Basic Economic Facts
GDP: US$25.4 bn
GDP per head: US$2,300
Annual Growth: 3.5%
Inflation: IMF prediction is 30-35% for 2001 as a whole
Major Industries: Machine building, metallurgy, mining, consumer goods, electronics, petroleum products and chemicals
Major Trading Partners: Bosnia and Herzegovina, Italy, Macedonia, Germany and Russia
Further information about Yugoslavia's economy can be found at Trade Partners UK
The FRY owes around $12bn to external creditors (140% of GDP). The UK and the international community have recognised the need to alleviate this to help the FRY contribute to economic growth as well as political stability in the region. The UK and Germany are the FRY’s largest bilateral creditors. Discussions are currently underway on the modalities of alleviating this debt.
FRY’s Relations with its Neighbours
Bilateral relations between the Belgrade government and its neighbours are generally constructive. Since October 2000 there have been a series of political meetings between Foreign Ministers and other officials to discuss common issues such as border demarcation, military co-operation, law enforcement, refugees, commercial links and minority rights.
FRY’s Relations with the International Community
The EU General Affairs Council (GAC) approved on 9 October 2000 a ‘Declaration on the FRY’ which provided for a radical review of EU sanctions. The oil embargo was lifted immediately, and almost all financial sanctions were lifted on 10 November 2000. The UN arms embargo was lifted on 10 September 2001 and the EU embargo (on arms exports and the supply of equipment, which might be used for internal repression or terrorism) was lifted at the GAC on 8 October 2001. The only remaining sanctions are a visa ban and assets freeze targeting Milosevic, his family and some ICTY indictees (a total of 13 people).
Co-operation with the ICTY is an international legal obligation for all member states of the United Nations. The UK welcomes the FRY’s agreement to re-open the ICTY office in Belgrade, the transfer of one Bosnian Serb indictee and the decision by the Serbian government to transfer Slobodan Milosevic to the ICTY on 28 June 2001. We look forward to the transfer of all remaining indictees to the ICTY.
On 14 October 2000 President Kostunica joined European leaders at the Biarritz Summit where a new 200m Euro package of EU assistance for the FRY was announced. Disbursement of this began in mid-November, with the provision of emergency energy supplies (‘Energy for Democracy’). Priority areas include electricity/heating, medicines, food and local infrastructure projects (especially for schools) and the water supply network. A further 240m Euro will be disbursed in 2001 through the European Agency for Reconstruction. A Donors’ Conference for the FRY, organised jointly by the European Commission and the World Bank in co-operation with the FRY authorities took place in Brussels on 29 June 2001. International donors pledged US$1.28bn worth of assistance for the FRY until the end of 2001.
The FRY has made rapid progress in joining international organisations. Since October 2000 the FRY has become a member of the Stability Pact, the United Nations, the OSCE, the IMF and the EBRD and the World Bank. Applications for the Council of Europe and the WTO have also been made.
FRY’S RELATIONS WITH THE UK
The UK and the FRY restored full diplomatic relations on 17 November 2000. Since then there have been a series of bilateral meetings including the Prime Minister’s meting with President Kostunica and FRY Foreign Minister Svilanovic in Zagreb on 24 November 2000; Mr Svilanovic’s visit to London on 28 February 2001, and Robin Cook’s visit as Foreign Secretary to Belgrade and Podgorica on 4 April 2001.
British Embassy Belgrade Embassy of the Federal Republic of Yugoslavia, London
UK Development Assistance
The FCO will continue to encourage the democratic process in Serbia by providing funding support for projects focussing on democratic development, parliamentary strengthening, local government and municipalities, civil society, legal and police reform and the media.
Since October 2000 the FCO has funded various projects to support the Serbian media and press, OSCE legal assistance training, English training for Serbian government officials and a forum organised by the British Association for Central and Eastern Europe.
The Department for International Development (DfID) has identified six key areas (macro-economic advice, aid co-ordination, civil service restructuring, privatisation strategy, telecommunications and banking reform) for UK assistance programmes, and has also earmarked £13.4m for urgent technical assistance.
Trade and Investment with the UK
The UK was the 14th largest supplier of goods to Yugoslavia in 1999 with a 2.3% of the market. It was the 8th largest recipient of Yugoslav exports with a 3.3% share of the Yugoslav export market. For more detailed information about UK/FRY commercial relations consult the Yugoslavia country brief on the Trade Partners UK website.
The British Council has been operating in Yugoslavia since 1940 and now has offices in Belgrade and Podgorica. Since the 1999 Kosovo conflict, British Council activities have now returned to normal. It runs public libraries and information centres in Belgrade and Podgorica and offers access to exams, distance learning and other UK education services. It has a varied programme of cultural events, aimed primarily at young people. Development of English language learning is an important priority and there are plans to increase involvement in this sector.
Inward In January 2001, Goran Karadzole (Deputy Federal Minister for External Trade) and Zarko Korac (Serbian Deputy Prime Minister with responsibility for social and cultural affairs) both visited the UK for discussions with their British counterparts. In February 2001, Goran Svilanovic the FRY Foreign Minister, visited London. In March 2001, FRY Interior Minister Zoran Zivkovic attended talks at the Home Office and Yugoslav National Bank Governor Mladin Dinkic and Serbian Finance Minister Bozidar Djelic met UK officials. On 18 July 2001, the Serbian Minister of Interior Dusan Mihajlovic also visited London for talks with Home Office and Metropolitan Police officials. On 11 September 2001, the Serbian Deputy Prime Minister and Co-ordinator on Kosovo, Dr Nebojsa Covic, visited the UK and met the Foreign Secretary Jack Straw and the Secretary of State for Defence Geoff Hoon. On 17-18 September 2001 Federal Minister for Defence Slobodan Krapovic met the Secretary of State for Defence Geoff Hoon.
Outward In November 2000, Richard Caborn, Department of Trade and Industry (DTI) Minister visited the FRY (the DTI Yugoslavia Taskforce is funding consultancy and infrastructure projects worth over £1m). In April 2001 the former Foreign Secretary, Robin Cook, visited Belgrade and Podgorica. On 18–19 July 2001, Dr Denis MacShane, FCO Minister with responsibility for the Balkans, visited Belgrade and held talks with President Kostunica’s policy advisers.
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USEFUL LINKSThe Western Balkans Trade Partners UK: Country Profile on Yugoslavia Department for International Development British Council Yugoslavia International Criminal Tribunal for the former Yugoslavia EU GAC Declaration on the FRY, 9.10.00 European Agency for Reconstruction Donors' Conference for the FRY, 29.6.01
Last updated: 8 October 2001