Bosnia, Serbia Launch Joint Trade Offensive in Saudi Arabia

The first joint delegation by trade officials from Bosnia and Serbia to visit Saudi Arabia aims to create a united front for the two Balkan states when it comes to boosting arms exports, analysts say. 

A joint visit by trade ministers from Bosnia and Serbia to Saudi Arabia is aimed at bolstering arms exports from the region and projecting an image of unity between the two Balkan states, analysts told BIRN.

The delegation including Bosnian Minister of Foreign Trade and Economic Relations Mirko Sarovic and Serbian Minister of Trade and Tourism and Communications Rasim Ljajic arrived in Riyadh on Sunday and lasted through Monday.

The two ministers on Monday announced the creation of a new trilateral committee, which will “support and oversee activities for boosting trade and those related to the realization of Saudi investments in Serbia and Bosnia”, according to the news agency Beta. 

Sarovic emphasized tourism relations between Bosnia and the Gulf kingdom, pointing out that many Bosnian Muslims are keen to visit Saudi Arabia for the Islamic pilgrimages of Hajj and Umrah.

“We aspire to attract citizens of the [Saudi] Kingdom to visit Bosnia and Herzegovina and see its natural beauty, and we are working to promote the deepening of relations and the exchange of expertise and visits and trade between the two countries,” Sarovic said.

Ljajic stressed that the joint delegation from Bosnia and Serbia sent a message that peace and security are thriving in the Balkans. 

Nine Bosnian companies from the Bosnian Foreign Trade Chamber were represented in the delegation, including the munitions firms Pretis, based in Vogosca, and Dzamp, based in Sarajevo, as well as the systems certification provider Institut za Certificiranje Sistema. 

Bosnia enjoys a warm relationship with Saudi Arabia, which has poured hundreds of millions of dollars into the country – much of which was classed as aid – since the 1992-1995 war ended.

Serbia has had a less close relationship with the Gulf state, but is looking to build on ties following a visit by Prince Sultan bin Salman bin Abdul Aziz to Serbia in 2015. 

Banja Luka-based economic analyst Damir Miljevic said a key goal of this visit - apart from generally courting investment - was to facilitate exports of military equipment and expertise from both Balkan countries to the Gulf kingdom. 

“In Saudi Arabia, there are a lot of different military systems from 40 or 50 years ago that could be repaired and updated by companies from the Balkans,” Miljevic said.

Economic expert Zlatko Hurtic agreed that Bosnia was in a position to export needed items and expertise to Saudi Arabia's military forces. 

“This is already happening as a number of Bosnian companies are exporting basic military equipment and ammunition, but nothing sophisticated,” he told BIRN. 

Such exports could grow if the government of Saudi Arabia offered trade concessions, he added. But these were unlikely, he said, due to Saudi budget deficits caused by low oil prices. 

Meanwhile, increased investments in Bosnia through the Saudi Fund –the main channel for state-level aid, in the form of grants and concessional loans – were also deemed unlikely.

Private investments – while on the rise – were likely to remain limited to a few hotels and real estate projects in the Sarajevo area, since the Saudi government has “no instruments or policies to ‘force’ private investors to invest” in either country.

The trade ministers’ statements on improving tourism links with Saudi Arabia – which are already strong – were welcome in principle, according to Hurtic. 

However, he noted, tourism was “mainly driven by the private sector and not the government, nor does the government of Saudi Arabia have the instruments to stimulate tourists to visit the region”.

In Hurtic’s view, the trip was of greater political than economic significance. 

“Bosnia is trying to help Serbia to ‘open the door’ to Saudi investments, and Serbia is eager to use this opportunity and establish important contacts,” he said.

“In my view the real effects at this stage are to launch some initiative that might be of interest to both countries, to relax relations between the two countries and gain some political points, internally and externally,” he said.  

Bosnia-Serbia relations have been strained in recent months due to a series of high-level political intrigues.

They include revelations that Serbian undercover officers were present at a memorial event for the Srebrenica massacre in Bosnia in 2015, when Serbian Prime Minister Aleksandar Vucic was attacked by stone-throwing assailants who have not yet been caught.