Copper, railways, China, UAE, AI & Tito's cookbook: The Belgrade connection - apropos of Xi's visit

Great links, images and reading from Chartbook newsletter by Adam Tooze

Biljana Durdevic Summer Time is Over (2005)

“Tiananmen square apart, there had been nothing like this since the Cultural Revolution” - The May 7 NATO bombing of the Chinese embassy in Belgrade

Today we have Bloomberg’s Long Read on Chinese investment in Serbia and Hungary

It’s 10 a.m. and the high-speed train leaves Belgrade’s new, glass-and-steel station right on time. Thirty-six minutes later it pulls into Serbia’s northern city of Novi Sad, the first completed section of a 350 kilometer-long (217 mile) upgrade going up to Budapest in Hungary. The route is the kind of European modernity that Serbia has coveted for years. Yet the line — being built by China — also represents something more political: how Beijing is helping transform a corner of Europe when much of the continent now views it as a strategic rival. The Belgrade-Budapest rail link will unite the capitals of two countries that have tightened their embrace of China and provided it with a backdoor to a continent that’s torn over its dealings with the world’s second-largest economy. From car battery plants in Hungary to copper mining in Serbia, direct Chinese investment in the two countries exceeds $15 billion with more coming. The new high-speed railway will be highlighted by President Xi Jinping during a trip to Europe this week, where he will stop in Belgrade and Budapest after Paris…. The broadening economic footprint is filling a void left by the EU, which is still the region’s biggest investor. The bloc is increasingly seen as a distant dream in Serbia and getting a negative report card in Hungary, where Orban talks of the decline of western civilization.

A case in point is Bor, Serbia’s main mining hub, which was a desolate place in a pariah state under international sanctions following the Balkan wars of the 1990s. Even after then-Yugoslavia’s isolation ended in 2000, the government-owned RTB Bor mining and smelting complex was struggling with debt and unable to fix its decrepit, polluting facilities that caused acid rain. The plant’s fate changed in 2018, when China’s Zijin Mining bought a majority of RTB Bor with a pledge to inject at least $1.5 billion. Six years later, the city’s grimy facades are scrubbed and repainted. The mining complex rebounded to employ more than 6,000, offering average net pay of $1,300 a month, more than 50% above the national average. Local real estate prices have almost tripled since the takeover, while dust and sulfur-oxide pollution are under legal limits for the first time in decades. Banners around the facility tell workers their safety paramount. Zijin plans to make the Serbian facility into the biggest copper producer in Europe by 2030, Chen Jinghe, the company’s chairman, said in late April.

Source: by Andrea Dudik, Misha Savic, and Marton Kasnyik at Bloomberg

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On the rise of Chinese firm Zijin as a global copper player

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What impelled the sale of the legendary Bor mines to Chinese investors? Financial exhaustion, Chinese wealth and expertise & pressure from the IMF! This from the IMF in 2019

Over the past years, Serbia has made significant progress in implementing SOE reforms to improve their operational viability and to contain fiscal risks, while substantially reducing state aid. At this point, the financial position of critical public network utilities, including Serbia Gas, the electricity generation and distribution company EPS, and Railways of Serbia has strengthened. This is thanks to comprehensive financial and corporate restructuring, appropriate regulatory price adjustments, and enhanced revenue collection. Under the PCI-supported program, the authorities have focused on resolving four big non-strategic SOEs, which will reduce the associated fiscal risks. RTB Bor, a copper mine, has been sold to a Chinese strategic partner; and the fertilizer plant Azotara has been entered into bankruptcy.

Source: IMF

The Bor mines were developed in the early 20th century by French capital. During WWII they were taken under direct German administration which deployed forced labour en masse:

One of the first goals, defined after the German occupation, was the revitalization of the demolished facilities of the Bor mine, followed by a maximum increase in its productivity, which required large contingents of labor force. Former workers were the first to be called to work in the mine, then experts returning from captivity, but also Serbs engaged in compulsory labor run by the National Reconstruction Service of Serbia under the Nedić government. As of 1942, additional labor force was provided through forced labor which was imposed on political opponents, prisoners of war from Greece, Italy, Poland, as well as Jews. The intensity of the military interventions during 1943 caused the engagement of the German allies with the aim of increasing the number of workers in the Bor mine. Thus, the same year, an agreement was concluded with Hungary, according to which about 6,000 Jews from Hungary and its occupation zones were sent for forced labor, including about 600 Jews from Bačka.

Source: Holocaust.rs

In September 1944 the Jewish workers of the camp were rounded up and sent on death marches to the West

The massacres were carried out on others as well: in late October, when the group met again near the Hungarian town of Veszprem, about 1,500 Jews were still alive, that is, half of those who had set out from Bor. Almost all of them were in a terrible state due to hunger and exhaustion. The following day, those who could not go on were killed, among them the famous poet Miklós Radnóti. 57 It was precisely during those days that he wrote his last verse:

Source: Milovan Pissari in Forced Labour in Serbia

After the war, the mine became an exemplary site of socialist reconstruction.

Bor mining complex in 1991 Source: Blogdigitalna

What is the impact of Chinese investment in Serbia today? An in-depth assessment here by Aleksandar Matkovic of China’s investments in the Balkans and Serbia including the environmental impact (more to come on Matkovic’s remarkable work on China’s presence in modern Serbia)

The IMF has nothing but praise for the macroeconomic record of Serbia under populist authoritarian President Vučić and his Serbian Progressive Party. GDP per capita, poverty, unemployment and FDI all going in the right directions.

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Serbia has armored itself with strong reserves, doubling from 12 to 24 bn euros. Recently a loan of $1 billion added to those reserves. Its source .. the UAE, which has emerged as Serbia’s chief partner in the Arab world.

On July 1, 2021, Serbian President Aleksandar Vučić, accompanied by Mohamed Alabbar, an entrepreneur and the chairman of UAE real estate firm Eagle Hills, attended a ceremony in Belgrade. It commemoratedthe final work on a tower within Waterfront Belgrade, a major real estate project funded by the UAE. The ceremony was an illustration of the growing ties between Serbia and the UAE, which over the past nine years has become Belgrade’s primary partner in the Arab world. The UAE has also emerged as a source of cash and an instrument of domestic political promotion for the Serbian leadership. In the defense industry, the central figure has been Mohammed Dahlan, the exiled Palestinian former Gaza spy chief who is now working for the Emirati government as a fixer. Dahlan has been the facilitator of the UAE-Serbia partnership and Emirati investments in the Serbian defense industry. In 2013, Yugoimport SDPR, Serbia’s largest defense company, and the Emirates Advanced Research and Technology Holding (EARTH) signed a $267.8 million deal on the joint development of the Advanced Light Attack System (ALAS), an anti-tank missile defense system. Serbia profits by having its weaponry in Middle Eastern markets, while the UAE acquires a source of weaponry and an ability to distribute it to its allies in various regional conflicts. In the meantime, Dahlan has been given Serbian citizenship and his associates have bought luxurious villas in Belgrade.

Belgrade rail station (with Chinese investment) and the UAE-financed waterfront development in background.

The Waterfront project remains controversial for many Belgradians due to the project’s lack of transparency. There is much debate about whether the luxurious urban complex fits with the low purchasing power of the average citizen and the city’s geographical and urban landscape. In 2016, a group of unidentified masked men demolished several legally disputed buildings obstructing the Waterfront project. The foot-dragging response of the police to the demolition triggered mass protests in Belgrade. … Weapons sold to the UAE and Saudi Arabia tend to end up in the hands of militants fighting in Syria and Yemen. The UAE’s agricultural investments are also controversial as the land sales to UAE firms went ahead in spite of the opposition of the Serbian military.

Source: MEI

And the Waterfront is surveilled by autonomous Smart Police Stations driven by Emirati and Chinese AI

In September 2023, Serbia unveiled its first Smart Police Station, made together with the UAE Police. Serbian Police Minister Bratislav Gasic then thanked the emirates “for their expertise and wholehearted support” in the implementation of that project. Smart Police Stations, SPS, provide security and community services around the clock, without human intervention. The police station was built at the Belgrade Waterfront, a new part of the city which Serbia also built in cooperation with UAE-based company Eagle Hills. Serbia also signed a MoU in February 2022 with G42 Cloud, a subsidiary of G42, the leading UAE-based AI and cloud computing company. This focused on the common development of AI and cloud computing, especially in healthcare, economy and finance. G42 develops Artificial Intelligence solutions for governments, healthcare providers and the finance, energy, aviation and hospitality sectors, as BIRN reported. To do this, it collects vast amounts of data; it also collaborates with the Israeli defence industry, UAE security services, and a Chinese company called BGI Genomics, a unit of which was placed on a trade blacklist by the United States in March 2023, saying that its operations “concerning the collection and analysis of genetic data present a significant risk of diversion to China’s military programs”. Serbia has also cooperated with China’s BGI since the COVID-19 pandemic. This company donated “Fire-Eye” labs to Serbia and opened an AI development centre in Belgrade in April 2023. Together with the UAE-based company Hayat Biotech, a joint venture between Chinese Sinopharm CNBG and G42, Serbia in 2021 started a project to produce Sinopahrm vaccines against COVID-19. They built the vaccine factory in the Belgrade municipality of Zemun, but it has never started production.

Source: Balkan Insight

Biljana Durdevic, Labirynth 2013

In Belgrade, on one of those hotel bookshelves that no one is ever expected actually to look at, I stumbled across this … FASCINATING!

Tito’s cookbook

Source: Research Gate

Biljana Durdevic, In Hotel Room 2006 from the Cycle Living in Oblivion

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