Federal Republic of Yugoslavia

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Development Challenge The USAID Program Other Program Elements Other Donors Program Data Sheets Summary Tables USAID Search: Federal Republic of Yugoslavia Previous Years' Activities 2002, 2001, 2000, 1999 Last updated: 32     (text taken from the FY 2003 Congressional Budget Justification) THE DEVELOPMENT CHALLENGE: U.S. assistance to the Federal Republic of Yugoslavia (FRY) and its two constituent republics (Serbia and Montenegro) continues to be based on fundamental U.S. national interests. Serbia has been the locus of instability in the Balkans since the end of the Cold War. After a decade of military and civil conflict, the international community seeks a lasting peace and stable region. The FRY is a social, political and geographic crossroads between Western and Eastern Europe, Turkey, and Greece. Mechanisms for meeting the aspiration of all ethnic groups remain weak after a decade of misrule and justice for past abuses is incomplete. Judicial reforms have yet to be started in the FRY and Serbia and are just beginning in Montenegro; transparent civil society organizations are incipient. The peaceful revolution of the people of FRY rejecting the Milosevic regime's authoritarianism on October 5, 2000 remains to be consolidated. Despite that dramatic political transition, the FRY's democratic future requires further consolidation. In addition to a peaceful resolution of the status of Montenegro and Kosovo and other pressures for increased autonomy, leaders face the challenge of building broad consensus on a range of critical social, economic, and political changes necessary to move the country toward the global community of democracies. It is essential that constructive frameworks be developed to address lingering ethnic, religious, regional and economic concerns through peaceful, legal means to avoid regression. Internal differences within the governing 18-party coalition (DOS) could result in a no-confidence vote and early elections. Economic and political reforms will be a major issue whenever elections take place. Reforms must be moved through largely unreformed bureaucracies and a Byzantine system of pervasive grand and petty corruption. Dealing with the past is of central importance in shaping the FRY's post-Milosevic national identity. Although Milosevic and others were transferred to The Hague in 2001, publicly -indicted war criminals remain in the region and attitudes toward efforts to bring Balkan war criminals to justice range from support for transfer, to apathy, or to anger. Other human rights problems, such as the trafficking in persons, also must be addressed. To confront these challenges, mechanisms for citizens to voice their concerns about issues that affect their lives and their communities must be practiced and expanded. The foundation for democratic transition and consolidation must be strengthened. The FRY economy is in crisis. Unemployment continues to rise in both Montenegro and Serbia and financial and social systems are extremely fragile and inadequate for a competitive free-market economy. It is essential that citizens receive economic and political benefits quickly, as a result of the break with the country's nationalistic past. After a decade of suffering from economic instability and distorted economic policies exacerbated by manipulative domestic political parties and by sanctions which severed market and trade links, relief assistance must be tangible to the ordinary citizen. Physical infrastructure is in poor condition. Bank and enterprise closings initially will increase unemployment and reduce economic activity further threatening the already fragile public confidence and support for reform. In conjunction with the basic economic, policy, and financial market reforms needed, the legislative and judicial systems must be overhauled before investment can be attracted. THE USAID PROGRAM: FY 2002 Estimate: $165 million FY 2003 Request: $135.0 million The Program Data Sheets provided below describe the four objectives for which USAID is requesting funding in the FRY, including both republics, Serbia and Montenegro. These objectives focus on strengthening democracy and governance, including the direct participation of citizens in decisions affecting their development, and establishing the foundation for reintegration into the Euro-Atlantic economic and democratic community and sustainable future economic growth. A fifth, ongoing objective is presented for Montenegro to cover budget support, which will end in FY 2002. Support for civil society, NGOs, independent media and labor, citizens' participation in decision-making, and local government strengthening will be continued under objective 2.1 in FY 2002. In FY 2003, however, support for civil society, NGOs, independent media and labor will be established under a separate SO focused on civil institutions. Promotion of employment generation and economic growth will continue to be supported under objective 1.3. ONGOING PROGRAMS FOR WHICH NO FY 2002 OR FY 2003 FUNDING IS REQUESTED: The USAID program includes the following objectives. Funds already obligated will continue to be expended. Number: Title: Last Notified: Planned Completion: 169-0230 More Effective, Responsive and Accountable Local Government FY 02 CBJ, p. 180 FY 2002 169-0310 Humanitarian Community Services and Facilities FY 02 CBJ, p. 183 FY 2002 169-0410 Special Initiatives FY 02 CN#4587/31/01 FY 2003 OTHER PROGRAM ELEMENTS: USAID will continue to support food assistance for refugees and internally displaced persons through the Food for Peace Program. In FY 2002 USAID also will continue support through the Office of Transition Initiatives. In June 2001, the donors pledged $1.2 billion in assistance to FRY. The FRY was also promised significant debt relief from the Paris Club. OTHER DONORS: Donor coordination is good. The European Agency for Reconstruction is the largest donor to the FRY, followed by the United States. The International Monetary Fund, World Bank and European Bank for Reconstruction and Development also provide significant assistance to the FRY. Substantial donor resources have been promised for small and micro enterprise support. There is a large array of donors engaged in democracy and governance activities. Key players, especially in civil society, are the Open Society Institute, Organization for Security and Cooperation in Europe, UNDP, and bilateral donors such as Sweden, Canada, Holland, Norway, and the United Kingdom. Program Data Sheets 169-0130  Accelerated Development and Growth of Private Enterprise 169-0200  More effective, responsive, and accountable democratic institutions 169-0210  Increased, Better-Informed Citizens' Participation in Political and Economic Decision-Making 169-0420  Cross-Cutting Programs 170-0130  Accelerated Development and Growth of Private Enterprises 170-0200  More Effective, Responsive, and Accountable Democratic Institutions 170-0210  Increased Better Informed Citizens' Participation in Political and Economic Decision-Making 170-0410  Special Initiatives-Budget Support 170-0420  Cross-Cutting Country Background Information Resources     CIA Factbook Library of Congress National Geographic Country Maps State Dept. Country Information

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