Sign of the rise of trade relations – and a possible restoration of political ties – Serbia inaugurated its innovation and trade office in Jerusalem last week.
The move comes after months of Serbian anger after Israel became embroiled in an American effort to negotiate a bitter dispute in the Balkans and recognized a separatist Kosovo.
This has seen Belgrade seemingly renege on its earlier promise to move its embassy to Jerusalem, and Israeli officials are now hoping that the start of a better trade relationship could also provide diplomatic fruits.
The office, located at Margalit Startup City in Jerusalem, is designed to enable countries to realize their bilateral economic potential, Tatjana Matic, Serbian Minister of Trade, Tourism and Telecommunications, told The Times of Israel at Wednesday’s ceremony. .
“We have very good bilateral relations with Israel, and we believe that we need to improve our economic cooperation. We have to go much further. We need more investment and it is very important to have the office here, ”she said, adding that she also sees room for growth in tourism, cybersecurity and security. technology.
“The level of our bilateral economic relations is not that satisfactory. We must and can do a lot more, ”she said.
Serbia is also looking to take advantage of Israel’s experience in providing the necessary infrastructure for startups to thrive, said Marko Čadež, president of the Serbian Chamber of Commerce, to which the office of the Serbian is located. innovation.
“We are studying how to support startups,” he explained. “How to make the environment an ecosystem of education, of institutions such as science and technology parks”.
The office, which began operations in August but has delayed its opening due to COVID-19 restrictions, will seek to attract Israeli investment “in real estate, renewables, water management, environment, infrastructure and transport, with an increase in Serbian exports to Israel, ”said Aleksandar Nikolić, director of the Serbian office and honorary consul in Israel.
“All the developed and respectable countries oriented towards innovation and high technology have their representative offices in Israel,” Nikolić said. “Serbia has recognized Israel as a natural partner for the cause. Serbia have joined the club’s best in doing business with Israel.
The economic relationship certainly has a lot of room to develop. Trade between the countries amounts to around 73 million euros per year, with Serbian exports to Israel increasing and Israeli exports to Serbia declining over the past fifteen years.
Serbia’s startup ecosystem, which currently has between 200 and 400 companies, could also be much larger. It shows particular potential in games, blockchain and agritech, and Belgrade hopes reforms such as compulsory coding courses for schoolchildren will unleash the country’s innovation potential.
“They were a little upset”
The real drama lies in the political context behind the opening of the Serbian office in Jerusalem.
In his March 2020 address to AIPAC in Washington, DC, Serbian President Aleksandar Vučić announced that he would open the Chamber of Commerce office in Jerusalem, as well as an “official state office” to accompany the embassy in Tel Aviv.
“This is our way of showing respect to the Jewish people,” he told the conference.
Then came the September 2020 Washington Accord at Trump’s White House.
Serbia and Kosovo – regional rivals who do not recognize each other – have each signed separate agreements with the United States concerning the normalization of economic relations between the two Balkan countries.
Belgrade, in its deal with the United States which made no mention of Kosovo, promised to move its embassy from Tel Aviv to Jerusalem by July 1, 2021. The separate agreement with Pristina stated that “Kosovo and Israel agree to recognize each other ”.
Kosovo declared independence from Serbia in 2008 and is recognized as an independent country by 97 UN states, including Israel.
Kosovo established diplomatic relations with Israel on February 1 and in March became the first European country and the first Muslim-majority country to establish an embassy in the western part of Jerusalem.
Senior Serbian officials made their dissatisfaction clear and the July 1 deadline for the embassy move came and went quietly.
At the event in Jerusalem, Israeli officials expressed hope that bilateral relations were moving in the right direction again.
“We don’t know if that will happen but we hope. It’s a very good start and a very important one, ”said Dan Oryan, head of the Balkans division at the Foreign Ministry.
“We see a way to resolve the crisis,” he continued. “For us it is a sign, and it has special meaning for us because we see it as a first sign on the way back.
“They were a little angry with us.”
A source close to the Serbian government stressed that political disagreement over recognition of Kosovo would not affect deep relations between Serbs and Jews.
“Serbia was the first to endorse the Balfour Declaration, the first to designate the Jewish state as ‘Israel’, and [father of modern political Zionism Theodor] Herzl’s grandparents are [buried] in Serbia, ”he said. “These links will not change.”
He warned that Serbia was keeping a close eye on how Israel would vote if Kosovo again applied for membership in international organizations like Interpol and UNESCO.
Kosovo contains important Serbian heritage sites, which Belgrade is keen to protect.
“Kosovo and Metohija, with its 1,500 Serbian Orthodox Christian monasteries, churches, foundations and monuments of Serbian culture, represent a central and inalienable part of Serbia,” a 2018 statement from the Serbian Orthodox Church said.
The source added that Kosovo’s membership in international organizations goes against Israel’s own interests, as it would support the campaign of the Palestinian Authority – which is also seeking recognition of an independent state without political agreement with Israel – to join such bodies.
The Israel-Kosovo recognition agreement, he said, was also not in Israel’s interest, saying it was being pushed by the Balkan political community in Washington, which has a vested interest. in an independent Kosovo.
A special triangle
As the political drama unfolds, the burgeoning economic relationship between Israel and Serbia could pay surprising dividends.
Although Serbia, with less than 7 million inhabitants, is not a particularly important market, it can be a bridgehead for Israeli companies to the entire Western Balkan region. The Common Regional Market initiative seeks to integrate more closely the markets of Serbia and five other Balkan countries, with a population of almost 18 million. These countries do not have innovation offices in Israel, and the office in Serbia also intends to help their companies do business in Israel.
In addition, Serbia has concluded free trade agreements with Russia, Turkey and the European Union, allowing Israeli investors and businesses to access these markets across the country.
“We attach great importance to the Balkans in general,” Oryan of the Foreign Ministry explained. “It’s a region that is close, between east and west. Serbia has ties with Russia and the EU, and free trade with both regions.
Serbia can also help Israel to further develop its trade relations with the United Arab Emirates. The United Arab Emirates is Serbia’s closest Arab ally and the only one with which it has entered into a strategic partnership agreement.
“Investments in agriculture and defense are a way for Abu Dhabi to invest in its food and military security” Explain an expert from the Balkans. “In doing so, the UAE is gaining a foothold in a region at the crossroads between the EU and the Middle East and has the opportunity to keep an eye on its rival, Turkey, which is also active in the Balkans.
Čadež told The Times of Israel that Serbia is looking to host a joint event with Israeli businessmen at Expo Dubai 2020.
“We need to come together on topics that we can then present to a third market,” said Matic. “Serbia has very good relations with the United Arab Emirates. This is an opportunity to take advantage of the political position and, together with Israeli companies, to go into the third market. “
“I hope this helps us all to make a special triangle,” Oryan said. “We are checking options, we are in talks.”
“The fact that they chose us means that they see real economic importance,” the diplomat concluded.