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YUGOSLAVIA
Yugoslavia. Wikimedia Commons (Public Domain)
Federal Republic of Yugoslavia
Federativna Republika Jugoslavijá
COUNTRY OVERVIEW
LOCATION AND SIZE.
Although the country is recognized by others, the United States does not officially recognize
the federation consisting of Serbia and Montenegro as Yugoslavia; it calls the country "Serbia
and Montenegro."
Located in southeastern Europe, bounded on the north by Hungary, on the northeast
byRomania, on the southeast by Bulgaria, on the south by Albania and Macedonia, on the
southwest by the Adriatic Sea, and on the west by Croatia, Bosnia, and Herzegovina,
Yugoslavia has an area of 102,350 square kilometers (39,518 square miles). Serbia, including
the province of Kosovo, accounts for 88,412 square kilometers (34,136 square miles) while
Montenegro accounts for 13,938 square kilometers (5,382 square miles), 199 kilometers (124
miles) of which is coastline. The total area is slightly smaller than Kentucky (Serbia is
slightly larger thanMaine, Montenegro is slightly smaller than Connecticut). The
capital, Belgrade, is situated on the Danube and Sava rivers in north-central Serbia. Until the
early 1990s, Yugoslavia incorporated the republics of Serbia, Montenegro,
Macedonia, Slovenia, Croatia, and Bosnia and Herzegovina. The territory has yet to resolve
all the territorial disputes between the former Yugoslav republics.
POPULATION.
The population was estimated to be 10,662,087 (Serbia—9,981,929; Montenegro—680,158)
in July 2000. By 2001, the World Factbook estimated that the population had grown to
10,677,290. The numbers are not exact, however, because of the dislocations caused by the
devastating Yugoslav wars and the ethnic cleansing (killing carried out on ethnic minorities
by a majority group) that had raged from 1991 to 1999. In 1998, the population was estimated
at 11,206,039, including a significant number of Serb refugees from Croatia and Bosnia. In
1999, a mass exodus of ethnic Albanians from the Serbian province of Kosovo into adjacent
Albania and Macedonia occurred; most have since returned. The population growth rate in
Serbia is positive, with a birth rate of 12.2 and a death rate of 11.08 per 1,000 population
(estimated in 2000). In Montenegro, emigration caused a decline in the population, although
in 2000 the estimated birth rate stood at 14.9 and the death rate at 7.9 per 1,000.
The ethnic composition before the recent wars included Serbs, 62.6 percent; Albanians, 16.5
percent; Montenegrins (close to Serbs), 5 percent; Hungarians, 3.3 percent; Muslims (or
Bosniaks), 3 percent; along with Roma (Gypsies), Bulgarians, Croats, and other groups.
Religions include Orthodox Christian (65 percent), Muslim (19 percent), Roman Catholic (4
percent), Protestant (1 percent), and others (11 percent). The population in Montenegro, and
to some extent in Serbia, is young, with 22.05 percent below the age of 14 and 11.79 percent
older than 65; in Serbia, 19.95 percent are below the age of 14 and 14.83 percent are older
than 65. In 1997, 58 percent of the population lived in urban areas.
OVERVIEW OF ECONOMY
The Yugoslav economy is severely damaged due to more than 10 years of internal fighting
and fighting among some republics that were formerly part of the federation. Prior to 1991,
Serbia and Montenegro were 2 of 7 constituent republics of the Socialist Federal Republic of
Yugoslavia (FRY). The disintegration of the federation in 1991-1992 and the secession
(withdrawal from an organization in order to gain independence) of 4 republics, including the
most prosperous ones, Slovenia and Croatia, were an economic disaster for the newly formed
FRY (Serbia and Montenegro).
The republics struggled for control of the area and some, especially Serbia, mounted
genocidal attacks on neighboring Kosovo. The conflicts led to market disruption, and
internationalsanctions . Corrupt economic policies led to devastation, high inflation , and the
reversal of market reforms that had started in the 1980s. Industry was almost ruined,
production was cut by more than 50 percent, the gross domestic product (GDP) per
capita in 2000 was half of the 1989 level, and unemployment was up by 50 percent.
Liquidity, large trade and fiscal deficits, and politically based economic inefficiencies
threaten economic stability.
Serbian president Slobodan Milosevic led much of the area's troubles. The international
community enforced strict sanctions against the area to try to stop the fighting and, finally, in
1999, NATO began a bombing campaign to end the internal fighting.
The international community welcomed the ouster of Milosevic in October 2000, and radical
institutional and economic reforms were expected in 2001. The European Union (EU) opened
up its market to imports of Yugoslav industrial and agricultural goods, and sanctions were
lifted as the West accepted that the only way to stabilize the country was to help reintegrate it
with the rest of Europe. Before the new government turns to reforms, however, companies
and institutions must first be made operational. The almost continuous conflicts in the area
have destroyed much of the country's infrastructure .
POLITICS, GOVERNMENT, AND TAXATION
Slavic republics had been separated for much of history by larger national powers, such as the
Austro-Hungarian Empire in the 19th century. After World War II, Slovenia, Croatia, Serbia,
Macedonia, and Montenegro, and Bosnia and Herzegovina were united. But the federation of
these republics was far from easy. Although mostly Slavic republics, the populations in the
republics were a blend of people with strong, differing cultural affinities that did not match
territorial boundaries. By the 1990s, tensions between the republics led to the dissolution of
Yugoslavia. The break was not clean, however, because people within the republics struggled
to redraw the territorial boundaries along cultural lines. Ethnic Serbs in Bosnia and
Herzegovina, for example, wished to join with Serbia. War between many of the republics
led to severe political and economic disruption in the area.
In 1992, Serbia and Montenegro adopted a new constitution that set up a parliamentary
government with a bicameral (2 house) legislature. Despite the new government, President
Milosevic headed a dictatorial regime from 1987 to 2000. Milosevic's regime is responsible
for much of the devastation caused by years of war from 1991 to 1999.
Following the presidential elections in September 2000, a popular uprising toppled
Milosevic. The new president, Vojislav Kostunica, pledged a return to democracy and the
rule of law. He promised to begin much needed reforms and to seek full reintegration into
Europe. Furthermore, he secured Yugoslavia's return to the United Nations (UN) and
admission to the International Monetary Fund (IMF).
Parliamentary elections in December 2000 brought to power the Democratic Coalition of
Serbia (DOS), a reformist union of 18 parties and a trade union, led by Zoran Djindjic of the
Democratic party, with 64 percent of the vote. Milosevic's Socialist Party of Serbia that ruled
along with the ultra-nationalist Serbian Radical Party and the Yugoslav United Left garnered
only 14 percent of the vote.
Recovery is expected to be long and painstaking. The DOS favors swift change, but
Kostunica holds that it would jeopardize stability before a new legal framework is instituted.
But the squabbles between the former Yugoslav republics are far from over. The UN Interim
Administration Mission in Kosovo (UNMIK), established after the 1999 war, is now the
authority in what was the former Autonomous Province of Kosovo and Metohija, and
Albanian separatists are wreaking havoc in south Serbia, adjacent to Kosovo. Montenegro,
which boycotted federal elections, continues its push toward independence. Bosnia and
Herzegovina and Serbia, Serbia and Montenegro and Croatia, and Serbia and Montenegro
and Macedonia have yet to resolve respective territorial issues.
The government's role in the economy is significant, as state enterprises owned more than 80
percent of the capital, and the private sector accounted for only 37 percent of GDP in 1996.
Federal and republic governments have retained many formal and informal levers of authority
over the economy, export and import licenses, credit, and jobs. The Montenegrin government
has been more reform-oriented, and its law establishes tax exemptions, tax relief, and other
privileges for foreign business activity.
INFRASTRUCTURE, POWER, AND COMMUNICATIONS
Serbia enjoys a central location in the Balkans, but the loss of markets and economic
sanctions and NATO's (North Atlantic Treaty Organization) bombardment in 1999
devastated the transportation and communications sector; billions of dollars are needed for
repair and modernization.
In 1997, the road network included 50,414 kilometers (31,326 miles) of roads (55 percent
paved), with 380 kilometers (237 miles) of expressways, and 171 kilometers (106 miles) of
semi-expressways. There were 4,031 kilometers (2,505 miles) of railroad tracks. Harbors on
Montenegro's coast and at Belgrade serve as shipping centers, and plans to clear debris from
the Danube left
Communications
Newspap Radi
ers
os
TV Cable
Set subscrib
sa
ersa
Intern
Mobile Fax
Personal Intern
et
Phone Machin Compute et
Hosts Users
sa
esa
rs a
b
b
1996
1997
199
1998
8
1998
1998
1998
1999
1999
Yugosla
107
via
297
259 N/A
23
1.9
18.8
7.65
80
United
States
215
2,146 847 244.3
256
78.4
458.6
1,508. 74,10
77
0
Russia
105
418
420 78.5
5
0.4
40.6
13.06
2,700
Romani
300
a
319
233 119.2
29
N/A
10.2
9.01
600
Country
Data are from International Telecommunication Union, World Telecommunication
Development Report 1999 and are per 1,000 people.
a
Data are from the Internet Software Consortium (http://www.isc.org) and are per 10,000
people.
b
SOURCE: World Bank. World Development Indicators 2000.
by the bombing campaign will make trade along the river active again. The national airline,
JAT, operates out of international airports in Belgrade and Podgorica, but under the 19921995embargo , flights to Yugoslavia were banned, and the bombing of 1999 caused damage
to civilian airports.
Before 1999, the country was self-sufficient in electricity from coal and hydropower. The
sector is dominated by the state-owned monopolies of Serbia and Montenegro. The bombing
in 1999 destroyed or damaged 14 power stations and 2 major oil refineries.
In 1997, the purchase of a 49 percent share of the Serbian Telecommunications Company
PTT by the Italian company Stet and Greece's OTE pumped nearly US$1 billion into the
budget. War and sanctions delayed modernization, but this has led to fast mobile telephone
growth. Access to the Internet was introduced in 1997, and there are about 100,000 registered
users and 150,000 personal computers.
ECONOMIC SECTORS
The sanctions of the 1990s hurt the economic sectors of Yugoslavia, especially industry.
Unable to reach export markets or to import needed materials, many companies had to cease
operations. Formerly one of the chief sources of copper in Europe, Serbia's mining industry
also suffered during the 1990s, and many factories in the manufacturing sector became idle.
But as sanctions were lifted, the industrial sector soon started up again. By 1998, the
contributions of industry to the GDP were as follows: manufacturing and mining accounted
for 33.9 percent; construction, 5.6 percent; agriculture, forestry, and fishing, 19.9 percent;
trade, tourism, and catering, 18.7 percent; crafts, 9.9 percent; and transport and
communications, 12 percent. Agriculture was estimated to account for 20 percent of GDP,
industry 50 percent, and services 30 percent by 1998. The government hoped to encourage
exports in agricultural goods, food processing, textiles, furniture, pharmaceuticals, metallic
ores, and to boost tourism, particularly in Montenegro, in order to earn foreign exchange.
AGRICULTURE
Chief agricultural products include corn, sugar beets, wheat, potatoes, grapes, plums, cattle,
pigs, and sheep. Vojvodina, in northern Serbia, contains the most fertile land. Cooperative
farms in Yugoslavia did not take root under the socialist regime, but the government of
Milosevic exported wheat and corn heavily (contributing 25 percent of Serbia's hard
currency ) and bartered grain for oil and gas from Iraq, Libya, Syria, and the Ukraine. This
practice exploited farmers by paying them below-market prices and limiting their access to
the free market. Farmers had no alternatives but to sell to state mills as most did not have
storage facilities and permits to trade. Police harassed them, and if caught selling outside state
outlets, they were fined US$2,000. The drought in the summer of 2000 was considered the
worst in 7 decades and food shortages threatened throughout the winter of 2000-2001, with
the corn harvest about 50 percent lower compared to 1999. Sunflower seeds were also down
by 60-70 percent, soya by 40-50 percent, and fodder crops by 40-50 percent. International
humanitarian aid pledged by the European Union and other donors following Milosevic's
removal in October 2000 may compensate for the shortages.
INDUSTRY
Unlike other former socialist countries with inappropriate concentration of heavy industry,
Yugoslavia inherited a diversity of industries. Before the disintegration of the federation there
were thriving metallurgy, chemicals, textiles, automobile, furniture, and food-processing
sectors. Industrial output plunged by 70 percent over the 1990s. Although industry wasn't
literally "wiped out," it became less commercial than in communist times. During the 1980s,
the communist regime set up joint ventures with foreign companies. Then, during the wars,
strategic firms were re- nationalized , most other companies remained in social ownership,
and less than a third were private. By the end of 2000, there were indications that much of
what had already been privatized by Milosevic might be re-nationalized.
Industry is considered about 50 percent over-staffed, and most firms are bankrupt. In 1996,
overdue inter-company debt was nearly US$2 billion (roughly 30 percent of the sector's
contribution to GDP). The biggest loss-makers were 30 large state and socially owned
companies, responsible for more than 60 percent of all losses. The complex system of
workers' ownership of companies, a legacy from the socialist past, confuses shareholder
issues. Although Montenegro was affected by the same problems, its active privatization
policy transferred all state-owned capital to government funds to attract foreign investment.
Among the industrial enterprises that have ties with foreign investors, but were bombed in
1999, were the Zastava factory in Kragujevac, maker of the Yugo automobiles, the Sloboda
domestic appliances factory at Cacak, and the 14 Oktobar factory in Krusevac, the largest
heavy machinery plant in the Balkans.
Copper, zinc, and lead mining were an important contributor to industry. The Trepca complex
near Mitrovica in Kosovo was the main mining area. In 2000, it was taken over by the U.N.
administration in Kosovo because of environmental and health hazards, provoking protest
from Belgrade, which accused the U.N. of confiscating the mine. Negative environmental
impact from mining in Serbia is considerable, but no serious measures were taken by the
Milosevic regime to counter it. Additionally, rivers and soils throughout Serbia, and
particularly in Kosovo, were heavily polluted by oil spills from destroyed refineries and
radioactive, depleted uranium shell debris from the 1999 bombing campaign. Serious
concerns arose in the Balkans and Western Europe about the health of the population and the
international peace-keeping troops based in the region. Sizeable international assistance could
help to improve the situation, but most likely only in a long-term scenario. Sustained
recovery in Yugoslav industrial performance will require, apart from ending the isolation and
instituting trade preferences, considerable foreign investment and new technologies to be
brought into the country.
SERVICES
FINANCE.
Yugoslavia has about 100 small commercial banks with bad loans amounting to more than
US$4 billion. Under-capitalization (insufficient funds) is rampant and, according to official
data, the assets of the 10 largest banks in Yugoslavia now total about US$3.5 billion, or 60
percent of all bank assets. Some experts estimate that even this modest number is overstated
by approximately 25 percent, because the banking system is not sound. Around 50 percent of
assets are of low quality (dubious receivables), while another 40 percent are non-performing
(frozen). Confidence in banks was destroyed after the sequestration (seizure) by the state of
the population's hard currency savings of US$3.4 billion for its war efforts in 1991-92 and the
collapse of a series of pyramid schemes in the early 1990s. The repayment of the savings to
depositors in dinars started in 2000, but most preferred to wait for future payments in hard
currency. Many banks did not have hard currency and offered gold coins instead. The
commercial banks put the blame on the National Bank of Yugoslavia (NBY, the central bank)
for its failure to provide funds for the reimbursement.
TOURISM.
Tourism is the most promising sector in Montenegro, given the short but beautiful stretch of
Adriatic coastline, adjacent to Croatian Dalmatia, with numerous resorts and picturesque
small towns. The sector was well developed before the wars, but is now in shambles. Some
limited foreign investment, primarily from Slovenian companies, may be expected in the
short run, but it will take longer to restore the one-time attractiveness of Montenegro for
Western tourists. In Serbia, the importance of the sector was lower and is now negligible.
RETAIL.
This sector was well developed and a major portion of it was privatized before the wars, but it
contracted with the economic collapse of the 1990s. By 2000, some small retail stores were
reopened and some experts hoped the success of small shops, such as gas stations and other
Trade (expressed in billions of US$): Yugoslavia
exports
Imports
1975
4.072
7.697
1980
8.978
15.076
1985
10.700
12.207
1990
14.308
18.871
1995
N/A
N/A
1998
N/A
N/A
SOURCE: International Monetary Fund. International Financial Statistics Yearbook 1999.
retail stores, would support growth of medium and large retail companies.
INTERNATIONAL TRADE
International sanctions on Yugoslavia were implemented in 1991 with weapons embargoes.
As the conflict in the area escalated, more sanctions were enforced and full trade was blocked
from 1992 until 1994. Embargoes against weapons sales were again imposed between 1998
and 2001.
The sanctions had a dramatic effect on trade. Trade with the United States, for example, went
from US$38.7 million worth of imports and US$5.9 million worth of exports in 1992 to
US$1.7 million in exports and no imports in 1993. Trade with the United States improved as
the sanctions were lifted in the late 1990s. In 1996, the United States exported US$46 million
to Yugoslavia and imported US$8.2 million worth of goods. Yugoslavia's total trade in 1996
reached US$1.8 billion for exports and imports rose to US$4.1 billion. The trade numbers for
1999 were US$1.5 billion for exports and US$3.3 billion for imports.
The imbalance between exports and imports reflected the weakness of the economy and the
export-oriented sectors. The lack of international recognition of the FRY made receiving
loans, foreign investment, and trade credit difficult and, in turn, did nothing to help develop
trade relations with other countries.
MONEY
Banking remains weak as many businesses owe large sums and show little inclination to pay
them back to the banks, which are now largely insolvent. Over the first half of 2000, the 28
largest banks made a loss of US$190 million at the black market exchange rate , and most
are unable to observe their own national banking regulations. Small banks were more costefficient and less vulnerable to political and business pressure. Some small steps
Exchange rates: Yugoslavia
Yugoslav New Dinars (YD) per US$1
2000
N/A
1999
N/A
Dec 1998
10.0
Dec 1997
5.85
Sep 1996
5.02
early 1995
1.5
Note: Rates in table are official; black market rate: 14.5 (Dec 1998), 8.9(Dec 1997), 2 to 3
(early 1995).
SOURCE: CIA World Factbook 2001 [ONLINE].
towards reform and consolidation of the fragmented sector were taken in 1997, when 16
small banks and 4 large ones—Beogradska Banka, Investbanka, Agrobanka and Beobanka—
were consolidated. The 20 banks together controlled about 75 percent of the market, and in
2000, the Montenegrin government passed a bill seeking stringent safeguards in the banking
system. Radical restructuring of the banking sector is more likely now as Yugoslavia is
restoring its membership in international financial institutions.
Capital markets are underdeveloped. The Belgrade Stock Exchange was established in 1989
and the Podgorica Stock Exchange in 1996. Given the current state of privatization, trading in
securities is very limited and both exchanges operate primarily in short-term (30 days or less)
commercial paper (notes) issued by large Yugoslav corporations.
In November 2000, Montenegro made the German mark legal tender. All payments between
the 2 republics will be conducted in marks. The dinar was tied to the German mark in 1995
(at a fixed rate of 3.3 dinars per mark). The street exchange rate in mid-2000 was at about 3.5
dinars per mark (5.7 dinars per US$1), but analysts believe the dinar was overvalued by 3050 percent. The black market in foreign currencies was robust, and inflation lowered the real
income of salaried workers.
POVERTY AND WEALTH
Before 1991, Serbs and Montenegrins enjoyed a comparatively prosperous life, and their
access to information, travel, and work abroad was easier than in most Eastern European
countries. As a socialist economy, old Yugoslavia was generally more egalitarian than
Western European countries. During the 1990s, as the economy collapsed, the majority of
Serbs grew desperately poor. Average salaries in Serbia hit the bottom at US$40 per month in
2000. Payments to employees on state payrolls—health workers, teachers, soldiers, police,
and pensioners
GDP per Capita (US$)
Country
1996
1997
1998
1999
2000
Yugoslavia
N/A
2,280
2,300
1,800
2,300
United States
28,600
30,200
31,500
33,900
36,200
Russia
5,200
4,700
4,000
4,200
7,700
Romania
5,200
5,300
4,050
3,900
5,900
Note: Data are estimates.
SOURCE: Handbook of the Nations, 17th,18th, 19th and 20theditions for 1996, 1997, 1998
and 1999 data; CIAWorld Factbook 2001 [Online] for 2000 data.
—were months overdue. The 1999 bombing of major cities led to many casualties and
devastation. Health, education, and welfare were also seriously jeopardized, and energy
shortages plagued the people. Widespread indignation fueled the mass protests of 1996 and
the popular uprising that finally toppled Milosevic in October 2000.
At the same time, many members of Milosevic's inner circle amassed—through nepotism,
corruption, and smuggling—largely illegitimate fortunes that the new government will work
to recover from foreign bank accounts. The dictator's notorious playboy son, Marko, was
particularly resented, and as soon as his father was out of office, many assets of his selfstyled business empire were looted and burned by angry crowds.
WORKING CONDITIONS
About a quarter of Serbs are officially unemployed, but the number rises to 50 percent if
people in insolvent companies are included. Over-staffing and underpayment in most
remaining firms mean that few workers have real jobs. The way to provide people with
sustainable livelihoods is to revive the companies with capacity to provide new jobs. These
companies must end their isolation and become able to export. Labor activism was
instrumental in ousting Milosevic and could hardly be underestimated as an economic factor
in a country with largely socialist traditions. Unions will influence economic decisions, as
workers, having taken control of their companies from Milosevic's managers, are pushing for
reversal of the privatization schemes that benefited Milosevic's cronies. Revisions of these
privatization deals seem more likely than elsewhere in Eastern Europe.
By late 1999, about 2 million people were employed in the state sector, about a million and a
half in industry and agriculture, and the rest in education, government, and services. Slightly
more than 300,000 were employed in private sector trade and services, and 560,000 were
independent farmers, while up to 1 million, including most Serb refugees from Croatia,
Bosnia, and Kosovo, engaged in subsistence agriculture and lived in deep poverty.
COUNTRY HISTORY AND ECONOMIC DEVELOPMENT
600s. Slavs settle in parts of the present Serbian and Montenegrin lands, comprising portions
of the ancient Roman province of Illyricum, then ruled by Byzantium, from which the Slavs
accept Orthodox Christianity.
1168. King Stefan Nemanja establishes the first kingdom of Serbia.
1331-55. Under King Stefan Dusan, Serbia acquires new lands as the feudal economy
develops and gives way to decentralization.
1389. Ottomans rout a Christian army including Serbs under King Lazar at Kosovo Polje.
1459. Serbia is violently conquered by the Ottoman Empire and remains under its rule for
nearly 4 centuries, while Montenegro, the one-time Serbian province of Zeta, remains
virtually independent.
1815. A revolt frees most of Serbia from Ottoman domination; a Serbian national revival
thrives. Serb nationalists aim at uniting all South Slavs under the Serbian state.
1912-13. In the Balkan Wars, Serbia annexes extensive territories, including the Sandjak,
Kosovo, and the present-day Republic of Macedonia.
1914. Austria-Hungary starts World War I, occupying Serbia by 1915. The Serbian army and
government flee.
1918. The Kingdom of the Serbs, Croats, and Slovenes (Kingdom of Yugoslavia from 1929)
is proclaimed (it includes Montenegro).
1941. In World War II, Yugoslavia breaks up as Nazi Germany occupies Serbia. Serb
nationalist Chetniks compete with Partisans led by Croatian communist Josip Broz Tito in
resisting the Germans.
1945. Tito's communists proclaim the Federal People's Republic of Yugoslavia. Serbia and
Montenegro become constituent socialist republics. In 1946, the regions of Kosovo and
Metohija and Vojvodina become autonomous provinces.
1945-80. Yugoslavia's socialist economy develops, and heavy industry is stressed, but since
the late 1950s economic control is decentralized, and some private initiative is allowed.
1987. Dissatisfaction with the federation grows among constituent republics after Tito's
death. Serbia, led by President Milosevic, tries to impose control over them and revokes the
autonomy of Kosovo (the 90 percent ethnic Albanian province) and Vojvodina (where a
sizeable ethnic Hungarian minority lives).
1991. Slovenia, Croatia, and Macedonia declare their independence, and Bosnia joins them in
1992. Serbia and Montenegro subsequently declare themselves the Federal Republic of
Yugoslavia, which is not recognized by the international community. Its U.N. membership is
suspended.
1991-95. The Milosevic regime plays an active role in the civil wars in Bosnia and Croatia
and is severely criticized by the international community for military atrocities and the brutal
oppression of domestic opposition and minorities.
1995. The Dayton peace accord puts an end to the war in Croatia and Bosnia.
1996. Mass demonstrations, led by the united democratic opposition against the Milosevic
regime, begin.
1999. Mass expulsion of ethnic Albanians from Kosovo, to counter the underground
insurgent Kosovo Liberation Army (UCK), provokes an international response, including
bombing and the stationing of NATO and Russian peacekeepers in Kosovo while
Montenegro declares the German mark official currency.
2000. Milosevic is defeated in presidential elections and democrat Vojislav Kostunica takes
over. Montenegro aspires for independence, and Albanian separatists strike in southern
Serbia. Readmission to the U.N. is approved; membership in the European Bank for
Reconstruction and Development and in the IMF is expected. The Democratic Coalition of
Serbia wins parliamentary elections in December, led by reformist Zoran Djindjic.
FUTURE TRENDS
Yugoslavia's economic problems will not disappear simply because it now has a
democratically elected president. The new government faces the challenge of reconstruction,
and the legacy of 10 years of war, sanctions, and corrupt officials' looting will take a
considerable amount of time to reverse and will not occur without a substantial inflow of
foreign capital. Trade relations can be normalized quickly and co-operation with the West can
be energized with the swift resolution of pending political issues.
The government's tasks will include stabilization and economic reform, imposing law and
order, and helping vulnerable sectors of society. They will be trying their best to
attract foreign direct investment and to unfreeze the assets of the former Yugoslavia by
reaching agreement with the other successor republics. The frozen private bank accounts in
the names of Milosevic and his associates in Switzerland and elsewhere may be transferred
back to the country, and immediate aid of US$172 million was pledged by the EU in late
2000 for medicine, heating, and food through the winter. The Stability Pact for South-eastern
Europe, a regional development plan backed by the EU and the United States, the IMF, the
World Bank, and regional banks will contribute to the reconstruction and reform process. The
prosperity of Serbia and Montenegro will be crucial for establishing lasting peace in the
Balkans.
DEPENDENCIES
Yugoslavia has no territories or colonies.
BIBLIOGRAPHY
Curtis, Glenn E. Yugoslavia: A Country Study. Library of Congress, 1992.
Economist Intelligence Unit. Country Profile: Yugoslavia. London: Economist Intelligence
Unit, 2000.
Stokes, Gale. Three Eras of Political Change in Eastern Europe. Oxford: Oxford University
Press, 1996.
U.S. Central Intelligence Agency. World Factbook
2001.<http://www.odci.gov/cia/publications/factbook/index.html>. Accessed October 2001.
U.S. Department of State. FY 2000 Country Commercial Guide: Serbia and
Montenegro.<http://www.state.gov/www/about_state/business/com_guides/index.html>.
Accessed December 2000.
"U.S. Trade Balance with Yugoslavia." U.S. Census
Bureau. <http://www.census.gov/foreign-trade/balance/c4799.html>. Accessed October
2001.
—Valentin Hadjiyski
CAPITAL:
Belgrade.
MONETARY UNIT:
Yugoslav dinar. 1 New Dinar (YD) equals 100 pari (in Serbia). Montenegro made the
German mark (DM equals 100 pfennige) legal currency alongside the YD in 1999.
CHIEF EXPORTS:
Manufactured goods, food (grain) and live animals, raw materials, and metals.
CHIEF IMPORTS:
Machinery and transport equipment, fuels and lubricants, manufactured goods, chemicals,
food and live animals, and raw materials.
GROSS DOMESTIC PRODUCT:
US$24.2 billion (2000 est.).
BALANCE OF TRADE:
Exports: US$1.5 billion (1999 est.). Imports: US$3.3 billion (1999 est.).
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Hadjiyski, Valentin. "Yugoslavia." Worldmark Encyclopedia of National Economies.
2002.Encyclopedia.com. 3 May. 2016 <http://www.encyclopedia.com>.