SERBIA: US Sanctions on NIS & more – 14th Jan 2025

Dobar dan from BA! This is the Rorshok Serbia Update from the 14th of January twenty twenty-five. A quick summary of what's going down in Serbia.

On Friday the 10th, the US Treasury’s Office of Foreign Assets Control, or OFAC, imposed sanctions on the Serbian Oil Industry, or NIS, because it is a subsidiary of the Russian Gazprom Neft energy company. OFAC gave NIS forty-five days to completely remove Russia’s stake, in an attempt to remove what they consider Russia’s key source of revenue for funding its war with Ukraine. President Vucic said that Serbia has to immediately start working on removing Russia from NIS.

At the same time, Azerbaijan - who is Serbia’s alternate source of gas - announced that it would be cutting off its supplies to the country. Vuk Vuksanovic, an expert on non-Western influence in the Balkans, speculated that it could be Russia’s attempt at pressuring Serbia, as Azerbaijan’s Gas Corridor is believed to be a rerouting channel for Russian gas.

Aside from NIS cutting ties with Russia, Milan Milojkovic, Serbia's Chief of General Staff, said that the state has canceled contracts for Russian weapons that have been supplying Serbia since the Soviet era. Milojkovic noted that the Western sanctions on Russia influenced the decision, adding that it is an attempt to align Serbia with the EU's foreign policy. He noted that the halt of arms imports from Russia created many issues in the army, with pilots and soldiers needing training for the new equipment.

However, Orhan Dragas, the founder and director of the Belgrade-based International Security Institute, said that such a radical decision is significant for Serbia as it shows that it is committed to the EU.

In other news, on Saturday the 11th, the Center for Research, Transparency and Accountability, or CRTA, posted the results of a public opinion poll they had conducted in December on student protests and the state of democracy in the country. They questioned more than one thousand people and discovered that sixty percent of the respondents supported the blockades, and believed that Serbia was moving in the wrong direction — with corruption being the main issue.

CRTA’s poll questioned the citizens’ trust in president Vucic, and the results showed that more than half of the participants did not trust him.

Nearly fifty percent of the respondents believe that the political responsibility for the tragedy in the northern city of Novi Sad - which we have been reporting in previous shows - should fall on relevant ministers, while forty percent blame the president. Recall that on the 1st of November a canopy of the railway station in Novi Sad collapsed and killed sixteen people, fueling mass protests in the country due to the lack of accountability from the state officials.

CRTA’s poll respondents are not the only ones who do not trust Vucic though, as the German Friedrich Naumann Foundation published a report criticizing Vucic for biased media and the promotion of Russian propaganda. The Friedrich Naumann Foundation is linked to Germany's Free Democratic Party. Its goal is to promote humans rights and democracy.

In the report, they talk about Serbia’s close ties with Russia, criticizing Vucic for balancing between the country and the West, instead of condemning the war in Ukraine by imposing sanctions. They accused pro-government media of promoting Russian influence in Serbia whilst demonizing the West, noting that high-ranking officials support such content.

Speaking of the high-ranking officials, PM Vucevic said on Thursday the 9th that the government has proposed a salary increase for the teaching staff of five percent in March, and another five percent in October, but only for teachers and professional associates. However, teacher trade unions are against the proposal, noting that the increase would not be enough to meet the national average salary of around 105,000 dinars, which is around 920 dollars. Vladimir Adzic from the Education Union of Cacak said that, to meet the national average, the government would have to offer an immediate increase of around ten percent not only for teachers but also for administrative staff and other school employees. The teacher trade unions noted that they will decide on the proposal next week.

Citizens of the Republic of Srpska - one of the entities in Bosnia and Herzegovina - celebrated its independence day on Thursday the 9th, despite Bosnia declaring the holiday’s celebration as unconstitutional. Citizens gathered in the city of Banja Luka carrying flags of Serbia and the Republic of Srpska, with some Serbian officials present at the march.

However, Bosnia’s other entity - the Federation of Bosnia and Herzegovina - views the 9th of January as the start of the Bosnian War in nineteen ninety-two. They banned the holiday in twenty fifteen because it aimed at celebrating the secession of the Republic of Srpska from Bosnia, but the Serbian population of the Republic of Srpska has ignored the ban.

Now for some news on the economy. The Ministry of Foreign Affairs stated that Serbia attracted a record of more than 500 billion dinars, which is around five billion dollars, of foreign direct investments in twenty twenty-four. Compared to twenty twenty-three, this marks an increase of a hundred billion dinars, which is around a billion dollars. Nearly forty percent came from EU countries, followed by Asian countries, with China being Serbia’s largest investor. The ministry said that they aim to reach free trade agreements with other Asian countries, such as South Korea and Japan, in order to diversify the market.

Contrary to the foreign direct investment growth, the Serbian budget deficit is decreasing with time, and in twenty twenty-four it amounted to roughly seventy billion dinars, which is around 600 million dollars. The Ministry of Finance noted that such numbers are positive, since they had previously projected a deficit of 110 billion dinars, which is almost a billion dollars.

In some environmental news, Irena Vujovic, the Minister of Environmental Protection, announced on Thursday the 9th that the ministry would continue to subsidize the purchase of electric vehicles in twenty twenty-five as one of the measures to improve Serbia’s air quality. The amount of the subsidy will depend on the vehicle’s type, but it will range from 30,000 dinars, which is around 250 dollars, to nearly 600,000 dinars, or around 5,000 dollars.

Vujovic emphasized that Serbia’s ongoing issue with air pollution is mainly due to outdated car engines producing exhaust gases. Moreover, switching to newer engines is one of the EU requirements for Serbia, since the country has some of the worst air quality on the continent.

When it comes to business, the National Alliance for Local Economic Development, or NALED, which is a Serbian NGO focused on improving the living and working conditions in the country, announced that it will be forming a Council for Small Businesses in twenty twenty-five. NALED said that small businesses in Serbia are facing several challenges, such as complex administrative procedures and limited access to financing, which hinder their growth. With the support of the British Embassy in Serbia, they said that a Council for Small Businesses will focus on networking, advocacy, and launching reform initiatives.

While on the topic of reforms, the Urban Planning Institute of Belgrade announced a winner of their international contest for an architecture project to transform an abandoned paper mill into a museum dedicated to the Serbian inventor Nikola Tesla. Zaha Hadid Architects, or ZHA, received around seven million dinars, which is around 60,000 dollars, as the first prize for the competition for their idea to blend Tesla’s historical legacy with the architecture of Belgrade’s old town.

ZHA’s scheme intends to feature Tesla’s inventions in the fields of magnetism and wireless electricity transmission, with the centerpiece of the planned museum being a 12-million-volt electric transformer. Still, they aim to preserve the mill’s aged exterior, as it is considered one of Serbia’s best-preserved and most significant buildings of industrial architecture.

Let’s close this edition with more cultural news, cities across Serbia are organizing the Epiphany Swimming for the Holy Cross competition, which is a tradition of Serbian Orthodoxy. The event is scheduled for Sunday the 19th in Belgrade, where swimmers will have to race thirty-three meters, or around a hundred feet, to reach the holy cross in the Danube River.

Those interested in participating can apply until Friday the 17th. For more information about the application process, check out the link in the show notes!

Aaand that’s it for this week! Thank you for joining us!

Thanks for tuning into the Serbia update. You can find us on your Spotify, Apple podcasts and all the other platforms as the Rorshok Serbia Update.

Do daljnjeg, zbogom!