Serbia’s Defence Minister said on Monday that his country will invest RSD 850 million (EUR 7.2 million) into the arms industry of Republika Srpska (RS), Bosnia’s Serb-dominated part.

Serbia's Defence Minister, Aleksandar Vulin, said this in Banjaluka after having met with the RS President Milorad Dodik, the President of the semi-autonomous RS entity.

“In accordance with the orders from the Supreme Commander of the Army of Serbia and the agreement with the President of the RS, Milorad Dodik, Serbia’s Ministry of Defence has secured 850 million Dinar for various needs of the companies of the RS defence industry, that is, for the restoration of tank and aircraft engines,” Vulin told reporters.

The investment is part of Serbia’s effort to help and strengthen the RS economy, he said.

Dodik added that the cooperation between the RS and Serbia regarding the arms industry was initiated for commercial reasons, to increase the production in the RS which has been decreased “because of the interventionism of international actors”.

“There is a complete imbalance in Bosnia and Herzegovina, as the Federation (Bosnia’s other entity, shared by Bosniaks and Croats) still has six very functional producers of weapons and ammunition, while in the RS all of that has been devastated,” Dodik said.

“We are trying to raise a certain kind of production and we have support from Serbia’s Defence Ministry for that, not for competition, but for commercial reasons,” he said.

The Banjaluka-based Kosmos company will receive some 100 million Dinars (EUR 846,832), the Serbian Minister said.

Apart from Kosmos, cooperation will be established with the company Orao in Bijeljina and a Pale-based factory which builds engines for special purposes.