The Serbian Prime Minister Zoran Djindjic

Belgrade, August 20 - The Serbian Prime Minister Zoran Djindjic, Aleksandar Vlahovic, Economy and Privatisation Minister, Dragan Milovanovic, Labour and Employment Minister, representatives of the Cambers of Economy of Belgrade and Serbia visited today the New Belgrade-based Industry of Machines and Tractors (IMT). The occasion for the visit was the government programme of subsidizing frozen production. The factory was granted the subsidy in the spring and the first results should be assessed in September.

Beside the YUD31m allocated for the running of the machines, those in the foundry in the first place, the IMT also obtained YUD276 from the Commodity Reserves Directorate to boost production of agricultural machines to be traded for 100,000 tons of wheat.

The effects of this "pecuniary injection", so dubbed by the factory management, are already visible - production has been restarted not only in the IMT but also with the 15 regular suppliers and subcontractors. As a result, 30,000 workers have been employed, and three-stage plans are under preparation to achieve the desired production rate of 23,000 tractors a year.

Vlahovic: Government comes up to expectations

The Economy and Privatisation Minister Aleksandar Vlahovic pointed out that the Serbian government had fulfilled all it had promised. By providing funds it has succeeded in restarting production in all factories producing agricultural mechanical equipment. "Now I can announce that within the next 15 days we are going to hold talks with the World Bank, which should grant further credits for the IMT, since it has proved its market viability." The final goal is privatisation and in order to carry it out properly, it is essential for the machines to operate and that there exist a sound basis of supply.

Djindjic expressed satisfaction at the attained results and hope for conditions being created by the end of September for a new crediting stage from the Development Fund.

"Our strategy of having confidence in the metal-working industry, despite its being one of industrial branches that has most suffered over the past ten years, proved right. The project has evidently succeeded. The government's fundamental principle is to invest in the branches producing commercially viable products, and tractors certainly have their market," Djindjic said noting that at the present moment Serbian farmers had the most outdated mechanisation equipment in Europe, old between 13 and 17 years on average.

According to him, the Serb government plans to direct operating capital into cost-effective production, since" a good product bringing in no profit is of no value", as well as to enable customer credits.

"It would be unrealistic to expect people to have DM10, 000 put aside in home safes, so that tractor sale could start that way. Without customer credit there would be no operating capital either."

He also announced that crediting would be more stable after debt rescheduling at the Paris Club in September/October and that the opportunity would be afforded for Serbian factories to take foreign credits on equal terms with the rest of the world.