Serbia (09/13/10)

September 13, 2010

For the most current version of this Note, see Background Notes A-Z.


Area: Serbia (77,474 sq. km.) is slightly smaller than Maine.
Cities: Capital--Belgrade. Other cities--Pancevo, Novi Pazar, Uzice, Novi Sad, Subotica, Bor, Nis.
Terrain: Varied; in the north, rich fertile plains; in the east, limestone ranges and basins; in the southeast, mountains and hills.
Climate: In the north, continental climate (cold winter and hot, humid summers with well-distributed rainfall); central portion, continental and Mediterranean climate; to the south, hot, dry summers and autumns and relatively cold winters with heavy snowfall inland.

People (2004 est.)
Nationality: Noun--Serb(s); adjective--Serbian.
Population (2002 Republic census): 7,478,820.
Population growth rate: -3.5%.
Ethnic groups: Serbian, with Hungarian, Bosniak, Romany, Albanian, Montenegrin, and other minorities.
Religions: Orthodox, with Roman Catholic, Muslim, Protestant minorities.
Languages: Serbian 88%, Hungarian 3.8%, Bosnian 2%, Albanian 1%, others 5%.
Health: Infant mortality rate--6.65 deaths/1,000. Life expectancy--males 71.26 yrs., female 77.1 yrs.

Type: Republic.
Constitution: Adopted in an October 28-29, 2006 referendum.
Branches: Executive--President (chief of state) Boris TADIC (since July 11, 2004); Prime Minister (head of government) Mirko CVETKOVIC (since July 7, 2008), Council of Ministers (cabinet). Legislative--Parliament. Judicial--Supreme Court of Cassation and Constitutional Court.
Political parties: Alliance of Vojvodina Hungarians (SVM), Christian Democratic Party of Serbia (DHSS), Coalition for Sandzak (KZS), Democratic Community of Vojvodina Hungarians (DZVM), Democratic Party (DS), Democratic Party of Serbia (DSS), Democratic Party of Albanians (PDSh), Democratic Union of the Valley (BDL-Albanians), Force of Serbia (PSS), G-17 Plus (G-17), League for Sumadija (LS), League of Social Democrats of Vojvodina (LSV), Liberal Democratic Party (LDP), Movement for Democratic Progress (LDP--Albanians), New Serbia (NS), Party of Democratic Action (SDA--Bosniaks), Party of Democratic Action (PVD--Albanians), Party of United Pensioners of Serbia (PUPS), People's Party (NP), Roma Party (RP), Sandzak Democratic Party (SDP--Bosniaks), Serbian Progressive Party (SNS), Serbian Radical Party (SRS), Serbian Renewal Movement (SPO), Social Democratic Party (SDP), Social Democratic Party of Serbia (SDPS), Social Democratic Union (SDU), Socialist Party of Serbia (SPS--former Communist Party), United Serbia (JS), Yugoslav United Left (JUL).
Suffrage: 16 years of age if employed; universal at 18.

GDP (2010 est.): $40.28 billion.
GDP growth rate (2010 est.): 1.5%.
GDP per capita (2010 est.): $5,370.
Inflation rate (2010 est.): 6.5%.
Natural resources: Coal, petroleum, natural gas, antimony, copper, lead, zinc, timber, bauxite, gold, silver, navigable rivers.
Agriculture (2009): 10.0% of GDP.
Industry (2009): 13.6% of GDP.
Public services (2009): 13% of GDP.
Real estate (2009): 12.3% of GDP.
Trade (2009): 11.7% of GDP.
Transportation/telecommunications (2009): 14.1% of GDP.
Construction (2009): 3.2% of GDP.
Electric energy production (2009): 2.6% of GDP.
Trade (2009): Exports--$8.34 billion. Major markets--Bosnia, Montenegro, Germany, Italy. Imports--$16.05 billion. Major suppliers--Russia, Germany, Italy, China.

The first Serbian kingdom was created in 1170 A.D. by Stefan Nemanja, the founder of the Nemanjic dynasty, whose son was canonized as St. Sava and became the patron saint of the autocephalous Serbian Orthodox Church founded in 1219. Serbia's territories expanded under the rule of King Milutin, who seized territory in nearby Macedonia from the Byzantines, and reached their peak under Milutin's son, Stefan Dusan (1331-55). However, Serbian power waned after Stefan's death in 1355, and at the Battle of Kosovo (June 28, 1389) the Serbs were defeated by the Turks. Following the Battle of Smederevo in 1459, the Ottoman empire exerted complete control over all Serb lands.

Serbs lived under the rule of the Ottoman sultans for nearly 370 years, though the Serbian Orthodox Church, with several disruptions, transmitted Serbian heritage and helped preserve Serbian identity during this period. Movements for Serbian independence began with uprisings led by Karadjordje Petrovic (1804-13) and Milos Obrenovic (1815-17), founders of two rival dynasties that would rule Serbia until World War I. Serbia became an internationally recognized principality under Turkish suzerainty and Russian protection after the Russo-Turkish War of 1828-1829. After waging war against Turkey in support of Bosnian rebels in 1876, Serbia formally gained independence in 1878 at the Congress of Berlin, largely thanks to Russian support. Following Austria-Hungary's annexation of Bosnia, Serbia led a successful coalition of Montenegrin, Bulgarian, and Greek troops (the Balkan League) that in 1913 seized remaining Ottoman-controlled territory in Europe and established Serbia as a regional military leader.

The assassination of Austrian archduke Franz Ferdinand on June 28, 1914 in Sarajevo by a Bosnian Serb, Gavrilo Princip, set off a series of diplomatic and military actions among the great powers that culminated in World War I. Austro-Hungarian and Bulgarian forces occupied Serbia soon after World War I began. After the collapse of Austria-Hungary at the war's end in 1918, Vojvodina and Montenegro united with Serbia, and former south Slav subjects of the Habsburgs sought the protection of the Serbian crown within the Kingdom of Serbs, Croats, and Slovenes. Serbia was the dominant partner in this state, which in 1929 adopted the name Yugoslavia.

The kingdom soon encountered resistance when Croats began to resent control from Belgrade. This pressure prompted King Alexander I to split the traditional regions into nine administrative provinces. During World War II, the Axis powers occupied Yugoslavia. Royal army soldiers, calling themselves Chetniks, formed a Serbian resistance movement, but the communist Partisans, with Soviet and Anglo-American help, succeeded in defeating the Chetniks and forcing German forces from Yugoslavia by 1944. In an effort to avoid Serbian domination during the postwar years, Bosnia and Herzegovina, Macedonia, and Montenegro were given separate and equal republican status within the new socialist federation of Yugoslavia; Kosovo and Vojvodina were made autonomous provinces within Yugoslavia.

Despite the appearance of a federal system of government in Yugoslavia, Serbian communists ruled Yugoslavia's political life for the next 4 decades under Josip Broz Tito, a former Bolshevik and committed communist. In 1948 after Tito made several significant foreign policy decisions without consulting Moscow, Yugoslavia was expelled from the Soviet bloc, signifying a split with Moscow that left Tito independent to accept aid from the Marshall Plan and become a leader of the Non-Aligned Movement. Communist rule transformed Serbia from an agrarian into an industrial society; however, by the 1980s, Yugoslavia's economy started to fail. With the death of Tito in 1980, separatist and nationalist tensions emerged in Yugoslavia.

In the late 1980s, Slobodan Milosevic propelled himself to power in Belgrade by exploiting Serbian nationalism, especially over Kosovo. In 1989, he arranged the elimination of Kosovo's autonomy in favor of direct rule from Belgrade. Belgrade ordered the firing of large numbers of ethnic Albanian state employees, whose jobs were then taken by Serbs. As a result of this oppression, Kosovo Albanian leaders led a peaceful resistance movement in the early 1990s and established a parallel government funded mainly by the Albanian diaspora.

Between 1991 and 1992, Slovenia, Croatia, Bosnia and Herzegovina, and Macedonia all seceded from Yugoslavia. On April 27, 1992, in Belgrade, Serbia and Montenegro joined in passing the Constitution of the Federal Republic of Yugoslavia (F.R.Y.).

Kosovo's peaceful resistance movement failed to yield results, and in 1997 the Kosovo Liberation Army (KLA) began an armed resistance. The KLA's main goal was to secure the independence of Kosovo.

In late 1998, Milosevic unleashed a brutal police and military campaign against the separatist KLA, which included atrocities against civilian noncombatants. For the duration of Milosevic's campaign, large numbers of ethnic Albanians were either displaced from their homes in Kosovo or killed by Serbian troops or police. These acts, and Serbia's refusal to sign the Rambouillet Accords, provoked 79 days of bombing by NATO forces from March to June 1999 and led the UN Security Council (UNSC) to authorize, through UNSC Resolution 1244 (June 10, 1999), an international civil and military presence in Kosovo under UN auspices. The resolution called for UN interim administration of Kosovo and authorized the international civil presence to facilitate a process to determine Kosovo's status. Following Milosevic's capitulation, international forces--including the UN Mission in Kosovo (UNMIK) and the NATO-led security force KFOR--moved into Kosovo.

Routine federal elections in September 2000 resulted in a narrow official victory for Slobodan Milosevic and his coalition against Vojislav Kostunica, the consensus presidential candidate of the Democratic Opposition of Serbia (DOS), an umbrella group of 18 anti-Milosevic political parties. After Milosevic's victory was documented to be fraudulent, citizens across Serbia turned out in street protests in support of Kostunica. On October 5, 2000, Milosevic was forced to concede defeat after mass protests across Serbia. The new F.R.Y. President Vojislav Kostunica was soon joined at the top of the domestic Serbian political scene by the Democratic Party's (DS) Zoran Djindjic, who was elected Prime Minister at the head of the DOS ticket in parliamentary elections that December. Although initial reform efforts were highly successful, especially in the economic and fiscal sectors, by the middle of 2002, the nationalist Kostunica and the pragmatic Djindjic were openly in conflict with each other.

Despite the initial euphoria of replacing Milosevic's autocratic regime, the Serbian population by mid-2002 slid into apathy and disillusionment with its leading politicians in reaction to this political maneuvering. Two rounds of voting for the republic presidency in late 2002 failed because of insufficient voter turnout (Serbian law required participation by more than 50% of registered voters).

On March 12, 2003, Prime Minister Djindjic was assassinated by organized crime elements threatened by his pursuit of anti-crime measures. Zoran Zivkovic, a vice-president of Djindjic's DS party, was elected Prime Minister in March 2003, but a series of scandals plagued the new government, which ultimately led to early elections.

Republic of Serbia presidential elections were held on November 16, 2003, but the results were declared invalid because of insufficient voter turnout. Following the December 2003 parliamentary elections, a new minority government was formed with the Democratic Party of Serbia (DSS), G17+, and the Serbian Renewal Movement/New Serbia (SPO/NS) coalition and the tacit support of the Socialist Party of Serbia (SPS). Former F.R.Y. president Vojislav Kostunica was named Prime Minister.

In March 2002, the heads of the federal and republican governments signed the Belgrade Agreement, setting forth the parameters for a redefinition of Montenegro's relationship with Serbia within a joint state. On February 4, 2003, the F.R.Y. parliament ratified the Constitutional Charter, establishing a new state union and changing the name of the country from Yugoslavia to Serbia and Montenegro.

Also in 2002, the F.R.Y. Government established a commission to coordinate cooperation with the International Criminal Tribunal for the former Yugoslavia (ICTY) and began serving warrants for the arrest of persons indicted for war crimes who sought refuge in the country. The crackdown on organized crime following the assassination of Serbian Prime Minister Djindjic also resulted in the apprehension and transfer to The Hague of several persons indicted for war crimes. In 2004 and 2005, a significant number of ICTY indictees surrendered to the tribunal. In 2007, Serbia assisted in the arrest of two of the remaining six persons indicted for war crimes, Zdravko Tolimir and Vlastimir Djordjevic, and in 2008 the government arrested and extradited Stojan Zupljanin and Radovan Karadzic. Bosnian Serb General Ratko Mladic and Croatian Serb political leader Goran Hadzic remain at large, but the government has indicated its intention to apprehend these individuals. The United States and other countries continue to urge Serbia to apprehend and transfer to The Hague both Mladic and Hadzic.

On May 21, 2006, the Republic of Montenegro held a successful referendum on independence and declared independence on June 3. Thereafter, the parliament of Serbia stated that the Republic of Serbia was the continuity of the state union, changing the name of the country from Serbia and Montenegro to the Republic of Serbia, with Serbia retaining Serbia and Montenegro's membership in all international organizations and bodies.

In mid-2007, the UNSC deadlocked on a way forward on Kosovo status and how to act on UN Special Envoy Maarti Ahtisaari’s Kosovo status proposal. On February 17, 2008, Kosovo declared its independence following a 120-day last-ditch effort by the EU-Russia-U.S. Troika to facilitate an agreement between Serbia and Kosovo on the latter's status. The United States officially recognized Kosovo's independence the following day. Seventy nations had recognized Kosovo as of September 2010. Serbia has rejected Kosovo’s independence.

After two rounds of voting in late 2002 and a third in November 2003 failed because of insufficient voter turnout, the election law was changed to allow for a valid election with turnout of less than 50% of registered voters. In elections held on June 27, 2004 Boris Tadic (DS) defeated Radical Party candidate Tomislav Nikolic by a slim margin and was elected President of Serbia.

Following the adoption of a new Constitution in October 2006, Serbia held parliamentary elections on January 21, 2007. A government was formed in May 2007, with a coalition of the DS, DSS, and G17+. The coalition chose Vojislav Kostunica to continue in his position as Prime Minister. On February 3, 2008, in run-off presidential elections, Boris Tadic again defeated Radical Party candidate Tomislav Nikolic by a slim margin and was re-elected President of Serbia. Following the collapse of the governing coalition in March 2008 in the wake of Kosovo’s independence, new parliamentary elections were held on May 11, 2008. The Democratic Party-led list, "For a European Serbia," won nearly 39% of the vote, and in July 2008 formed a coalition government with the Socialists and ethnic minority parties. The May 11, 2008 Serbian national election results are illustrated by the following chart:


Serbian Political Parties Percentage
of vote
Seats in
For a European Serbia--(ZES) DS, G-17, SPO, LSV, SDP 38.7% 102
Radicals (SRS) 29.1% 78
Democratic Party of Serbia (DSS) 11.3% 30
Socialists (SPS), (PUPS), (JS) 7.9% 20
Liberal Democratic Party (LDP) 5.2% 13
Hungarians (MK) 1.8% 4
Bosniaks Coalition 0.8% 2
Albanian Coalition 0.5% 1
Others--Below Threshold 4.7%  
Total 100% 250

In September 2008, Radical Party (SRS) deputy president and two-time presidential candidate Tomislav Nikolic split from the SRS and formed the Forward Serbia caucus. Together with former Radical General Secretary Aleksandar Vucic, Nikolic officially formed the Serbian Progressive Party (SNS) in October 2008. As of June 2009, the SNS held 21 seats in parliament due to defections from the SRS, while the SRS maintained 57 seats. The SNS joined two local governments in western Serbia in early 2009 to win a plurality of votes in June 2009 repeat elections in two municipalities in Belgrade. The SNS in December 2009 scored a victory over the DS in the Belgrade municipality of Vozdovac; local analysts considered this a sign of the party’s consolidation.

The Serbian National Assembly, a unicameral parliament, is the lawmaking body of the Republic of Serbia.

Principal Government Officials
President--Boris Tadic
Prime Minister--Mirko Cvetkovic
First Deputy Prime Minister--Ivica Dacic
Deputy Prime Minister--Bozidar Djelic
Deputy Prime Minister--Mladjan Dinkic
Deputy Prime Minister--Jovan Krkobabic
Ambassador to the U.S.--Vladimir Petrovic

Serbia maintains an embassy in the United States at 2134 Kalorama Rd., NW, Washington, DC 20008 (tel. 202-332-0333).

Military branches include the Army of Serbia, which includes ground forces with internal and border troops, and air and air defense forces, and Civil Defense. In 2001 an estimated 2,088,595 civilians were fit for military service. The 2002 estimate for military expenditures as percentage of GDP was 3.6%. The Ministry of Defense has undertaken significant reform initiatives, which, if continued, will help move Serbia closer to full Euro-Atlantic integration. The Serbian Government named an ambassador and military representative to NATO in 2009, and is expected to implement an information security agreement that will enable the opening of Serbia’s mission to NATO in 2010.

Since the fall of Milosevic, Serbia’s economic progress has been substantial, but economic reform and restructuring are continuing challenges for the Serbian Government. Unemployment, corruption, and labor unrest remain ongoing political and economic problems. The dinar has fallen by more than a third against the Euro since the onset of the global financial crisis in 2008, highlighting Serbia’s fragile and structurally weak economy. The economic crisis, and a concern over Serbia’s external financing gaps, also led Serbia to seek a $4 billion Stand-By Arrangement (SBA) with the International Monetary Fund (IMF), which was approved in May 2009. The IMF has conducted a series of periodic reviews of Serbia’s economic performance under the SBA and generally concluded that Serbia is meeting most SBA conditions. Future loan disbursements will be contingent upon the Serbian Government’s progress in adopting a law on fiscal responsibility intended to ensure fiscal discipline following expiration of the SBA in April 2011.

GDP growth in 2007 was a healthy 7.5%, but this pace slowed to 5.4% during 2008 as a result of the global economic crisis. In 2009, Serbia’s GDP fell 3% compared to 2008 but is projected to rise by 1.5% in 2010 and 3.5% in 2011. In 2007, Serbia recorded strong foreign direct investment (FDI) of $2.2 billion. In 2008, FDI was $2.3 billion, while in 2009 FDI was $1.9 billion. For the period January-June 2010, FDI was $530 million. Greenfield investments are at a near standstill as a result of the economic crisis. Serbia is also pursuing membership in the World Trade Organization with a goal of attaining membership in 2011. Serbia assumed a 1-year term as chair of the Central European Free Trade Agreement (CEFTA) in January 2010.

While economic reform has been moving forward in many areas, including trade liberalization, enterprise sector reform is still halting. Over 26% of all people employed in Serbia work for state-owned enterprises or the central and local governments. Serbia is required to reduce the size of the public sector by 10% in 2010, in accordance with the IMF’s Stand-By Arrangement. It is unclear, however, whether the Serbian Government will meet this politically sensitive goal by the end of the year. Privatization of socially-owned companies was to be completed in 2009, but this target was not met due to the global economic crisis, which greatly reduced the value and attractiveness of such assets.

In April 2008, the Serbian Government signed an agreement with car maker Fiat to purchase and invest in Zastava, Serbia's state-owned car manufacturer. This agreement revitalized interest in Serbia's industrial heartland, but Fiat's investment timetable was delayed due to the economic crisis. Major U.S. investors such as U.S. Steel and Ball Packaging had to cut production in 2009 as a result of falling global demand, but production has partially rebounded in 2010.

Serbia currently enjoys stable diplomatic relations with all of its neighbors except Kosovo.

Immediately preceding the NATO bombing campaign of the F.R.Y. in March 1999, the U.S. and most European countries severed relations with Belgrade, and the U.S. Embassy was closed. After October 5, 2000, foreign embassies, including that of the U.S., reopened and Serbia, as the successor state to the F.R.Y., regained its seat in such international organizations as the Organization for Security and Cooperation in Europe (OSCE) and the UN, and is actively participating in International Monetary Fund (IMF) and World Bank projects. In 2003, Serbia was admitted to the Council of Europe and in 2006 joined NATO's Partnership for Peace. Serbia has also indicated its desire to join the European Union (EU). The EU has made full ICTY cooperation a prerequisite for increased cooperation with Serbia. Serbia and the EU signed a Stabilization and Association Agreement (SAA)--the first step toward eventual accession--in April 2008, but the EU immediately froze the related Interim Trade Agreement (ITA) pending full cooperation with the ICTY.

After ICTY Chief Prosecutor Serge Brammertz reported to the UN Security Council that he was satisfied with Serbia’s level of cooperation with the ICTY, the EU agreed in December 2009 to implement the ITA. While Serbia has initiated social, political, and economic reforms, full implementation of the SAA is contingent on Serbia’s further cooperation in apprehending remaining war crimes fugitives Ratko Mladic and Goran Hadzic. However, on June 14, 2010, the EU agreed to submit Serbia’s SAA to member state parliaments for ratification following Brammertz’s positive assessment of Serbia’s ICTY cooperation on the same day, a milestone that many observers perceive as a strong boost for Serbia’s EU aspirations. The EU implemented visa liberalization for Serbians as of December, 19, 2009, allowing visa-free travel to Schengen countries for business and tourism. Serbia submitted its candidacy application to the EU on December 22, 2009; however, as of August 2010 the EU Council had not set a date to review it.

Serbia's bilateral relationship with many countries was chilled following Kosovo's independence in February 2008. In the days following Kosovo's independence, rioters in Belgrade attacked the embassies of several countries, including the United States, causing significant property damage. Serbia recalled its ambassadors for consultations from all countries that formally recognized Kosovo. Serbia returned its ambassadors to EU countries in July 2008 and to the remaining countries in October 2008.

Government officials declared their intent to pursue all peaceful, political, and diplomatic means to retain Kosovo and sought a UN General Assembly resolution to request that the International Court of Justice (ICJ) issue an advisory opinion on the legality of Kosovo's declaration of independence. After a vigorous lobbying campaign, on October 9, 2008, the Serbian resolution passed in the UN General Assembly. Serbia, the United States, and other UN member states presented their legal positions to the Court through written briefs and oral presentations in 2009. Kosovo, although not a UN member, was permitted to participate in the written and oral proceedings, as the authors of Kosovo’s declaration of independence. On July 22, 2010, the ICJ released its advisory opinion decisively affirming that Kosovo’s declaration of independence was in accordance with international law and did not violate UN Security Council Resolution 1244.

Aside from Kosovo, Belgrade has made efforts to improve relations with its regional neighbors. In March 2010, the National Assembly passed a resolution condemning the crimes committed at Srebrenica in 1995, which also reaffirmed the territorial integrity of Bosnia and Herzegovina. President Tadic has taken steps to improve relations with Croatia, working to resolve longstanding obstacles to greater cooperation, including refugee, property, border, and war crimes issues. In Bosnia, the Serbian Government has played a helpful role in urging Republika Srpska Prime Minister Milorad Dodik to engage in reform discussions and renewed relations with Federation leaders as well.

Foreign Aid
At the social, political, and geographic crossroads between Eastern and Western Europe, Serbia occupies a key strategic juncture in the Balkans. The U.S. has been engaged in assisting Serbia's transition to a market-oriented democracy since 1997. Despite political uncertainty, U.S. Government assistance to Serbia continues to promote opportunities for economic growth, build capacity with key counterparts, and work steadily to move the country toward stability and Euro-Atlantic integration.

U.S. assistance to Serbia is strategically targeted to address priority U.S. foreign policy objectives and to promote Serbia's successful transition to a functioning market economy and stable pluralistic democracy. These resources, although modest in comparison to the European Union and other multilateral donors, have proven to be instrumental in leveraging other investments and in focusing Serbia's reform agenda.

Annual congressional restrictions have been imposed on U.S. assistance to Serbia in order to ensure that the country meets its obligation to comply with the rulings of the International Criminal Tribunal for the former Yugoslavia (ICTY). On June 7, 2010, Secretary of State Hillary Clinton certified that Serbia was cooperating with the ICTY.

After severing diplomatic relations in March 1999, the U.S. Embassy formally reopened in May 2001. The Serbian Embassy in Washington and the U.S. Embassy in Belgrade have reestablished bilateral relations and provide a full range of consular services. Serbia withdrew its ambassador to Washington from February to October 2008 in protest of U.S. recognition of Kosovo’s independence. Vice President Joseph Biden visited Serbia in May 2009 and met with President Tadic, Prime Minister Cvetkovic, and Defense Minister Sutanovac. Vice President Biden’s visit was the highest-level U.S. visit to Serbia since Vice President George H.W. Bush’s visit in September 1983 and signaled an interest in energizing U.S.-Serbia relations. In 2009 and 2010, other high-ranking U.S. officials have visited Serbia and met with key leaders in an effort to bolster Serbia’s European integration path.

Principal U.S. Embassy Officials
Ambassador--Mary Burce Warlick
Deputy Chief of Mission--Earle Litzenberger
Public Affairs Counselor--Conrad Turner
Political Counselor--Deborah Mennuti
Economic Counselor--Douglas Apostol
Consul General--Peter Marigliano
Acting Defense Attaché--Col. Paul Brotzen
Foreign Commercial Service--Bradley Harker
USAID--Susan Fritz
Management Officer--Jeffrey Cellars

The U.S. Embassy in Serbia is located at Kneza Miloša 50, 11000 Belgrade (tel. 381-11-361-9344).