BASIC INFORMATION

Full Country Name:�Republic of Serbia


Country Profile: Serbia (Formerly the State Union of Serbia and Montenegro)

Kosovo is a province of the Republic of Serbia but has been under interim UN administration since 1999. See separate profile for Kosovo Country Profile

Capital City: Belgrade

Area: 88,361 sq.km
Population (without Kosovo)*: 7,498,001 (Serbian Government census, 2002)
*There has been no official census in Kosovo since UNMIK took administrative responsibility in 1999.
Languages: Serbian (official nationwide); Romanian, Hungarian, Slovak, Ukrainian, and Croatian (all official in Vojvodina); Albanian (official in Kosovo); Bosniak, Montenegrin, Bulgarian and Ruthenian.
Major Religions and Denominations: Christianity: Serbian Orthodox dominant), Roman Catholicism, Islam.
Currency: Serbian Dinar (RSD)
Major Political Parties: Serbian Radical Party (SRS), Democratic Party (DS), Democratic Party of Serbia (DSS), G17 Plus, Socialist Party of Serbia (SPS), Liberal Democratic Party (LDP), Serbian Renewal Movement (SPO), New Serbia (NS), League of Vojvodina Social Democrats (LSDV), Sandzak Democratic Party (SDP), Coalition for Sandzak, Vojvodina Hungarians Alliance (SVM), Coalition of Albanians of the Presevo Valley (KAPD), Roma Party (RP), Union of Roma of Serbia (URS)

Parliament of The Republic of Serbia: The national legislature of Serbia is a unicameral assembly of 250 deputies elected through direct general elections for a term of four years.

The deputies in the National Assembly elect the Government of the Republic of Serbia, which, together with the President of the Republic, represents the country's executive authority. The judiciary is independent.

The President of the Republic is elected for a term of 5 years by direct election and has important powers under the constitution. The President is not a member of the National Assembly or the government.

The Leadership of the Republic of Serbia - President and Head of State: Boris Tadic.
Government Ministers: Please note: following parliamentary elections on 21 January 2007, all Ministers are caretakers until a new government is formed.
Prime Minister: Vojislav Kostunica (DSS)
Deputy Prime Minister: Ivana Dulic-Markovic (G17 Plus - resigned 1 October 2006)
Foreign Minister: Vuk Draskovic (SPO)
Defence Minister: Zoran Stankovic (no party affiliation)
Finance Minister: Mladjan Dinkic (G17 Plus - resigned 1 October 2006)
Membership of International Organisations: United Nations (UN), Organisation for Security and Co-operation in Europe (OSCE), Council of Europe (CoE), European Bank of Reconstruction and Development (EBRD), Stability Pact, South-Eastern Co-operation Initiative (SECI), Central European Initiative (CEI), South Eastern Europe Co-operation Process (SEECP), Danube Commission, Initiative for Danube Co-operation, International Monetary Fund (IMF), World Bank, Partnership for Peace (PfP).

GEOGRAPHY

The Republic of Serbia has external borders with Hungary to the north, Bosnia and Herzegovina, Montenegro and Croatia to the west and north-west; Romania to the north-east; Bulgaria to the south-east; and Albania and Macedonia to the south.

The landscape ranges from flat plains in the north to hilly and mountainous regions in southern Serbia.

Since June 1999, Kosovo, a province of Serbia, has been under the administrative control of the United Nations Interim Administration Mission in Kosovo (UNMIK). Please follow link for Kosovo's profile.

HISTORY

Longer Historical Perspective

The five independent countries that emerged from former Yugoslavia in 1991-92 had spent centuries, from the late Middle Ages, under either Austrian Habsburg or Ottoman Turkish rule. Most of present-day Serbia fell under Ottoman control.
Two Serbian uprisings beginning in 1804 and 1814 resulted in a Serbian state gaining first semi-autonomous status within the Ottoman Empire and eventually, in 1830, full autonomy. Turkey was forced out of the region during the Balkan Wars (1912-13) when Serbia also regained control of Kosovo, which it had lost to the Ottomans in 1389.
In the First World War, the joint forces of Austria-Hungary, Germany and Bulgaria defeated Serbia. The Serbian army regrouped and went to fight along side the forces of the Entente on the Salonica front. In 1918, under the Serb Karadjordjevic dynasty, the ‘Kingdom of Serbs, Croats and Slovenes’ came into existence. The new state was renamed the ‘Kingdom of Yugoslavia’ in 1929.
During the Second World War, in April 1941, Yugoslavia was invaded and partitioned by the Axis powers. When Yugoslavia emerged in 1945 as a socialist federation under the communist partisan leader Josip Broz (Tito), the state was structured as a federation of six republics: Croatia, Bosnia and Herzegovina, Slovenia, Serbia, Montenegro and Macedonia. Kosovo and Vojvodina gained increasing autonomy within Serbia. Tito ruled the SFRY for 35 years, sharing power amongst Yugoslavia’s constituent nations.

Recent History

Tito’s death in 1980 signalled the beginning of the end of the SFRY. The state’s economic decline continued and, increasingly, the power sharing issue rose up the agenda. In 1989 Slobodan Milosevic, riding a wave of nationalist sentiment, came to power in Serbia, and quickly installed his supporters in positions of power and severely restricted the autonomy of Kosovo and Vojvodina. In January 1990, the Yugoslav League of Communists failed to reach agreement on urgent questions of reform and the Slovenian delegation walked out.
The next eighteen months witnessed a round of largely insincere negotiations over how to resolve Yugoslavia’s collective problems. In June1991 Slovenia and Croatia declared their independence. Macedonia withdrew from Yugoslavia after its independence referendum in September 1991, followed by Bosnia and Herzegovina in 1992, after its independence referendum. Serbia, under Milosevic, opposed the independence moves and actively participated in wars and armed conflicts in Croatia and Bosnia and Herzegovina (1992-95) under the pretext of ‘protecting’ Croatian and Bosnian Serbs.

Following the secession of the other Yugoslav republics, Serbia and Montenegro adopted the Constitution of the Federal Republic of Yugoslavia (FRY) on 27 April 1992, and declared themselves a new state.
When Kosovo and Vojvodina were stripped of their previous degree of autonomy, Kosovo Albanians began boycotting the Serbian institutions and elections. However, after several years of passive resistance, violent opposition to Serbian hegemony grew in Kosovo. Milosevic turned to the policy of ethnic cleansing, this time against the Kosovo Albanian population. NATO intervened between March and June 1999 with a 78-day bombing campaign across Serbia and Montenegro to push repressive Serb troops out of Kosovo and force Milosevic to relinquish control of the province.

Since June 1999, UNMIK has exercised administrative control of Kosovo, whilst the NATO-led Kosovo Force (KFOR) has maintained security within the province.

Milosevic’s regime came to an end on 24 September 2000, following FRY Presidential elections. He refused to accept the first round victory of Vojislav Kostunica, the Democratic Opposition of Serbia Coalition (DOS) candidate. However, Milosevic had underestimated popular support for the opposition and overestimated the loyalty of the army and security services. Hundreds of thousands of people took to the streets, storming government buildings, and forcing Milosevic from power. The uprising of 5 October 2000 was consolidated in December 2000, when DOS swept to power in Serbia, following the Assembly elections.

5 October 2000, people of Yugoslavia storm government buildings and end Milosevic's 10 year regime

The state union of Serbia and Montenegro

On 14 March 2002, following months of negotiations between the two republics and mediation by EU High Representative Javier Solana, the federal and republican level governments signed the ‘Belgrade Agreement’, forming a new, looser union between Serbia and Montenegro. With the formal adoption of a new Constitutional Charter on 4 February 2003, the FRY became the State Union of Serbia and Montenegro (SaM). Foreign policy, defence policy, foreign economic relations and human/minority rights were dealt with at state union level. Svetozar Marovic, a Montenegrin, was appointed President of SaM. There was also a single-chamber Parliament made up of 126 members (91 Serbian, 35 Montenegrin).

The State Union was intended to promote stability within the region and help both republics make further progress towards European integration, but opinion in Montenegro was divided and the union did not function effectively. Under the terms of the Constitutional Charter either republic could hold a referendum on independence after three years. Montenegro chose to exercise this right and, with the EU acting as facilitator, held a successful referendum on 21 May 2006: 55.5% of those who voted did so in favour of independence. The Montenegrin Assembly made a formal declaration of independence on 3 June 2006, thus bringing the union between Serbia and Montenegro to an end.

On 5 June 2006 the Serbian National Assembly decreed Serbia to be the continuing international personality of the State Union of Serbia and Montenegro, and fully succeeded its legal status. Serbia therefore inherited membership of international organisations of which Serbia and Montenegro was a member. The Republic of Serbia remains party to all international agreements, treaties and conventions to which Serbia and Montenegro was a party.

ECONOMY

Basic Economic Facts:
(sources: Serbian National Statistical Office, National Bank of Serbia)

GDP: $28.7bn (2005)
GDP real growth rate: 5.8% (2006), 6.3% (2005)
GDP per capita: US $4028 (2006)
Population below poverty line: 30%
Unemployment rate: 28.1% (2006 - excl. Kosovo)
Inflation: 6.6% (2006), 17.3% (2005)
Official Currency: Serbian Dinar (RSD)
Major industries: Agribusiness, machine building, metallurgy, mining, consumer goods, electronics, pharmaceuticals, petroleum products and chemicals.
Major trading partners: Italy, Bosnia and Herzegovina, Germany, Russia, Austria, Slovenia, Hungary, France, Macedonia, Croatia, Montenegro.


Economic Overview

After the democratic changes in October of 2000, the Government of Serbia inherited an economy shattered by war and economic sanctions. Since then Serbia has been making great progress in economic transition even though this has often produced mixed results. Initially, in order to rebuild the economy, the government implemented a series of bold economic reforms such as stabilising the currency; liberalising price controls; streamlining the tax system and introducing VAT; reforming the banking sector; and enacting laws on privatisation, inward foreign investment, customs reform and the pension system.

The results include successful foreign debt settlements with the Paris and London clubs of creditors; completion of the IMF three-year stand-by programme; first-ever country credit ratings (BB-); GDP and export growth; and budget surpluses in 2005 and 2006. Between 2000 and 2005, Serbia attracted almost US $4.5 billion in FDI stock. However, the current macroeconomic and investment climate is still somewhat fragile with the current account deficit remaining high (close to 10% of GDP) and the foreign trade deficit amounting over US $ 6.7 billion in 2006. The official unemployment rate (excluding Kosovo) stood at 28.1% in December 2006, and is most likely to continue to rise due to upcoming restructuring of public companies and state-owned enterprises. Inflation, after falling to single digit numbers in 2003, grew in the following two years to 17.3% in 2005. However, strict and more effective monetary policy from the National Bank of Serbia has seen inflation back to 6.6% in 2006.

In 2005, trade between the UK and Serbia stood at approximately US $213 million (according to the Serbian Statistical Office) with UK imports amounting to US $84 million and UK exports of US $129 million. Major UK investment in Serbia occurred in 2003 with the acquisition of the second largest tobacco manufacturer by British American Tobacco for approximately €87 million. Many other British companies also have a presence in the market, and interest from UK businesses in investing and creating a presence in the Serbian market continues to grow. A number of UK service providers are successfully doing business in Serbia in the areas such as law, banking, real estate and construction, engineering, marketing and PR. January 2007 saw the first steps towards establishing a UK-Serbia Business Council. Over 40 companies expressed interest, including PriceWaterhouseCoopers, Yugoslav Airways (JAT), Global Steel, Deutsche Bank and Inghams Ski.

International Assistance

Following the profound political crisis in 1999/2000, Serbia sought emergency international assistance to maintain basic services, particularly in welfare and energy sectors. From 2000 to date international assistance totalling €4.0 billion has been committed to Serbia and Montenegro, on grant of soft loan terms.

In June 2001, the European Commission and World Bank in co-ordination with the post-Milosevic FRY Government launched a four-year Economic Recovery and Transition Programme (ERTP) of multilateral and bilateral assistance aimed at rebuilding the region's institutions and economy. This outlined a €4.6 billion external financial support package needed to reduce poverty and to promote economic stability and growth through political and institutional reforms; priority public investments (such as health, education and infrastructure); and urgent budgetary and balance of payments support.

The EU, the largest donor (since 1991 the EU has committed €2.9 billion to Serbia and Montenegro), currently has in place a CARDS programme intended to assist with reconstruction, development in the region. In addition, EU member countries, including the UK, are running bilateral programmes of development assistance. Large amounts of aid have been spent, particularly in the reconstruction of physical infrastructure; now the focus is on the institutional changes required for the continuation of the transition process and European integration.

Debts totalling approximately US$ 4.5 billion owed to the Paris Club were restructured in November 2001. The Paris club agreed to write off 51% of Serbia and Montenegro's debt, with and additional 15% write off being conditioned upon successful completion of a three-year extended agreement with the IMF. The government negotiated an extension of IMF arrangement until February 2006. Negotiations with the London Club of commercial creditors proved to be more challenging but, in July 2004, an agreement was reached to restructure US$ 2.7 billion debt. The Agreement envisages the write-off of about 62% and rescheduling payments on the remaining amount of US$ 1.08 billion over the period of 20 years.

Environmental Assistance

The United Nations Environment Programme – Post Conflict Clean-Up of Environmental Hotspots.

In May 1999, the United Nations Environment Programme (UNEP) established a post-conflict Balkans Task Force, which would assess the environmental consequences of NATO’s bombing campaign in Serbia. The bombing of chemical factories and oil refineries had caused air, soil and water pollution. UNEP identified four heavily polluted ‘hotspots’ in Serbia: Pancevo, Kragujevac, Novi Sad and Bor; and implemented a US $12.5 million clean-up programme. By working closely with the environmental authorities in Serbia, UNEP implemented a series of technical projects to: decontaminate soil and water; remove and transport for final treatment tons of hazardous waste; rehabilitate wastewater capacities at industrial sites; and install water and air quality monitoring stations.

In 2004, UNEP handed the clean-up programme over to the national authorities, principally the Ministry for Science and Environmental Protection. Although Kragujevac and Novi Sad are no longer considered ‘hotspots’, problems still remain.