Remond Olivier, economic adviser to the French embassy in Belgrade: We are interested in investing in Serbia's railways and ports

- The economies of Serbia and France are slowly recovering from the consequences of the economic crisis, which is why I expect the volume of economic exchange to grow in the future. However, among the countries of former Yugoslavia, Serbia ranks third in the volume of exchange with France, behind Slovenia and Croatia – Remond Olivier, economic adviser to the Embassy of France, told eKapija and added that the levels of current trade exchange and investments were low, but that a positive trend was present.

France has invested between 550 and 750 million U.S. dollars in Serbia since 2000, which puts it in the eighth place on the list of investors in our country. In spite of this relatively low ranking, the largest member of the EU is interested in investing in Serbia, primarily in railway transport, construction of the Belgrade metro, and agriculture.

eKapija: What was the volume of Serbian-French economic exchange in 2010?

- The total exchange was worth EUR 500 million, 300m of which was the value of France's exports. Products from France are mainly from the processing industry or those intended for consumption, whereas Serbia builds its reputation as a manufacturer of red fruits. But, for example, Renault Group has its own plant in Slovenia, which significantly increases Slovenia's exports, primarily to France. Serbia will achieve a similar thing through its partnership with Fiat. The key condition for the development of relations between Serbia and France is the arrival of a significant industrial group whose investment would attract both small and medium-sized enterprises.

eKapija: How big are France's investments and what is their structure?

- Since 2000, companies from France have invested between 550 and 750 million U.S. dollars in Serbia. What makes French investments different from others is their focus on industrial projects. Out of 9,000 employees at French companies, as many as 5,000 work in the processing industry. Some of the most famous companies are Lafarge, Michelin, Bongrain, Lactalis. As far as other jobs are concerned, they are mainly in the sector of financial services where four large companies of ours operate: Societe Generale, Credit Agricole, BNP Paribas, and Axa. About 1,000 employees work in the service sector, in which the most famous investor is Veolia, owner of Litas, Braca Sarac, and Interex.

Serbian economists now insist on the "new model of growth" based on the industrial production, which is undoubtedly encouraged by our investments. There has not been a large French investment so far, but the ones made are quite diverse, which helps local development. For example, one of the largest investors in Serbia is Norway, which has earned that title by making one investment only - in Telenor. Besides, France has been investing in Serbia on a regular basis, every year, since 2000.

eKapija: What do French investors think about investment potentials of Serbia?

- There is an excellent agricultural potential, as well as an industrial tradition. Besides, Serbia has a good geographic position between Turkey and western Europe. Finally, growing number of foreign investors take the advantage of Serbia's free trade agreement with Russia. However, people in France do not generally know that Serbia possesses such attributes.

eKapija: Investors from France are traditionally focused on francophone countries and certain European markets with which France has deep cultural relations. Among such countries are Belgium, Switzerland, Poland, Romania... What can be done to make Serbia a desirable investment destination?

- Although generally thought so, the French investors are only not interested in investing in the countries of northern Africa. France is primarily investing in highly developed countries such as Belgium. Cultural closeness is also of exceptional significance to small and medium-sized enterprises.

However, large industrial investments have proved to be a trigger for mass inflow of foreign capital. Therefore, Renault's investment in Dacia attracted a huge number of collaborators to Romania, thus reviving the local industry. Although the chances that Renault, Citroen or Peugeot will invest in the construction of an automobile plant in Serbia are small at the moment, that does not mean it is impossible that there will be some large French industrial investment in Serbia.

We should also not neglect the importance of the university exchange between Serbia and France. Concretely, it is in our interest to have as many Serbian students as possible studying in France and interning at our companies, as well as returning to their country, because these talents will in that way cause a quicker economic development of Serbia.

eKapija: What does prevent a greater inflow of French investment in Serbia?

- The biggest problem for both French and other investors is the institutional unpredictability of performance. It is very hard to make long-term plans for operations in Serbia because the rules of the game are changed quite often and they are applied selectively. Plans for aforementioned large industrial investments are usually made for the period of over 10 years, which is not possible in an unstable environment.

eKapija: Can we expect French investment in the field of modernization, that is, construction of railway infrastructure?

- Owing to the excellent geographic position of Serbia, as well as to the French tradition in the railway sector, there is an obvious mutual interest in such investment. Modernization of the railway infrastructure is being negotiated with the Serbian representatives, but some French companies, one of which is Vinci, have given their proposals for the construction of brand new railway lines.

Freight railway transport is the most efficient and environment-friendly, and Serbia has such relief that the construction of railway infrastructure is simple. Besides, the oil derivatives price increase trend is another argument in favor of reliability on the railway infrastructure.

The railway infrastructure is, however, not the only thing that the French are interested in. One company is also interested in investing in the Novi Sad Port and using the potential of the Danube as an infrastructure corridor in that way.

eKapija: Will French partners participate in the construction of the Belgrade metro?

- Of course, Alstom has expressed interest, but official negotiations have not started yet. Construction of a metro demands a very complicated procedure and careful planning. That job must be approached from the visionary point of view, and I think that the city management is on a good way.

eKapija: What can be expected from the strategic partnership agreement signed between presidents of the two countries in Paris?

- This agreement is significant because it sends a signal to the French businessmen that Serbia is safe and favorable investment market. However, concrete activities are necessary to make the agreement "alive".

M.D.