The president of Serbia's Chamber of Commerce warned Wednesday of the urgent need for foreign capital to jump-start the economy as the international community threatened to re-impose sanctions over the war crimes issue.
"The economy needs $1.5 billion a year in order to develop, which cannot be raised only from domestic capital," Vlajko Stojiljkovic said in Wednesday's issue of Politika, the pro-government Serbian daily newspaper.Western diplomats say foreign investment is unlikely to begin until Yugoslavia gains access to international financial institutions.
Stojiljkovic's remarks came against a background of U.N. threats to renew sanctions on Belgrade. Sanctions were suspended in November after 42 months, when Serbian President Slobodan Milosevic endorsed the Dayton peace accords.
But so far Milosevic has failed to arrange the handover of Bosnian Serb leader Radovan Karadzic and his military commander, Gen. Ratko Mladic, to The Hague war crimes tribunal. Under the Dayton agreement, the rival Balkan leaders agreed to extradite indicted war criminals.
On Tuesday the U.N. Security Council deplored Belgrade's "continued failure" to arrest Mladic, which it said "cannot be justified." The sharply worded statement was read by the Security Council president, Qin Huasun of China. Belgrade relies on China as an ally.
Renewed sanctions would have a serious effect on Serbia's economy, which is still in a shambles after the previous sanctions, the collapse of trade among the former Yugoslav republics and the cost of backing Serb fighters in Bosnia. More than half of the Serbian workforce is unemployed, most factories have closed down and the average monthly wage is down to about $100.
Milosevic wants to stave off the re-imposition of sanctions but fears a backlash within the political and military establishment and among Serbs if Karadzic were arrested.
Milosevic has blocked proposed economic reforms, including privatization, the full liberalization of foreign trade and the restructuring of the banking system.
He also has vetoed an agreement with the International Monetary Fund giving rump Yugoslavia - Serbia and Montenegro - access to international financial markets.
Belgrade has refused to join the IMF unless Yugoslavia is named as the sole successor to the former Communist federation of six republics as opposed to one of five successor states.
(Distributed by Scripps Howard News Service.)