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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: 076 - (28/08/03)

Death of Djindjic
The death on March 12th of Zoran Djindjic, premier of the country until then, continues to dominate political life in Serbia. Rarely can the outcome of an assassination have had a more dramatic consequence that is 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, the new premier, Zoran Zivkovic, the former security chief, announced on March 25th the arrest of the presumed murderer, Milorad Lukovic, head of the Red Berets, the special operations unit closed down at the same time.
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 Austrian 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. It 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.

Serb troops for Iraq?
Zivkovic has a bold plan to send 1,000 Serb troops to Iraq or Afghanistan under US auspices. He discussed the idea with the Secretary of State, Colin Powell, and Condeleeza Rice in Washington in early August. The Administration is lukewarm about the plan, which is bound to startle the US military, considering that they were at war with Serbia four years ago.
More time will have to pass before the Serbs will become close allies of the US. The Djindjic case is after all still open.

New bank governor
The Serbian Central Bank has a new governor, 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.

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IMF welcomes new Serbian central bank law, government's economic policy

The International Monetary Fund (IMF) has assessed as positive the new Law on the National Bank of Serbia [NBS] and praised the Serbian government's economic policy in an official statement issued on the occasion of its approval of US$140m to the country, the Serbian Ministry of Finance and Economy said in a statement on 1st August, Tanjug News Agency has reported. 
Deputy Managing Director, Anne Kruger, said that the central bank's credibility had been reinforced by the new law, which secured its independence, strengthened control of its work and promoted internal control. This key international financial institution has thus confirmed the correctness of solutions incorporated in the Law on the National Bank of Serbia and reinforced the government's determination to persist with responsible and comprehensive economic reforms, the statement said.

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Turkish investors study investment opportunities in Kosovo

Free trade agreement, liberalization of visas and formation of a Kosova [Kosovo]-Turkish business council are the main starting points of future cooperation between Kosova and Turkey, which will be negotiated during September in Turkey, KosovaLive web site has reported. 
This was the outcome of the meeting between Kosova Finance and Economy Minister, Ali Sadriu, and the chairman of the Turkish Chamber of Commerce, Bulent Alamut. 
According to the guests from Turkey, the aim of the visit to Kosova was to look into possibilities for investment now that the privatisation process had begun. 
Bulent Alamut said after the meeting with the Economy and Finance Ministry officials that the relations between Turkey and Kosova were not at the desired level and added that he hoped that things would improve in this respect. 
"We want to pave the way for Turkish investors who are interested in the Kosova markets and other areas. We hope to sign a free trade agreement between the two countries very soon," he said. 
According to him, Turkish businessmen are interested in the privatisation process, ways to contribute to the stabilization of the Kosova economy, and strengthening of relations with Kosova businessmen. 
Muharrem Shahini, spokesman of the Finance and Economy Ministry, said that high customs tariffs was the main factor that had been hindering the Turkish investments. 
The ministry has announced that it would soon change its fiscal policy. One of the first measures will be to bring down customs tariffs from 10 per cent to 2 per cent. 
According to Shahini, the Turkish Chamber of Commerce has invited the Kosova Business Alliance [AKB] to visit Turkey in September, which will serve to improve relations between the businessmen of the two countries. AKB director, Agim Shahini, said that a group of Turkish construction businessmen had approached the AKB with a project for building a complex of 18-floor apartment blocks, but with certain conditions. 
"These businessmen have asked that the government or municipal authorities allocate free sites for building these apartments blocks and exemption of customs and building duties so that the apartments could be sold very cheaply - about 285 euros per square metre," he said. 
The Turkish Chamber of Commerce plans to visit all relevant institutions that can help them in the realization of their goals. 
According to the latest data, the largest exporters to Kosova are the European Union [EU] and Switzerland with 103 million euros, Macedonia with 66 million euros, Turkey with 37 million euros, Albania with 23 million euros, Bulgaria with 18 million euros, and Croatia and Bosnia-Herzegovina with 12 million euros. Imports from other countries were valued at 71 million euros.

Prime Minister Zivkovic sees strong US interest in investing in Serbia

Serbian Premier Zoran Zivkovic said on 7th August that following normalization of trade relations with the US, goods made in Serbia would be cheaper by 20 to 30 per cent on the US market. This percentage is equivalent to the current customs duties on US imports from Serbia, Zivkovic told a press conference, Tanjug News Agency has reported. 
Normalization of trade will also pave the way for the export of furniture, spirits and hunting and sports weapons from Serbia, Zivkovic said. A great interest exists in the US for investing in Serbia, Zivkovic said.

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European Commission approves 35m Euro grant for reforms

The European Commission [EC] has approved an instalment of 35m Euros of non-returnable aid to Serbia-Montenegro, aimed at supporting economic reforms and stability of the country, FoNet News Agency has reported.
According to a statement by the EC delegation in Belgrade, the grant was approved on 1st August and it would be available during the following week.
This is the second part of the EU's package of microeconomic aid to Serbia-Montenegro worth 65m Euros, of which the remaining 30m euros worth of loans will be approved by the end of August.

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Serbian minister happy with bids for purchase of Nis, Vranje tobacco industries

Serbian Minister of Economy and Privatisation, Aleksandar Vlahovic, said on 4th August that the bids presented by Philip Morris and British American Tobacco [BAT] for the purchase of 70 per cent of the capital of the Tobacco Industry of Nis (DIN) and Tobacco Industry of Vranje (DIV) of 518m and 87m Euros respectively were good offers, Tanjug Mews Agency has reported. 
This will help revitalize DIN and DIV, and provide revenue for the budget, the restitution fund, the pension fund and local self-government authorities, Vlahovic told a press conference. 
The tender commission said that second and third best offers for DIN were made by the Tvornica Duhana Rovinj and BAT, and that it has accepted the offer of BAT as the sole bidder for DIV, Vlahovic said. 
After negotiations are completed in one month, the Serbian Privatisation Agency will sign agreements on the sale of DIN and DIV with Philip Morris and BAT, Vlahovic said, adding that the tenders were the result of coordinated work of the Agency, his ministry, labour unions and the Serbian government.

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