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SERBIA & MONTENEGRO


 

 

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Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 19,176 15,555 10,900 70
         
GNI per capita
 US $ 1,910 1,400 930 112
Ranking is given out of 208 nations - (data from the World Bank)

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REPUBLICAN REFERENCE

Area (sq.km) 
102,350

Population 
10,825,900

Capital 
Belgrade 

Currency 
New Dinar

President 
Boris Tadic

Private sector 
% of GDP 
40% 



Update No: 105 - (30/01/06)

Serbian negotiating team adopts platform for Kosovo talks
There is no more important question for a state than where your frontiers end. This is the key issue of the Serbian state today.
Serbian negotiators led by Prime Minister Vojislav Kostunica are calling for the establishment of Serb municipalities in Kosovo as well as constitutional and legal protections for the Serb community there.
Belgrade's negotiating team for the Kosovo status talks has adopted a platform and appointed a delegation for the upcoming meeting on decentralisation, to be held in Vienna. The January 5th ession was the second for the team, which was chaired by Serbian Prime Minister Vojislav Kostunica. 
The platform calls for the formation of Serb municipalities in Northern Mitrovica -- that is, northern Kosovo, central Kosovo, and southeastern Kosovo around Gnjilane and Metohija. Together, these municipalities would amount to a Serb entity. 
"The existing and newly formed municipalities with a Serb majority would not be a compact territory, but would be functionally linked and thereby provide for an institutional framework for the normal life and certain survival of the Serb community in the province," the platform reads. 
The document, parts of which were presented to the public Monday (9th January), also calls for the most important Orthodox Christian places of worship in Kosovo to fall within the Serb entity. 
According to the negotiating team, three kinds of constitutional guarantees and legal protections should be provided for the Serb community. Firstly, its position must be "defined in a manner that will not give any constitutional or legal grounds to the Albanian majority to treat Serbs as a minority or to impose on the Serbs any solution that is against their vital interests." 
Secondly, Serbs must be granted all individual rights and freedoms that the EU countries, the state union, and Serbia grant to their citizens. Thirdly, Serbs must be given constitutional guarantees and institutional mechanisms that will ensure their normal life and survival in the province. The easiest way to ensure these guarantees is through decentralisation, the document reads. 
The Serb negotiators outlined a set of guiding principles for the platform: sovereignty and territorial integrity, essential autonomy for Kosovo within Serbia, the creation of a Serb entity, and the protection of Orthodox holy sites, cultural heritage and property. 
The Kosovo Albanian side has also finalised its decentralisation proposal. The document contains basic principles for the reform of local self-rule and "guarantees the territorial integrity of Kosovo", Kosovo Local Self-Rule Minister Ljutfi Haziri said recently. 
According to Haziri, it is a serious proposal "which the Kosovo delegation will offer the ethnic communities." He urged the Serb community to accept the plan, explaining that it is founded on constitutional solutions that refer to the immediate future of Kosovo with its status resolved. 

Search is on for fugitive Mladic -Serbia Minister 
The Croatians have stolen a march on the Serbs. They have allegedly acquiesced in the capture and trial in The Hague of their untoward general, Ante Gotovina, responsible for abominable war crimes. They are on track for EU membership as a result.
The search is on for General Ratko Mladic and other top war crimes fugitives, the Serbian defence minister said on January 11th, accepting a part of the military's blame that the suspects are still at large. "The search to locate the suspects is on as we speak," General Zoran Stankovic said, adding he couldn't provide details of the ongoing operation.
Serbia is under intense international pressure to find and extradite Mladic and Bosnian Serb political leader Radovan Karadzic, both sought for more than a decade by the U.N. war crimes tribunal in The Hague, Netherlands.
The court indicted Mladic and Karadzic on genocide charges in connection with the 1995 massacre of about 8,000 Bosnian Muslim men and boys in Srebrenica - the worst carnage in Europe since World War II - and for a three-year armed siege of Bosnia's capital, Sarajevo, during the 1992-1995 war.
Mladic is thought to be hiding in Serbia under the protection of hard-liners in the Serbian military, while Karadzic is believed to be moving between Bosnia, Serbia and his native Montenegro.
Stankovic said the "military had in the past period some activities which were not in accordance with The Hague tribunal's" demands to hand over the fugitives. "We will certainly remove those obstacles," Stankovic said.
The hunt for Mladic intensified after police intercepted one of his cell phone conversations, a Serbian security official told The Associated Press.
The interception of Mladic's chat with his friend - which could lead the police to his hiding place - appears to be the most concrete progress so far in Serbia's hunt for war crimes fugitives.
Serbia's President Boris Tadic, however, said on National Television the information he has "does not lead me to conclude that we are finally close to solving the (Mladic) problem."

Will the EU suspend association talks as Serbia and Montenegro fail to arrest indicted war criminals? 
The European Union began negotiations with Serbia and Montenegro on a Stabilization and Association Agreement (SAA) only three months ago, but the talks already hang in the balance due to Belgrade's lack of cooperation with the International Criminal Tribunal for the former Yugoslavia (ICTY). 
The next round of talks is planned for the last week of February but may not happen at all if ICTY chief prosecutor Carla Del Ponte and EU representatives determine cooperation to be insufficient. 

A shrinking list
Relations between Belgrade and the ICTY improved throughout 2005 as scores of war-crime indictees surrendered following Serbian Prime Minister Vojislav Kostunica's calls for them to give up. But the ICTY wants Serbia to extradite four more men: Zdravko Tolimir, Stojan Zupljanin, the former leader of Croatia's Serbs Goran Hadzic, and the most prominent of them all, former Bosnian Serb military commander General Ratko Mladic. 
In addition, Bosnian Serb wartime leader Radovan Karadzic is seen as a common obligation of Bosnia and Serbia. The Belgrade authorities and the ICTY prosecution believe that another indictee, former Serbian police commander Vlastimir Djordjevic, is hiding in Russia.
The deputy director of the Serbian government's office for association with the EU, Srdjan Majstorovic, said on January 9th that the Belgrade authorities had been "clearly told" that SAA negotiations could be suspended because of the war crimes issue. 
"In the mandate for the talks with Serbia and Montenegro, the European Commission said that the negotiations could not be completed and the SAA signed without [Serbia's] full cooperation with the ICTY. However, the talks can also be frozen if Belgrade fails to cooperate fully with the tribunal. Chief prosecutor Carla Del Ponte will make the final assessment of the cooperation," Majstorovic said. 
He added that the EU officials involved in the talks mentioned no specific deadline for the resolution of the cooperation issue.
It became clear in recent months that Serbia and Montenegro were facing an uphill struggle to get the SAA talks going again in February 2006: during her last visit to Belgrade in December, Del Ponte expressed her disappointment over the failure to arrest Mladic, and she also criticized the authorities in Belgrade when reporting to the UN Security Council.
The head of the government office for association with the EU, Tanja Miscevic, stated in an earlier interview that once suspended, restarting the talks would be very difficult since all EU member states, not just the European Commission, had to agree on such a move. 
While EU officials have not given any formal deadline, Serbian Deputy Prime Minister Miroljub Labus, who heads the Serbian negotiating team, said at the end of the last round of talks in December that the next round would not take place unless full cooperation was forthcoming. Labus told Belgrade media on December 21st that cooperation was an absolute condition for talks to continue and that it was not happening yet.
The chief of the European negotiating team, Teresa Sobietski, said on the same day that the matter of cooperation was important, adding that she expected the Serbian government to take steps toward finishing the job as soon as possible so the talks could move on. She said that such issues from the past put a strain on the government, the EU, and foreign investors.

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BANKING

OTP buys Niska Banka 


OTP Bank Rt won the bidding to buy a majority stake in Niska Banka a.d. from the Serbian government as part of continuous expansion in the region. OTP will buy 89.39 per cent of Niska Banka, based in the south Serbian town of Nis, for an undisclosed price, the Hungarian bank said recently, New Europe reported.
The buyer expects to complete the transaction in February. Having spent over US$850 million in the past six years on new acquisitions in the Balkans to offset a slowdown in its domestic market, OTP now has holdings in Bulgaria, Croatia, Romania and Slovakia. Currently, it is bidding for another Serbian bank and a Ukrainian lender. "Serbia's economy and banking system are facing promising growth, in which the OTP Group wants to take part," Deputy CEO, Laszlo Wolf, emphasised.

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FOREIGN COOPERATION

Serbia and Croatia sign an agreement on customs


The government of the Republic of Serbia said that the customs administrations of Serbia and Croatia signed an agreement on cooperation, thus creating the legal framework for exchange of data that will enable mutual assistance in the prevention and investigation of offences of customs, foreign currency and foreign trade regulations, as well as provision of data for the purpose of curbing smuggling. The Serbian Customs Directorate stated that the agreement prescribes the way of providing and using information and documents, their use in possible court proceedings, participation of experts in these proceedings, as well as prevention of personal data that might appear in the exchanged data, New Europe reported.

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FOREIGN LOANS

World Bank gives US$55 million to Serbian budget
 

World Bank has given Serbian budget an interest-free credit worth US$55 million. Serbian Minister of Finance, Mladjan Dinkic, said that this loan is an aid to structural reforms implemented by the Serbian government during 2005 and because its GDP per capita has now exceeded 3,000 Euro. Speaking on the future cooperation with the IMF, Dinkic said that this institution has recommended a postponement of a new stand-by arrangement until the nature of relations between Serbia and Montenegro becomes clear. Until then, the IMF would monitor the implementation of the established economic policy in Serbia, New Europe reported.
The minister said except inflation all the objectives of the economic policy in 2005 have been realised, and at the end of 2005, the country has seen a 16.5 per cent increase in prices, which makes single-digit inflation the most important aim in the year to come. Dinkic explained that the mechanisms for preventing further increase in prices have been created by limiting money supply for salaries of the employed in the public sectors, increasing budgetary surplus and controlling prices of services of public companies under the authority of local governments. The average salary in Serbia in 2005 rose by 5.8 per cent against 2004 and now stands at 209 Euro. Dinkic stressed that apart from reducing the inflation rate, one of the main goals of economic policy in 2006 will be to reduce the deficit in the current account of its balance of payment. The introduction of the Value Added Tax (VAT) is the greatest success in 2005, Dinkic said. Participation of the public debt in GDP was reduced to 48.6 per cent, and of the current payment deficit to 9-9.8 per cent. Foreign direct investment this year came in at US$1.5 billion, and privatisation revenues totalled 42 billion dinars. Export was increased to US$4.5 billion, while the total import was worth US$11 billion. Therefore, the foreign trade deficit was reduced from US$7.2 billion in 2004 to US$6.5 billion this year.

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PRIVATISATION

390 million Euro from privatisation revenues in 2005 


Serbian Minister of Economy, Predrag Bubalo, said that in the second half of 2005, 501 companies were privatised and Serbia received 390 million Euro, while the agreed investments totalled 118.2 million Euro. Bubalo said that during 2006 the ministry will forward to the Serbian parliament four bills and four strategies from the field of economy. He added that the ministry currently draws up bills on cooperatives, entrepreneurs, balancing of regional development, and commodity exchange, New Europe reported.
Bubalo said the Serbian government will look at the list of bids that have been submitted for the selection of privatisation advisor for the Serbian oil industry NIS. He said that the lowest price was offered by the consortium Merrill Lynch and Raiffeisen Investment, which calls for a fixed fee of 900,000 Euro for consultancy services and a 1.2 per cent commission for successful work. Six constia of renowned international companies submitted bids in the tender, and the selection of the NIS advisor is a condition for the termination of the current financial arrangement with the International Monetary Fund (IMF) and a write-off of approximately 700 million Euro of Serbia's debt towards the Paris Club of Creditors, the economy minister said.

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TOURISM

Montenegro expects 242m Euro income from tourism


Montenegro Minister of Tourism, Pedrag Nenezic, has stated that he expects Montenegro to register incomes of 242m Euro in the tourism sector in 2006, which is 8-10 per cent more than last year, the Montenegrin MINA News Agency reported.
Nenezic also expects that incomes from foreign tourists would be 111m Euro, which is 23 per cent more than last year. He said that results of tourism sector, projected by the Government's Economic Policy for 2005 had been realised and in some segments even better than planed. Number of tourists has increased by 17 per cent, and the incomes registered in 2005 are 21.8 per cent higher than in 2004. Taking into account the contracts signed with foreign tour operators and agencies, the ministry of tourism expects 364,000 foreign tourists this year, which is 30 per cent more than in 2005.

Serbia to cooperate with Japan in tourism

The arrival of experts of the Japanese International Cooperation Agency (JICA) in Serbia marks the first step in the aid offered by the agency to Serbian tourism, said Serbian Assistant Minister of Trade, Tourism and Services, Radjvoje Pirgic, New Europe reported.
He expressed hope that its recommendations will attract Japanese investment in the future in addition to contributing to the development of tourism. Pigric expressed gratitude to Japan, which has been a leader in providing help to Serbia since 2001 and added that Serbia has a very positive attitude towards Japan and its people, which is a good basis for cooperation in tourism. Japanese Ambassador to Serbia-Montenegro, Tadashi Nagai, said that for the development of Serbian economy it is very important that Japanese companies to arrive in the country and invest here. This way they can contribute far more to the economy of Serbia that the donations given until now by the Japanese government. Yokoyama said that there is a huge possibility of attracting Japanese tourists, especially because in Japan nothing is known about Serbia. He added, however, that this is simultaneously the biggest obstacle and the reason for the lack of Japanese tourists in this country.

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