Serbia arms industry boom time detonates Nato debate

Weapons made at the Krusik arms factory in Valjevo, western Serbia
Image caption Weapons are rapidly becoming Serbia's most valuable export

It is sealed off with rusty old gates, some of the buildings still in ruins after Nato air strikes twelve years ago.

But inside the Krusik arms factory in Valjevo, western Serbia, the ammunition produced is of the highest quality - used in theatres of war around the world.

From mortars to anti-tank rockets, these are weapons made to destroy, but they are slowly rebuilding Serbia's economy.

Under President Tito, Yugoslavia was a major arms exporter to its allies in the Middle East and North Africa.

As the country broke apart in the wars of the 1990s, sanctions halted sales. Many of the weapons factories, such as Krusik, were heavily bombed by Nato during the Kosovan war in 1999.

The irony is that today, the arms produced here are used in Nato missions in places like Afghanistan.

Access to markets

The arms industry in what is now Serbia has slowly recovered. It is rapidly becoming the country's main money earner.

Serbia is already the biggest exporter in the region. Sales last year amounted to almost $250m (£150m) to countries like Iraq.

"Serbia partly inherited the traditional customers from Tito's Yugoslavia", says military analyst Daniel Sunter.

Image caption The damage inflicted by Nato on Serbia is still painfully raw.

"Many personnel of those armies were educated in Belgrade in the 1970s and 1980s", he adds, "and they have their personal ties towards Serbia, so that helps the country find a market in this part of the world."

But producers believe that if Serbia were to join Nato, they would benefit from easier exporting and the modernisation of ageing equipment.

The alliance is actively courting Serbia. A military conference organised by - among others - Nato, is being held in Belgrade next week in a clear gesture.

The country is already a member of Nato's Partnership for Peace programme and has opened a mission to Nato.

For the alliance, bringing Serbia in would be a way of maintaining security and pacifying a part of Europe still recovering from the instability of the 1990s.

Serbia's Defence Minister, Dragan Sutanovac, says his country has not yet made up its mind on Nato membership, although he does see the advantage - not least for Serbia's global image and the export potential of its arms industry.

"If someone is buying military goods from a Nato country, you do not question whether it's good quality or not", he says.

"If, for example, the Belgian military is buying munitions from Serbia, all other Nato countries are willing to buy from Serbia. So you are in a very good company to promote yourself and your products."

Nato membership would be "a political decision", the minister says, taken in time. "For now the most important is that we reach Nato standards - the best standards worldwide."

Hostility to Nato

But joining an alliance that went to war with Serbia would be a delicate move.

Polls show a large majority of Serbs are still vehemently against Nato. Hence the cagey approach of the government.

Protests are planned for next week's conference. The scars of 1999 have not healed and former government buildings remain in their burnt-out state in the centre of the city.

Dragan Djokic's house in southern Serbia was hit by a Nato bomb, leaving his father severely injured.

He shows me photos of where the cluster munitions entered the building - and x-rays of his father's shattered leg.

"For me, for my family, also for my nation, it is full of very painful memories", he says "and Nato is responsible. We never had an apology. I'm against the idea that Serbia could be a member of this organisation because I couldn't see why and I don't want to have the responsibility if Nato decides to bomb civilians in another country".

But there is another factor behind attitudes towards Nato here: the position of Russia.

Many Serbs still see Moscow as their greatest ally. It opposed the bombing twelve years ago and has stood by Belgrade in refusing to recognise the independence of Kosovo - Serbia's southern province, which broke away in 2008.

When Russia's Prime Minister, Vladimir Putin, visited Belgrade in April, he is thought to have reiterated behind closed doors his opposition to Serbian membership.

Image caption Nice little earner: Iraq has bought 20 Serbian-made Lasta training aircraft.

"Serbs are very attentive to the Russian position because of the specific relations between our countries", says Aleksandar Konuzin, Russia's ambassador to Serbia.

"So naturally my government, myself - I am very clear about my position regarding the enlargement of Nato. What Putin said is 'what is good for Serbia is good for Russia.'"

"And if Russia says this is good for Serbs, they will believe us. Immediately."

But Serbia's military cooperation with the West is growing fast.

On an airstrip outside Belgrade, a Serbian-made Lasta 95 training aircraft takes to the skies. Twenty such planes have recently been sold to the Iraqi air force, with US authorisation, as part of a deal worth $235m (£140m).

From the air, the agility of the Lasta is clear, as it ducks and dives with ease.

This is a country turning its war-torn past around, into a profitable and trusted defence industry.

Nato membership could be the next step, but for many here that would go too far.

For now, Serbia is focusing on becoming a large and reliable arms exporter.

And as that industry climbs steadily, so does the reputation of Serbia itself.

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