• by Vesna Peric Zimonjic (belgrade)
• Tuesday, August 18, 2009
• Inter Press Service

The arms industry in Serbia is seeing record growth amidst the economic slum that has hit other industries.

Military exports were worth 520 million dollars last year, and will reach 650 million dollars this year, according to Serbia's Chamber of Commerce. About 90 percent of military production in Serbia is exported.

'After quite a long while, Serbia's military production is back on its feet again, with some 20 training aircraft Lasta (Sparrow) due to be supplied to Iraq by mid 2010,' defence minister Dragan Sutanovac told reporters after return from Baghdad with a 305 million dollar contract.

'This is one of the biggest contracts our military industry has got, it will create almost 20,000 new jobs, and see the return of our nation to the international scene in this segment,' Sutanovac added.

Iraq will get the first of these planes made at the Utva sports and training plane factory in Pancevo, near Belgrade, by the end of this month.

'We have introduced a six-day working week, employed 100 new people, and significantly raised salaries,' says manager Tomislav Bjelogrlic. Salaries in the military industry average 60,000 dinars (923 dollars). This is twice the average of other industries.

'The revival of military industry, primarily deliveries to Iraq, could open the doors for other industries' re-entry into that country,' Sutanovac told state- run Radio Television of Serbia Monday.

'Our construction industry built the bulk of infrastructure in Iraq in the 1970s and 1980s. They might re-enter that market in future, as Iraq plans to invest some 70 billion dollars for general reconstruction.'

Arms worth several billion dollars annually was one of the main exports before the wars that tore former Yugoslavia apart in the 1990s. Production takes place at six big factories, with the state the majority shareholder.

The biggest clients were nations from the non-aligned bloc such as Iraq and Libya. After the 1990s wars broke out, the region was placed under a strict arms exports and imports embargo by the United Nations.

Military industry installations were regular targets in the North Atlantic Treaty Organisation (NATO) bombing of Serbia in 1999, which came due to Serb repression against ethnic Albanians in its southern province Kosovo. The 11 weeks of bombing hit production centres for rifles, small arms, missile and anti-aircraft rocket factories and production of ammunition and rocket fuel. The centres are all located in central Serbia.

The only centre that was spared was the giant explosives factory Prva Iskra, 36 km from Belgrade.

'Now it's back to arms in the sense of production and industry, but not to wars,' military analyst Aleksandar Radic told IPS. 'This business is now completely transparent, with contracts being made well in advance, supervised by responsible, relevant authorities at home and abroad.'

According to Rade Gromovac, manager of the Zastava Oruzje factory manufacturing small arms, the bulk of its 30 million dollar export this year - 30 percent more than last year – is for international peacekeepers in Iraq and Afghanistan, and for Iraqi security forces. The factory also produces hunting rifles sold mostly to the U.S.

But non-aligned countries are considered the most promising outlets for industrial and agricultural exports. Serbian President Boris Tadic proposed at a summit of non-aligned nations in Egypt last month that the 2011 summit to mark 50 years of the movement be held in Belgrade, where the first was held in 1961.

'Renewal of cooperation with non-aligned countries, where some are large such as India or Indonesia, or highly eager to spend – like some Middle Eastern nations - could certainly mean an economic boost,' Chamber of Commerce spokesperson Ivan Jaksic told IPS.

'There is a pronounced need in those countries for experts from the military industry,' he added. 'However, there should be no relying on any single source. Agriculture and services such as management, construction, medicine, transport, engineering and IT technologies are in high demand as well.'

© Inter Press Service (2009) — All Rights Reserved. Original source: Inter Press Service

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