SERBIA

Republic of Serbia

CAPITAL: Belgrade

FLAG: The flag has three equal horizontal stripes of red (top), blue, and white, with the coat of arms set slightly to the hoist side.

ANTHEM: Boze Pravde (God of Justice)

MONETARY UNIT: The new dinar (jd) replaced the dinar on 24 January 1994. jd1 = $0.01499 (or $1 = jd66.68973; as of 2 June 2006).

WEIGHTS AND MEASURES: The metric system is in force.

HOLIDAYS: New Year's Day, 1 and 2 January; Orthodox Christmas, 7 January; Orthodox New Year, 13 January; Unification of Serbia, 28 March; FR Yugoslavia Day, 27 April; Labor Day, 1 May; Victory Day, 9 May; St. Vitus Day, 28 June; Serbian Uprising, 7 July.

TIME: 1 pm = noon GMT.

LOCATION, SIZE, AND EXTENT

Serbia is situated on the central part of the Balkan Peninsula. The total area was approximately 88,412 sq km (34,135 sq mi). The entire country is about the size of Maine. Serbia is bordered on the n by Hungary, on the ne by Romania, on the e by Bulgaria, on the s by Macedonia and Albania, on the sw by Montenegro, on the w by Bosnia and Herzegovina, and on the nw by Croatia; total land boundary length is 2,114.2 km (1,313.76 mi). There are territorial disputes with Bosnia and Herzegovina over Serbian-populated areas.

Serbia's capital is Belgrade, situated in north central Serbia.

TOPOGRAPHY

Rich fertile plains are found in the Serbian north, while in the east there are limestone ranges and basins. Nearly half of Serbia is mountainous, with the Dinaric Alps on the western border, the North Albanian Alps (Prokletija) and the Sar Mountains in the south, and the Balkan Mountains along the southeast border. The highest point is Daravica, in the North Albanian Alps, at 2,656 m (8,714 ft). Of its mountains, 15 reach heights of over 2,000 m (6,600 ft).

The Danube is the longest river. With a total length of 2,783 km (1,729 mi), about 588 km (365 mi) flows from west to east through the northern region of Serbia. The Tisa, Sava and Morava rivers are major tributaries of the Danube.

Located on the Eurasian Tectonic Plate, there are several fault lines running through the country which seismically active. Earth tremors are fairly common and destructive earthquakes have occurred.

CLIMATE

In the north, winters are cold and summers are hot and humid. In the central and southern regions, the climate is more continental. Annual precipitation in most of the country is 56 to 190 cm (22 to 75 in).

FLORA AND FAUNA

The forests of Serbia contain about 170 broadleaf species of trees and shrubs, along with about 35 coniferous species. The animals found in Serbia include types of hare, pheasant, deer, stag, wild boar, fox, chamois, mouflon, crane, duck, and goose. As of 2002, in the union of Serbia and Montenegro, there were at least 96 species of mammals, 238 species of birds, and over 4,000 species of plants throughout the country.

ENVIRONMENT

Industrial wastes are dumped into the Sava, which flows into the Danube. Air pollution is a problem around Belgrade and other industrial cities. Thermal energy plants utilize technology from the 1950s and mostly burn lignite; since combustion is inefficient, air pollution is a major problem in Kosovo. Destructive earthquakes are a natural hazard.

In 2001, the union of Serbia and Montenegro had 104 protected areas, covering about 3.3% of the nation's total land area. There are four Wetlands of International Importance in Serbia and three World Heritage Sites. According to a 2006 report issued by the International Union for Conservation of Nature and Natural Resources (IUCN), the number of threatened species in the union of Serbia and Montenegro included 10 types of mammals, 10 species of birds, 1 type of reptile, 1 species of amphibian, 20 species of fish, 19 species of invertebrates, and 1 species of plants. Threatened species include Atlantic sturgeon, slender-billed curlew, black vultures, asps, bald ibis, Danube salmon, several species of shark, the red wood ant, and beluga. At least one type of mollusk has become extinct.

POPULATION

The population of Serbia in 2002 was 7,498,001 (excluding Kosovo). In 2005, in the union of Serbia and Montenegro, approximately 14% of the population was over 65 years of age, with another 19% of the population under 15 years of age. There were 99 males for every 100 females in the country. According to the UN, the annual population rate of change for 2005–10 was expected to be 0.2%, due to a low fertility rate and high emigration rate. The government of Serbia and Montenegro viewed the population decline as a major concern. The population density of the union of Serbia and Montenegro was 105 per sq km (272 per sq mi).

The UN estimated that 52% of the population of the union of Serbia and Montenegro lived in urban areas in 2005, and that urban areas were growing at an annual rate of 0.47%. The capital city, Belgrade, had a population of 1,576,124 in 2002.

MIGRATION

The following information on migration pertains to the union of Serbia and Montenegro based on statistics gathered prior to Montenegro's independence in 2006. During the 1960s and 1970s, many Serbs fled from the Yugoslav Socialist Federal Republic, seeking political and economic freedom. The breakup of the Yugoslav SFR in the early 1990s and the ethnic hostilities that came in its aftermath resulted in enormous migrations to and from its various former republics. During the first half of 1999, the situation of refugees and internally displaced people deteriorated even further. As of 30 June 1999, the United Nations High Commissioner for Refugees (UNHCR) reported 508,000 refugees from Bosnia and Herzegovina and Croatia; 770,000 returnees to Kosovo, and 500,000 other refugees remained; 220,000 Serb, Montenegrin, and Roma internally displaced persons from Kosovo were living in other parts of the former Yugoslavia. The total number of migrants in 2000 was 626,000. By the end of 2004, these numbers were still rising; UNHCR reported a total of 627,476 persons of concern. There were 276,683 refugees, 180,117 Croatians and over 95,000 from Bosnia and Herzegovina. In addition, in that same year there were 248,154 internally displaced persons, 85,000 local residents at risk, 8,143 refugees who returned primarily to Croatia), and another 9,456 refugees returning to other places of origin during the year. In 2004, over 204,000 Serbs and Montenegrins were refugees in Germany, the United Kingdom, Sweden, Switzerland, Canada, France, and Australia. Also, in that same year over 29,000 Serbs and Montenegrins sought asylum in 18 countries primarily in Europe, in the United Kingdom and the United States.

In 2005 the net migration rate was an estimated -1.3 migrants per 1,000 population, down from 3.9 migrants per 1,000 in 1990. The government views the migration levels as too high. Worker remittances in 2003 amounted to $2.7 billion.

ETHNIC GROUPS

Ethnic Serbs constitute a majority in Serbia, at about 82.86% (excluding Kosovo). There are 37 different ethnicities in Serbia. Ethnic Albanians are concentrated in the Kosovo region of southwest Serbia. Ethnic Hungarians make up about 3.91% of the population and live in northern Serbia near the Hungarian border. The remaining population consists primarily of Slavic Muslims, Bulgarians, Slovaks, Macedonians, Croats, Roma, Montenegrins, Ruthenians, Romanians, Vlachs, Bunjevci, and Turks.

LANGUAGES

Serbian is the official language; more than 95% of the population speak it; Albanian accounts for the remaining 5%. The script in official use is Cyrillic, while the Latin script is also used. In the areas inhabited by ethnic minorities, the languages and scripts of the minorities are in official use, as provided by law.

RELIGIONS

The ancestors of the Serbs converted to Christianity in the 9th century and sided with Eastern Orthodoxy after the Great Schism of 1054 that split Christendom between the Eastern and Roman Churches. The Serbian Orthodox Church has been autonomous since 1219. Islam came to the area from the Ottoman Turks in the 15th century. Though there is no state religion, the Serbian Orthodox Church does receive some preferential treatment from the state.

About 78% of the total population of the union of Serbia and Montenegro prior to Montenegro's independence in 2006 were Serbian Orthodox. Muslims accounted for 5% of the total population, Roman Catholics for 4%, and Protestants 1%. Protestant denominations include Baptists, Adventists, Reformed Christians, Evangelical Christians, Evangelical Methodists, Jehovah's Witnesses, the Church of Christ, Mormons, and Pentecostals. There is a small Jewish community in the country. In Kosovo, Islam is the dominant religion, but Serbs in Kosovo are generally Serbian Orthodox.

TRANSPORTATION

In 2002, Serbia had 3,619 km (2,248.8 mi) of railroads, all of it standard gauge. Railways connect Belgrade with Budapest and Zagreb. The Belgrade-Bar line links Serbia to Montenegro and terminates at the Adriatic Sea. Rail service is provided by locomotives manufactured in the 1950s and 1960s.

Asphalt road length totaled 42,692 km (26,528.8 mi) in 2002 in Serbia, and there were 24,860 km (15,448 mi) of concrete roads. While the freeway between Belgrade and Zagreb is officially open, the lack of normal relations between Serbia and Croatia has kept commercial traffic on the highway to a minimum. In 2003, there were 1,650,000 passenger cars and 155,000 commercial vehicles in the union of Serbia and Montenegro.

The Danube, Sava, and Tisa are important commercial rivers, with ports at Belgrade, Novi Sad, Sabac, Pancevo, Smederevo, and Prahovo. Serbia's river fleet has a large transport capacity in Europe. As of 2004, the union of Serbia and Montenegro's navigable inland waterway system totaled 587 km (365 mi).

There were an estimated 43 airports in Serbia in 2004. As of 2005, half of them had paved runways, and there were also four heliports. Yugoslav Aero Transport (YAT) operates from Belgrade. YAT is considering upgrading its aging fleet for European destinations. Passengers carried on scheduled domestic and international flights in 2003 in the union of Serbia and Montenegro were about 1.298 million.

HISTORY

The Serbs, one of the large family of Slavic nations, first began settling in the Balkans around the 7th century in the areas now known as Bosnia, Kosovo, and Montenegro, straddling the line that since ad 395 had divided the Eastern and Western halves of the Roman Empire.

Tracing the origins of the Serbs (and Croats) has fueled many debates among historians, but there seems to be a consensus on their Sarmatian (Iranian) origin. Having assimilated into the Slavic tribes, the Serbs migrated with them west into central Europe (White Serbia) in the Saxony area and from there moved to the Balkans around ad 626 upon an invitation by the Byzantine emperor Heraclius to assist him in repelling the Avar and Persian attack on Constantinople. Having settled in the Balkan area the Serbs organized several principalities of their own, made up of a number of clans headed by leaders known as zupans. Both the Byzantine Empire and the Bulgars tried to conquer them, but the Serbs were too decentralized to be conquered.

Between the 9th and 12th centuries, several Serbian principalities evolved, among them Raška in the mountainous north of Montenegro and southern Serbia, and Zeta (south Montenegro along the Adriatic coast), whose ruler Mihajlo (Michael) was anointed king by Pope Gregory VII in 1077.

In the late 10th century the Bulgarian khan (leader) Samuilo extended his control over Bosnia, Raška, and Zeta, north to the Sava River, and south over Macedonia. Raška became the area from where the medieval Serbian empire developed. Stephen Nemanja, grand zupan of Raška, fought against the Byzantines in ad 1169, and added Zeta to his domain in 1186. He built several Serbian monasteries, including Hilandar on Mount Athos. His son, Rastko, became a monk (Sava) and the first Serbian archbishop of the new Serbian Autocephalous Church in 1219. The second son, Stephen, received his crown from Pope Innocent IV in 1202. Stephen developed political alliances that, following his death in 1227, allowed Serbia to resist the pressure from Bulgaria and, internally, keep control over subordinate zupans. Archbishop Sava (later Saint Sava) preferred the Byzantine Church and utilized the Orthodox religion in his nation-building effort. He began by establishing numerous Serbian-Orthodox monasteries around Serbia. He also succeeded in turning Zeta from Catholicism to Serbian Orthodoxy.

The medieval Serbian empire, under Stephen Dušan the Mighty (1331–55) extended from the Aegean Sea to the Danube (Belgrade), along the Adriatic and Ionian coasts from the Neretva River to the Gulf of Corinth and controlled, aside from the central Serbian lands, Macedonia, Thessaly, the Epirus, and Albania. The Serbian Church obtained its own patriarchate, with its center in Peć. Serbia became an exporting land with abundant crops and minerals. Dušan, who was crowned tsar of "the Serbs and Greeks" in 1346, gave Serbia its first code of laws based on a combination of Serbian customs and Byzantine law. His attempt to conquer the throne of Byzantium failed, however, when the Byzantines called on the advancing Ottoman Turks for help in 1345. Even though Dušan withstood the attacks from the Turks twice (in 1345 and 1349), the gates to Europe had been opened, and the Ottoman Turks had initiated their campaign to subjugate the Balkans.

Under Ottoman Rule

Dušan's heirs could not hold his empire together against the Turks and the Nemanja dynasty ended with the death of his son Stephen Uroš in 1371, the same year his brothers Vukašin and Ivan Ugleš were killed at the battle of Marica. The defeat of the Serbs at Kosovo Polje in 1389 in an epochal battle that took the lives of both Sultan Murad I and Serbian prince Lazar left Serbia open to further Turkish conquest. Following a series of wars, the Turks succeeded in overtaking Constantinople in 1453 and all of Serbia by 1459. For the next three-and-a-half centuries, Serbs and others had to learn how to survive under Ottoman rule.

The Turks did not make any distinctions based on ethnicity, but only on religion. Turkish Muslims were the dominant class while Christians and Jews were subordinated. While maintaining their religious and cultural autonomy, the non-Turks developed most of the nonmilitary administrative professions and carried on most of the economic activities, including internal trade and trade with other countries of the Christian world. There was no regular conscription of non-Turks into the sultan's armies, but non-Turks were taxed to pay for defense. Christian boys between the age of eight and twenty were forcibly taken from their families to be converted to Islam and trained as "Janissaries" or government administrators. Some these former Christians became administrators and even became grand viziers (advisers) to sultans.

Urban dwellers under Ottoman rule, involved in crafts, trade, and the professions, fared much better than the Christian peasantry, who were forced into serfdom. Heavy regular taxes were levied on the peasants, with corruption making the load so unbearable that the peasants rebelled.

Two distinct cultures lived side by side—Turkish Muslim in cities and towns as administrative centers and Christian Orthodox in the countryside of Serbia. The numerous Serbian monasteries built around the country since the Nemanja dynasty became the supportive network for Serbian survival. The Serbian Church was subjected after 1459 to the Greek patriarchate for about a century until a Serbian patriarchate emerged again. The Serbian patriarchate covered a large area from north of Ohrid to the Hungarian lands north of the Danube and west through Bosnia.

The Serbian Diaspora

Over the two centuries 1459–1659 many Serbs left their lands and settled north of the Sava and Danube Rivers where Hungary had promised their leader ("Vojvoda") an autonomous arrangement in exchange for military service against the Turks. The region is called "Vojvodina" by Serbs, even though the Hungarians had reneged on their promise of autonomy. Fleeing the Turkish conquest many Serbs and Croats settled in Venetian-occupied Dalmatia and continued fighting against the Turks from fortified areas. The wars between Austria and the Turks in the late 17th through the mid-18th centuries caused both mass migrations from Serbia and the hardening of Ottoman treatment of their Christian subjects. Following the defeat of the Turks in 1683 at the gates of Vienna by a coalition led by Poland's king Jan Sobieski, the Christian armies pursued the Turks all the way to Macedonia and had a good chance to drive the Turks off the European continent. Turk reprisals were violent and many Serbs fled, leaving Serbian lands, particularly Kosovo, unpopulated. Albanians, whom the Turks favored because they were mostly Muslims, moved in. Conversion to Islam increased considerably.

A second large-scale migration took place 50 years later, after the 1736–39 Austrian defeat by the Turks. All these movements of population resulted in the loss of the Kosovo area—the cradle of Serbian nationhood—to Albanians. As a result, the Serbs were unable to give up control over an area to which they feel a tremendously deep emotional attachment, even though they represent only about 10% of its population. This situation persisted and remained unresolved as of the early 21st century.

Serbian Revolts and Independence

Meanwhile, two areas of active Serbian national activity developed, one under the Turks in the northern Šumadija region and the other in Hungary. Šumadija, a forested region, became the refuge for many hajduks (Serbian "Robin Hoods") that raided Turkish establishments. These hajduks were legendary heroes among the Serbian people.

In 1805, the Serbs defeated the Turks and gained control of the Belgrade region. The sultan agreed to Serbian terms for political autonomy in September 1806. A partially elected government structure was established, and by 1811 the Serbian assembly confirmed Karadjordje as supreme leader with hereditary rights. The drive of Serbia for complete independence was thwarted, however, because Serbia was still under Ottoman rule. The Turks reoccupied Serbia by 1813, retaliating against the Serbs by pillaging, looting, enslaving women and children, while killing all males over age 15, and torturing any captured leader.

A second uprising by the Serbs occurred in 1815 and spread all over Šumadija. It was led by Miloš Obrenović, who had participated in the first revolt. Successful in repelling Turkish forces, Obrenović gained the support of the Russian tsar, and after some six months he negotiated an agreement giving Serbia a de facto autonomy in its internal administration. By 1830, Serbia had gained its full autonomy and Miloš was recognized as an hereditary prince of Serbia. Serbia was internationally accepted as a virtually independent state.

Miloš Obrenović was an authoritarian ruler who had to be forced to promulgate a constitution for Serbia, establishing a council of chiefs sharing power with him. In 1838 a council was appointed to pass laws and taxes, a council of ministers was created, and provisions were formulated for an eventual assembly. A succession of rulers were installed and deposed over the next decade until, in 1848, the Serbian assembly demanded the incorporation of Vojvodina into Serbia.

The 1858 assembly restored Miloš Obrenović to power, but he died in 1860 and was succeeded, again, by his son Mihajlo. Mihajlo built up the Serbian army to fight a war of liberation against the Turks as a first step towards the goal of a Greater Serbia. Mihajlo developed a highly centralized state organization, a functioning parliament, two political parties, a judicial system, and urban educational institutions prior to his murder in 1868. Mihajlo's cousin, Milan, succeeded him, and accomplished total independence from the Ottomans in 1882. Despite this success, during the same period Austria conquered Bosnia and Herzegovina, badly wanted by Serbia. Milan became dependent on Austria when that country saved Serbia from an invasion by Bulgaria.

Milan Obrenović abdicated in 1889 in favor of his son Alexander, who abolished the constitution, led a corrupt and scandalous life, and was murdered along with his wife, the premier, and other court members by a group of young officers in June 1903. The assembly then called on Peter, Alexander Karadjordjević's son, to take the crown. Under Peter Karadjordjević, a period of stable political and economic development ensued, interrupted by the 1908 Austrian annexation of Bosnia and Herzegovina, the 1912 and 1913 Balkan wars, and World War I (1913–18).

The Balkan Wars

Austria's annexation of Bosnia and Herzegovina was carried out in 1908 with the full backing of Germany. The Serbs saw Austria's move as a serious blow to their goal of a Greater Serbia with an outlet to the Adriatic Sea through Bosnia and Herzegovina. They turned to the only other possible access routes to the sea—Macedonia, with its port city of Salonika, and the northern coast of Albania. The Balkan countries (Serbia, Bulgaria, Montenegro, and Greece) formed the Balkan League and attacked Turkey in 1912, quickly defeated them and driving them to the gates of Constantinople. Austria and Italy opposed a Serbian outlet to the Adriatic in Albania, supporting instead an independent Albanian state and assisted its establishment in 1913. Serbia, deprived of access to the sea, requested it from Bulgaria. Bulgaria responded by attacking Serbia and Greece, hoping to obtain all of Macedonia. The resulting second Balkan War ended with the defeat of Bulgaria by Serbia, Montenegro, Greece, Romania, and Turkey, which gained back Adrianople and Thrace. Romania gained northern Dobrudja, Serbia kept central and northern Macedonia, and Greece was given control over the southern part with Salonika and Kavalla in addition to southern Epirus.

Austria viewed Serbian expansion with great alarm, and the "Greater Serbia" plans became a serious threat to the Austro-Hungarian empire. The Austro-Hungarians felt Serbia had to be restrained by whatever means, including war. They needed only a spark to ignite a conflagration against the Serbs.

World War I and Royal Yugoslavia

The spark was provided by the 28 June 1914 assassination in Sarajevo of Austria's Archduke Ferdinand and his wife. The archduke's visit to Sarajevo during large-scale maneuvers was viewed as a provocation by Bosnian Serbs, and they conspired to assassinate him with the assistance of the Serbian secret organization, Black Hand, which had also been behind the murder of Serbian king Miloš and his wife in 1903.

Austria presented an ultimatum to Serbia on 23 July with 10 requests, all of which were accepted by Serbia in a desperate effort to avoid a war. Austria, however, declared war on Serbia on 28 July 1914. They began bombing Belgrade the same day and sent armies across the Danube and Sava rivers to invade Serbia on 11 August 1914, taking the Serbs by surprise. The Serbian army twice repelled the Austrian forces in 1914, with tremendous losses in men and materials and civilian refugees. In addition, a typhus epidemic exacted some 150,000 victims among Serbian soldiers and civilians throughout Serbia, where there were almost no doctors or medical supplies. Still, an army of some 120,000 men joined the Allied forces holding the Salonika front in the fall of 1916. From there, after two years, they were successful in driving the Austrian forces out of Serbia in October 1918.

The Serbian elite's political goal for the main outcome of World War I was the same—a greater Serbia, with the liberation of their South Slavic brethren, particularly Serbs, from the Austro-Hungarian yoke. The dissolution of the Austro-Hungarian empire was not yet an operational concept. On 20 July 1916 the Corfu Declaration delineated the future joint state of Serbs, Croats, and Slovenes while treating both Macedonians and Montenegrins as Serbs.

But Austro-Hungary was losing the war and disintegrating from the inside. In May 1917, the "Yugoslav Club" in the Vienna parliament, consisting of deputies from Slovenia, Istria, and Dalmatia issued a declaration demanding the independence of all Slovenes, Croats, and Serbs united in one national state. (The phrase "under the scepter of the Hapsburgs" was added to their declaration for safety reasons, to avoid prosecution for treason.) Poles, Czechs, and Slovaks were also agitating for their independence, and they all had received support from their communities in the United States. On 20 October 1918, US President Woodrow Wilson declared his support for the independence of all the nation subjects of the Austro-Hungarian monarchy.

Under the leadership of Monsignor Anton Korošec, a council of Slovenes, Croats, and Serbs was formed in Zagreb, Croatia, to negotiate a union with the Kingdom of Serbia. The Serbian army entered Belgrade on 1 November 1918 and proceeded to take over the Vojvodina region. The armistice ending World War I was signed on 3 November 1918, and on 6–9 November a conference was held in Geneva by Serbia's prime minister Nikola Pašić, Monsignor Korošec, and the Yugoslav Committee.

The conference was empowered by the Zagreb Council to negotiate for it with the Allies. Prime Minister Pašić could not ignore the provisional government set up by elected representatives of the Slovenes, Croats, and Serbs. Thus, Pašić signed a declaration setting up a joint provisional government with the right of the National Council in Zagreb to administer its territories until a constitutional assembly could be elected to agree on the form of government for the new state. However, the Serbian government reneged on Pašić's commitment. The National Council delegation with Monsignor Korošec was detained abroad and, given the pressures from the ongoing Italian occupation of Slovene and Croat territories and the urgent need for international recognition, the National Council sent a delegation to Belgrade on 27 November 1918 to negotiate terms for unification with Serbia. But time was running out and the unification was proclaimed on 1 December 1918 without any details on the nature of the new state, since Bosnia and Herzegovina, Vojvodina, and Montenegro had already voted for their union with Serbia.

The Corfu declaration of 1917 had left open the issue of the unitarist or federalist structure of the new state by providing for a constitutional assembly to decide the issue on the basis of a "numerically qualified majority." Serbs interpreted this to mean a simple majority whereas others advocated a two-thirds majority. Following the 28 November 1920 elections, the simple majority prevailed, and a constitution (mirroring the 1903 constitution of Serbia) for a unitary state was approved on 28 June 1921 by a vote of 223 to 35, with 111 abstentions out of a total of 419 members. The 50 members of the Croatian Peasant Party refused to participate in the work of the assembly, advocating instead an independent Croatian Republic.

After 10 years of a contentious parliamentary system that ended in the murder of Croatian deputies and their leader Stjepan Radić, King Alexander abrogated the 1921 constitution, dissolved the parliament and political parties, took over power directly, renamed the country "Yugoslavia," and abolished the 33 administrative departments.

A new policy was initiated with the goal of creating a single "Yugoslav" nation out of the three "tribes" of Serbs, Croats, and Slovenes. In practice, this meant the Serbian king's hegemony over the rest of the nation. The reaction was intense, and King Alexander himself was assassinated in Marseille in 1934. Alexander's cousin, Prince Paul, assumed power and managed to reach an agreement in 1939 with the Croats. An autonomous Croatian banovina (territory headed by a leader called a ban ) headed by Ivan Subašić was established, including most Croatian lands outside of the Bosnia and Herzegovina area. Strong opposition developed among Serbs and there was no time for further negotiations, since Prince Paul's government was deposed on 27 March 1941 and Germany's Adolph Hitler and his allies (Italy, Hungary, Bulgaria) attacked Yugoslavia on 6 April 1941.

World War II

Yugoslavia was divided up and occupied by Germany and its allies. Serbia was put under the administration of General Milan Nedić who was allowed to organize his own military force for internal peacekeeping purposes. In Serbia the resistance was led by the "Cetniks," the "Yugoslav army in the homeland." The Cetniks recognized the authority of the Yugoslav government-in-exile, which, in fact, promoted Draža Mihajlović to general and appointed him its Minister of War. In the fall of 1941 Mihajlović and Josip Broz Tito, who led the Communist partisan movement, met to seek agreement on a common front against the Nazis. However, Mihajlović saw that Tito's goal was to conquer Yugoslavia for Communism. Mihajlović could not go along with this, nor could he accept Tito's request that he subordinate his command to Tito. A civil war between the two movements (under foreign occupation) followed. Meanwhile, large numbers of Serbs fled Croatia, either to join the partisans or to seek refuge in the Dalmatian areas under Italian control. British leader Winston Churchill, convinced by reports that Mihajlović was collaborating with the Germans while Marshal Tito's partisans were against the Germans, decided to recognize Tito as the legitimate Yugoslav resistance. Though aware of Tito's Communist allegiance to Stalin, Churchill threw his support to Tito.

When Soviet armies, accompanied by Tito, entered Yugoslavia from Romania and Bulgaria in the fall of 1944, military units and civilians that had opposed the partisans had no choice but to retreat to Austria or Italy. After the end of the war, the Communistled forces took control of Serbia and Yugoslavia and instituted a violent dictatorship that committed systematic crimes and human rights violations. Thousands upon thousands of their former opponents who were returned from Austria by British military authorities were tortured and massacred by partisan executioners. General Mihajlović was captured in Bosnia in March 1946 and publicly tried and executed on 17 July 1946.

Communist Yugoslavia

Such was the background for the formation of the second Yugoslavia as a Federative People's Republic of five nations (Slovenes, Croats, Serbs, Macedonians, Montenegrins) with their individual republics and Bosnia and Herzegovina as a buffer area with its mix of Serb, Muslim, and Croat populations. The problem of large Hungarian and Muslim Albanian populations in Serbia was solved by creating for them the autonomous region of Vojvodina (Hungarian minority) and Kosovo (Muslim Albanian majority) that assured their political and cultural development.

Tito attempted a balancing act to satisfy most of the nationality issues that were carried over, unresolved, from the first Yugoslavia. However, he failed to satisfy anyone. The numerically stronger Serbs had lost the Macedonian area they considered Southern Serbia; lost the opportunity to incorporate Montenegro into Serbia; lost direct control over the Hungarian minority in Vojvodina and Muslim Albanians of Kosovo (viewed as the cradle of the Serbian nation since the Middle Ages); were not able to incorporate into Serbia the large Serbian-populated areas of Bosnia; and had not obtained an autonomous region for the large minority Serbian population within the Croatian Republic. The official position of the Marxist Yugoslav regime was that national rivalries and conflicting interests would gradually diminish through their sublimation into a new Socialist order. Without capitalism, nationalism was supposed to wither away. Therefore, in the name of their unity and brotherhood motto, any nationalistic expression of concern was prohibited.

After a short post-war coalition government, the elections of 11 November 1945—boycotted by the non-Communist coalition parties—gave the Communist-led People's Front 90% of the vote. A Constituent Assembly met on 29 November, abolished the monarchy and established the Federative People's Republic of Yugoslavia. In January 1946, a new constitution was adopted based on the 1936 Soviet constitution.

Yugoslavia was expelled from the Soviet-dominated Cominform Group in 1948, and was forced to find its own road to Socialism, balancing its position between the North Atlantic Treaty Organization (NATO) alliance and the Soviet bloc. Tito quickly nationalized the economy through a policy of forced industrialization, supported by the collectivization of the agriculture.

The agricultural reform of 1945–46 included limited private ownership of a maximum of 35 hectares (85 acres) and a limited free market (after the initial forced delivery of quotas to the state at very low prices) but had to be abandoned because of resistance by the peasants. Collectivization was initiated in 1949 but had to be abandoned by 1958 because its inefficiency and low productivity could not support the concentrated effort of industrial development.

By the 1950s, Yugoslavia had initiated the development of its internal trademark: self-management of enterprises through workers councils and local decision-making. Following the failure of the first five-year plan (1947–51), the second five-year plan (1957–61) was completed in four years by relying on the well-established self-management system. Economic targets were set from the local to the republic level and then coordinated by a federal planning institute to meet an overall national economic strategy. This system supported a period of very rapid industrial growth in the 1950s. But public subsidies, cheap credit, and other artificial measures led to a serious crisis by 1961, leading to the introduction of market socialism in 1965. Laws abolished most price controls and halved import duties while withdrawing export subsidies. Councils were given more decision-making power on investing their earnings, and they also tended to vote for higher salaries to meet steep increases in the cost of living. Unemployment grew rapidly even though political factories were still subsidized. The government responded by relaxing restrictions on labor migration particularly to West Germany, encouraging up to 49% foreign investment in joint enterprises, and removing barriers to the exchange of ideas.

Yugoslavia began to develop a foreign policy independent of the Soviet Union. In October 1949, Yugoslavia was elected to one of the nonpermanent seats on the United Nations (UN) Security Council and openly condemned North Korea's aggression in South Korea. Tito intensified his commitment to the movement of nonaligned "third world" nations in cooperation with Jawaharlal Nehru of India, Gamal Abdel-Nasser of Egypt, and others.

With the September 1961 Belgrade summit conference of nonaligned nations, Tito became the recognized leader of the movement. The nonaligned position served Tito's Yugoslavia well by allowing Tito to draw on economic and political support from the Western powers while neutralizing any aggression from the Soviet bloc. Tito condemned all Soviet aggression. Just before his death on 4 May 1980, Tito condemned the Soviet invasion of Afghanistan. In the 1970s and 1980s, Yugoslavia maintained fairly good relations with its neighboring states by playing down or solving pending disputes and developing cooperative projects and increased trade.

As an integral part of the Yugoslav federation, Serbia naturally was impacted by Yugoslavia's internal and external political developments. The main problem facing communist Yugoslavia was the force of nationalism.

As nationalism was on the rise in Yugoslavia, particularly in Croatia and Slovenia, Serbs were facing a real dilemma with the rising of Albanian nationalism in Kosovo. After World War II, Tito had set up Kosovo as an autonomous province and the Albanians were able to develop their own political and cultural autonomy, including a university with instructors and textbooks from Albania. Immigration from Albania also increased and after Tito's death in 1980, Albanians became more assertive and began agitating for a republic of their own, since by then they comprised about 80% of Kosovo's population.

The reverberations of the Kosovo events were very serious throughout Yugoslavia since most non-Serbs viewed the repression of the Albanians as a possible precedent for the use of force elsewhere. Serbs were accused of using a double standard—one for themselves in the defense of Serbs in Kosovo by denying the Albanians' political autonomy and violating their human rights, and a different standard for themselves by demanding political autonomy and human rights for Serbs in Croatia.

In 1986, the Serbian Academy of Arts and Sciences issued a draft manifesto that called for the creation of a unified Serbia whereby all lands inhabited by Serbs would be united with Serbia while bringing Kosovo under control to be eventually repopulated by Serbs. To accomplish this goal, the 1974 constitution would need to be amended into an instrument for a recentralizing effort of both the government and the economy.

Recentralization vs. Confederation

In 1986, work was begun on amendments to the 1974 constitution that, when submitted in 1987, created a furor, particularly in Slovenia and Croatia. The main points of contention were the creation of a unified legal system, the establishment of central control over the means of transportation and communication, the centralization of the economy into a unified market, and the granting of more control to Serbia over its autonomous provinces of Kosovo and Vojvodina. These moves were all viewed as coming at the expense of the individual republics. Serbia also proposed replacing the bicameral federal Skupština (assembly) with a tricameral one where deputies would no longer be elected by their republican assemblies but through a "one person, one vote" nationwide system. Slovenia, Croatia, and Bosnia and Herzegovina strongly opposed the change, just as they opposed the additional Chamber of Associated Labor that would have increased the federal role in the economy.

Meanwhile, Slobodan Milošević had become the head of the Communist Party in Serbia in early 1987. An ardent advocate of the Serbs in Kosovo (and elsewhere) and a vocal proponent of the recentralizing constitutional amendments, he was able to take control of the leadership in Montenegro and Vojvodina and impose Serbian control over Kosovo.

The Slovenian Communist Party had taken the leadership in opposing the recentralizing initiatives and in advocating a confederate reorganization of Yugoslavia. Thus a political dueling took place between Slovenia and Serbia. Slobodan Milošević directed the organization of mass demonstrations by Serbs in Ljubljana, the capital city of Slovenia. Serbs began a boycott of Slovenian products, withdrew savings from Slovenian banks, and terminated economic cooperation and trade with Slovenia. The tensions with Serbia convinced the Slovenian leadership of the need to undertake protective measures and, in September 1989, draft amendments to the constitution of Slovenia were published that included the right to secession, the sole right of the Slovenian legislature to introduce martial law, and the right to control deployment of armed forces in Slovenia. The latter seemed particularly necessary since the Yugoslav Army was largely controlled by a Serbian and Montenegrin officer corps.

A last attempt at salvaging Yugoslavia was made when the League of Communists of Yugoslavia convened in January 1990 to review proposed reforms. The Slovenian delegation walked out on 23 January 1990 when their attempts to broaden the reforms was rebuffed.

Yugoslavia's Dissolution

In October 1990, Slovenia and Croatia published a joint proposal for a confederation of Yugoslavia as a last attempt at a negotiated solution, but to no avail. The Slovenian legislature also adopted a draft constitution proclaiming that "Slovenia will become an independent state.…" On 23 December, a plebiscite was held on Slovenia's secession from Yugoslavia if a confederate solution could not be negotiated within a six-month period. An overwhelming majority of 88.5% of voters approved the secession provision, and on 26 December 1990 a Declaration of Sovereignty was also adopted. All federal laws were declared void in Slovenia as of 20 February 1991 and, since no negotiated agreement was possible, Slovenia declared its independence on 25 June 1991.

On 27 June, the Yugoslav army tried to seize control of Slovenia under the pretext that it was its constitutional duty to assure the integrity of Socialist Yugoslavia. The Slovenian "territorial guards" surrounded Yugoslav army tank units, isolated them, and engaged in close combat along border checkpoints, and the Yugoslav units often surrendered. Over 3,200 Yugoslav army soldiers surrendered, and the Slovenes scored an international public relations coup by having the prisoners call their parents all over Yugoslavia to come to Slovenia and take their sons back home. The European Community negotiated a cease-fire after ten days, with a three-month moratorium of Slovenia's implementation of independence.

The collapse of Communist regimes in Eastern Europe in 1989 had a deep impact in Yugoslavia. Communist leaders there realized that, in order to stay in power, they needed to embrace the goals of nationalistic movements. In Serbia and Montenegro, the Communists won on 9 December 1990 on the basis of their strong Serbian nationalism. In its last years, Yugoslavia became a house divided, prompting the parliament of Slovenia to pass a resolution on 20 February 1991 proposing the division of Yugoslavia into two separate states.

Suppression of Kosovo and Revolt in Croatia

On 2 July 1990, Albanian members of the Yugoslav legislature declared Kosovo a separate territory within the Yugoslav federation. Three days later, on 5 July 1990, the Serbian parliament countered the Albanian move by suspending the autonomous government of Kosovo. The next month (August 1990), an open Serb insurrection against the Croatian government was initiated apparently with the support of Slobodan Milošević. On 17 March 1991, Milošević declared that Krajina, a region in Croatia, was a Serbian autonomous region. Clashes between the Serbian militia and Croatian police required the use of Yugoslav army units to keep the peace.

The Serbian determination to maintain a united Yugoslavia hardened, while the determination of the Slovenes and Croats to gain their independence grew stronger. This caused the closing of ranks by the Yugoslav army command in support of the Serbian leadership and Slobodan Milošević. Since there was no substantial Serbian population in Slovenia, its secession did not present a real problem to Milošević, but secession by Croatia and Bosnia and Herzegovina would necessitate border revisions to allow land with Serbian populations to be joined to Serbia.

The new constitution promulgated by Serbia in September 1990 provided for a unicameral legislature of 250 seats and the elimination of autonomy for Vojvodina and Kosovo. The first elections were held on 9 December 1990. More than 50 parties and 32 presidential candidates participated. Slobodan Milošević's Socialist Party of Serbia received two-thirds of the votes and 194 out of the 250 seats. The Movement for Renewal, headed by Vuk Drašković, received 19 seats while the Democratic Party won 7 seats. With the mandate from two-thirds of the electorate, Slobodan Milošević had complete control of Serbia. Having gained control of Serbia, Montenegro, Kosovo, and Vojvodina, Milošević controlled four of the eight votes in the collective presidency of Yugoslavia. With the collective presidency stalemated, the top army leadership became more independent of the normal civilian controls and was able to make its own political decisions on rendering support to the Serbs in Croatia and their armed rebellion.

On 3 June 1991 Bosnia and Herzegovina and Macedonia proposed the formation of a Community of Yugoslav Republics as a compromise. In this community, national defense, foreign policy, and a common market would be centrally administered while all other areas would fall to the jurisdiction of the member states (except for the armed forces and diplomatic representation). But it was already too late. Serbia disliked the confederate nature of the proposal and objected to leaving an opening for the establishment of separate armed forces. In addition, Milošević and the army had already committed to the support of the revolt of the Serbs in Croatia. At their meeting in Split on 12 June 1991, Milošević and Croatia's president Tudjman were past the stage of salvaging Yugoslavia when discussing how to divide Bosnia and Herzegovina into ethnic cantons.

The international community stood firmly in support of the preservation of Yugoslavia, of the economic reforms initiated by the Marković government, and of the peaceful solution to the centralist vs. confederate conflict. The United States and the European Community had indicated that they would not recognize the independence of Slovenia and Croatia if they unilaterally seceded from the Yugoslav Federation. With the then-Soviet Union also supporting Socialist Federal Yugoslavia, Milošević was assured of strong international backing. Slovenia and Croatia proceeded with their declarations of independence on 25 June 1991.

As a shrewd politician, Slobodan Milošević knew that a military attack on a member republic would deal a mortal blow to both the idea and the reality of a Yugoslavia in any form. Thus, following the Yugoslav army's attack on Slovenia on 27 June 1991, Miloševićand the Serbian leadership concentrated on the goal of uniting all Serbian lands to Serbia.

This position led to the direct use of the Yugoslav army and its superior capabilities in establishing the Serbian autonomous region of Krajina in Croatia. Increased fighting from July 1991 caused tremendous destruction of entire cities (Vukovar), and large scale damage to the medieval city of Dubrovnik. Croatia, which was poorly armed and caught by surprise, fought over a seven-month period. It suffered some 10,000 dead, 30,000 wounded, over 14,000 missing, and lost to the Krajina Serbs (and to the Yugoslav Army) about one-third of its territory, from Slavonia to the west and around the border with Bosnia and south to northern Dalmatia.

The intervention of the European Community (as earlier in the case of Slovenia) and the United Nations (UN) brought about a cease-fire on 3 January 1992. UN peacekeepers were stationed by March 1991 to separate the Serb-controlled areas from Croatian army and paramilitary forces. Milošević had very good reasons to press the Krajina Serbs and the Yugoslav army to accept the cease-fire because the Serb forces had already achieved control of about one-third of Croatian territory. He was confident that the UN forces would actually protect the Serb-occupied territories from the Croats.

Aggression in Bosnia and Herzegovina

In the meantime, a far worse situation was developing in Bosnia and Herzegovina. Following the deployment in Croatia of UN peacekeepers, the Yugoslav army moved into Bosnia and Herzegovina. Bosnia and Herzegovina held a referendum on independence in February 1992 in accordance with the European Community's conditions for eventual international recognition. In 1991, Bosnia and Herzegovina was about 44% Muslim, 31% Serbian, 17% Croatian, and 6% Yugoslav. Milošević's goal of unifying all Serbian lands would become impossible with an independent Bosnia and Herzegovina. Therefore, Bosnian Serbs abstained from voting, while 64% of eligible voters approved of an independent Bosnia and Herzegovina by an almost unanimous 99.7%.

At the same time, a provisional agreement had been reached at a conference in Lisbon in late February 1992 on dividing Bosnia and Herzegovina into three ethnic units, with related central power sharing. This agreement was rejected by the Muslim side, and the Bosnian Serbs, who had earlier organized their territory into the Serbian Republic of Bosnia and Herzegovina, prepared for hostilities with the support of the Yugoslav army and volunteers from Serbia and Montenegro.

International recognition of Bosnia and Herzegovina came on 6 April 1992, the anniversary of the 1941 Nazi invasion of Yugoslavia. The fear of another genocidal orgy against Serbs steeled the Serbs' determination to fight for their own survival. On 1 March 1992 a Serbian wedding party was attacked in the Muslim section of Sarajevo. This was the spark that ignited the fighting in Bosnia and Herzegovina. Serbs pounded Sarajevo for two years, reducing it to rubble. They took control of two-thirds of the territory, and carried out ferocious "ethnic cleansing" of Muslims in areas they intended to add to their own. Under international pressure, the Yugoslav army moved to Serbia, leaving to the Bosnian Serbs an abundance of weaponry and supplies.

Serbia and Montenegro formed their own Federal Republic of Yugoslavia on 27 April 1992. Despite the lack of international support, Milošević was elected president in December with 56% versus 34% for his opponent, Milan Panić. Inflation, unemployment, and savage corruption convinced Milošević to support the various plans for bringing about peace to Bosnia and Herzegovina. Even with the eventual settlement of hostilities in Bosnia and Herzegovina, Yugoslavia faced serious internal political problems in addition to its ruined economy: the tradition of independence in Montenegro, the Albanian majority in Kosovo, the Muslims of the Sandžak area, the Hungarians in Vojvodina, and independent Macedonia.

Kosovo

Kosovo was the center of the Serbian kingdom in the Middle Ages. Firmly attached to their Christian faith and opposed to conversion into Islam, large numbers of Serbs were forced to leave the Kosovo region because of Turkish persecutions. In their place Muslim Albanians were settled in increasing numbers so that liberation of Serbian Kosovo in 1912 actually liberated an almost entirely Albanian area. By the end of World War II, the Kosovo area was already about 70% Albanian. Tito granted Kosovo a special autonomous status, keeping Serbian hopes alive that eventually Serbs could repopulate Kosovo.

The Albanians clamored for their right to self-determination and a republic of their own (still within Yugoslavia). Albanians increased their pressure on the remaining Serbian population, which had dwindled to some 10% of the total by 1991. Cries of genocide were raised by Serbian media, and a series of bloody clashes justified Slobodan Milošević's administration to develop a new Serbian constitution of September 1990, drastically limiting Kosovo's autonomy. Albanians then organized their own political parties, the strongest of which became the Kosovo Democratic Alliance led by Ibrahim Rugova.

In a street meeting on 2 July 1990, the adjourned Kosovo Assembly adopted a declaration proclaiming Kosovo a separate republican entity. Serbs reacted by suspending the Kosovo Assembly on 5 July 1990. Most of the Albanian delegates had to flee the country to avoid imprisonment.

Serbia found itself in a very peculiar and dangerous situation. Through several past centuries the Serbian people expanded their reach by forced mass migrations and wars that have contributed to the depopulation of its own cradle area—Kosovo. The Serbian claims to these lands were being contested by neighboring states or other older populations. Serbia and Montenegro became isolated and were facing adversary states.

The Ongoing Conflict

The quest to create a "Greater Serbia"—that is, to unite the Serbs under a single Serbian government—resulted in continued fighting, particularly in Bosnia and Herzegovina. Over 8,000 Bosnian Muslim men and boys were summarily executed at Srebrenica in July 1995. On 8 September 1995, the leaders of Serbia, Croatia, and Bosnia and Herzegovina agreed on a new governmental structure for Bosnia and Herzegovina; the three parties soon afterwards refined their agreement to include a group presidency, a parliament, and a constitutional court in which Bosnia and Herzegovina and Croatia would share power with the Serbian republic.

In October 1995, Bosnia and Herzegovina accused the Bosnian Serbs of war crimes, leading to international suspicion that Serbian soldiers had massacred thousands of Muslims. Pressured by air strikes and diplomacy, Serb authorities joined leaders from Bosnia and Herzegovina and Croatia on 31 October 1995 in Dayton, Ohio, for a round of peace talks sponsored by the United States. On 21 November 1995, the three presidents of Bosnia and Herzegovina, Croatia, and Serbia finally agreed to terms that would end the fighting in Bosnia and Herzegovina after four years and an estimated 250,000 casualties. The agreement, formally signed in Paris in mid-December, called for 60,000 UN peacekeepers. The United States then ended its economic sanctions against Serbia.

Enforcement of the peace was difficult and problems arose over the exchange of prisoners. The United States ordered the leaders of the former warring parties to meet in Rome in February 1996 to recommit themselves to the Dayton agreement. Meanwhile, the International Criminal Tribunal for the former Yugoslavia at The Hague set out to find and prosecute Serbian soldiers accused of atrocities. In March 1996, the UN Tribunal filed its first charges. Among those cited were Serb generals Djordje Djukic and Ratko Mladic, and Bosnian Serb leader Radovan Karadzic. The latter two remained at large, spurring accusations by the United States and Europe that the Serbian government was protecting the international outlaws. In May 1996, Serbian President Milošević pledged that Karadzic would be removed from power. The presidents of Serbia, Croatia, and Bosnia and Herzegovina agreed to hold Bosnian elections in mid-September 1996.

While international suspicion swirled about him for his role in the Bosnian conflict, Serbian President Milošević was not very successful in delivering promised reforms for Serbia. In March 1996, a demonstration in Belgrade brought out 20,000 protestors against the Milošević regime, which opponents charged with starting the Bosnian conflict and devastating the Serbian economy.

Mass demonstrations against Milošević flared later in 1996 when he voided local elections won by the opposition. In December, the Milošević administration shut down Belgrade's independent radio station, which further alienated Serb citizens. Thousands of protesters met in the streets of Belgrade, hoping to topple the Milošević administration. In February 1997, Milošević relented and agreed to recognize the results of the previous local elections, in which opposition parties won majorities in 14 of Serbia's 19 largest cities. In July 1997, Milošević was appointed to the presidency of Yugoslavia by the federal parliament, allowing him to maintain control for another four years.

During early March of 1999, Albanian moderates led by Ibrahim Rugova (president of the self-proclaimed Republic of Kosovo) and representatives of the Yugoslav government held talks in Ramboullet, France; they came up with a plan to give Kosovo back its autonomy under a three-year NATO occupational guarantee. The Serbs refused to sign the accord, and Yugoslav forces grew to 40,000 in Kosovo, continuing hostilities. Beginning 24 March 1999 NATO forces bombed Serbia and Kosovo, in an attempt to check human rights violations and end fighting. NATO bombs and cruise missiles fell on military targets in Belgrade and Pristina. Fears ran high that other European nations would get involved in the conflict and take sides, resulting in a third world war. Russia disagreed with the NATO bombing runs, attempting its own peace process. After 11 weeks of bombing, casualties reported by the Yugoslav government amounted to 462 soldiers and 114 police officers, but NATO estimates claimed 5,000 had died including 2,000 civilians. On 3 June, the Yugoslav government accepted a peace plan that involved removing Yugoslav troops from Kosovo, and giving some autonomy to the province. NATO troops entered Kosovo on 12 June to enforce the peace plan. Some 170,000 Kosovar Serbs were thrown out of Kosovo by the ethnic Albanian majority during the conflict, adding to an already large refugee population.

On 29 June 1999, 10,000 Serbian protestors gathered in Čačak, in northern Serbia, to demand the resignation of Milošević. In August, more than 100,000 Serbians called for an end to his rule in a march on Belgrade. The UN began the unwieldy task of reconciliation in the region during the fall of 1999. Kosovo was to remain under the sovereignty of Yugoslavia as a Serbian province, but with some future determination of further self-government (scheduled to follow the fall of the Milošević regime). The next regular presidential elections were set for 2001. Sweeping constitutional changes in July 2000 changed the presidential term so that Milošević could run for two additional four-year terms. They also made the weight of the Montenegran vote in the Yugoslav parliament equal to its population, or only 7%. Milošević called presidential elections early, for 24 September 2000; most believed that they would be rigged in his favor, and were planning to boycott the elections.

Milošević banned international observers from the process of monitoring the 24 September elections. The opposition to Milošević was strong, and a crowd of 150,000 turned out for the final pre-election rally against him. The opposition claimed victory in the election, with Vojislav Kostunica proclaiming himself the "people's president." The Federal Election Commission called for a second vote, stating that neither candidate had won an outright majority; this plan was met with worldwide opposition.

On 27 September, 250,000 people took to the streets to demand that Milošević step down. On 28 September, the Electoral Commission announced that while the Democratic Opposition group had won the largest single block of seats, the Socialists and their coalition partners had won an absolute majority. By 2 October, protesters had called a general strike, were blocking Belgrade's main streets and had caused a halt to economic activity in other Yugoslav cities. On 4 October 2000, the Constitutional Court annulled the election results and ruled that Milošević should serve out his last term in office. Tens of thousands of opposition supporters stormed and burned the parliament building on 5 October and captured the state television service; police joined the crowds. Kostunica told approximately 500,000 supporters at a rally in Belgrade that Serbia had been liberated. On 6 October, Milošević conceded defeat, and Kostunica was sworn in as president on 7 October. He stated his first objective as president would be to right the economy and lead reconstruction efforts. Milošević was indicted for atrocities in Kosovo by the UN war crimes tribunal in The Hague. A bounty of us$5 million was offered by the US government to find the war criminal, but he remained in power even after losing the war.

The European Union (EU) and United States lifted their economic sanctions against Yugoslavia, and in November the country rejoined the UN; Kostunica indicated the country wanted to join the EU as soon as possible. In January 2001, Yugoslavia and Albania reestablished diplomatic relations after they had been broken off during the crisis in Kosovo in 1999.

On 1 April 2001, Milošević was arrested at his home in Belgrade after a tense standoff in which shots were fired; he had been charged with corruption and abuse of power within Yugoslavia. Kostunica had originally ruled out extraditing Milošević to the war crimes tribunal at The Hague. Milošević was formerly indicted by the tribunal in May 1999 for alleged war crimes in Kosovo; other indictments later included war crimes carried out in Bosnia and Herzegovina and Croatia, including charges of genocide carried out in Bosnia and Herzegovina from 1992–95. This was the first time a sitting head of state had been charged with war crimes. In June, then-Serbian prime minister Zoran Djindjic authorized the extradition of Milošević to the tribunal, exacerbating a rift between him and Kostunica, who favored a trial for Milošević in Belgrade. Milošević's trial at The Hague began in February 2002; Milošević died of a heart attack in prison in The Hague on 11 March 2006 with just 50 hours of testimony left before the conclusion of the trial.

Serbia and Montenegro

On 14 March 2002, in an agreement mediated by the EU, Serbia and Montenegro agreed to consign the Yugoslav Republic to history and create a loose federation called "Serbia and Montenegro." Both republics would share defense and foreign policies, but would maintain separate economies, currencies (the dinar for Serbia and the euro for Montenegro), and customs services for the immediate future. Each republic would have its own parliament with a central 126-member parliament located in Belgrade. Montenegrin president Milo Djukanovic reluctantly agreed to the union, commiting Montenegro to a three-year moratorium on an independence referedum, but in April, the Montenegrin government collapsed over differences on the new union. Kosovo, which remained under UN administration, remained part of Serbia. This angered many Kosovo activists, although the agreement looked to some as possibly accelerating the process of independence for the province. The parliament of the Federal Republic of Yugoslavia voted to disband itself on 4 February 2003, dissolving the country and introducing the new state of Serbia and Montenegro. Both republics agreed they would be able to hold referendums on full independence in 2006.

Serbian presidential elections were held on 29 September 2002, with 55.5% of registered voters casting ballots. Kostunica won 30.9% of the vote, and his opponent Miroljub Labus finished second with 27.4%. The second round of voting was held two weeks later, with Kostunica winning 66.8% of the votes, to 30.9% for Labus. However, voter turnout failed to reach a mandated 50% (it was 45.5%), and the elections were declared to be invalid. Natasa Micic, formerly the speaker of parliament, became acting president. She stated Serbian presidential elections would be held after the adoption of the new Serbian constitution, after it was harmonized with the constitution of Serbia and Montenegro. Montenegrin general elections were held in October 2002, and in November, Djukanovic resigned as president to take on the job of prime minister. Presidential elections held in Montenegro in December 2002 and February 2003 were invalidated due to low voter turnout. Filip Vujanovich was finally elected president of Montenegro in the third round of voting.

On 7 March 2003, Svetozar Marovic, deputy leader of the Montenegrin Democratic Party of Socialists, was elected the first president of Serbia and Montenegro after Kostunica stepped down as president of the former Yugoslavia. Marovic was the only candidate to run; the next presidential elections were to be held in 2007.

On 12 March 2003, Serbian prime minister Zoran Djindjic was assassinated outside the main government building in Belgrade. Members of criminal organizations were suspected of carrying out the assassination; Djindjic had declared war on organized crime in Serbia, which was said to flourish under Milošević. After the assassination, Serbia was placed under a state of emergency and police arrested some 1,000 people, including members of Serbia's secret service and policemen. Zoran Zivkovic, a leading official of the ruling Democratic Party, was elected prime minister to replace Djindjic.

While the Montenegrins managed to elect a president for their small republic, the Serbs failed to do so, even after the third voting round (in November 2003), due to low voter turnout. In addition, the indecisive parliamentary elections results from December 2003 led to a crisis within the Serbian parliament. The crisis was ended on March 2004 when former Yugoslav president, Vojislav Kostunica, was appointed the new prime minister of Serbia. In June 2004, the Serbs also got a new president, Boris Tadic. Tadic, the leader of the Democratic Party, managed to defeat his main contender—the nationalist Tomislav Nikolic, taking 52.34% of the tally in the second voting round.

In February 2005, officials from Montenegro asked their Serbian counterparts for an early vote on independence, claiming the union was inefficient and that it squandered money. Vojislav Kostunica refused the proposal and indicated that European integration and economic development should be the main focus of Serbia and Montenegro. A referendum on full independence for Montenegro was held on 21 May 2006; to be accepted internationally, a 55% majority was required for a "yes" vote. The vote on independence was 55.5% in favor. Voter turnout was 86.3%. A demand by pro-Serbian unionist parties for a recount was rejected. Serb politicians, Orthodox church leaders, and Montenegrins from the mountainous inland regions bordering Serbia opposed secession. However, ethnic Montenegrins and Albanians from the coastal area favored indpendence. Serbian President Boris Tadic recognized the independence of Montenegro. Serbia became the successor state to the union of Serbia and Montenegro, inheriting its UN seat and seats in other international institutions: the newly independent Montenegro would have to apply for UN and EU membership on its own, once it had been granted recognition by other states. Serbia's ambition to join the EU was hampered by its failure to arrest key war crimes suspects, including Ratko Mladic. Serbia inherited legal claim to the UN-administered province of Kosovo.

GOVERNMENT

Prior to Montenegro's independence in 2006, the union of Serbia and Montenegro was a confederal parliamentary democratic republic, with two constituent states—the Republic of Serbia and the Republic of Montenegro. As of June 2006, the Serbian province of Kosovo remained governed by the UN Interim Administration Mission in Kosovo (UNMIK), and had self-government. The Serbian province of Vojvodina is nominally autonomous. A constitutional charter for the state of Serbia and Montenegro was ratified by both the Serbian and Montenegrin parliaments in January 2003, and the constitution for the unified state was approved on 4 February 2003. The constitution allowed the member republics to hold independence referendums in 2006, which Montenegro did on 21 May of that year.

Following the dissolution of the union of Serbia and Montenegro on 5 June 2006, the Republic of Serbia was faced with drafting a new constitution. As of June 2006, Serbia had a legislature (National Assembly) of 250 deputies chosen in direct general elections for a period of four years. The deputies in the National Assembly elect the government of the Republic of Serbia, which, together with the president, represents the country's executive authority. The Serbian government was formed on 3 March 2004 with the appointment of Vojislav Kostunica as the prime minister. Boris Tadić was serving as president in June 2006. The judiciary is independent.

POLITICAL PARTIES

The Republic of Serbia held parliamentary elections on 28 December 2003. The following political parties won seats in the National Assembly: Serbian Radical Party, 82 seats; Democratic Party of Serbia, 53 (includes candidates of the People's Democratic Party, the Serbian Liberal Party, and the Serbian Democratic Party); the Democratic Party, 37 (includes candidates from the Civic Alliance of Serbia, Democratic Center, Social Democratic Union, Bosniak Democratic Party of Sandzak, and the Social Liberal Party of Sandzak); the G17 Plus, 34 (including candidates from the Social Democratic Party); the Serbian Renewal Movement, 22; and the Socialist Party of Serbia, 22.

Other minor parties and coalitions which were not represented in the National Assembly include: Together for Tolerance; Democratic Alternative; For National Unity; Otpor; and Independent Serbia.

LOCAL GOVERNMENT

The Republic of Serbia is made up of 29 districts and the city of Belgrade. Each district is, in turn, divided into several municipalities.

Serbia's ethnic diversity often makes local governance a burdensome task. Besides Serbs and Albanians, there are considerable populations of Romanians, Hungarians, Roma, Bulgarians, Bosnians, Croats, Slovaks, and Montenegrins.

JUDICIAL SYSTEM

The Serbian Constitutional Court determines whether Serbian laws, regulations and other enactments are in conformity with the Serbian constitution. Any citizen may begin an initiative in the Court. The Supreme Court is the highest appellate court. It also has an administrative law department with jurisdiction over all appeals of final decisions by administrative organs. As of 2002, a new intermediate appellate body became effective, the Court of Appeals. It has jurisdiction over appeals from the municipal and district courts. Its decisions may be appealed to the Supreme Court. The Administrative Court provides first instance review of all final administrative organ decisions. The decisions of the Administrative Court may be appealed to the Supreme Court.

The district courts' jurisdiction is limited to first instance matters. The courts have jurisdiction to try criminal offenses punishable by ten years' imprisonment or more, and other specified offenses, juvenile offenses, civil disputes of substantial value and in other specified areas, labor disputes, and certain other matters. There are 30 district courts in Serbia. The 143 municipal courts are the principal first instance courts. The courts have first instance jurisdiction over all criminal and civil cases that do not fall within the first instance jurisdiction of the district courts.

Commercial courts have jurisdiction over a wide range of commercial disputes, including copyright, privatization, foreign investment, unfair competition, maritime and other matters. These courts also are responsible for the registration of commercial enterprises. There are 16 commercial courts, and their decisions may be appealed to the High Commercial Court, located in Belgrade. Decisions of the latter court may be appealed to the Supreme Court.

ARMED FORCES

The following information on armed forces pertains to the union of Serbia and Montenegro prior to Montenegro's independence in 2006. Active armed forces numbered approximately 65,300 in 2005, supported by 250,000 reservists. The Army had 55,000 active personnel and was equipped with 962 main battle tanks, 525 armored infantry fighting vehicles, 288 armored personnel carriers and 2,729 artillery pieces. The Navy had 3,800 active personnel, including 900 Marines. Major naval units included eight tactical submarines, three frigates, 31 patrol/coastal vessels, 10 mine warfare ships, 23 amphibious landing craft, and seven logistical/support vessels. The Air Force had 6,500 active members, along with 101 combat capable aircraft, including 39 fighters, 51 fighter ground attack aircraft and 17 armed helicopters. There was also a paramilitary force that consisted of 45,100 personnel, of which an estimated 4,100 made up special police units, 35,000 were Ministry of Interior personnel and an estimated 6,000 were Montenegrin Ministry of Interior Personnel. Sixteen military personnel were stationed in four African countries under UN command. In addition, military contingents from 45 countries were stationed in Serbia and Montenegro as part of the Kosovo Peace Implementation Force. The defense budget in 2005 totaled $706 million.

INTERNATIONAL COOPERATION

The Socialist Federal Republic of Yugoslavia was an original member of the United Nations (1945) until its dissolution and the establishment of Bosnia and Herzegovina, Croatia, Slovenia, the Former Yugoslav Republic of Macedonia, and the Federal Republic of Yugoslavia as new states. The Federal Republic of Yugoslavia was admitted to the United Nations on 1 November 2000. Following the adoption and promulgation of the Constitutional Charter of Serbia and Montenegro on 4 February 2003, the name of the Federal Republic of Yugoslavia was changed to Serbia and Montenegro. Following Montenegro's referendum on independence, Serbia became the sucessor state to the union of Serbia and Montenegro on 5 June 2006, and thus retained its membership in international bodies, including the UN and the specialized UN agencies, such as the FAO, UNESCO, UNHCR, UNIDO, the World Bank, IAEA, and the WHO.

Serbia is a member of the Council of Europe, the Black Sea Economic Cooperation Zone, the European Bank for Reconstruction and Development, and the OSCE. It has observer status in the OAS and the WTO. In environmental cooperation, the country is part of Basel Convention, Ramsar, the London Convention, the Montréal Protocol, and the UN Conventions on the Law of the Sea and Climate Change.

ECONOMY

During the UN economic sanctions that lasted from 1992 to 1995, economic activity was extremely limited. By 1994, hyperinflation had brought formal economic activity to a virtual halt. By 1996, GDP had fallen to only 50.8% of 1990s total. Industry declined to just 46.6% of 1990s output; agriculture, 94.4%; construction, 37.5%; transportation, 29.3%; trade, 60.6%; and services, 81.1%. Formal lifting of these sanctions occurred in October 1996. However, the United States sponsored an "Outer Wall" of sanctions, which prevented Yugoslavia from joining international organizations and financial institutions. Taken together, the "Outer Wall," the Kosovo war, and continuing corruption continued to stifle economic development. In October 2000, the coalition government began implementation of stabilization and market-reform measures. Real growth in 2000 was reported as 5%. A donors' conference in June 2001 raised $1.3 billion in pledges for help in infrastructural rebuilding. Real GDP in 2001 was 5.5% and an estimated 4% in 2002. The average lending rate, at 79.6% in 2000 dropped to 33.2% in 2001, reflecting some improvement in economic security.

Economic output was positive but volatile after 2002, dropping 2.1% in 2003 and jumping to 8% in 2004; in 2005 it was estimated at 5.5%. Inflation was on a downward spiral, reaching 9.8%, but grew again in 2005 (to 15.5%) as a result of the increase of service and oil derivatives prices. Unemployment remained unusually high, hovering around 30%, but a large chunk of the unemployed are considered to work in the informal economy. One of Serbia's main tasks was to bring about fiscal and monetary stability, and create a legal framework that will allow the market economy to flourish.

INCOME

The CIA defines GDP as the value of all final goods and services produced within a nation in a given year and computed on the basis of purchasing power parity (PPP) rather than value as measured on the basis of the rate of exchange based on current dollars. The per capita GDP was estimated at $5,000 in 2005. The annual growth rate of GDP was estimated at 5.5%. The average inflation rate in 2005 was 15.5%. It was estimated that agriculture accounted for 16.6% of GDP, industry 25.5%, and services 57.9%.

According to the World Bank, in 2003 remittances from citizens working abroad totaled $1.397 billion or about $172 per capita and accounted for approximately 6.8% of GDP. Foreign aid receipts amounted to $1,317 million or about $163 per capita and accounted for approximately 6.4% of the gross national income (GNI).

The World Bank reported that in 2003 household consumption in Serbia and Montenegro totaled $18.27 billion or about $2,246 per capita based on a GDP of $20.7 billion, measured in current dollars rather than PPP. Household consumption includes expenditures of individuals, households, and nongovernmental organizations on goods and services, excluding purchases of dwellings. It was estimated that in 1999 about 30% of the population had incomes below the poverty line.

LABOR

The labor force in the union of Serbia and Montenegro was estimated at 3.22 million in 2005. The unemployment rate in 2005 was estimated at 31.6%, with Kosovo's unemployment at around 50%. There was no data available as to the ocupational breakdown of the country's workforce.

With the exception of the military, all workers are entitled to form unions. However, the majority of unions are government-sponsored or affiliated: independent unions are rare. Therefore, unions have not been effective in improving work conditions or wage structure increases. Virtually all of the workers in the formal economy are union members. Strikes are permitted and are utilized especially to collect unpaid wages. Collective bargaining is still at rudimentary level.

The minimum employment age is 16 although younger children frequently work on family farms. As of 2005, there was no national minimum wage rate. On average, the full-time monthly wage in the public sector that year was $181, while the average wage in the private sector was $250. Niether wage rate offered a decent living wage for a family. The official workweek is set at 40 hours, with required rest periods and overtime limited to 20 hours per week or 40 hours per month. Health and safety standards are not a priority due to harsh economic circumstances.

AGRICULTURE

The union of Serbia and Montenegro had 3,717,000 hectares (9,160,000 acres) of arable land in 2003. Serbia historically accounted for 60% of agricultural production. Vojvodina is the major agricultural region. In 2000, 20% of the labor force was engaged in agriculture.

Between 1991 and 1996, total agricultural production declined by 10%. During that time, production of farm crops fell by 9%; cereals by 12%. Viticultural production, however, increased by 51%. However, by 1999, total agricultural output was at 92% of the average during 1989–91. During 2002–04, crop production was 10% higher than during 1999–2001.

Agriculture contributed an estimated 17% to GDP in 2002. Major crops produced in 2004 included (in thousands of tons): corn, 6,287; wheat, 2,746; sugar beets, 2,643; potatoes, 1,098; and grapes, 490.

Serbia has a network of agrarian organizations in the form of chambers, farmers' cooperatives, and unions.

ANIMAL HUSBANDRY

In 2005, the livestock population in the union of Serbia and Montenegro included 3,550,000 pigs and hogs, 1,796,600 sheep, 1,230,000 head of cattle, 182,000 goats, 40,000 horses, and 17,464,000 poultry. Total meat production that year was 848,240 tons; milk, 1,852,000 tons. Between 1990 and 1999, total livestock production increased by 1.8%, but during 2002–04 it fell by 5.4% from 1999–2001.

FISHING

The total catch in 2003 was 3,665 tons in the union of Serbia and Montenegro, 86% from inland waters. Common carp accounts for much of the inland catch.

FORESTRY

In 2000, estimated forest coverage was 2,887,000 hectares (7,134,000 acres) in the former Yugoslavia. Total roundwood production in the union of Serbia and Montenegro in 2004 was 3,520,000 cu m (124.3 billion cu ft), of which about 75% came from public forests. Sawnwood production amounted to 575,000 cu m (20.3 million cu ft); plywood and particle board, 59,000 cu m (2.1 million cu ft). In 2004, exports of forest products amounted to nearly $139.1 million; imports, $352.9 million.

MINING

In 2003 industrial production in the union of Serbia and Montenegro fell by 3% compared to 2002, although mining and quarrying operations reported a 1% increase from 2002. Aggregated production from the metals mining sector in 2003 fell by 33% from the previous year, although the output of basic metals increased by 2%. The country also confronted continuing economic sanctions and the loss of control of Kosovo, with its ores and production facilities for nickel, lead, zinc, coal, lignite, ferronickel, and tin-plate. In light of this, Serbia and Montenegro's gross domestic product (GDP) was officially reported to have increased by 3% in 2003. The country had significant capacities to produce refined aluminum, lead, silver, and zinc. In 2003, the output of bauxite fell by about 12% from 2002, although aluminum output remained at around 2002 levels. Although exports of primary aluminum and aluminum alloys grew by 18% in 2002, from 2001, eight-month data (January through August) for 2003 appeared to indicate a steep drop in those exports. Mining in Serbia dates back to the Middle Ages, when silver, gold, and lead were extracted.

Mine output of metals in 2003 were: lead ore (gross weight), 183,000 metric tons, down from 733,000 metric tons in 2000 and 284,000 metric tons in 2002; bauxite (gross weight), 540,000 metric tons, down from 612,000 metric tons in 2002 and from 630,000 metric tons in 2000; agglomerate iron ore and concentrate saw no recorded production from 2001 through 2003; and copper ore (gross weight), 5,710,000 tons, down from 12,896,000 tons in 2000 and from 7,968,000 tons in 2002. Production of silver in 2003 totaled 2,028 kg, down from 6,838 kg in 2002. Output of refined gold in 2003 was estimated at 600 kg, down from 900 kg in 2002. In 2003, the country also produced alumina, magnesium, palladium, platinum, and selenium. Among the industrial minerals produced were asbestos, bentonite, ceramic clay, fire clay, feldspar, pumice, lime, magnesite, mica, kaolin, gypsum, quartz sand, salt, nitrogen, caustic soda, sodium sulfate, sand and gravel, and stone.

ENERGY AND POWER

The Electric Utility Company of Serbia (EPS) has control over coal mines, electric power sources (hydroelectric power plants, thermal power plants, heating plants) and grid distribution systems. Serbia has abundant hydroelectric potential, but there are frequent electrical blackouts and brownouts during the peak winter months. Since 1992 energy supplies have been interrupted by UN and US sanctions. Hydroelectric projects are located on the Danube, Drina, Vlasina, and Lim rivers. Thermal plants are located at Kostolac and in Kosovo. Total electrical generating capacity in 2002 was 9.6 million kW. Electric power production in that year amounted to 31.696 billion kWh, of which 67% was thermal and 33% hydroelectric. Consumption of electricity in 2002 was 33.090 billion kWh.

Serbia is the only Balkan country with substantial coal deposits. Proven reserves as of 1999 totaled 18.2 billion tons, 95% of which was lignite. The country's largest lignite mine has an annual capacity of 14,000 tons. Total coal output in 2002 was 39,568,000 short tons, of which lignite accounted for 39,445,000 short tons. Coal imports totaled 310,000 short tons in 2002, of which 171,000 short tons was hard coal.

Serbia has limited proven reserves of oil and natural gas. As of 1 January 2002, these reserves totaled 38.75 million barrels and 24.07 billion cu m, respectively. Production of crude oil in the union of Serbia and Montenegro in 2002 averaged 14,000 barrels per day. Refined petroleum product output in that year averaged 53,000 barrels per day. Imports of petroleum products in 2002 averaged 68,98 barrels per day, which included an average of 37,460 barrels per day of crude oil. Demand for refined oil products in 2002 averaged 83,82 barrels per day.

Natural gas production totaled 22.95 billion cu ft in 2002. Dry consumption totaled 80.87 billion cu ft. Dry gas imports totaled 59.68 billion cu ft in 2002.

INDUSTRY

Serbia contributed 35% to the total industrial production of the former Yugoslav SFR. Between 1989 and 1996, total industrial output fell by 60%. Production declines by sector during that time were as follows: metals and electrical products, 85%; textiles, leather, and rubber products, 75%; wood products, 63%; nonmetals, 56%; and chemicals and paper, 54%. In the mid-1990s, industry accounted for approximately 50% of the country's GDP.

The industrial production growth rate in 2000 was 11%, and industry accounted for 36% of GDP in 2001. Principal industries in Serbia include machine building (aircraft, trucks, automobiles, tanks and weapons, electrical equipment, agricultural machinery), metallurgy, textiles, footwear, foodstuffs, appliances, electronics, petroleum products, chemicals, and pharmaceuticals. The country produced 8,978 automobiles in 2001, a 30% decline from 2000; it also produced 555 heavy trucks in 2000, a 33% increase over 1999.

The industrial production growth rate in 2002 was only 1.2%, way under the real GDP growth rate—an indication that industry plays an increasing marginal role in the economy. In 2005, the industry of Serbia and Montenegro made up only 25.5% of the GDP. Agriculture contributed with 16.6%, and services came in first with 57.9%.

In 2000, there were 696,540 workers employed in industrial and mining companies in the Republic of Serbia, comprising 52% of the total active labor force. Small enterprises employed 82,273 workers, with 146,972 in medium-size and 457,286 in large enterprises. The Law on Privatization established conditions for reform of the industrial sector. Large industrial enterprises with financial difficulties are obliged to undertake a program of restructuring, which, it is hoped, will further attract foreign investment.

SCIENCE AND TECHNOLOGY

A large communications satellite station was made operational in Ivanica during the 1970s. Scientific and technological policies are developed and implemented by the Ministry of Science and Technology of the Republic of Serbia. As of 2002, there were a combined 1,330 scientists and 568 technicians engaged in research and development (R&D) per million people in the union of Serbia and Montenegro. There were 98 registered research institutions in Serbia and six public universities.

A nationwide scientific and technological development policy formulated in 1994 created 250 five-year basic research projects in all scientific disciplines.

DOMESTIC TRADE

Belgrade serves as the economic and commercial center of the country. Pristina and Subotica serve as regional market centers. The domestic economy has been held back for the past few years due the lack of major privatization reforms and trouble in the general European economy. Hours of business are usually between 8 am and 4 pm.

FOREIGN TRADE

The United Nations imposed sanctions on international trade with Yugoslavia in May 1992 and lifted them in December 1995. During the war, when sanctions were in force, dozens of Cypriot companies, set up by senior Serbian officials and businessmen, trafficked millions of dollars in illegal trade.

Trade started to catch up in subsequent years, and in 2004 exports in the union of Serbia and Montenegro reached $3.2 billion (FOB—Free on Board). In the same year, imports were almost triple that amount, at $9.5 billion (FOB), indicating that the economy in the two republics was in disarray, but that the union was trying to renew its industrial base. Most of the import commodities included machinery and transport equipment, fuels and lubricants, manufactured goods, chemicals, food and live animals, and raw materials. The imports mainly came from Germany (18.5%), Italy (16.5%), Austria (8.3%), Slovenia (6.7%), Bulgaria (4.7%), and France (4.5%). Exports included manufactured goods, food and live animals, and raw materials, and largely went to Italy (which receive 29% of total exports), Germany (16.6%), Austria (7%), Greece (6.7%), France (4.9%), and Slovenia (4.1%).

Imports were expected to be constrained by tight fiscal and monetary policies, while exports will be encouraged through targeted policy measures, and as a result of a restructured and more competitive economic base.

BALANCE OF PAYMENTS

The US Central Intelligence Agency (CIA) reported that in 2005 the purchasing power parity of Serbia and Montenegro's exports was $5.485 billion while imports totaled $11.94 billion.

Exports of goods and services totaled $5.9 billion in 2004, up from $4.2 billion in 2003. Imports grew from $8.7 billion in 2003, to $12.8 billion in 2004. Consequently, the resource balance was on a negative upsurge, growing from -$4.5 billion in 2003, to -$7.1 billion in 2004. A similar trend was registered for the current account balance, which deteriorated from -$2.0 billion in 2003, to -$3.1 billion in 2004. The national reserves (including gold) were $3.6 billion in 2003, covering less than 6 months of imports; by 2004, they increased to $4.3 billion.

BANKING AND SECURITIES

Serbia's banking system was still hampered by the history of international sanctions. Banks are severely hampered by a lack of liquidity, a result of the tight monetary policy prevalent in the country.

INSURANCE

Insurance of public transport passengers, motor vehicle insurance, aircraft insurance, and insurance on bank deposits are compulsory. Only domestic insurance companies may provide insurance. In 2003, the value of all direct insurance premiums written in the union of Serbia and Montenegro totaled $436 million, of which nonlife premiums accounted for $420 million. In that same year, the top nonlife insurer was Dunav, which had gross written nonlife premiums of $138.6 million, while the country's leading life insurer was Zepter, which had gross written life insurance premiums of $7.1 million.

PUBLIC FINANCE

The US Central Intelligence Agency (CIA) estimated that in 2005 the union of Serbia and Montenegro's central government took in revenues of approximately $11.4 billion and had expenditures of $11.1 billion. Revenues minus expenditures totaled approximately $330 million. Public debt in 2005 amounted to 53.1% of GDP. Total external debt was $15.43 billion.

TAXATION

The republic of Serbia has a standard corporate tax rate of 10%. Capital gains derived from the sale of industrial property rights, real estate, shares and other securities, and capital participations are considered taxable income, and are taxed at the corporate rate. However, gains arising from certain government bonds or from bonds issued by the national bank are excluded from the tax. Dividends, interest and royalties are subject to a 20% withholding tax. Other taxes includes a value-added tax (VAT), with a standard rate of 18% and a lower rate of 8%, property taxes, transfer taxes, a tax on financial transactions, payroll taxes, and social security contributions. In Serbia, the republic government, rather than the city governments, collects local taxes and then disperses part of the funds to city officials. Local factories pay no city taxes in Serbia.

CUSTOMS AND DUTIES

Serbia's has six tariff rates that range from 1–30%, with a weighted duty average of 9.37%. Serbia applies a VAT of 18%, with an 8% reduced rate for basic foodstuffs, medicines, published materials, public utilities and certain services. Serbia imposes excise taxes on certain luxury goods.

Serbia has established free trade zones (FTZ) in Smederrevo, Kovin, Nis, Belgrade, Novi Sad, Šabac, Pahovo, Sombor, Sremska Mitrovica, Subotica, and Zrenjanin.

FOREIGN INVESTMENT

Foreign investment was severely restricted during the years of the economic embargo. Since the sanctions have been lifted, foreign investors from neighboring countries, Russia, and Asia have expressed an interest in capital investment. The main sectors attracting the interest of foreign investors are metal manufacturing and machinery, infrastructure improvement, agriculture and food processing, and chemicals and pharmaceuticals. Foreign investors may hold majority shares in companies.

In 1997, foreign direct investment (FDI) inflows into the former Yugoslavia reached $740 million, but dried up with the onset of the conflict in Kosovo. FDI inflows averaged $122.5 million in 1998 and 1999, then fell to $25 million in 2000. In 2001, FDI inflow reached $125 million.

In the following years, Serbia and Montenegro undertook an aggressive program of reforms aimed at both re-establishing the area as a major transportation hub, and at attracting foreign investment. These policies seem to have paid off as in 2004, capital inflows jumped to $3.4 billion. While Serbia is still considered to be a risky place for doing business, the political and economic climate is steadily improving.

ECONOMIC DEVELOPMENT

Officials in general see revitalization of the infrastructure (roads, rail and air transport, telecommunications, and power production) as one step toward economic recovery. Another important aspect of economic reconstruction will be the revival of former export industry, such as agriculture, textiles, furniture, pharmaceuticals, and nonferrous metallic ores.

The Kosovo war in 1999 left much of Serbia's infrastructure in ruins, but reconstruction efforts were proceeding slowly in the early 2000s. The new government that came to power in 2000 faced numerous economic challenges. Nevertheless, inflation decreased sharply from 113% at the end of 2000 to 23% in April 2002. In 2002, the International Monetary Fund (IMF) approved a three-year $829 million Extended Arrangement to support Serbia and Montenegro's (then Yugoslavia's) 2002–05 economic program. In 2002, the dinar became convertible. Privatization has been slow, and foreign direct investment lagged in the early 2000s.

While politically, and economically, Serbia is much more stable than in previous years, the economy is still in a quasi-state of disarray, with rampant unemployment, with a large grey market, and a relapsing industrial base. Foreign investors, as well as several international financial institutions (EBRD, IMF, and the World Bank), have recognized economic reforms as being ositive, and in 2004 increased their capital transfers to the region.

In 2005 there was a boom in several sectors: trade, financial services and transport and communications. The growth is to be sustained by continued investment in newly privatized companies, by strong local demand, and by an expansion of the services sector.

SOCIAL DEVELOPMENT

A social insurance system, updated in 2003, provides old age, disability, and survivorship benefits. The pension plan is funded by contributions from both employers and employees. The retirement varies depending on years of insurance; retirement from insured employment is necessary. Each Republic provides its own system for sickness and maternity benefits. Medical services are provided directly to patients through government facilities. Workers' compensation, unemployment benefits, and family allowances are also available. Family allowances vary according to the number of children in the family are adjusted periodically for cost of living changes.

Traditional gender roles keep women from enjoying equal status with men and few occupy positions of leadership in the private sector. However, women are active in human rights and political organizations. High levels of domestic abuse persist and social pressures prevent women from obtaining protection against abusers.

The government's human rights record remains poor and is additionally marred by the crisis in Kosovo, where police are responsible for beatings, rape, torture, and killings, committed with impunity. In May 1999, the International Criminal Tribunal for the former Yugoslavia in The Hague indicted Yugoslavian president Slobodan Milosevic for war crimes against the citizens of Kosovo. Milosevic was brought to trial at The Hague in 2002 for war crimes and crimes against humanity in Kosovo and Croatia, and for war crimes, crimes against humanity, and genocide in Bosnia and Herzegovina; in March 2006 Milosevic died in prison before a verdict could be decided.

HEALTH

The government provides obligatory health care to citizens for preventive, diagnostic, therapeutic, and rehabilitative services. There were 228 health institutions and about 3,000 other clinics, mostly private in Serbia and Montenegro in the mid-2000s. As of 2004, there were an estimated 20 physicians per 100,000 people. The University Clinical Center in Belgrade conducts about nine million examinations and 46,000 emergency operations per year and functions as one of the World Health Organization's largest diagnostic and referral centers.

In 2005 infant mortality in the union of Serbia and Montenegro was reported at 15.53 per 1,000 live births. Overall mortality was 9.7 per 1,000 people in the Republic of Serbia. Average life expectancy in 2005 in the union was 74.73 years.

The HIV/AIDS prevalence was 0.20 per 100 adults in 2003 in the union of Serbia and Montenegro. As of 2004, there were approximately 10,000 people living with HIV/AIDS in the country. There were an estimated 100 deaths from AIDS in 2003.

HOUSING

At the beginning of 1996, the former Yugoslavia had 3,124,000 dwellings, with an average of 3.4 persons per dwelling. Housing area at that time averaged 20 sq m (215 sq ft) per person. New housing completions during 1995 totaled 14,337 units, of which 11,847 were in the public sector, and 2,490 were in the private sector. According to a 1999 assessment, it was estimated that about 120,000 dwellings were damaged or destroyed in Kosovo due to internal conflicts. About 50,000 homes had been damaged in Serbia. Overcrowding, particularly in urban areas, has become more of a problem as Serbian refugees have returned from Croatia and Bosnia and Herzegovina. In 2002, the nation counted about 2,790,411 households with an average of 2.89 people per household.

EDUCATION

As of 2005/2006, education was compulsory for nine years of primary school. This may be followed by three years of secondary school, with students having the option to attend general, vocational, or art schools. The academic year runs from October to July. In 2001, about 43% of children between the ages of three and six in the union of Serbia and Montenegro were enrolled in some type of preschool program. Primary school enrollment in 2001 was estimated at about 96% of age-eligible students. The same year, secondary school enrollment was about 82% of age-eligible students. It is estimated that about 96% of all students complete their primary education. The student-to-teacher ratio for primary school was at about 20:1 in 2000; the ratio for secondary school was about 14:1.

Serbia has six universities (at Belgrade, Novi Sad, Pristina, Nis, and Kragujevac) with 76 academic departments. In 2001, it was estimated that about 36% of the tertiary age population in the union of Serbia and Montenegro were enrolled in tertiary education programs. The adult literacy rate for 2004 was estimated at about 96.4%.

As of 2003, public expenditure on education was estimated at 3.3% of GDP.

LIBRARIES AND MUSEUMS

The National Library of Serbia (1.6 million volumes) is in Belgrade. The Matica Srpska Library has over 3 million volumes in holdings. The Serbian Academy of Arts and Sciences in Belgrade has about one million volumes and the library system at the University of Belgrade has 1.45 million volumes. The Belgrade City Library is the largest public lending library system in the country; the network contains 14 branches and over 1.7 million items in collection.

Serbia has over 2,500 cultural monuments, including about 100 museums and 37 historical archives libraries. The Belgrade National Museum, founded in 1844, includes exhibits featuring national history, archaeology, medieval frescoes, and works by Yugoslavian and other European artists. Belgrade also has the Museum of Modern Art, the Museum of the Serbian Orthodox Church, the Museum of Natural History, and the Museum of Science and Technology, which opened in 1989.

MEDIA

In 2003, there were an estimated 243 mainline telephones for every 1,000 people in the union of Serbia and Montenegro; about 313,500 people were on a waiting list for telephone service installation. The same year, there were approximately 338 mobile phones in use for every 1,000 people. PTT Serbia is the monopoly owner/operator of Serbia's telecom network. There are 2.2 million installed fixed lines (700,000 are duplex shared lines) in the republic.

In Serbia and Montenegro, only the RTS television network was owned by the state; the other six (BK, TV Studio Spectrum Čačak, Kanal 9 Kragujevac, Pink, Palma, and Art Kanal) are privately owned. The ownership and editorial positions of television and radio stations usually reflects regional politics. Government control over independent broadcasts and the print media has discouraged political opposition parties that have called for greater democracy and a more open economy. In 2004, Serbia and Montenegro had about 297 radios and 282 television sets for every 1,000 people. The same year, there were 27.1 personal computers for every 1,000 people and 79 of every 1,000 people had access to the Internet. There were nine secure Internet servers in the country in 2004.

In 1791, the first Serbian-language newspaper was published in Vienna, Austria. Privately owned newspapers are sometimes critical of the government. The dailies with the largest circulation (as of 2002) are Politika (Politics, 300,000) and Vecernje Novosti (Evening News, 169,000). Other newspapers that are essentially controlled by the government, include (with 2002 circulation) Borba (85,000), Jedinstvo (6,090), Dnevnik (61,000), and Pobjeda (19,400). There are several minority language newspapers.

While the government provides for freedom of speech and of the press, libel suits have been fairly prevalent and some media sources have practiced self-censorship in order to avoid problems with government officials.

ORGANIZATIONS

The Chamber of Commerce and Economy of Serbia is located in Belgrade.

The Matica Srpska was founded in Novi Sad in 1824 as a literary and cultural society. The Serbian Academy of Science and Art was founded in Belgrade in 1886. There are several organizations for professional journalists, including the Journalists' Federation of Yugoslavia, the Journalists' Association of Serbia, Independent Journalists' Association, and the Association of Private Owners of the Media.

National youth organizations include the Bureau of International Cooperation of Youth of Serbia, Union of Socialist Youth of Yugoslavia, and the Junior Chamber. Scouting organizations are also active. The Child Rights Centre and Child to Child are national groups working to promote the rights of children and youth. Creative Youth of Novi Sad offers a variety of educational, volunteer, and development programs for youth as well. There are a variety of sports associations available promoting amateur competition among athletes of all ages. There are active chapters of the Paralympic Committee, as well as a national Olympic Committee. There is a national chapter of the Red Cross Society.

TOURISM, TRAVEL, AND RECREATION

Rich architecture, museums, galleries, cathedrals, parks, and rivers, are just some of the attractions that bring visitors to Serbia. The largest two of Serbia's five national parks are Djerdap (64,000 ha/158,000 acres) and Sar planina (39,000 ha/96,000 acres). Serbia has dozens of spa resorts such as Vrnjacka Banja, Mataruska Banja, and Niska Banja. Serbia has three UNESCO heritage sites. Popular sports in Serbia are rafting, hunting, fishing, skiing, and cycling.

All visitors need a valid passport to enter Serbia. Serbia requires an onward/return ticket, sufficient funds for the stay, and a certificate showing funds for health care. Visas are required for all nationals except those of 41 countries including the United States, Australia, and Canada.

In 2003, about 1.4 million tourists arrived in Serbia and Montenegro, of whom 93% came from Europe. Hotel rooms numbered 2,435 with 4,926 beds and an occupancy rate of 46%

According to 2005 US Department of State estimates, the cost of staying in Belgrade was $340 per day. The daily costs elsewhere in the country averaged $157.

FAMOUS SERBS

Sava Rastko Nemanjic (c.1174–1235) was the first Serbian archbishop and a writer who became one of Serbia's most prominent figures of the Middle Ages. Vuk Stefanovic Karadzic (1787–1864) reformed the Serbian language by clarifying grammar, standardizing the spelling, and compiling a dictionary. Dositej Obradovic (1742–1811) was a famous writer, philosopher, and teacher.

Djordje Petrovic Karadjordje (1768–1817) led a rebellion against the Turks in 1804. Zivojin Misic (1855–1921) was a distinguished military leader during World War I. Prince Miloš Obrenović (r.1815–1839) founded the Obrenović dynasty and ruled Serbia as an absolute monarch. King Alexander of Yugoslavia (1888–1934) was assassinated in Marseille, France. Prince Paul of Yugoslavia (1893–1976) ruled as a regent for Peter II (1923–70) from 1934 to 1941 and was forced into exile after signing a secret pact with the Nazi government.

Slobodan Milošević (1941–2006) was elected president of Serbia in 1990 and 1992 before being elected president of Yugoslavia in July 1997. He came before the UN's International Criminal Tribunal for the Former Yugoslavia in 2002 for genocide, crimes against humanity, and war crimes, and died of a heart attack in his cell just months before the trial was due to end.

Ibrahim Rugova (1944–2006) was president of Kosovo and its leading political party, the Democratic League of Kosovo (LDK). During the many conflicts in Kosovo, Rugova was regarded as a moderate ethnic Albanian leader, and later by some as "Father of the Nation."

Ivo Andrić (1892–1975) received the Nobel Prize for Literature in 1961. Danilo Kiš (1935–89) established his reputation with his work A Tomb for Boris Davidovich (1976). Other notable Serbian authors include Meša Selimović, Miloš Crnjanski, Milorad Pavić, Dobrica Ćosić and David Albahari. Anastas Jovanović (1817–99) was a pioneering photographer. Kirilo Kutlik set up the first school of art in Serbia in 1895. Nadežda Petrović (1873–1915) was influenced by Fauvism while Suva Šumanović worked in Cubism. Other Serbian artists include Milan Konjović, Marko Čelebonović, Petar Lubarda, Milo Milunović, and Vladimir Veličković.

DEPENDENCIES

Serbia has no dependencies or territories.

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