Written evidence submitted by HE Dr Vladeta
Jankovic, Ambassador of Serbia and Montenegro
Four years after the democratic opposition's
election victory in Serbia and the dramatic turn of events which
put an end to the wretched 13-year period of Milosevic rule, the
Federal Republic of Yugoslavia is replaced by the state union
of Serbia and Montenegro; the changes which have taken place are
however deeper and more far-reaching than just a change of name
would suggest. The most important factor here is the irreversible
nature of this change, in the sense that any return to a crypto-communist
dictatorship and the aggressive nationalism which characterised
the Milosevic era is now unthinkable. There remain, however, many
difficulties, not of fundamental significance but nevertheless
obstacles, which are impeding and slowing down progress for the
country as a whole and are, for the man in the street, reflected
in the poor standard of living. These hardships are, primarily
the consequence of the wars and of sanctions, but are in part
also typical for any society in post-communist transition. Serbia
& Montenegro, as a state union, has proved its determination
to follow the path of reform and Euro-Atlantic integration and
this applies equally to each of the two member-states. It does
not mean however that such elements as oppose this trend do not
exist or that they do not have some electoral support (sometimes
even as much as 25%-30%) but their influence remains limited.
Even the desperate attempt to foil development with the assassination
of the energetic and dynamic Premier Dindic failed to achieve
that desired result—the country continued, even after this
tragic event, to move in the direction of reform. Here is a short
summary of the results so far achieved and of the stumbling blocks,
which still have to be overcome.
1. Relations between Serbia and Montenegro
have, after a lengthy hiatus, been constructed afresh on new foundations
and, insofar as important institutions are concerned (such as
the Army, Parliament and the Council of Ministers), have actually
started to function. In February 2006 at the latest it is anticipated
that a referendum will be conducted whereby the citizens of both
member republics will decide whether to continue to live together
in a single state. The difficulties which existed regarding the
divergencies in economic, trade and customs systems have recently
been overcome by the EU decision to advance towards European integrations
on the principle of a twin-track system. In practice this means
that the unbridgeable differences in the economic systems of the
two republics have been recognised while, in their aspirations
to join Europe, they remain politically united. In other words,
when the time comes to sign the Stabilisation Association Agreement,
there will be the one contract with two separate economic annexes.
International opinion is overwhelmingly in favour of the survival
of the State Union, the general view being that it is both possible
to achieve and desirable from the standpoint of stability in the
Balkans and that, therefore, every effort should be made to give
it a fair chance. But ultimately, the will of the people (as expressed
through a referendum) will prevail and should be respected. Whatever
the final outcome, one can say with confidence that there is no
danger of violence erupting over this, least of all the kind that
accompanied the break up of the former Yugoslavia.
2. The situation in Kosovo and Metohija
is far from promising. Five years after the arrival of KFOR and
UNMIK, the Serbian and other non-Albanian population has been
deprived of all basic human rights, starting with elementary physical
security. There is no freedom of movement, the return of the displaced
population has been totally abandoned, while the eruption of violence
from 17 March this year has seen the systematic destruction of
Serbian religious monuments, houses and property, which has put
any proclaimed principle of multi-ethnicity of Kosovo in jeopardy.
The Serbian Government has, with the unanimous approval of Parliament,
put forward a plan for the safeguarding of institutional guarantees
and of local self governing bodies for the non-Albanian populations,
without any mention of a division of Kosovo or territorial autonomy
for the Serbs. The plan is in total accord with the Security Council
Resolution 1244 and intended merely as a talking ground, where
every idea is open to discussion and change. The Albanian side,
however, rejects this initiative in its entirety, as it rejects
every suggestion to serious debate with Belgrade, but insists
exclusively on independence. If such independent status were to
come about before democratic standards had been fulfilled and
the elementary human rights criteria secured for minorities, it
would lead to an ethnically pure Albanian Kosovo, with dire and
far reaching destabilising consequences for the whole region.
3. Cooperation with the ICTY in the Hague
has for years been the chief condition (and has, at the same time,
represented the chief obstacle) for the advancement of Serbia
and Montenegro towards the Euro-Atlantic integrations. Although,
in addition to Milosevic practically the whole of the political
and military summit of his regime has been delivered to the International
Court, there is still continuing insistence on the extradition
of Mladic, Karadzic, the group of four generals, as well as of
10 or so minor inductees. In spite of there being real risk of
internal destabilisation (because about 75% of the population
declares its opposition to the extraditions), the Government is
doing all it can to prove that Mladic and Karadzic are not within
their reach. It has also allowed open access to its state archives,
and has provided the witnesses which ICTY has requested. Fully
aware of the seriousness of the situation, the Government has
undertaken to fulfil, in the shortest possible time, all the demands
which the Hague and the International Community have placed upon
it, wherever it is physically possible and even at the expence
of jeopardising the internal democratic reforms. It would, however,
be of inestimable value if in this extremely risky undertaking
they were to receive some support, by allowing for at least some
of the less important cases to be dealt with by the local courts.
4. When speaking of the state of the economy
in Serbia and Montenegro, we must keep in mind that the economic
systems of the two republics, independently of their potential,
significantly differ. Amongst other things: there are two central
banks; two different currencies are in use; the systems of privatisation
are different, so are foreign trade, protection and custom and
excise systems, as is general taxation (so, for instance, VAT
has already been introduced in Montenegro, while in Serbia it
comes into effect from 1 January.) Following unsuccessful attempts
to harmonise these diverging systems, the EU has recently accepted
the twin-track approach in economic matters. In the political
sphere, of course, the State Union is obliged to act together.
— While in Montenegro the currency
is the Euro, in Serbia the Dinar is a stable currency and depends
on supply and demand. Currency reserves are constantly on the
rise and, according to latest data from Serbia, amount to a total
of around 4.5 billion dollars.
— Inflation has been under control
for the past four years and, in 2004 is planned to stand at 8.5%,
with smaller variations depending on a possible rise in the price
of oil on the world markets.
— The growth of GDP in Serbia this
year will be double the projected 4.3%. This upward trend is mainly
due to the remarkable increase in agricultural production (12%),
general trade (10.5%) and the building trade (between 10 and 15%).
In Montenegro, industrial output for the first half of this year,
relative to the same period last year, was higher by 14.4%.
— Privatisation has, up to date, comprised
around 55% of the total capital in Montenegro and slightly less
in Serbia, which has benefited the country as a whole by some
570 million Euro. Both governments are firmly commited to the
path of privatisation, which is the most effective tool for transformation
into a market economy.
— Serbia and Montenegro have already
concluded agreements with the IMF, the World Bank and EBRD, who
are assisting the projects for reform in the country.
— The fundamental problems of the country's
economy are a traditionally high deficit in the exchange of trade,
a high degree of unemployment (31.9%) and still a very high percentage
of "grey economy".
5. The state of human rights and the position
of minorities in Serbia & Montenegro have, up until now, received
favourable assessment/evaluation from the competent European bodies.
The recent rise in tension over an incident involving the Hungarian
minority in Vojvodina seems to be resolved to universal satisfaction
and had most likely been provoked and caused for propaganda-based
partisan reasons on both sides of the border.
6. Serious reforms of the judicial system
are in train and it is there among other things, that the roots
of corruption are to be found. This process (particularly complicated,
as in all other post-communist societies) has already started
to bring results, which will undoubtedly create a favourable climate
for privatisation and encourage the flow of foreign investment
into the country.
7. Frequent election cycles, particularly
in Serbia, are basically a reflection of a steady stabilisation
of democratic institutions. The ratio of power in Parliament is
2:1 in favour of the democratic and reformist parties, while the
main opposition is constituted by the ultra-nationalist Radical
party. Relations between the leading democratic parties, once
venomous, are recently much improved, owing to the growing awareness
that only together can they restrain and control the isolationist
and even irredentist opposition. The present government of Vojislav
Kostunica is a somewhat loose coalition, which has for the last
eight months been functioning well and, all things considered,
producing quite impressive results: Parliament is carrying out
its business in a much more conducive atmosphere than before,
after two years of futile attempts a President has been elected,
important new reform legislation is being implemented and a new
Constitution may well be in place in a few months time (to supplant
the still current Constitution from Milosevic's time). There are
no scandals and the rule of law is increasingly felt to be in
force. Corruption is on the decrease and the general economic
output is showing marked improvement. If, in spite of all this,
the present government were to fall owing to the pressures from
aforementioned problems relating to Kosovo and the Hague, it would
mean holding new elections. However, the eventual hand-over of
power would be conducted according to the highest democratic standards.
Renewed upheavals or crises of a serious nature need not be anticipated.
8. This holds true even more because the
country's foreign policy and its priorities are widely accepted
by the political factors and the population alike. Over 80% of
the population has declared itself in favour of joining the EU
(the number of those in favour of joining NATO is significantly
smaller—only about 30%), relations with neighbouring countries
have improved substantially, particularly those between the former
Yugoslav republics, and the general inclination is towards a better
balanced relationship with the great powers. Immediate goals include
the signing of the SAA and the joining of the Partnership for
Peace. With internal conditions now unquestionably stabilising,
the economy continuing to recover and outside pressures from the
international community (sometimes unjustifiable and excessive,
particularly with regard to ICTY and Kosovo) easing a little,
Serbia and Montenegro could very shortly find itself promoted
from the lower end of the table to be in the front ranks of candidates
for joining the European Union.
HE Dr Vladeta Jankovic
Ambassador of Serbia and Montenegro
30 September 2004
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