VZCZCXRO0486
RR RUEHAG RUEHAST RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN
RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHBW #0878/01 2410909
ZNR UUUUU ZZH
R 280909Z AUG 08 ZDK
FM AMEMBASSY BELGRADE
TO RUEHC/SECSTATE WASHDC 0344
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RHEHNS/NSC WASHDC
RUCPDOC/DEPARTMENT OF COMMERCE WASHINGTON DC
RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK
RHMFISS/HQ USEUCOM VAIHINGEN GE

UNCLAS SECTION 01 OF 02 BELGRADE 000878 
 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PREL ECON EAID PINR SR
SUBJECT: SERBIA: CITY OF NIS IS OPEN FOR BUSINESS 
 
REF:  Belgrade 745 
 
Summary 
------- 
 
¶1.  (SBU) After four years under the control of reactionary 
nationalist parties, the city of Nis is under "new management" by 
pro-European forces.  The new mayor is intent on opening his city 
for engagement with the west in an effort to attract assistance and 
investment.  Although he is a newcomer to local politics, he has 
laid out clear priorities, established alliances within the national 
government, and appears to enjoy the confidence of the local 
community and business interests.  End Summary. 
 
¶2.  (U) Pol Chief visited Nis, Serbia's third largest city, August 
21-22 to attend the opening of the city's annual film festival and 
to meet with new Mayor Milos Simonovic, of President Tadic's 
Democratic Party (DS).  Simonovic, in coalition with the Socialist 
Party of Serbia (SPS) and G-17 Plus, took office on July 29. 
 
Nis to the U.S.:  Welcome Back! 
------------------------------- 
 
¶3.  (SBU) Simonovic is clearly eager for increased engagement with 
the U.S. to overcome the disastrous legacy of his predecessor 
Smiljko Kostic of the New Serbia party.  Under Kostic, who famously 
threw a going-away party for ICTY indictee General Vladimir 
Lazarevic, almost all of Nis's ties to the international community 
and cooperative projects withered.  In his first weeks in office, 
Simonovic has invited the diplomatic corps to the film festival, 
asked to participate in USAID's MEGA program, and reached out to FCS 
about an upcoming Ohio trade delegation.  He even volunteered to us 
that he would like to offer a better, larger space for the American 
Corner. 
 
It's the Economy 
---------------- 
 
¶4.  (U) Simonovic told us on August 22 that his top priorities were 
reducing unemployment and improving the investment climate in order 
to spur economic development.  He plans to pursue a range of 
infrastructure projects neglected under his predecessor, downsize 
the city administration and streamline procedures (including for 
construction permits), identify land for economic development, and 
establish an office of local economic development.  He listed the 
electronics, mechanical, agricultural, tourism and textile sectors 
as the most promising for foreign investment. 
 
¶5.  (U) Simonovic said he was approaching economic development 
through the prism of European Union membership: his task was to 
prepare Nis to start receiving EU pre-accession funds as early as 
¶2009.  He noted that decentralization of state control will be a 
necessary part of the EU accession process, as certain EU funds must 
be administered at the regional level; he hopes for passage of a new 
law on administration soon.  Simonovic also underscored the need for 
additional legislation on local government property to facilitate 
development. 
 
Importance of Foreign Investment 
-------------------------------- 
 
¶6.  (U) Simonovic stressed how much he valued the presence of Philip 
Morris, which purchased the local Tobacco Industry of Nis in 2003 
for 513 million, employs 1100 local residents, and donates 1 
million per year to local causes.  He met with the director of 
Philip Morris on August 21 to begin rebuilding a relationship 
between the city and its largest investor.  Former Mayor Kostic, 
even though he once worked as director of Nis Tobacco Industry, was 
reportedly hostile toward the company and had no direct contact with 
its management. 
 
¶7.  (SBU) Miodrag Stojadinovic from Philip Morris told us that 
Simonovic is known as an earnest, honest person with deep roots in 
Nis who lacks experience in local politics but has close relations 
with Deputy PM Bozidar Djelic (DS).  (Minister of Defense Dragan 
Sutanovac is also a friend; he attended the film festival opening 
and dinner afterward.)  Djelic reportedly promised Simonovic that he 
would help drum up attendees for an October 2 investment forum being 
sponsored in part by Philip Morris.  Stojadinovic observed that 
former Prime Minister Zoran Zivkovic, who had returned to Nis to 
live, could complicate the situation for the DS locally if he 
decided to return to politics.  (Local media reported on August 23 
that Zivkovic planned to form his own party.) 
 
¶8.  (SBU) Comment:  The change in the political atmosphere in Nis is 
striking, and has attracted the attention of the international 
community -- many of our diplomatic colleagues have already visited 
 
BELGRADE 00000878  002 OF 002 
 
 
or are planning to soon.  Whether this new international engagement 
results in the increased prosperity that the voters of Nis are 
expecting, however, depends not only on the ability of Simonovic and 
his team to produce, but also on the national government to give 
local leaders the tools they need.  End comment. 
 
¶9.  (SBU) Simonovic bio:  Milos Simonovic was born in Nis on May 31, 
¶1973. He earned bachelors and masters degrees from the Nis 
University, Faculty of Mechanics, with a scholarship of the Fund for 
Youth Talents of the Republic of Serbia.  Simonovic worked at the 
Nis University as an assistant professor of robotics until his 
election as Mayor in July 2008.  He became a member of the 
Democratic Party in 1993, where he headed the Club of the Democratic 
Youth, and served as vice-president of the Democratic Youth. 
Simonovic became president of the DS Nis chapter in October 2006. 
He served as a Member of Parliament for two terms, and was a member 
of the Parliament's Committee for Industry, Transportation and 
Communications.  The ruling coalition of the Nis Assembly, composed 
of the DS, SPS and G-17 Plus, elected Simonovic as Mayor of Nis on 
July 29, 2008.  Simonovic speaks English and Russian, and some 
German. He is married and has a daughter Nadica born in June 2008. 
 
MUNTER