Several of Serbia's deals with the Emirates were declared "deals of the century" and were harmful to Serbia, while the real earnings - in the trade in arms and military equipment - were mostly kept silent.
Hardly any of the randomly selected citizens would remember what happened on February 17, 2013. In the meantime, there were many dates that should be remembered - for better or for worse - but that February 17, it seems, no one remembered.
But what actually happened then, and why is that day important for recent Serbian history? On that day, he was only the first vice president Government of Serbia - Aleksandar Vučić signed the "umbrella agreement" between Serbia and United Arab Emirates. This act provided for the cooperation of these two countries in a dozen different areas - security, military, media, judicial, health, agricultural... At the same time, this agreement forever sealed the appearance of the capital, and enabled the "Arab friends" to develop their projects in Serbia. disregarding its laws: Vučić, signing the agreement, also signed the small article 6, which effectively removes the state of Serbia and its national legislation from all future projects and contracts that will be signed on the basis of the "umbrella agreement".
In fact, there were more projects like this, fiercely contested in the remnants of the destroyed public under Vučić's regime, projects whose effects are still debated today. Also, there were several projects and promises of "heavy" multibillion euros that were never fulfilled. And during all that time, quietly, behind the scenes, the arms trade flowed from Serbia to the United Arab Emirates. This activity, although more valuable than all the "investments" that the UAE brought to Serbia, as a rule, during the years that followed, remained silent and was not in the foreground.
But let's go in order.
ANNOUNCEMENTS AND ACHIEVEMENTS
Diplomatic relations between the two countries were restored in 2007, but before the arrival Serbian Progressive Party came to power, there were no major joint projects or investments, on both sides. Therefore, there were no historical, economic, or political ties between the two countries, not even arms trade.
Everything starts in October 2012, with the visit of Aleksandar Vučić and the now forgotten Mlađan Dinkić to the Emirates. Then the two of them brought to Serbia announcements about the investment of a foreign partner in the amount of several hundred million euros - in agriculture, in drainage canals, dedicated industry was also mentioned. Sheikh - then Prince of the Emirates - Mohammed bin Zayed al-Nahyan returns his visit to Belgrade in January 2013, and at that time there was already euphoria in the media: allegedly, the prince calls Aleksandar Vučić "brother", he wants to invest in dedicated industry, in agriculture, in "JAT Technique", in irrigation... The sheik then visits the Crvena Zvezda Football Club, and Vučić goes so far as to even declare that the sheik will invest in businesses where he will not earn anything - only to help Serbia.
In February 2013, in Abu Dhabi (the capital city and one of the seven emirates that make up the UAE), Vučić signed the above-mentioned umbrella agreement, on the basis of which at least three very harmful contracts would later be signed for Serbia - one is for "Belgrade on the Water", the other for the national airline "Air Serbia", and the third for the sale of PKB.
There is even greater euphoria in the regime media - during 2013 and 2014, billions of euros are already being talked about. The chip factory "Mubadala" will come and invest eight billion euros, the Emirates wants to build a factory of aircraft components worth 400 million euros, Belgrade on the water will be worth 4 billion euros and employ 200000 people ("Informer")...
It is rumored in the media that, now also forgotten, the former head of the IMF and Vučić's adviser Dominik Strauss-Kahn will "work out the modality in which the potential excess funds from the UAE loan could be used as a basis for attracting additional funds from private sources", and in March In 2014, the UAE gave Serbia a loan of one billion dollars, with an interest rate of only two percent. The then Minister of Finance Lazar Krstić declared that "in today's money it is literally like a gift, as if someone gave that money from their pocket".
So far, Serbia has borrowed a total of three billion dollars from the UAE, and the net foreign direct investments in Serbia from this country amounted to 705 million euros in the period 2010-2023 (see graph 1).
"I am convinced that behind everything are the Americans who gave the ruler of Abu Dhabi the signal to open up to the Balkans and thus establish a channel of 'intermediary cooperation' which, let's not forget, first started with Montenegro, and only after that, when he became involved Vučić's advisor Mlađan Dinkić, and with Belgrade," Boško Jakšić, a foreign policy commentator for decades, told Vreme. "Palestinian Mohammed Dahlan, one of the brokers from the Middle East who was accused of ties to the CIA, played a big role in that. In 2013, Dahlan was awarded in Serbia, and after the Montenegrin citizenship, he also received Serbian citizenship. Investments are an expression of affection, and the authorities in Belgrade know that the Americans are behind them, and they should appreciate that. At the same time, it is easier with the Emiratis than with the Americans to enter into dubious deals that are a source of corruption. The project 'Belgrade on water' was thus turned into a mega money launderer".
BELGRADE ON THE WATER
Four billion euros of investment and 200.000 new jobs - wrote the pro-state "Informer" in 2014 about a future project that will completely wall up the Sava coast and hide it from the rest of the old part of the city with dozens of residential and commercial single-storey buildings and multi-storey buildings.
Practically everything is disputed in this mega-project, which the government claimed would bring an investment of 3,5 billion euros and 200000 new jobs to Serbia and Belgrade. During the campaign for the Belgrade elections, Vučić said about this project that "we have a large number of interested investors, but it is pointless to talk about it, because of course there will be a tender and there will have to be a match and a competition for something like this".
Of course the match did not exist, of course the tender was not announced and no one could compete with the "Eagle Hills" company in what - at least for the Arab side - was really the deal of the century: they received 170 hectares of land in the center of Belgrade for free, the state invested hundreds of millions of euros in order to infrastructurally arrange and equip this part of Belgrade, received only a third of the ownership in the joint company, and the Arab "partner" gave the joint company a loan of 150 million euros and committed to investment of up to 150 million euros. The contract was signed by Zorana Mihajlović. Not only was there no tender, but the Serbian Parliament adopted a scandalous "lex specialis" for Belgrade on water, by which the clear private interest of the investor - to build buildings and sell them - was declared a public interest in order to enable the displacement of the existing residents of Savamala.
The leaders of the government arrogantly responded to the extremely numerous criticisms of experts and the general public, simply saying "you invest 3,5 billion, then build". After that - a rarity! - the finally published contract on "Belgrade on the water", the mayor of Belgrade at the time, Siniša Mali, "explained" the disparity between the promised 3,5 billion and the agreed 300 million by counter-questioning: "What, is 300 million euros too little?"
Experts pointed out the obvious damage that is occurring to the capital city and the country of Serbia, so the Academy of Architecture of Serbia called Belgrade on the Water "the biggest wild construction in the world", and lawyers pointed to the fact that the contract stipulates that the shares in the company will not change regardless of the additional investment of any partner.
Of course, only the domestic side had additional investments, as in the case of Air Serbia. The way in which Belgrade on the water got the necessary green areas was spectacular - it was done by allocating land on the other side of the river, in New Belgrade, where the meadow is located.
And then in April 2016, there was a demolition in Savamala, and all semblance of Serbia as a functional state disappeared. The expansion of Belgrade on the water continued, so first in 2021, about 5,6 hectares of land across the road from Ada Ciganlija was purchased from NIS, and in April 2023, the Government of Serbia allocated another 327 hectares of land to this joint venture, so that Belgrade on the Water will swallow up the previous the territory of the Belgrade Fair, as well as parts of Čukarica and Novi Belgrade.
Therefore, more solitary confinement is expected where they do not belong, and the entire right bank of the Sava - from Čukarica to the Branko bridge - will be permanently taken away from the citizens of Serbia and Belgrade.
CBA
And the sale of the Agricultural Combine "Belgrade" (CBA) to the Al Dahra company was followed by the exceptional foresight of the state leadership, and that on several occasions. It should be said at this point that PKB was operating extremely poorly and unsustainably for years before the sale, but the way it was sold (as well as what happened afterwards) is truly spectacular.
First of all: PKB was not the owner of the land it cultivated, but had the right to use it. However, in 2015, Vučić, as prime minister, signed a conclusion informing the State Attorney's Office that "the government agrees" to no longer initiate administrative disputes against acts of the Ministry of Construction, Transport and Infrastructure (the then minister was Zorana Mihajlović), which enshrines the right property of PKB over land that was state-owned until then.
Why was this done? Because the sale of state agricultural land is prohibited by law. However, in order to circumvent this difficulty, the government made it possible for PKB to first become the owner of the land it cultivates: there will be no more problems when selling, because the land is no longer state-owned. After all, the future owners were only interested in the land - the company was not sold, but only its assets.
On the last day of 2015, the sale of PKB property was announced for 150 million euros. No one answered. Instead of setting more lenient conditions in the next privatization attempt, the state tightened them. According to the new conditions, only companies with "income of at least 400 million euros in the last business year" could apply for the purchase of PKB property, which practically eliminated local farmers from the race for purchase.
The assets of PKB - about 17000 hectares on the territory of the capital, facilities and equipment - were thus sold to the company "Al Dahra" from the Emirates for about 105 million euros, with another 16,7 million for the livestock fund. "Al Dahra" was the only one to respond to the call and pay around 4700 euros per hectare, or a total of around 80 million euros for the land alone.
The spectacle begins later: first, "Insider" discovered that in its financial statements, "Al Dahra" instead of 80 - what it paid - entered the value of the land as much as 170 million euros - which was the fair value of this huge piece of the capital - and then that the state will have to buy part of that land from "Al Dahra", because the future Belgrade-Zrenjanin road will go there.
In that period, the new colorful lie for citizens called EXPO did not exist, but when it was disclosed where this manifestation would be held, Radio Free Europe journalists discovered that the same hectare in Surčin, which "Al Dahri" sold for 4700 euros, was owned by the state. paid as much as half a million euros, i.e. 100 times more than she sold it for.
As we mentioned, PKB has performed poorly for years. The income from the business fell continuously until the sale, the losses were measured in millions of euros. What happened after the sale? From 2018 to 2023, the company realized a total loss of around 30 million euros (see chart 2).
AIR SERBIA
Another spectacle of the business model was seen in the cooperation of the state with the company "Etihad", from which JAT grew into "Air Serbia” in 2013. In the new company, the state had 51 percent, and the partner from the Emirates 49 percent of ownership. That cooperation lasted for ten years, so that Etihad would completely exit the ownership of the national airline in November 2023.
Apart from the fact that - of course - the key part of the contract remained under the veil of secrecy, the state also behaved in this situation as it did with Belgrade on the water: "Etihad" converted its loan of 40 million euros into 49 percent ownership, while the state is only in the first four (2013-2016) pumped almost 200 million euros into the new company through donations and write-offs of debts to Belgrade Airport and still held 51 percent ownership.
It was clear from the beginning that it was a political story, not an economically profitable one. In 2013, the new government needed any success and any investment for the sake of political points, and one such investment came in the form of "Etihad".
Where does the claim that it is an unprofitable story come from? Every year, "Air Serbia" formally ended with some kind of net profit, which was measured in millions of euros, until the emergence of covid. Every time the government - and especially Siniša Mali - bragged about this profit and said that it was a stable company that finally got back on its feet.
What was never published in the regime's media is that, until covid and those several million euros, "Air Serbia" was accounting for several tens of millions of euros in state donations every year. In reality, the company was in debt, so the state had to "step in" twice with recapitalization - once in 2020 in the amount of 100 million euros and the second time in 2022 in the amount of around 15,5 million euros.
Who did Air Srbija borrow from? Well, precisely with its partner, that is, the company "Etihad Airways Partners", and at least on two occasions: in 2015 and 2016. At that time, interest rates on the market tended to be zero, but the "partners" of "Air Serbia" then lent a total of 117,5 .79,2 million dollars with an interest rate of as much as seven percent per year. On top of all that, someone took "transaction costs" of close to eight million dollars for these two loans. And to make matters even better, in the same year that "Air Serbia" took another such unfavorable loan with seven percent interest, it paid 0.4 million dollars with commercial banks in Serbia with interest that ranged from 2.2 to XNUMX percent per year.
What "Etihad" did bring were new planes in the Air Serbia fleet, again taken from "partners" on long-term leasing ("wet-lease", i.e. the most expensive variant), which enabled the opening of new routes to numerous destinations. However, the cooperation ended as illogically as it began: "Etihad" came out of ownership precisely in the period when "Air Serbia" finally started to make (real) profit: in 2022, about twenty million euros, and in 2023, revenues from of passenger transport jumped by as much as 61 percent compared to the previous year.
ARMAMENTS AND MILITARY EQUIPMENT
Finally, we come to the "real thing". In contrast to the mentioned other deals with the Emirates, Serbia really did achieve large revenues from the UAE on arms sales. Available data from the Ministry of Trade show that Serbia exported weapons and military equipment to the UAE in just five years (2017-2021) in the amount of almost half a billion euros. What is the problem here?
The problem is to whom armament is coming In recent years, Serbia has often received news that its weapons were found in places where they should not have been, taking into account who was the end user of our exports. The same is true in trade with the UAE.
Also, the question remains open as to which of the intermediaries was "embedded" in this export and how much - let's remember the company GIM, where the late father of former minister Nebojsa Stefanović worked, and which, according to the report of the state auditor, at one point damaged the state company "Krušik" for about 16 million dollars. But the answer to this question will have to wait for a change of government.
"The tradition of bilateral relations between the UAE and Serbia does not exist, especially in defense cooperation," Nikola Lunić, executive director of the Council for Strategic Policies, told Vreme. "The current global demand for weapons and military equipment generates a higher level of trade exchange with the UAE in that area. However, the reliability of the end-user certificate from the UAE, which is committed to supporting some of the involved parties in a series of proxy conflicts in the Arab world, is questionable. Even if the institutions in Serbia want to check the actual end user of our export defense products, they are not able to do so because we have long since renounced our national intelligence capabilities".
Boško Jakšić reminds that this cooperation began when "SDPR Jugoimport" signed a contract worth 268 million dollars with partners from the Emirates on the joint development of light anti-aircraft and anti-tank systems:
"The Emirates buy large quantities of weapons and ammunition from Serbia, and all of this goes to rebels in Syria or pro-government forces in Yemen through secret channels. The Emirates thus avoids the strict rules for monitoring weapons of European origin, and Serbia gains a lucrative market. On the international level, Serbia gains an influential and wealthy ally in the Arab world, which ensures a direct connection with the USA, while the Emirates strengthen their diplomatic prestige and enter that part of Europe where they are tasked with blocking the growing influence of China", notes Jakšić. Lunić adds that this kind of cooperation cannot be long-term.
"The current trend of improving bilateral cooperation is only a consequence of personal leadership relationships that do not guarantee long-term and predictable relations between the two countries. The long-term nature of this type of cooperation with the UAE is unlikely, because Serbia is interested in, in addition to quantitative and qualitative, technological improvements in defense production, which imposes some other Western countries on us as potential strategic partners. "Once we really start the process of EU integration and become part of the European security architecture, then the priorities will change in the area of cooperation and trade in the Serbian defense industry," concludes Lunić.
This text was supported by the Czech organization AMO
Arrests out of the blue, banishment from the country, beatings... All this happened to us in the last week alone. The Serbian Progressive Party, born from the foam left behind by their spiritual father Vojislav Šešelj, is returning to its roots. I can't escape from myself
"The levers of power are not in their hands," said Bishop Grigorije. "But there is something in the Holy Scriptures that I like very much, and that is that the power of God is revealed in weakness. So, all worldly power is on one side. And on the other side, in the hands of these young men and women is the weakness of this world. But in their weakness, the power of God or God's justice appears. That is why they are at such a great advantage."
The regime and its media have been trumpeting the "civil war" for months, and the government is the only one that has a patent for peace and stability - of course, with the help of the propaganda machine and the use of force. "It is a propaganda tactic of SNS that says: 'violence is everywhere, terrorists surround us, but we are here to save you,'" explains communication professor Jelena Kleut for "Vreme".
Students and citizens who accompany them on these walking feats, were welcomed as the most native together with those who came the day before from other places. A dove of peace was also released on the stage next to the promenade along the river - this symbolic gesture of the two students is the most impressive gesture of understanding and respect between the Bosniak and Serbian peoples since the end of the wars in the former Yugoslavia
The three-day parliament for the promotion of Aleksandar Vučić and his Movement for the People and the State was realistically a fiasco. But it was first of all conceived as a media spectacle for regime television directed by court promoter Željko "DJ Žeks" Mitrović, with scenography and iconography adapted to the Serbian political market.
Anyone who condemns the regime's targeting of people from the media, the non-governmental sector, the opposition and universities, must not agree to this targeting of RTS editors and journalists either.
The government of Đur Mazut is "counter-revolutionary", focused on retaliation and state and street violence against opponents of the regime
Depriving Dejan Ilić, an intellectual with an impeccable life and work biography, of his freedom, without the slightest meaningful reason, is just one of the brutal indicators that the regime has turned against its own citizens and is entering a phase of terror
Vučić and Šešelj: Where I stopped, you continue
The return of radical violence subscribeThe archive of the weekly Vreme includes all our digital editions, since the very beginning of our work. All issues can be downloaded in PDF format, by purchasing the digital edition, or you can read all available texts from the selected issue.
See all
