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FEDERAL REPUBLIC OF SERBIA
>> Regional Overview >> Federal Republic of Yugoslavia Overview Introduction
The past decade of violence and instability in Southeast Europe has its roots in the authoritarian, Serbian leadership of the Federal Republic of Yugoslavia (Yugoslavia or FRY). Despite the recent emergence of an increasingly viable opposition movement, President Milosevic’s leadership continues to represent a significant obstacle to developing Southeast Europe into a stable, democratic, and economically vibrant region that can be integrated into Europe. The direction taken by the Serbian, republic of Yugoslavia over the next several years will be a major determinant of future political and economic development in Southeast Europe, particularly in regions – such as Montenegro, Bosnia, and Kosovo – where Serbia has regularly exercised its influence.
The importance of Serbia to maintaining regional stability, and the realistic potential for exerting a strong positive influence in favor of systemic change constitute the rationale for U.S. engagement to address key democratic transition issues. Prospects for long-term peace and stability in the region require the successful establishment in Serbia of an open, democratic society governed by the rule of law, and respect for human and civil rights. Towards this goal, USAID activities in Serbia are focused on accelerating democratic reform by supporting local government effectiveness, independent media, civil society development, and political pluralism.
The Development Challenge
USAID's assistance program has been developed and is implemented in an environment created by the sanctions imposed on the FRY for non-compliance with key provisions of the Dayton Agreement. The rules of engagement are conditioned by the "outer wall" sanctions that impose broad constraints on Serbia's economic access to the international community. Sanctions prevent international financial organizations such as the International Monetary Fund (IMF) from providing debt assistance. USAID’s foreign assistance activities in Serbia are also governed by the "Lautenberg Amendment" in the FY 2000 Foreign Assistance Act which limits assistance to countries or entities not cooperating with the International War Crimes Tribunal.
Isolated from international markets, the Serbian economy is severely constrained. Reliable data is not available, but unemployment is estimated to be high, economic growth stagnant, and corruption and political cronyism prevalent. The value of the national currency (dinar) continues to spiral downward. Damage associated with the North Atlantic Treaty Organization’s (NATO’s) bombing campaign has set the economy back even further by reducing production capacity, disrupting agricultural operations, and hampering distribution channels.
The autocratic rule of President Milosevic has severely limited political diversity, civil society growth, the protection of citizen’s rights, and access to independent and objective information for Serbia’s citizens. Three evacuations of U.S. Government personnel during FY 1999 severely curtailed USAID operations in Serbia and hampered efforts to support and empower change agents in the media, indigenous non-governmental organizations (NGOs) and other local organizations. Moreover, the Milosevic government used the threat of international intervention to implement a number of repressive laws in the name of national security, significantly impeding efforts to encourage the development of independent media and democracy. All USAID non-humanitarian assistance programs in Serbia were suspended during the NATO military action, although our program partners managed to maintain contact with their counterparts.
In July 1999, President Clinton announced that the United States would resume and expand its program of support for emerging pro-democracy forces in Serbia. USAID moved quickly to restart democracy-building activities, and designed new activities structured to provide appropriate assistance to organizations active in democratic and political reform.
USAID's current assistance program in Serbia works through its NGO partners to promote the establishment of more democratic institutions and practices. As structured, the program is pre-transitional in that many of the elements necessary for full transition to democracy and a market economy cannot be implemented until a collaborative, democratic government emerges at the national level. USAID is currently providing technical assistance and direct material support to empower leaders of NGOs, citizen and professional associations, as well as labor unions engaged in civic action, legal defense and other activities that advocate for change and democratization in Serbia.
USAID is supporting the establishment of a more open and fair political process by providing technical assistance, training and direct material support to alliances and coalitions and other progressive political elements that are in active opposition to the current regime. USAID’s support for independent media is helping build viable media outlets that offer objective news and information to the general public. Our local government initiatives focus on helping opposition-led municipalities improve the delivery of essential services, increase citizen participation and transparency in local government decision-making, encourage legal and financial sustainability, and strengthen local government’s relationship with and influence at the national level.
External Debt and U.S. Debt Assistance
The Federal Republic of Yugoslavia's total external debt, estimated at $15 billion in 1998, is not being paid. U.S. debt assistance to Serbia is prohibited under current law.
Humanitarian Assistance
USAID's Office of Transition Initiatives has been an active participant in activities for democratic and political reform, particularly in working with selected civic organizations and supporting independent media. USAID also provided humanitarian assistance in Serbia, largely in the form of food aid, as part of its overall assistance program for the FRY in 1999. Food distributions in Serbia focused on "old caseload" refugees from Bosnia and Croatia, particularly elderly and invalid refugees, and on "social cases" among the general Serbian population. Total FY 1999 food aid commitments in Serbia amounted to approximately 9,900 metric tons valued at $6.6 million. These commodities were distributed to an estimated 135,000 beneficiaries by the World Food Program (WFP), Catholic Relief Services (CRS) and the American Red Cross (ARC). Following procedures required by FRY authorities, all three implementing agencies worked through the Yugoslav and Serbian Red Cross societies in managing actual commodity distribution to targeted beneficiaries. During the NATO air campaign, the CRS program continued uninterrupted and the ARC turned its food stocks over to the International Committee of the Red Cross for distribution through its programs. The WFP program was suspended in March 1999 and has not been restarted, pending resolution of concerns regarding the role of the Yugoslav Red Cross.
Other Donors
The United States is playing a lead role in supporting democratic reform in Serbia. At this time, other donors such as the European Union and the Soros Foundation have limited non-humanitarian assistance programs in Serbia. In late 1999, the European Union launched a program to provide heating oil to opposition cities in Serbia this winter. The World Bank and IMF do not have an active relationship with Serbia due to sanctions.
FY 2000 Supplemental Request
The Administration has pending before Congress a FY 2000, Support for East European Democracy (SEED) Act, supplemental appropriation request of $15 million for U.S. priorities in Serbia. One of the highest U.S. priorities is support for the opposition to the regime of Slobodan Milosevic, and to independent media in Serbia, to bolster those forces seeking a change of regime and move to a democratic system. From the base FY 2000 appropriation, $25 million has been allocated to these efforts; but additional support could hasten political changes within Serbia.
Additional resources would allow greater levels of technical assistance and material support to non-governmental organizations, labor unions and other pro-democracy organizations to improve their capabilities in effective advocacy and civic action. Greater support would be possible for the democratic opposition, including the Alliance for Change, political parties and other active opponents to the current regime, extending their ability to engage Serbians at large in political action. Technical and material support to independent broadcast and print media can be accelerated. Reform-minded municipalities will be assisted in strengthening their service-delivery capabilities, meeting the humanitarian and other needs of their citizens.
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State Dept. Country Information
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Last Updated on: December 12, 2000 |
