Economic Woes to Weigh on Serbian Vote

Serbians vote Sunday in elections billed as crucial for their EU future by center-left President Boris Tadic, who faces a populist challenger in a campaign focused on jobs and the economy.

For Serb voters, it is the first election in decades to focus on economic issues rather than Balkan strife that led to international sanctions against Serbia.

Even the issue of Kosovo, which Serbs consider a breakaway province and which has been a key question in previous polls, has been pushed to the background.

"Economic growth is not possible for Serbia if we do not continue with our foreign policy based on cooperation, especially in the region," Tadic insisted on Thursday in his final remarks before a media black-out.

The incumbent -- who has led Serbia from being an international pariah state to EU candidacy status in March -- stressed the vote was "crucial for the next ten years in Serbia... in terms of the economy, foreign policy and the challenges Serbia must face."

The country's economic outlook looks grim however, with gross domestic product growing in 2011 by just 1.6 percent and expected to flatten this year.

Economists predict that unemployment -- which already stands at a record 24 percent -- will rise further.

Tadic is running neck-and-neck with populist conservative Tomislav Nikolic, the latest polls showed.

Analysts expect the 54-year-old leader to triumph in a second round however, as he has done twice before.

Nikolic used his last remarks to focus on the economic situation and vowed to attract foreign investment from countries outside the EU.

"We are counting on investments both from the East and from the West," he said, referring to plans to strengthen ties with Serbia's traditional ally Russia.

The 60-year-old reformed ultra-nationalist acknowledged that European Union membership would be useful to the country.

But he stressed that Serbia "can only join the EU with Kosovo", meaning that Belgrade would not give up its claim to the southern territory.

Kosovo declared independence from Serbia in 2008 and has been recognised by 90 countries, including the United States and all but five members of the European Union.

Analysts said Nikolic's Serbian Progressive Party (SNS) has managed to capitalize on voter discontent with low wages, unemployment and mishandled privatizations, while Tadic's DS Democrats have suffered from perceived mistakes in their handling of the economic crisis.

Following parliamentary polls also to be held on Sunday, the SNS is projected to become the biggest in parliament, just ahead of the DS.

With neither the SNS nor the DS tipped to win enough votes to form a government on its own however, the Socialists led by outgoing Interior Minister Ivica Dacic were set for a kingmaker role.

Dacic has been in a ruling coalition with the Democrats for the last four years and is expected to favor the same although he has been careful not to rule out participating in an SNS-led government.

Around 6.7 million Serbian voters are eligible to cast ballots for 12 presidential candidates and 18 parties contesting the parliamentary elections.

Local and regional elections are to be held as well.

Polling stations open at 7:00 am (05:00 GMT) and close at 8:00 pm. The first significant partial results are expected at 9:30 pm.