For current reports go to EASY FINDER



Key Economic Data 
  2002 2001 2000 Ranking(2002)
Millions of US $ 15,555 10,900 8,100 75
GNI per capita
 US $ 1,400 930 122
Ranking is given out of 208 nations - (data from the World Bank)


Area ( 



New Dinar

Vojislav Kostunica

Private sector 
% of GDP 


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: 077 - (01/10/03)

Two massively important events have occurred is Serbia recently, one affecting its security, the assassination of its prime minister in March, the other the appointment of a new central bank chief, affecting its reform course. 
The fact that both may turn out to be turning-points, and the latter even more important, would refute the view of the dead man, Zoran Djindjic, who would have regarded neither as decisive. He certainly had a premonition of his death, knowing his firm espousal of reform had made him deadly enemies, so that he went around with a large bodyguard. But this was his very undoing. Almost certainly one of them was a traitor who alerted the assassins to Djindjic's next movements by walkie-talkie. The reasons for that we will come to later. 
One of Djindjic's last political judgments was that if he were assassinated it would make no difference; "reform will go on all the same." This is by no means certain. The appointment of the new central bank governor may change everything here. It was a political appointment, removing the chief drive behind reform after Djindjic himself. It was made by his successor, Zoran Zivkovic, an effective enforcer of the law as he has swiftly shown subsequently in apprehending the likely culprits, but not a trained economist. Indeed appropriately enough previously the minister of security.

New bank governor
The Serbian Central Bank's a new governor is Kori Udovicki, a former IMF economist, who was also minister of energy and mining. Her appointment by the government has caused a serious rumpus at the bank, eight of its senior officials resigning at the breach of the bank's independence, as they see the matter.
Her predecessor, Mladjan Dinkic, was a hard-line monetarist who did much to curb inflation. The top bankers fear that policy will now be relaxed.
Ms Udovicki totally denies this. She is widely respected for her brains and expertise, but she is a political appointee.
Mr Dinkic has hit back hard at the government for his removal and Zivkovic has weakened his hand as regards reform. So fear the international community, which has backed him fully up until now.
The new governor may allay their apprehensions by continuing her predecessor's policies as firmly as he initiated them, after years of profligacy under the old regime. Time will tell.
The first signs are not good that the removal of the two main reformers in a matter of months is irrelevant.

Stalled reforms
In the latter half of this year, Serbia's reformists have turned on each other, spending more energy on mutual allegations of corruption than on economic issues. Over the previous two years, the clear reformist course was backed by Western aid, leading to a better standard of living, more spending and to an overall annual gross domestic product growth of five per cent
The Serbian government has defended the sale of state-controlled companies as a step toward better productivity and transparency. But critics - including the opposition and most labour unions - insist that the country, along with the country's poor, will face serious trouble when the inflow of money from the large privatisation stops.
Despite good privatisation figures, local economists have warned that with the exception of major deals guaranteeing profits - such as DIN, DIV and Beopetrol - underlying problems threatening stability were keeping foreign investors at bay.
"Investments are dropping in real terms," independent economist, Stojan Stamenkovic said, specifying economic stagnation as the major factor that may hamper the servicing of the country's already huge foreign debt.
Belgrade economist, Jurij Bajec agreed, saying Serbia was facing dangerous stagnation amid apparent loss of its reformist course. . But lately "spending continues unchecked while economic activity declines," Bajec said. "The reluctance of foreign capital to commit, except in some privatisations where the gain is certain, as in the tobacco and fuel industries, is a logical consequence."

Death of Djindjic
The death on March 12th of Djindjic then may turn out to be decisive for the economy. It is certainly doing so for political and social stability, paradoxically greatly increasing it, as the miscreants are either apprehended or are on the run.
Rarely can the outcome of an assassination had a more dramatic consequence - quite the reverse of its instigators' expectations. There has been a huge backlash against the perpetrators of the deed. In the framework of a wave of arrests without precedent in Serbia, Zoran Zivkovic, as we have seen, the new premier and former security chief, announced on March 25th an order for the arrest of the presumed organizer of the murder, Milorad "Legija" Lukovic, head of the Red Berets; the special operations unit (JSO) closed down at the same time. 
Lukovic is believed to have masterminded the assassination with the leaders of an organized crime syndicate known as the Zemun Clan. Despite the arrest warrant he is still at large. The actual assassin was captured, Zvezdan Jovanovic, also a member of JSO. But that is less important than getting the 'Moriarty' of the affair, Sherlock Holmes's main adversary.
It is not unreasonable to suppose that the deed was an in-house affair. It needed knowledge of Djindjic's exact movements on the day in question. There was one such event in history that changed everything, also emanating out of Serb assertion, namely the assassination of Archduke Ferdinand and his wife on July 28th 1914. There the deed was expected by those who knew about the Black Hand, a Serb terrorist group with allies in the security services, and yet unexpected by the world at large; it gave a new meaning to the twentieth century that nobody expected. 
This is a more localized affair, but with repercussions right across the Balkans for all that. There is something equivalent to The Black Hand still around in Serbia. The new premier is determined to root it out. He looks as if he is succeeding, which is good news all round. The Serbs may be finally entering the modern Western world, with its strong condemnation of terrorism, especially when rogue elements in the state apparatus itself are involved. 

Parliamentary commission
The Serbian parliament, which is dominated by the Democratic Party of the deceased premier, has set up a commission of enquiry. Its head, Bosko Ristic, has said of more than a dozen dismissed judges and the president of the Supreme Court, no less, also forced out, that: "many of the criminals are still at liberty because of the behaviour of these persons."
Moreover the chief of military intelligence, Aca Tomic, a figure close to Vojislav Kostunica, the former president of Yugoslavia, has been relieved of his functions. With big names falling the Augean Stables are being truly cleansed as well as old scores being settled.

« Top


Business ties with Russia successfully restored

Serbian Minister of Finance, Bozidar Djelic, who was visiting Moscow as member of the Serbia-Montenegro (SCG) delegation, told Tanjug News Agency on 29th August that business ties between Serbia and Russia are successfully being restored and fostered, and that a new stage in bilateral economic cooperation could start by the end of this year. 
Russia's Gazprom and Serbian oil industry NIS have reached agreement on continuing gas supplies, Djelic underlined. Serbia has proposed several models for resolving the problem of NIS debt to Gazprom, and it is now up to the Russian side to select the most favourable one, he said. 
Russian Foreign Minister Igor Ivanov will visit Belgrade in mid-September to pursue the talks, and a multilateral agreement between Russia and the states created after the break-up of the former Yugoslav federation (SFRY) is expected to be signed at about the same time in Moscow, Djelic said. 
Djelic expects that negotiations between the Serbian government and the SCG Council of Ministers and Russia will be successfully concluded by the end of the year. 
The debt issue between Serbia and SCG and Russia would in that case be resolved, paving the way toward resolving the NIS debt to Gazprom, and giving the green light to large projects such as repairs and modernization of the Djerdap hydro-electric power plant on the Danube that Russian companies could realize together with the Serbian ones, Djelic said.

Montenegrin goods being exported to Bosnia under favourable tariffs

Montenegrin goods are from 5th September being exported to Bosnia-Herzegovina under favourable customs tariffs as part of a free trade agreement which was signed between the governments of the Federal Republic of Yugoslavia [FRY] and Bosnia-Herzegovina in 2002, [Montenegrin] Minister for Economic Relations Slavica Milacic has said, Radi Montenegro has reported.
The Montenegrin government made the decision to implement the accord, and the Bosnia-Herzegovina Council of Ministers is expected to implement it soon, or rather to lift a ban on an earlier decision to exclude Montenegrin goods from the agreement.
The agreement envisages the complete liberalization of goods between Serbia-Montenegro and Bosnia-Herzegovina from 1st January 2004.

« Top


Croatian Koncar company signs deal with Serbian company to modernize locomotives

Croatia's Koncar Electric Locomotives has signed a 25m-Euro agreement with Serbia's Public Railway Transport Company Belgrade to modernize 38 electric locomotives, the Croatian company reported on 9th September, HINA News Agency has reported. 
The deal was won at an international tender and will be financed by a loan which the Belgrade company has received from the European Bank for Reconstruction and Development.
Koncar is to complete the job within 30 months in cooperation with two Serbian companies, MIN from Nis and Minel from Belgrade.

« Top





Our analysts and editorial staff have many years experience in analysing and reporting events in these nations. This knowledge is available in the form of geopolitical and/or economic country reports on any individual or grouping of countries. Such reports may be bespoke to the specification of clients or by access to one of our existing specialised reports. 
For further information email:

Considering an investment or a trip to any newnation? First order our Investment Pack which will give you by e-mail the last three monthly newnation reports and the complete worldaudit democracy check for the low price of US$12. The print-out would be a good companion to take with you. Having read it, you might even decide not to go!
To order please click here:
Investment background report

« Top

« Back


Published by 
International Industrial Information Ltd.
PO Box 12 Monmouth 
United Kingdom NP25 3UW 
Fax: UK +44 (0)1600 890774