| MILOSEVIC-era mismanagement of the economy, an extended period of economic sanctions, and the damage to Yugoslavia's infrastructure and industry during the NATO airstrikes in 1999 left the economy only half the size it was in 1990. After the ousting of former Federal Yugoslav President MILOSEVIC in October 2000, the Democratic Opposition of Serbia (DOS) coalition government implemented stabilization measures and embarked on an aggressive market reform program. After renewing its membership in the IMF in December 2000, a down-sized Yugoslavia continued to reintegrate into the international community by rejoining the World Bank (IBRD) and the European Bank for Reconstruction and Development (EBRD). A World Bank-European Commission sponsored Donors' Conference held in June 2001 raised $1.3 billion for economic restructuring. An agreement rescheduling the country's $4.5 billion Paris Club government debts was concluded in November 2001 - it wrote off 66% of the debt - and the London Club of private creditors forgave $1.7 billion of debt, just over half the total owed, in July 2004. The smaller republic of Montenegro severed its economy from federal control and from Serbia during the MILOSEVIC era and continues to maintain its own central bank, uses the euro instead of the Yugoslav dinar as official currency, collects customs tariffs, and manages its own budget. Kosovo's economy continues to transition to a market-based system, and is largely dependent on the international community and the diaspora for financial and technical assistance. The euro and the Yugoslav dinar are both accepted currencies in Kosovo. While maintaining ultimate oversight, UNMIK continues to work with the EU and Kosovo's local provisional government to accelerate economic growth, lower unemployment, and attract foreign investment to help Kosovo integrate into regional economic structures. The complexity of Serbia and Montenegro political relationships, slow progress in privatization, legal uncertainty over property rights, scarcity of foreign-investment, and a substantial foreign trade deficit are holding back the economy. Arrangements with the IMF, especially requirements for fiscal discipline, are an important element in policy formation. Severe unemployment remains a key political and economic problem for this entire region. |
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Source: CIA World Factbook |
