BASIC INFORMATI0N

Full Country Name: Federal Republic of Yugoslavia
Area: 102,173 sq km (39,449 sq mi); Montenegro – 13,812 sq km (5,331 sq mi); Serbia – 88,538 sq km (34,175 sq mi)
Population: 10.5m
Capital City: Belgrade (FRY and Serbia), Podgorica (Montenegro)
People: Serb (63%), Albanian (14%), Montenegrin (6%), Hungarian, Croatian, Roma, Other
Languages: Serbian, Albanian, Hungarian
Religions: Serbian Orthodox (dominant), Islam, and Roman Catholicism
Currency: Yugoslav Dinar (German Deutschmark in Montenegro)
Major Political Parties:
Serbia: Democratic Opposition of Serbia (DOS) Government Coalition - 18 parties in total; Democratic Party of Serbia (DSS); Democratic Party (DS); Serbian Civic Alliance (GSS); Social Democratic Union (SDU); New Democracy (ND)
Others: Socialist People’s Party (SPS)
Montenegro: Socialist Peoples Party (SNP); Democratic Party of Socialists (DPS); Social Democratic Party (SDP); People’s Party (NS)
Government: Multiparty Republics within a Federation
Head of State: President Vojislav Kostunica
Prime Minister/Premier: Dragisa Pesic (Federal Prime Minister), Dr Zoran Djindjic (Serbia), President Djukanovic (Montenegro)
Foreign Minister: Dr Goran Svilanovic
Economic Information
Membership of International Groupings/Organisations: United Nations (UN), Organization for Security and Cooperation in Europe (OSCE), European Bank for Reconstruction and Development (EBRD), Stability Pact, International Monetary Fund (IMF), World Bank.

GEOGRAPHY

The Federal Republic of Yugoslavia (FRY) consists of the Republic of Serbia and Montenegro. Since the end of the Kosovo conflict in June 1999, Kosovo (until then administered as a province of Serbia) has been under the administrative control of the United Nations Mission in Kosovo (UNMiK). The FRY borders Croatia, Bosnia and Herzegovina, Albania, Macedonia, Romania, Bulgaria, and Hungary. The climate in Serbia is generally moderate but there is a considerable difference between the Montenegrin coast and the Central European continental climate characterised by long, dry summers and cold winters in the inland regions.

POLITICS

Recent Political Developments

Slobodan Milosevic was overthrown after trying to falsify the results of elections held on 24 September 2000. A massive protest demonstration on 5 October 2000 led to the occupation of the Federal Parliament and other government buildings. The opposition coalition DOS, who had united around Dr Vojislav Kostunica as their Presidential candidate, secured legal recognition for his victory and his inauguration as Federal President. A Federal Government was formed on 4 November 2000, as a coalition of DOS and the Socialist People’s Party (SNP the formerly Milosevic-allied party from Montenegro).

Serbian Parliamentary elections completed the democratic transformation when DOS won 178 seats out of the 250 in the Serbian Parliament. The new Serbian Government was finalised in January 2001, with Zoran Djindjic as Prime Minister.

DOS Coalition: New Federal Government

The transfer of Slobodan Milosevic to the International Criminal Tribunal for the former Yugoslavia (ICTY) on 28 June 2001 led to the resignation of the (SNP) Federal Prime Minister, Zizic and the collapse of the Federal Government. On 24 July 2001, a new Federal Government was elected. Dragisa Pesic, the former Finance Minister, is the new Federal Prime Minister. The new Cabinet has ten members, five from Serbia and five from Montenegro with an equal share of ministerial portfolios.

In August 2001, the murder of a former State Security official Momir Gavrilovic led to a series of public recriminations between followers of Kostunica and Djindjic who exchanged allegations of both Federal and Serbian government officials having connections to organised crime. Officials in Kostunica’s party, the DSS, resigned their positions in the Serbian government. The “Gavrilovic Affair” has driven a wedge into the DOS coalition. This could affect the nature and the speed of political and economic reforms, the FRY/Serbian governments’ handling of the Kosovo issue, further co-operation with the ICTY in The Hague and the FRY’s relationship with the Republika Srpska.

Status of Montenegro

Montenegro is, with Serbia, one of the two constituent Republics of the Federal Republic of Yugoslavia (FRY) formed in 1992. Today Montenegro is trying to re-negotiate its relationship with Serbia. In theory the two Republics share competences within the Federation, but in practice Montenegro has assumed self-governance in many areas.

In July 2000, in the run-up to the elections, Milosevic forced through amendments to the FRY constitution that undermined Montenegro’s equal status. The Montenegrin Government did not participate in the Federal elections (in which Milosevic was defeated). While the Montenegrin government welcomed Vojislav Kostunica’s victory and Milosevic’s defeat, they did not recognise the new President of the FRY as a legitimate representative of Montenegrin interests.

Montenegrin Parliamentary elections took place on 22 April with two opposing coalitions forming: the pro-independence ‘Victory is Montenegro’s’, led by President Djukanovic’s DPS with the SDP; and the pro-Federation 'Together for Yugoslavia', led by Predrag Bulatovic’s SNP, with the support of the NS. The former grouping called for two independent and sovereign states, with separate UN seats, sharing joint functions in areas of interest such as defence and foreign policy. The latter sought to preserve a common Federation of two republics.

The election resulted in a narrow victory for the pro-independence coalition. Djukanovic continued at the helm of a minority Government with the support of the hardline pro-independence Montenegrin Liberal Party, who won a crucial 6 seats and agreed to support until a referendum on independence take place.

President Djukanovic has called for the formation of a broad concentration government of all parties to give any future referendum greater legitimacy. If this occurs, then a referendum may take place in spring 2002. The DOS government in Belgrade has also published its proposals setting out the basis of a new relationship between Montenegro and Serbia. This envisages shared competences: defence, monetary policy, customs etc.

The UK and the EU are encouraging Belgrade and Podgorica to negotiate seriously on their future. Any solution must be agreed between the two governments and must be democratically legitimate. We and EU partners continue to believe that a revised relationship between the two Republics within a Federal structure would best preserve regional stability.

BBC Monitoring Timeline

ECONOMY

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.

INTERNATIONAL RELATIONS

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

Sanctions
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).

ICTY
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.

EU
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.

International Organisations
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.

Diplomatic Representation