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 You are in: Out of Date Releases > Previous Editions of Background Notes > Out of Date Background Notes: S

Serbia and Montenegro (08/99) (See Yugoslavia)

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


Federal Republic of Yugoslavia

(Serbia and Montenegro have asserted the formation of a joint independent state, but this entity
has not been recognized as a state by the United States.)

Area: Montenegro (13,938 sq. km.) is slightly smaller than Connecticut; Serbia (88,412 sq. km.) is slightly smaller than Maine. Combined, they are slightly smaller than Kentucky (102,350 sq. km.).
Cities: Capital of Serbia--Belgrade, Capital of Montenegro--Podgorica. Other cities--Pristina, Pancevo, Novi Pazar, Uzice, Novi Sad, Subotica, Bor, Nis, Tivat, Kotor.
Terrain: varied; in the north, rich fertile plains; in the east, limestone ranges and basins; in the southeast, mountains and hills; in the southwest, high shoreline with no islands off the coast.
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, Adriatic climate along the coast, hot, dry summers and autumns and relatively cold winters with heavy snowfall inland.

People (July 1998 est.)
Nationality: Noun--Montenegrin(s) and Serb(s); adjective--Montenegrin and Serbian.
Population: 11,206,039, (Montenegro--679,904; Serbia--10,526,135).
Population growth rate: Montenegro--0.07%; Serbia--0.02%
Ethnic groups: Serbian 63%, Albanian 14%, Montenegrin 6%, Hungarian 4%, other 13%.
Religions: Orthodox 65%, Muslim 19%, Roman Catholic 4%, Protestant 1%, other 11%.
Languages: Serbo-Croatian 95%, Albanian 5%.
Health: Infant mortality rate--11.24 deaths/1000. Life expectancy--(Montenegro) male 73 yrs., female 80 yrs.; (Serbia) male 71 yrs., female 76 yrs.

Type: Republic.
Constitution: Adopted April 27, 1992.
Independence: April 11, 1992 (Federal Republic of Yugoslavia formed as self-proclaimed successor to the Socialist Federal Republic of Yugoslavia).
Branches: Executive--President (chief of state), Prime Minister (head of government), Federal Executive Council (cabinet); Legislative--bicameral Federal Assembly (Savezna Skupstina) consists of the Chamber of Republics (Vece Republika) and the Chamber of Citizens (Vece Gradjana); Judicial--Federal Court (Savezni Sud) and Constitutional Court.
Political Parties: Serbian Socialist Party (SPS) (former Communist Party), Serbian Radical Party (SRS), Serbian Renewal Movement (SPO), Democratic Party (DS), Democratic Party of Serbia (DSS), Democratic Party of Socialists of Montenegro (DPSCG), People's Party of Montenegro (NS), Socialist People's Party of Montenegro (SNP), Social Democratic Party of Montenegro (SDP), Liberal Alliance of Montenegro (LSCG), Democratic Community of Vojvodina Hungarians (DZVM), Alliance of Vojvodina Hungarians (SVM), League of Social Democrats of Vojvodina (LSV), Reformist Democratic Party of Vojvodina (RDSV), Democratic Alliance of Vojvodina Croats (DSHV), Kosovo Parties--Democratic Alliance of Kosovo (LDK), United Democratic Movement (LBD), Party of Democratic Action (SDA), Civic Alliance of Serbia (GSS), Yugoslav United Left (JUL), New Democracy (ND).
Suffrage: 16 years of age if employed; universal at 18.

GDP (1997 est.): $24.3 billion.
GDP growth rate (1997 est.): 7%.
Per capita income (1997 est.): $2,280.
Inflation rate (1997): 7%.
Natural Resources: oil, gas, coal, antimony, copper, lead, zinc, nickel, gold, pyrite, chrome.
Agriculture: 25%.
Industry: 50%.
Trade (1996): Exports--$2.8 billion. Major markets--Russia, Italy, Germany. Imports--$6.2 billion. Major suppliers--Germany, Italy, Russia.


The Serbian state as known today was created in 1170 A.D. by Stefan Nemanja, the founder of the Nemanjic dynasty. Serbia's religious foundation came several years later when Stefan's son, canonized as St. Sava, became the first archbishop of a newly autocephalous Serbian Orthodox Church (1219). Thus, at this time, the Serbs enjoyed both temporal and religious independence. After a series of successions, Serbia fell under the rule of King Milutin who improved Serbia's position among other European countries. Milutin was also responsible for many of the brightest examples of Medieval Serbian architecture. Moreover, Serbia began to expand under Milutin's reign, seizing territory in nearby Macedonia from the Byzantines. Under Milutin's son, Stefan Dusan (1331-55), the Nemanjic dynasty reached its peak, ruling from the Danube to central Greece. However, Serbian power waned after Stefan's death in 1355, and in the Battle of Kosovo (June 15, 1389) the Serbs were catastrophically defeated by the Turks. By 1459, the Turks exerted complete control over all Serb lands.

For more than 3 centuries--nearly 370 years--the Serbs lived as virtual slaves of the Ottoman sultans. As a result of this great oppression, Serbs began to migrate out of their native land (present-day Kosovo and southern Serbia) into other areas within the Balkan Peninsula, including what is now Vojvodina and Croatia. When the Austrian Hapsburg armies pushed the Ottoman Turks south of the Danube in 1699, many Serbs were "liberated" but their native land was still under Ottoman rule.

Movements for Serbian independence began more than 100 years later with uprisings under the Serbian patriots Karageorge (1804-13) and Milos Obrenovic (1815-17). After the Russo-Turkish War of 1828-29, Serbia became an internationally recognized principality under Turkish suzerainty and Russian protection, and the state expanded steadily southward. After an insurrection in Bosnia and Herzegovina in 1875, Serbia and Montenegro went to war against Turkey in 1876-78 in support of the Bosnian rebels. With Russian assistance, Serbs gained more territory as well as formal independence in 1878, though Bosnia was placed under Austrian administration.

In 1908, Austria-Hungary directly annexed Bosnia, inciting the Serbs to seek the aid of Montenegro, Bulgaria, and Greece in seizing the last Ottoman-ruled lands in Europe. In the ensuing Balkan Wars of 1912-13, Serbia obtained northern and central Macedonia, but Austria compelled it to yield Albanian lands that would have given it access to the sea. Serb animosity against the Hapsburgs reached a climax on June 28, 1914, when the Austrian archduke Franz Ferdinand was assassinated in Sarajevo by a Bosnian Serb, Gavrilo Princip--the spark that lit the powder keg of World War I.

Soon after the war began, Austro-Hungarian and Bulgarian forces occupied Serbia. Upon 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 Hapsburgs sought the protection of the Serbian crown within a 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 Croatians 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, Yugoslavia was divided between the Axis powers and their allies. Royal army soldiers, calling themselves Cetnici (Chetniks), formed a Serbian resistance movement, but a more determined communist resistance under the Partisans, with Soviet and Anglo-American help, liberated all of Yugoslavia by 1944. In an effort to avoid the Serbian domination during the post 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 attempts at a federal system of government for Yugoslavia, Serbian communists played the leading role in Yugoslavia's political life for the next 4 decades. As the Germans were defeated at the end of World War II, Josip Broz Tito, a former Bolshevik and devout communist, began to garner support from both within Yugoslavia as well as from the Allies. Yugoslavia remained independent of the U.S.S.R., as Tito broke with Stalin and asserted Yugoslav independence. Tito went on to control Yugoslavia for 35 years. Under communist rule, Serbia was transformed from an agrarian to an industrial society. In the 1980s, however, Yugoslavia's economy began to fail. With the death of Tito, separatist and nationalist tensions emerged in Yugoslavia. In 1989, riding a wave of nationalist sentiment, Serbia's leadership reimposed direct rule over the autonomous provinces of Kosovo and Vojvodina, prompting Albanians in Kosovo to agitate for separation from the Republic. 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.

Montenegro's history is almost inextricably tied to Serbia's. Similarly to Serbia, Montenegro was under the rule of the Ottoman Turks for the duration of their reign in the Balkans. When the Turks were removed from the area, Montenegro became an independent principality within the Austro-Hungarian Empire but did not become an independent sovereign state until 1878.

During World War I, Montenegro fought on the side of the Allies but was defeated and occupied by Austria. Upon Austrian occupation, the Montenegrin king, King Nikola I, and his family fled to Italy. Consequently, the Serbian king, Petar Karadjordjevic, was able to exploit the chaotic conditions in Montenegro at the war's end, paving the way for the violent and unwanted Serbian annexation of Montenegro. Montenegro was the only Allied country in World War I to be annexed to another country at the end of the war. The majority of the Montenegrin population opposed the annexation and on January 7, 1919, staged a national uprising -- known to history as the Christmas Uprising -- against the Serbian annexation. The uprising became a war between Serbia and the Montenegrins that lasted until 1926. Many Montenegrins lost their lives, and though many hoped for an intervention by the Great Powers to protect their sovereignty, none came and Montenegro was effectively absorbed into the new kingdom of Yugoslavia.

When Yugoslavia was invaded and partitioned by the Axis powers in April 1941, Montenegro was appropriated by the Italians under a nominally autonomous administration. This caused a great divide within the Montenegrin population. Many nationalists who had been frustrated with the experience of Yugoslav unification supported the Italian administration. Also, there were advocates of the union with Serbia who began armed resistance movements as well as many communists who, by nature of their political beliefs, were opposed to the Italian presence. As war progressed, the local strength of the communists grew and Montenegro served as an effective base for communism in the region; it was an important refuge for Tito's Partisan forces during the most difficult points in the struggle. After the war, the communist strategy of attempting to unify Yugoslavia through a federal structure elevated Montenegro to the status of a republic, thus securing Montenegrin loyalty to the federation.

The breakup of the Yugoslav federation after 1989 left Montenegro in a precarious position. The first multiparty elections in 1990 showed much public support for the League of Communists, confirming Montenegrin support for the federation. Montenegro joined Serbian efforts to preserve the federation in the form of a "Third Yugoslavia" in 1992. Though Montenegro reaffirmed its political attachment to Serbia, a sense of a distinct Montenegrin identity continued to thrive. Outspoken criticism of Serbian conduct of war in Bosnia and Herzegovina added to the continuing strength of Montenegrin distinctiveness. Recently, both the people and the government of Montenegro have been critical of Slobodon Milosevic's campaign in Kosovo.

Even as opposition is grows, the organs of government in the Federal Republic of Yugoslavia (F.R.Y.) remain dominated by F.R.Y. President Milosevic. And although his political party, the Socialist Party of Serbia (SPS), does not have a majority in either the federal or Serbian parliaments, it dominates the governing coalitions and holds the key administrative positions. An essential element of Milosevic's grasp on power is his control of the Serbian police, a heavily armed force of some 100,000 that is responsible for internal security and which reportedly has commited numerous serious human rights abuses.

In late 1998, Milosevic unleashed a brutal police and military campaign against separatist insurgents in the southern Serbian province of Kosovo. Milosevic's campaign and failure to capitulate to resolutions agreed upon in the Rambouillet Accords provoked a military response from NATO which consisted primarily of aerial bombing and lasted from late March 1999 through late June 1999. For the duration of Milosevic's campaign, enormous masses of ethnic Albanians were either displaced from their homes in Kosovo or killed by Serbian troops or police. Both Milosevic's and NATO's campaigns have stopped, and negotiations within the European community for a lasting peace in the region are in progress. The United States would like to see a democratic Serbia emerge from its isolation and rejoin European and international institutions, something that will only be possible once Milosevic is removed from power. The U.S. also is calling for Milosevic and other high-ranking Serbian officials to be tried as war criminals at The Hague.

At the outbreak of the war in Yugoslavia, the U.S. and most West European countries broke relations with the F.R.Y, and the U.S. embassy is now closed. The F.R.Y. must reapply for membership, as did the other four former Yugoslav republics, in the United Nations, the Organization for Security and Cooperation in Europe, and other international organizations and financial institutions such as the World Bank and International Monetary Fund.

In addition to remaining barred from membership in international organizations, the F.R.Y. is still subject to an "outer wall" of sanctions maintained by the United States and the international community until it makes substantial progress on five core issues: a Kosovo settlement, cooperation in implementing the Dayton Peace Accords, cooperation with the International Criminal Tribunal for the Former Yugoslavia, progress on democratization in the F.R.Y., and resolution of the Yugoslav state succession issues.

Montenegro continued to be the only bright spot in the F.R.Y. in 1998, although Milosevic's influence threatened to complicate Montenegro's efforts at democratization. In January 1998, Milo Djukanovic became Montenegro's President, following bitterly contested elections in November 1997, which had been adjudged by international monitors to have been free and fair. His reform coalition followed up with parliamentary elections in May. President Djukanovic continues to implement democratic and economic reforms, while weathering a relentless campaign by Milosevic to undermine his government.

The Federal Assembly (Savezna Skupstina), consisting of the Chamber of Republics (Vece Republika) and the Chamber of Citizens (Vece Gradjana), is the law making body of the Government of the Federal Republic of Yugoslavia.

There are 40 seats in the Chamber of Republics, 20 of which are Serbian and 20 of which are Montenegrin. Members serve 4-year terms, and seats are distributed on the basis of party representation to reflect the composition of the legislatures of the republics of Montenegro and Serbia. There are 138 seats in the Chamber of Citizens, 108 of which are Serbian with half elected by constituency majorities and half by proportional representation. Of the 30 Macedonian seats, six are elected by constituency and 24 are elected proportionally. Members serve 4-year terms.

The last election for the Chamber of Republics was held on December 24, 1996. The last election for the Chamber of Citizens was held 3 November 1996. The distribution of seats by party is: SPS/JUL/ND 64, Zajedno (a coalition of SPO, DS, and GSS) 22, DPSCG 20, SRS 16, NS 8, SVM 3, other 5.

Judicial System
The court system consists of a Constitutional Court and a Federal Court (Savezni Sud). In both courts judges are elected for a 9-year term.

Military branches include a People's Army (including ground forces with internal and border troops, naval forces, and air and air defense forces) and Civil Defense. Civilians fit for military service are estimated at about 150,666 for Montenegro and 2,187,111 for Serbia. The 1998 estimate for military expenditures as percent of GDP is 6%.

Principal Government Officials
F.R.Y. President--Slobodan Milosevic
President of Serbia--Milan Milutinovic
President of Montenegro--Milo Djukanovic
F.R.Y. Prime Minister--Momir Bulatovic
F.R.Y. Foreign Minister--Zivadin Jovanovic
Serbian Prime Minister--Mirko Marjanovic
Montenegrin Prime Minister--Filip Vujanovic

The economy of the Federal Republic of Yugoslavia (Serbia and Montenegro) continued a slow economic decline in 1998. Exacerbated by additional international sanctions imposed in response to President Slobodan Milosevic's actions in Kosovo, the F.R.Y. economy's downward spiral showed no real sign of recovery by the outset of 1999. Despite internal optimistic projections, economic growth limped along at 3.5% in 1998, with inflation about 45%. Economic growth is unlikely without outside investment, which is not expected, and most observers predict that inflation will accelerate and living standards will continue to decline.

The F.R.Y.'s monetary unit, the dinar, remained volatile, falling from 4.6 dinars to the DM in December 1997 to a temporary low of 9.5 dinars per DM in December 1998. Alarmed, F.R.Y. officials took several steps to tighten monetary policy, including ruling out a devaluation in the near term, increasing reserve requirements, and issuing bonds. As 1999 began, the damage control operation had succeeded in returning the rate to 8.5 dinars per DM, but no later data regarding its value has been available.

Substantial economic reform was not pushed in 1998, nor is it anticipated. The law on privatization, which went into effect on October 31, 1997, was largely undersubscribed during its first year. Not a single company was privatized under the new law in 1998. Toward the end of the year, government sources stated that 100 firms had begun the process and that at least 1,000 were having their "capital" evaluated. Meanwhile, polls showed that workers and managers in 300 firms lacked any enthusiasm for privatization. Managers tend to blame the dearth of interest on the current negative business climate in the F.R.Y. The Kragujevac-based "Zastava" automobile plant--heavily damaged during the recent NATO bombing--remains the most publicly discussed large privatization candidate.

Foreign investment remains modest, hampered in part by the Kosovo-related sanctions imposed by the United States and the European Union (EU). Media reports featured F.R.Y. Government attempts to lure foreign investment into Serbia, prompting government spokesmen to portray such efforts as victories, regardless of the results. The Director of the coal sector of Serbia's power company (EPS) announced talks with the German firm Krupp on possible investment in the mines and a DM 150-million deal for coal mining equipment. The largest coal deposits are in Kosovo.

International sanctions continue to hobble the economy. The General Director of Yugoslav Airlines (JAT) announced publicly that losses directly attributable to the EU flight ban had exceeded $35 million in 1998 and that indirect losses were in the hundreds of millions of dollars. According to JAT officials, the losses have prompted the airline to shift some operations to Macedonia.

Since the breakup of the Socialist Republic of Yugoslavia in 1989, the foreign policy of the F.R.Y. seems to have been characterized primarily by a desire to secure its political and geopolitical position and the solidarity of the Serbian people in the Balkan region through a strong nationalist campaign. The F.R.Y. has exacerbated violent campaigns, in Bosnia and Herzegovina, Croatia, and its own province, Kosovo, in order to advance its policies.

Foreign Aid
Since the outbreak of war between NATO and the F.R.Y. in the spring of 1999, the F.R.Y. has received no foreign aid from the United States and other West European countries. The United States' current position (July 1999) is that it will offer humanitarian aid to the people of Serbia but will not offer aid toward the reconstruction of Serbia and President Milosevic's regime.

Since the outbreak of war between NATO and the Federal Republic of Yugoslavia in the spring of 1999 the United States and the F.R.Y. have not maintained diplomatic relations.

Principal U.S. Embassy Officials
The U.S. does not currently maintain a diplomatic presence in the F.R.Y.

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