% of GDP
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The Kingdom of Serbs, Croats, and Slovenes was formed in 1918; its name was changed to Yugoslavia in 1929. Occupation by Nazi Germany in 1941 was resisted by
various partisan bands that fought themselves as well as the invaders. The group headed by Marshal TITO took full control upon German expulsion in 1945.
Although communist in name, his new government successfully steered its own path between the Warsaw Pact nations and the West for the next four and a half
decades. In the early 1990s, post-TITO Yugoslavia began to unravel along ethnic lines: Slovenia, Croatia, and The Former Yugoslav Republic of Macedonia all
declared their independence in 1991; Bosnia and Herzegovina in 1992. The remaining republics of Serbia and Montenegro declared a new "Federal Republic of
Yugoslavia" in 1992 and, under President Slobodan MILOSEVIC, Serbia led various military intervention efforts to unite Serbs in neighboring republics into a
"Greater Serbia." All of these efforts were ultimately unsuccessful. In 1999, massive expulsions by Serbs of ethnic Albanians living in the autonomous
republic of Kosovo provoked an international response, including the NATO bombing of Serbia and the stationing of NATO and Russian peacekeepers in Kosovo.
Blatant attempts to manipulate presidential balloting in October of 2000 were followed by massive nationwide demonstrations and strikes that saw the election
winner, Vojislav KOSTUNICA, replace MILOSEVIC.
Update No: 061 - (23/05/02)
War crimes bedevil politics
The Serbs are cooperating with the international community in extraditing suspected war criminals under the threat of losing huge sums of finance and aid. The
recent sum in question is US$120m, which was due to be handed over before the end of March. Yugoslavia missed the deadline and aid of around US$40m was
President Vojislav Kostunica is opposed to the process in principle, but realises that in the real world the country has to comply: "it is something we have
to live with." But he insists that without a clear national law regulating the cooperation, continually handing over suspects would result in the
destabilisation of the country.
He has in mind that the war crimes purportedly, and almost certainly in most cases verily, committed by the suspects comprise the tip of an iceberg. A whole
regime is really in the dock, with a secret police, informers, 'illicit' bankers and businessmen and other rogues, not just brutal ethnic cleansers in the
army and air force. Kostunica was never part of that regime, his claim to integrity, as his modest life-style shows, a small flat in Belgrade and a battered
car. But he knows well that a prolonged series of trials in the Hague spells trouble; anything could yet come out.
The pro-democracy forces in the Serb government are adamant that the issue has to be addressed and a complete catharsis take place. The government will
continue to cooperate with the Hague, even if the odd suspect or two attempts suicide rather than be handed over, as did former Milosevic aide, Vlajko
Stoljilikovich, on April 11th outside parliament by shooting himself in the head; he died a few days later.
On April 17th indeed, the Yugoslav government, that is the government of the Union of Serbia and Montenegro, published a list of 23 suspects wanted by the UN
War crimes tribunal. The 23 included Karadzic, Bosnian Serb leader, and his military commander, Mladic.
Montenegro stays on board
In the Montenegrin republic, the other constituent member of the union, recent events have unfolded in a dramatic fashion. The premier of Montenegro,
Filip Vijanovic, resigned after the separatist Liberal Party withdrew support for the government for shelving independence plans for the tiny republic of
His resignation came after the Montenegrin president, Milo Djukanovic, abandoned a long-planned referendum on independence and signed a deal with Serbia to
abolish the old Yugoslav Federation and create a new country, to be called as we have already had cause to mention, the Union of Serbia and Montenegro.
Mr Djukanovic's decision, taken after immense international pressure had been exerted for him to comply, has left Montenegrin society deeply polarised. But
the ruling elite does not want to fall foul of the West, on whom it depends for a great deal, including help to develop an oil deposit of perhaps one billion
barrels in the Adriatic. Meanwhile it wants the international community to continue to turn a blind eye to what is going on in the way of smuggling.
In fact Djukanovic's policy is not so at variance with the popular mood. His socialist party won 9 out of 11 local elections in mid-May, indicating that the
population understand full well the need to remain in with the West.
Two Belgrade banks seek licences to operate in Kosovo
The Banking and Payments Authority of Kosova [Kosovo] (BPK) has received three requests from two banks and an insurance company from Serbia for permission to
operate in Kosovo, the internet news agency, KosovaLive, has reported.
"The two Belgrade-based banks, Ekos and Delta, have requested permission from BPK to establish branches in Kosovo," the UNMIK [UN Mission in Kosovo] Fourth
Pillar reported on 24th April.
The BPK governor, Ajri Begu, also confirmed the requests. He told KosovaLive that such requests for branches were common, and that the BPK would follow the
correct procedures for any possible licensing.
Begu said the procedure for opening new branches of a bank whose main headquarters are in a different country is different in only one aspect - the fact that
BPK requests the approval of the country's central bank for a commercial bank to open a branch in another country.
The request for banking licences from Serbia is the first of this type since the UN administration transferred the licence authority and banks' control to the
According to the regulation in force, the Yugoslav National Bank must approve the request for a Serbian commercial bank to open a branch in Kosovo.
Up to now, the Yugoslav National Bank has been claiming that it has authority in the banking market in Kosovo.
BPK officials also reported another request by Serbia-based Takovo insurance company to operate in Kosovo.
The BPK is currently looking into the three license requests.
Serbian oil industry invites tenders for purchase of crude oil
The Serbian oil industry, NIS, on 18th April announced its annual invitation for tenders for purchasing crude oil,Tanjug News Agency has reported.
The oil company will monthly purchase 200,000 tonnes of crude oil, or 2,400,000 tonnes over the next year, the statement said.
Tenders will be received until 23rd April, and purchase will start in May 2002 and last until May 2003.
Netherlands writes off over half of Yugoslavia's debt
Yugoslav Deputy Prime Minister, Miroljub Labus, and National Bank of Yugoslavia Governor, Mladjan Dinkic, on 17th April signed an agreement with the Dutch
Finance Ministry on the write-off of 51 per cent of the principal debt Yugoslavia owes to the Netherlands, Tanjug News Agency has reported.
Under the agreement, there will be no interest rate on the remainder of the debt in the next three years, after which an arrangement on further payments will
be made within the Paris Club of Creditors, through which the loan was approved, Dinkic told Yugoslav reporters at The Hague.
Labus told reporters that the change of the Dutch government was the country's internal affair and that it would not affect the talks and further cooperation
between the two countries...
EBRD makes €18m Yugoslav private-sector loan
The European Bank for Reconstruction and Development is providing €18m to Hemofarm, a leading pharmaceutical company in the Federal Republic of Yugoslavia,
marking the Bank's first loan to a private local company in the country, an EBRD press release reported. The 6-year credit will support Hemofarm's expansion
to meet increasing demand for its medicines both at home and from markets abroad. Development of the private sector in Yugoslavia has been severely
constrained for more than a decade and companies like Hemofarm, which itself employs 2000 people, have no access to term finance locally.
Olivier Descamps, the EBRD's Business Group Director for Southern and Eastern Europe, said the challenge in 2002 would be to provide longer-term financing
that could help larger industrial companies become more efficient and profitable through investment.
Hemofarm was established in 1960 and is currently the largest pharmaceutical company in Yugoslavia. It is undergoing an upgrading of its present facilities
and improving efficiency to increase production. Demand has increased particularly from foreign clients in Bosnia Herzegovina, FYR Macedonia, Romania and
Russia, its largest market. Mr Descamps said "the EBRD wants to assist Yugoslavia in recovering its export markets to create jobs and stimulate growth at
"This loan from EBRD is of great significance for Hemofarm's further development maintaining product quality and expanding export," said Mr Miodrag Babic,
President of Hemofarm Concern.
The EBRD last year invested €230m in Yugoslavia. Becoming a shareholder in the Micro Enterprise in April last year, the EBRD earlier this year became an
equity holder in local Yugoslav bank, Eksimbank. In November, the EBRD provided a short-term working capital loan to Tigar, a local manufacturer of tyres. In
addition, the EBRD channelled a large part of its investment, helping to upgrade transport, power and municipal infrastructure.
Mr Descamps said that the EBRD would continue to place infrastructure high on its list of priorities, but that the private sector would account for an
increasing portion of the Bank's business. "We want to show investors that here are good quality, well managed companies in Yugoslavia," he said. That will
involve selecting well managed, privately owned or recently privatised companies that have clear financial accounts and credible business plans. "Our aim is
to develop good sound investment in Yugoslavia," Mr Descamps added.
For any further information contact: Ben Atkins, Tel: +44 207 338 7236 or E-mail: email@example.com
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