The news that River Road Entertainment had selected Serbia as the location for shooting Coriolanus, a $10m project to star and be directed by Ralph Fiennes, surprised many in Serbia.

While this is perhaps the most tangible indication that Serbia is re-emerging as a cost-effective destination for international production, it was also a result of dedicated work by a US programme to reignite the country's film sector.

The USAID Serbia Competitiveness Project, implemented by US consulting company Booz Allen Hamilton, supports Serbian firms in expanding their presence in international markets and recognised the potential of the film industry more than a year ago.

In its assessment, it found Serbia has several competitive advantages which qualify it as more feasible and attractive than the current regional leaders in the filming location sector, such as Hungary, Bulgaria and Romania.

Mike Downey, CEO of UK production company F&ME, which has collaborated on several film productions in the region, has been involved with the Usaid project since March.

'Serbia and the former Yugoslavia used to be the second leading destination after the UK for US and international film shooting,' says Downey.

'Serbia is being rediscovered as a country with unique potential for the international feature film and commercial market. Serbia offers high-end production values and world-class talent, highly skilled, multilingual, experienced crews and close proximity to European centres. With the unmatched location diversity and some of the lowest location rates in Europe, Serbia is finding its way back into the film industry.'

US ambassador to Serbia, Cameron Munter, notes this is consistent with US objectives in Serbia. 'The United States has made promoting economic growth in Serbia a priority of our assistance programmes,' he says.

'Over the past few years, there has been significant interest from foreign film-makers to produce movies, television shows and commercials in Serbia. USAID's Competitiveness Project experts are confident Serbia can once again become a leading destination for film productions. This will help show investors from all sectors that Serbia is open for business and has a lot to offer.'

International outreach

'Although it is unique for donor-funded projects to work in film location promotion, the Serbian firms we have partnered with in the first year have had significant success in securing contracts for film, TV and commercial productions, and we believe this is just the beginning,' says project advisor Ana Ilic.

'In the next year, we will continue to work with key Serbian firms to attend Cannes, Cannes Lions and the AFM, and will develop promotional materials, including a website and location guide on filming in Serbia, and online and print versions of service-provider catalogues. These activities will further increase awareness of Serbia's capabilities and advantages.'

'The Usaid Competitiveness Project is offering invaluable support to the Serbian film industry,' says Andjelka Vlaisavljevic, CEO of Work In Progress, the Belgrade-based company that will provide services for the production of Coriolanus.

Since its founding two years ago, Work In Progress serviced Endgame Entertainment's The Brothers Bloom and EuropaCorp's Romance The Dark and District 13 - Ultimatum.

'When foreign producers decide to film in this part of the world, they first ask around to see who worked here. Recommendations are very important, but not enough. We can beat the regional competition with low prices, quality of services and a transparent way of doing business,' explains Vlaisavljevic.

Facilities growth

The range of services available in Serbia also continues to expand to support foreign film productions. Last year the post-production company Cinebox 100, the only one in the region with a digital intermediate capability, established the first film laboratory in Serbia, Cinelabs Beograd. Until recently, Serbian producers had to use Hungarian or Bulgarian facilities.

'Bringing foreign productions to Serbia is crucial because the market is small. No progress in any branch of the film industry can be made without foreign productions,' says Lidija Kurucki, executive director of Cinebox 100. 'This is a big chance, because there are disadvantages in the administration and legislature of our country.'

Serbian director Goran Markovic, one of the advisors to the Serbian minister of culture Nebojsa Bradic, agrees: 'Avala Film, the biggest studio in the Balkans, is currently used only on a limited basis, as the ownership is still in the hands of a man who hails from Milosevic's regime.'

Officially the studio is both in the processes of bankruptcy and privatisation, but there is investor interest in retaining the assets as a production studio. 'Without Avala fully functioning as a film studio, all efforts would be in vain,' says Markovic.

Producer Miroslav Mitic, owner and CEO of Dream Company, which is behind the highest grossing Serbian film of all-time, Zamfir's Zona, is thinking along the same lines. 'We hope that with Usaid's support, Serbia will be able to implement the legal regulations that are necessary for further positive development of our industry.'

The government of Serbia is expressing support for forming a friendlier space for foreign film productions in Serbia. 'In the past few years, Serbia has created an attractive investment environment, with a low level of business taxation and benefits for investors. A proposed law on film includes a new set of tax incentives for foreign film producers,' says Bozidar Djelic, deputy prime minister of the Serbian government.

Culture minister Bradic adds: 'The Ministry of Culture is embarking on a strategy to change the image of Serbia by promoting arts and culture. We're looking forward to providing support to companies that film in our country.'