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yugoslavia

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  SERBIA & MONTENEGRO

REPUBLICAN REFERENCE

Area (sq.km)
102,136

Population
10,677,290

Capital
Belgrade

Currency
New Dinar

President
Vojislav Kostunica

Private sector 
% of GDP

40% 

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Background:
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: 065 - (26/09/02)

The Serbs are reconstructing their war-devastated country with zeal. They are getting a lot of foreign assistance. The financial institutions and foreign firms are showing renewed interest. With Milosevic in the Hague and a new regime in Belgrade everything is different from the bad old days.

Montenegrin complications
One big change is that the country is now the Union of Serbia and Montenegro. The Montenegrins are probably going to go independent, indeed de facto already are. They are developing oil fields in the Adriatic with British and Slovene help. 
Of course the Serbs would dearly love to keep the 660,000 Montenegrins on side, giving them an outlet to the sea and the prospect of oil. They are likely to have both with an independent Montenegro anyway; but at a price!

Slovenia comes to the rescue
The shattering of Yugoslavia in the 1990s broke up long established ties between its constituent republics. The successor states can now pick up these ties again and are doing so; none more actively than Slovenia, their most successful cohort. Slovenia and Serbia are co-signatories of a wide-ranging free trade agreement covering 6,000 products, eliminating customs dues, special taxes and all quantitative restrictions between the two sides.
There is also a big surge in Slovenian investment in Serbia from banking to aluminium to textiles. Slovenian firms know the ropes of course and there are no language problems. The labour costs are much lower in Serbia and it makes sense to relocate in the republic for many.

Austria and Norway into telecoms
Austrian and Norwegian firms are entering the currently profitable telecoms sector. A massive boom in sales of mobiles is well under way, and normal telephone communications are rising rapidly too.
Mobilkom of Austria and Telenor of Norway are showing great interest. Serbia is a must for expansion in several other areas; soft drinks and tourism are due for massive growth, Serbia having a great deal to offer foreign visitors from historic architecture to marvellous countryside, especially for the mountaineer.

Government in harness
Premier Djindjis's government is settling in well after a promising start by cooperating fully with the West over Milosevic and war criminals. President Kostunica opposed this approach, but has been overruled.
There has been an indication recently that Djindjic might stand for the presidency next time, still several years away, with the idea of leaving a staunch ally in the premiership. He believes it would be better if there was a close relationship between president and premier working harmoniously for the public good, instead of the continual friction between him and Kostunica.
He perhaps got the idea from taking a look at Slovenia where Premier Drnovosek is going to stand for the presidency in November. Being a president is a lot less arduous a job and has great prestige, even if less power. But the move would have sound logic behind it if it created 'an axis of good' between the premiership and the presidency.

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AUTOMOBILES

Serbian company begins exporting trucks to Algeria

The first four trucks of the total 10 which will be exported shortly, were delivered to Algeria on 4th September, the director general of the Priboj-based FAP, Mirko Stojovic, said FoNet News Agency has reported.
He told Novi Pazar-based Sanapress that the export business had a value of over 400,000 euros.
Stojovic announced that a delegation from the Algerian company which should finalise the contract on the transfer of technology for assembling Priboj's trucks in Algeria with FAP would be arriving in Priboj shortly.

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ENERGY

Serbian premier discusses gas delivery problems with former Russian premier

Serbian Premier Zoran Djindjic on 2nd September received Russian Chamber of Commerce and Industry President and former Russian Prime Minister, Yevgeniy Primakov, Tanjug News Agency has reported. 
Djindjic and Primakov reviewed the present political situation in the region and exchanged views on transition and decentralization in the two states. Primakov pointed out the need for stepping up business contacts, which came to a standstill after several years of successful cooperation. 
A greater presence of Serbian companies on the Russian market and vice versa, greater number of Russian enterprises in the Serbian privatisation process would restore successful economic cooperation, the Serbian government's press department said in a statement. 
The need was stressed to engage in further cooperation in gas trade and Moscow pledged to resolve problems created in the purchase and sales of gas to the Serbians. 

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FOREIGN ECONOMIC RELATIONS

Yugoslavia, Russia discuss ways of increasing Yugoslav exports to Russia


Yugoslav Deputy Premier and Foreign Trade Minister, Miroljub Labus, said in Belgrade on 1st September that it is necessary to modify the free-trade agreement with Russia so that Yugoslav manufacturers of footwear, textiles and furniture can again increase exports of these goods to Russia, TANJUG News Agency has reported.
Labus received Yevgeniy Primakov, president of the Russian Federation Chamber of Trade and Industry and former prime minister. They conferred about concrete measures for promoting economic-trade cooperation between the two countries and possibilities for increasing Yugoslav exports to Russia. 
In the part of the talks on bilateral debts, the sides agreed progress has been achieved in resolving this problem, the Federal Secretariat of Information said. 
Labus informed Primakov that Yugoslav representatives recently made a rational proposal for resolving this outstanding issue, and that agreement was reached that experts of the two sides will continue negotiations. 

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FOREIGN LOANS & DEBT

Norway writes off US$17m of Yugoslavia's debt

Norwegian Foreign Minister, Jan Petersen, and Yugoslav Deputy Prime Minister, Miroljub Labus, signed in Oslo on 3rd September, an agreement under which Norway would write off part of Yugoslavia's foreign debt amounting to US$17m, on the basis of the November 2001 agreement with the Paris Club, Tanjug News Agency reported. 
After the signing at the Norwegian Foreign Ministry, Labus told reporters that Norway had written off US$17m and rescheduled the remaining US$8m to 25 years under very favourable circumstances. 
Labus said that the signing of the agreement had paved the way for direct investments from Norway through the Investment Guarantee Fund and a special state fund for direct investments.

World Bank signs US$20m loan for renewing power supply in Montenegro

Acting Yugoslav Finance Minister, Veroljub Dugalic, and World Bank's country manager for Yugoslavia, Rory O'Sullivan, on 4th September signed two agreements on loans for structural adjustment and stabilization of electricity supply in Montenegro, with a value of US$20m, Tanjug News Agency has reported. 
Under the agreements, on the basis of which Yugoslavia would take World Bank loans on behalf of Montenegro, about US$15m will be received for structural reforms and another US$5m for support to the Montenegrin electric power industry, Dugalic said.

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PRIVATISATION

Serbian premier announces tax incentives to boost privatisation

Serbian Premier Zoran Djindjic has said that he is not satisfied with the privatisation rate, since only a half of what had been envisaged had been fulfilled, and announced a package of tax concessions which would make Serbia the most favourable country for foreign investment in Europe, Tanjug News Agency has reported. 
"They criticize the government for selling off agriculture, but up to now just one per cent of enterprises have become privatised. 
"The private property issue is the question of management and responsibility, and the company itself can be sold for 'zero euros'. I deem tenders as the right way in which big companies can become privatised," Djindjic told the 9th September issue of the Belgrade 'Danas' daily.

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TRANSPORT

Serbia earmarks funds for reconstruction of major transit route

A total of 2bn euros will be needed for the reconstruction of roads along Corridor 10, Serbian Minister of Transport and Telecommunications, Marija Raseta Vukosavljevic, said on 5th September. 
Addressing an international conference on Corridor 10, she said the republican government had earmarked 11bn dinars from the budget for reconstructing road infrastructure last year and it expected to spend about 13bn this year. 
Yugoslavia accounts for 800 kilometres of the total length of this European corridor - 2,360 kilometres. The European Investment Bank has approved a credit worth 162m Euros for the reconstruction of roads in Serbia, which includes the reconstruction of 500 kilometres of Corridor 10.

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