UAE to Develop the Serbian Arms Industry

Over the past two years the UAE has invested billions of dollars in Serbia.

The Emirati leadership has agreed lucrative deals to develop the Serbian arms industry; bought a significant stake in its national airline; and handed out multibillion dollar loans to the government.

The reasons for UAE investment in Serbia are shrouded in secrecy, although Serbian sources have revealed to MEE that they go far beyond any potential financial rewards.

The Crown Prince of Abu Dhabi Mohammed bin Zayed al-Nahyan has been accused of acting as a proxy for the US and Israel in Eastern Europe while also attempting to exploit a loosely regulated Serbian arms market to distribute weapons across the Middle East.

Behind the huge investment lies the shadowy figure of exiled Palestinian strongman Mohammed Dahlan. He is said to be at the centre of a web facilitating communication between the UAE with American and Israeli intelligence figures while also aiding corrupt Emirati investments in Serbia that have lined the pockets of their political leaders.

UAE investments in Serbia

An agreement worth up to $200mn was signed between the Serbian arms company Yugoimport SDPR and the UAE’s Emirates Advanced Research and Technology Holding (EARTH) at the International Defence Exhibition in Abu Dhabi last year.

A source in Serbia told MEE the investment relates to the Serbian missile system ALAS (Advanced Light Attack System), which is a “multipurpose anti-armour weapon with effective range up to 60km”. The source said the UAE is interested in these missiles because “they should be able to destroy all existing models of tanks in the world”.

The UAE is the fourth largest arms importer in the world, according to the Stockholm International Peace Research Institute, and spent over $19bn on military equipment in 2012. With a national population of fewer than one million the UAE, in terms of arms per capita, is now widely viewed as being the most heavily armed nation on the planet.

The UAE-Serbian defence relationship is becoming increasingly close, according to the Serbian source, who said “initial forms of cooperation have been established at the level of military security agencies, military police and special units, and in the fields of information and communication technologies and cyber defence”.

While the source said the UAE is primarily interested in Serbia’s burgeoning defence industry, the Emiratis have also made numerous other investments across several industries.

One of the most prominent deals has been Abu Dhabi’s Etihad Airways buying a 49 percent stake in Serbia’s lossmaking JAT Airways in August 2013. A new company was born out of that investment, Air Serbia, with the stated aim of creating an eastern European transportation sub-hub.

The deal, however, has been criticised as corrupt by a former economic advisor to the Serbian government.

“Etihad provided a credit note, not a direct investment, in the JAT deal that will later be converted to shares,” Dusan Pavlovic, who served as advisor to the Minister of Economy in Serbia from September 2013 to January 2014, told MEE. “The Republic of Serbia is the guarantor of this credit note and if the new company goes bust it is the Serbian people who will have to pay up the 40 million euros.”

“If this were to happen an additional two million euros would have to be paid in legal fees to a company involving people close to the Serbian prime minister,” he added.

Deals involving UAE investments in Serbia are kept secret from the public because of a condition in an agreement signed between the two governments in March 2013, according to Pavlovic.

“This agreement included provisions to overrule some domestic law in Serbia. For example, any investment that comes from the UAE is given priority over local deals,” he said.

“The agreement for UAE investments in Serbia stipulates that the details of all deals must remain secret.”

Pavlovic slammed many of the most high-profile Emirati investments and criticised the Serbian government for lying to their people.

He described a proposed multibillion dollar property investment by the Emiratis in Belgrade as “totally absurd”, saying “there simply isn’t the market for luxury apartments” in a country as poor as Serbia.

He criticised the sale of agricultural land to the UAE worth hundreds of millions of dollars as preventing local Serbians from accessing huge farming areas, condemning the government’s claim that the land was derelict as a “complete lie”. (middleeasteye)

Poland, India, UAE Step Up Defense Investment

The Polish defense ministry is speeding up requests for 10 combat-ready helicopter bids, from foreign and domestic manufacturers, after the “outbreak of civil war” in eastern Ukraine, according to Polish Radio. Main contenders, RBC says: AgustaWestland/Turkish Aerospace Industries T129, the Boeing (BA) AH-64E Apache Guardian, and the Airbus (EADSY) Helicopters EC 665 Tiger.

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