Jared Kushner's withdrawal from Serbia will hurt investment, official says

BELGRADE, Dec 23 (Reuters) - A decision by Jared Kushner, U.S. President Donald Trump's son-in-law, to pull out of a luxury development plan in Serbia will deprive the country of much-needed foreign investment and other Balkan states will benefit, the head of Serbia's ruling party said. 

Kushner's U.S.-based Affinity Global Development told the Wall Street Journal last week it was withdrawing from the project to build a hotel, apartments, shops and offices on the site of the former Yugoslav army headquarters in Belgrade.

The firm signed a 99-year lease with the Serbian government last year but the project has faced opposition.

The plans, which were backed by Serb President Aleksandar Vucic, became embroiled in a corruption scandal and led to protests by Serbs who say the dilapidated site in the centre of Belgrade should be preserved as a tribute to people killed when it was damaged in a 1999 NATO bombing campaign.

The bombing campaign was intended to stop Serbian forces attacking parts of Kosovo, which was part of Serbia at the time.

Last week, Serbia's prosecutor filed an indictment against three officials including a minister over their role in removing the protected status of the buildings this year, a move that had allowed the project to advance but which prosecutors allege was done illegally.

"They (the protesters) drove investors away. This is the most negative message for investors," Milos Vucevic, head of Serbia's governing SNS party, told Prva TV on Monday. 

"They have sent Americans to the Albanian coast," he said, referring to another project Kushner is developing in Albania. 

Affinity Global Development did not immediately respond to requests for comment. There is no indication of any wrongdoing by Kushner or Affinity in the case.

(Reporting by Ivana Sekularac, Editing by Edward McAllister and Timothy Heritage)