevarlic, professor at the Belgrade agriculture faculty, said that investments in irrigation systems are necessary, especially due to climate changes.
"That investment in irrigation will pay off in three to five years," Sevarlic told SETimes.
Farmer Mileta Vojnov said he expected the Arab investment to help small producers like himself.
"First we must enlarge our land, because no one wants to irrigate small plots, and a lot more has to be done in cleaning the irrigation canals, so that we can use what we have," Vojnov told SETimes.
Miroslav Grubanov, head of the farmers' association Paor from Crepaja, however, voiced a concern that the state was favouring foreign investors, and that it has not offered domestic farmers land under such favourable terms.
Grubanov told Belgrade news agency Beta that the farmers resent that they were not offered to lease the land under such favourable conditions, because they paid up to 900 euros per hectare at auctions, while the Arab investors will get it for 250 euros.
Serbia is not the only regional country where UAE investors are investing.
Following the armed conflict in Bosnia and Herzegovina (BiH), the UAE focused on financial aid for the reconstruction and refugee return, also investing in favourable loans for small and medium businesses and education. All investments are done through Dubai-founded Bosnia Bank International, the only BiH bank that operates on Islamic principles.
Trade between BiH and the UAE is some 4 million euros. The number of Emirate companies that entered the BiH market in the last three years has risen to 15, including three government-owned companies.
Some of the largest are the investments of the Abu Dhabi Islamic Bank and the Dubai Islamic Bank, focusing on the finance and real estate sectors. BiH exports halal meat to the UAE.
Three years after the opening of the Albanian embassy in Abu Dhabi, UAE investments have grown in Albania. The UAE government is investing 51 million euros in the construction of the 32 km long Tirana-Elbasan highway. The two countries in 2012 signed a common agreement on air services between relevant territories.
The UAE government has also placed 17 million euros into the construction of the Kukes airport in northern Albania.
The two countries established a common Committee on Economic Co-operation in early January.
In Bulgaria, UAE direct investments were 0.3 million euros in 2000, while they reached 34.4 million euros in 2012.
Correspondents Anes Alic in Sarajevo, Erl Murati in Tirana and Svetla Dimitrova in Sofia contributed to this report.