Gulf cash for Belgrade waterfront development

Updated 28 June 2014
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Gulf cash for Belgrade waterfront development

BELGRADE: Serbia has unveiled plans to redevelop the Belgrade waterfront, aiming to make the capital a tourism and business hub, in a controversial 3 billion euro scheme that will be funded by Gulf cash.
The Belgrade Waterfront project promises office and luxury apartment blocks, eight hotels, a shopping mall and a tower resembling Dubai’s landmark Burj Khalifa, albeit a quarter of the size at 200 meters, on the right bank of the Sava River.
It is the signature project of Prime Minister Aleksandar Vucic’s government, which has pledged to create jobs and growth and turn Belgrade into a business hub for the Western Balkans. But it has also drawn criticism from architects, economists and corruption watchdogs, who have raised concerns over its design, cost and transparency.
“It (the project) will make Belgrade a regional center and it will attract many tourists,” Vucic said at a press conference held at Geozavod, a renovated 1907 building that dominates the area and will house the Belgrade Waterfront Gallery.
The proposed area for development, Savamala, houses grand, century-old buildings that have become derelict, though the area has started to re-emerge as a cultural hub. Unlike some parts of Belgrade, the area escaped damage by NATO bombing during the Kosovo conflict in 1999 but the right bank of the Sava is blighted by a seedy central railway station and bus terminus.
The project is to be co-financed and led by Dubai-based construction company Eagle Hills, although Eagle Hills and the Serbian government have yet to form a joint venture and define a co-financing model. Eagle Hills has agreed to put up the 3 billion euro ($4.08 billion) cost of the scheme but the terms have not been settled and it is unclear how much the Serbia government will contribute in funds.
It is the latest sign of increasingly cosy economic ties between the United Arab Emirates and Serbia under Vucic, a former ultranationalist who has rebranded himself as a pro-European reformer.
In March, while Vucic was deputy premier, Serbia secured a $1 billion, 10-year loan from the United Arab Emirates to prop up its budget. Last year, Abu Dhabi’s Etihad Airways bought a minority stake and gained managerial rights in troubled Serbian flag carrier JAT Airways.
Critics have pointed to the absence of public tenders for the project.
Others question the economic wisdom and viability of the project in a country under pressure to cap its deficit and public debt, which stand at 7 percent and 63 percent of gross domestic product respectively.
On top of building costs, the government will also have to compensate residents who will be relocated.
With unemployment running at 20 percent and the average net wage in Serbia just 380 euros a month, the project appears unnecessarily lavish to many members of the public, who say the government should be building roads and hospitals instead.
Developing the waterfront has been talked about by city officials since the 1970s, but successive governments have never managed to find the funds to finance it.
While that problem appears to have been solved, some economists now question whether there is enough demand for the amount of upscale office space or luxury flats envisaged in the project.


Urgency needed to boost Palestinian economy: IMF chief

Updated 1 min 4 sec ago
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Urgency needed to boost Palestinian economy: IMF chief

  • The MF has been warning of severe deterioration in the Palestinian economy
  • ‘If there is an economic plan, if there is urgency, it’s a question of making sure that the momentum is sustained’

MANAMA: IMF chief Christine Lagarde said Wednesday that major economic growth was possible in the Palestinian territories if all sides showed urgency, as she took part in a US-led conference boycotted by the Palestinian leadership.
The International Monetary Fund has been warning of severe deterioration in the Palestinian economy, with tax revenue blocked in a dispute with Israel which has also imposed a crippling blockade on the Gaza Strip for more than a decade.
“If there is an economic plan, if there is urgency, it’s a question of making sure that the momentum is sustained,” said Lagarde.
The IMF chief is attending a conference in Bahrain to discuss the economic aspects of a United States plan for Israeli-Palestinian peace, which has already been rejected by the Palestinians as it fails to address key political issues.
Lagarde said for the US plan to work “it will require all the goodwill in the world on the part of all parties — private sector, public sector, international organizations and the parties on the ground and their neighbors.”
Citing examples of post-conflict countries, Lagarde said that private investors needed progress in several sectors including strengthening the central bank, better managing public finance and mobilizing domestic revenue.
“If anti-corruption is really one of the imperatives of the authorities — as it was in Rwanda, for instance — then things can really take off,” she said.
The plan presented by White House adviser Jared Kushner calls for $50 billion of investment in the Palestinian territories and its neighbors within a decade.
The proposals for infrastructure, tourism, education and more aim to create one million Palestinian jobs.
Gross domestic product in the Gaza Strip declined by eight percent last year, while there was only minor growth in the West Bank.
Kushner, opening the conference on Tuesday, called the plan the “Opportunity of the Century” — and said the Palestinians needed to accept it before a deal can be reached on political solutions.
The Palestinian Authority has rejected the conference, saying that the US and Israel are trying to dangle money to impose their ideas on a political settlement.
Washington says it will unveil the political aspects of its peace deal at a later date, most likely after Israel’s September election.