Republican Reference - Area (sq.km) 77,474 - Population 7,310,555 - Capital Belgrade - Currency New Dinar - President Boris Tadic

serbia

SERBIA


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Key Economic Data 
 
  2012 2009 2008 Ranking(2012)
GDP
Millions of US $ 37,489 42,594 50,061 85
         
GNI per capita
 US $ 5,280 5,990 5,590 116
Ranking is given out of 213 nations - (data from the World Bank)

  

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 paramilitary bands that fought each other as well as the invaders. 
Marshal TITO took full control upon German expulsion in 1945. Although Communist, his new government and its successors (he died in 1980) managed to remain independent of both 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, Macedonia, and Bosnia and Herzegovina were recognized as independent states in 1992. Serbia and Montenegro declared a new "Federal Republic of Yugoslavia" (FRY) in April 1992 and, under President Slobodan MILOSEVIC, Serbia initiated various military intervention efforts to unite ethnic Serbs in neighbouring republics into a "Greater Serbia." These efforts were ultimately unsuccessful and led to Yugoslavia being ousted from the UN in 1992. 
In 1999, massive expulsions by FRY forces and Serb paramilitaries of ethnic Albanians living in Kosovo provoked an international response, including the NATO bombing of Serbia and the stationing of NATO, Russian, and other peacekeepers in Kosovo.
Federal elections in the fall of 2000, brought about the ouster of MILOSEVIC and installed Vojislav KOSTUNICA as president. The arrest of MILOSEVIC in 2001 allowed for his subsequent transfer to the International Criminal Tribunal for the Former Yugoslavia in The Hague to be tried for crimes against humanity. He died in captivity, but before the trial had ended and a verdict could be brought in. In 2001, the country's suspension from the UN was lifted, and it was once more accepted into UN organizations under the name of Yugoslavia. 
Kosovo has been governed by the UN Interim Administration Mission in Kosovo (UNMIK) since June 1999, under the authority of UN Security Council Resolution 1244. 
In 2002, the Serbian and Montenegrin components of Yugoslavia began negotiations to forge a looser relationship. These talks became a reality in February 2003 when lawmakers restructured the country into a loose federation of two republics called Serbia and Montenegro. 
An agreement was also reached to permit a referendum in each republic in three years on full independence. Montenegro took up this right. A referendum was held on May 21, 2006 on whether Montenegro should go independent. The 'Yes' camp won by the narrowest of margins, just over the requisite 55%. Serbia became independent as a consequence. 

Update No: 185 - (26/11/13)

Summary: In April of this year, negotiators finally managed to achieve a breakthrough in Serbia-Kosovo relations. The deal instated an agreement that would see Belgrade abolish the parallel systems that have, up until now, been in place for Kosovan Serbs in the country's north in order to secure greater autonomy for them. This was a major step forward, since Belgrade has been famously resolute in refusing to recognise the sovereignty of the Kosovan state and has fiercely tried to protect the ethnic Serbs who live in the country's north. The genesis of this project was pressure for Serbia to reach normalised relations with Kosovo if the country wishes to pursue an EU bid. Regretfully, recent events at local elections suggest that the process of normalisation, even if there may be political will, seems to have been derailed somewhat. On the economic front, Serbia is, like many of its neighbours, struggling with skyrocketing debt.

Although ‘normalisation’ has been approved of, Kosovo remains the major point of contention in Serbia's political sphere along with Belgrade's claims for the territorial integrity of Serbia. A reminder of how contentious this area is came in late October, when Turkish Prime Minister Recep Tayyip Erdogan told a crowd in Pristina that "Turkey is Kosovo and Kosovo is Turkey," doubtless an attempt to draw on solidarity with the Albanian Muslim community. The response was an entirely justified Serbian government statement two days later which said that Erdogan's comments represented "a severe violation of international law and interference in Serbia's internal affairs," which "harm relations between Belgrade and Ankara and disturb efforts deployed by Serbia to normalize the situation in the region, notably in Kosovo."

As part of an EU-brokered deal to normalise relations with Kosovo, it was agreed earlier this year that local elections for counsellors and mayors were to be held in Kosovo. However, the attempts to hold them were derailed in 3 out of 4 of the Northern, Serb-dominated districts, when masked men, ethnic Serbs who oppose Kosovo's independence, disrupted proceedings. They apparently destroyed ballot boxes and harassed election workers. Prior to this observers had noted that there were attempts to deter people from voting in the elections by a variety of intimidation tactics. Roberto Gualtieri, head of the EU's observer mission called the events "an attack on fundamental human rights."

Overall however, optimists were quick to point out that in other parts of the country, the municipal elections were generally peacefully and properly conducted. The Serbian Prime Minster Ivica Dacic re-asserted, however, that voters should go to the re-run in order to legitimise these elections. Dacic emphasised that violence was not a viable response for those who opposed the elections, stating, “Serbia cannot help you today with guns and tanks." Kosovo's prime minister, Hashim Thaçi also called upon Kosovan Serbs to vote in the elections. His tone was not entirely conciliatory, however, stressing that should there be further disruptions to the voting, he would hold Serbia responsible. Disturbingly, some even suspect that Belgrade may have funded those who disrupted the elections, although what funding Serbian nationalists would need to go on the rampage is probably irrelevant. But there is intense feeling on both sides given such a long and unhappy history that they have shared.

Normalisation is proving a difficult feat to manage. Reminders of the recent conflict periodically inflame tensions. In early November, an EU prosecutor indicted 15 former Kosovo Liberation Army (KLA) fighters on charges of torturing and killing civilians during the 1998-99 conflict with Serbia. The perpetrators include Kosovo's ambassador to Albania, Sulejman Selimi, and leading members of Thaçi's governing PDK party, including Sami Lushtaku. The accusation has not effected the latter's popularity - he still received 88% of the vote in the mayoral elections from his prison cell. Thaci has pledged that those who have been convicted of crimes in the past will be expelled from the party in an attempt to create a political tabula rasa for future relations.

Serbia has recently made a deal with its traditional ally Russia. Relations with Russia remain strong, and have recently deepened with the agreement between Serbian Defense Minister Nebojša Rodić and his Russian counterpart Sergei Shoigu on cooperation in the defence sector. Notably during discussions between the pair, Shoigu asserted that Russia will continue to support the Serbian government's policy and territorial integrity of the Republic of Serbia (in other words its stance on Kosovo). The 15-year agreement includes the sharing of strategic information, military exchanges, and taking part in military exercises.

The South Stream pipeline is another source of co-operation with Russia. Construction of the Serbian part of the pipeline will begin on November 24. Unfortunately, the deputy director of the Energy Community Secretariat has just stated that the agreement is not in accordance with EU energy rules. Gas relations with Russia and the EU are notoriously difficult and it seems that Serbia may be the next transit state to enter into the quagmire.

Whilst Serbia clearly does want to proceed with the EU accession process, there are a number of factors which problematize its aspirations. Especially worrying have been the recent events surrounding Serbia's annual ‘gay pride’ march. The last time a ‘gay pride’ march was held in Serbia was in 2010 when right wing nationalists took their opposition to the parade onto the streets in a violent fashion. This year the Serbian government was under pressure from EU ambassadors, who view the treatment of gay rights protests as a barometer for the general position on tolerance and diversity, to ensure that the march could go ahead. Nonetheless, the result of an hour-long meeting between government leaders and security chiefs was a statement from Prime Minister Dacic confirming that the march would not be held. "After a long discussion on whether the march would pass without severe consequences, the security assessments indicated severe threats to public safety," Dacic, commented, adding, "This is not a capitulation to the hooligans." Observers noticed however that the websites of nationalists groups such as Obraz were quick to assert that they had 'won' and viewed the decision as confirmation that the government had heeded their demands that it be cancelled.

Gay Pride organizer and activist Goran Miletic commented "Everyone's a loser here, except the hooligans who for the third consecutive year have proved they can tell that state what it can and cannot do."

In another part of the political sphere, the government has a major domestic concern: the economy. Serbia's economy has been flailing for some time, not unlike many neighbouring states. With unemployment at nearly 25%, and a contraction of 25% in the economy last year, there is plenty to be worried about. At the start of October the government announced austerity measures. These will take the form of a range of "solidarity taxes," ranging from 10% to 25% on salaries in the public sector that are above 60,000 dinars ($712) a month. In addition, sales tax on food will be increased and the retirement age for women increased. Privatisation of 179 state-owned businesses is also part of the plan. The government currently has foreign debt of €19 billion euros and a budget deficit of 6.5% of annual GDP. Whilst these measures will undoubtedly prove unpopular, they are, the government says, unavoidable given that the country is reportedly close to bankruptcy. Lazar Krstic, the 29-year-old finance minister, a former McKinsey consultant, and the youngest Finance Minister in the country's history, has asserted that the measures are designed to reduce the budget deficit, at 7.5% last year, to between 2% and 3% of GDP by 2016 or 2017. Loans will also shore up the economy for the moment, as Belgrade hopes to negotiate a new financial support package from the IMF and may receive a €1 billion loan before the end of this year from the United Arab Emirates. The government is needless to say, bracing itself for popular unrest.

In another ‘controversial’ move, in September Aleksandar Vucic announced that former International Monetary Fund chief Dominique Strauss-Kahn would become an economic adviser to the Serbian state. Strauss-Kahn, it may be remembered was ousted from his IMF position as the result of being implicated in a number of sex scandals and is currently facing charges of aggravated pimping in France, which has little to do with his undoubted finance expertise and which of course is still unproven .
A senior political source in Belgrade defended the decision by saying, “There is no point in pretending that the economy is not in a mess and we need someone with the economic authority and knowledge who can be of assistance and Strauss-Khan fulfills those conditions. We are, of course, aware that there will be some controversy over this because of what has happened in his private life, but we believe that does not have any bearing on the professional role we are seeking from him. Let’s not forget the man used to be the director of IMF.” The one time economics professor will apparently offer his first three months work for free. That seems like a bargain for Serbia who very sensibly can distinguish between a totally irrelevant ‘popular media’ hunt, and their national need for expert advice which S-K is undoubtedly able to offer.

Next year will see a variety of new challenges for Serbia. Whilst Deputy Prime Minister Aleksandar Vucic's Progressive party is apparently enjoying high polarity, the effects of austerity may hit it hard. In the meantime EU prospects will continue to hang in the balance and the situation in Kosovo must be closely observed.

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