Serbia expects a flurry of investments from UAE companies this year as the two countries prepare to launch embassies in their respective capitals next month, the European country's deputy prime minister said.
Aleksandar Vucicsaid Etihad Airways' acquisition of a 49 per cent stake in the national carrier, Jat Airways, was being complemented by deals in agriculture, defence and other areas.
In addition, the government of the EU candidate country held talks on Thurday with an Abu Dhabi business delegation including the Mubadala Development chief operating officer Waleed Al Mokarrab Al Muhairi.
"We've grown our level of commercial exchange between the UAE and Serbia five times in 2012 comparing to 2011 but it's still at a very low level," said Mr Vucic during a press conference in Belgrade. "I'm absolutely sure it will increase 50 times."
Relations between the two countries have warmed in the past year after a souring of ties in 2008 when the UAE formally recognised Serbia's neighbour Kosovo as an independent state.
Bilateral commercial ties last year reached €23.3 million (Dh113.6m), a figure already dwarfed by agreements signed this year. Relations will be further cemented when Serbia opens an embassy in Abu Dhabi next month. The UAE will also open an embassy in Belgrade, said Mr Vucic."The embassy in Abu Dhabi will be one of our most important, with 15 people," he said.
Sheikh Mohammed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces, has been integral to the engagement process. Discussions over a possible stake in Jat were first mooted when Mr Vucic hosted Sheikh Mohammed at his Belgrade home on January 10, said Mr Vucic.
The same month, Al Dahra Agriculture, the Abu Dhabi-based agribusiness, said it was making a €300m investment in eight Serbian farming companies. The deal included upgrading of farming equipment and machinery and irrigation systems, along with the cultivation of wheat, barley, corn, soya beans, sugar beet and citrus fruit over an area of about 14,000 hectares of land.
Two months later, the Abu Dhabi Fund for Development approved a US$400m loan to Serbia to invest in irrigation and provide loans to farmers. Agriculture made up 20 per cent of Serbia's exports last year, a market the UAE is hoping to exploit for its food security needs.
Investments have also emerged in other areas. In January, the UAE and Serbia signed a €100m weapons deal and said they were considering a separate joint tie-up in the development of a guided surface-to-surface missile.
More could follow.
"Mubadala's visit is part of ongoing discussions across a range of sectors," said a spokesman for the Abu Dhabi Government-controlled strategic investment vehicle after the latest trip.
The discussions surrounded semiconductors, renewables, property, aerospace and telecommunications, said Mr Vucic.
Serbia has been looking east to drum up investment from countries such as the UAE, Russia and China amid economic woes weighing on its traditional trading partners in the euro zone. The country is targeting a rebound from a double-dip recession this year with GDP expansion of 2 per cent.
But despite the sudden closeness in political ties between the UAE and Serbia, both sides insist business deals will happen only where they make commercial sense.
"The relationship between Serbia and Abu Dhabi is very strong. But the very clear guidance I got from my board was that unless you can make this work, don't do it," said James Hogan, the president and chief executive of Etihad Airways, speaking after it announced the carrier would invest up to $100m in relaunching Jat Airways as Air Serbia under a five-year management contract.
Mr Vucic shares a similar sentiment.
"Abu Dhabi is a true friend of Serbia, but Abu Dhabi companies have to make profit here," he said.
