Serbia and Montenegro

THE STATE UNION of Serbia and Montenegro (SCG), formed in February 2003, is made up of two member states, the state of Montenegro and the state of Serbia, which includes the Autonomous Province of Vojvodina and the Autonomous Province of Kosovo and Metohija, which is currently under an international administration in accordance with United Nations Security Council Resolution 1244.

Situated in southeastern Europe, SCG has a population of 10,019,657, of which 9,396,411 live in Serbia (2,116,725 in Vojvodina and 1,800,000 in Kosovo and Metohija) and 623,246 in Montenegro. The majority of the population is Serb (62.6 percent), with Albanians at 16.5 percent and Montenegrins at five percent. The sizable minority includes Hungarians, Muslims/Bosniaks, Croats, and Slovaks. Orthodox Christians are the most numerous, with the strong presence of other religious communities—Islam, Roman Catholic, and Protestant.

Because of the decade-long international sanctions, wars of succession, and NATO (North Atlantic Treaty Organization) bombing campaign, the economy of SCG has badly suffered. Upon the collapse of Slobodan Milosevic's regime in October 2000, the SCG economy has been slowly reintegrated into the international community. While Gross Domestic Product (GDP) grew at 6.9 percent in 2004, the GDP per capita of $2,400 is seriously lagging when compared to other transitional economies. The unemployment rate is close to 30 percent and severely impedes economic restructuring and liberalization of the market. The complexity of SCG's political relationships, legal uncertainty over property rights, and scarcity of foreign-investment are holding back the economy.

Poverty analyses show that poverty in the union is at about 11 percent; approximately 800,000 in Serbia and 87,600 in Montenegro live below the national poverty lines, with consumption (per equivalent adult) at less than $85 per month in Serbia and $135 in Montenegro, that is, $2.90 and $4.70 per day. Poverty is higher among vulnerable groups and in rural regions. Additionally, in both republics, many people are at risk of falling below the poverty line, while 15 percent of Kosovo's population live in extreme poverty, surviving on less than $1.10 per day.

Serbs, the strongest and the most numerous amongst the South Slavs, populated the territory of former Yugoslavia in the course of the 6th and 7th centuries. The first Serbian state emerged in 1077 and was recognized by Pope Gregory VII. Serbia prospered the [Page 972]most under the medieval Nemanjic dynasty, which ruled from 1168 to 1371.

Following the Battle of Kosovo in 1389, Serbia first became a vassal state of the Ottoman Empire, and then in 1459 was conquered. Serbia liberated itself from Turkish rule in the beginning of the 19th century, and gained independence along with Montenegro at the Congress of Berlin in 1878.

After World War I, Serbia and Montenegro joined the Kingdom of the Serbs, Croats, and Slovenes in 1918. In 1945, Serbia and Montenegro became republics in the Socialist Federal Republic of Yugoslavia. Upon the unilateral secessions of Slovenia, Croatia, Bosnia and Herzegovina, and Macedonia, Serbia and Montenegro formed the Federal Republic of Yugoslavia in 1992. In 2002, they came to a new agreement that led to the formation of a loose confederation called the State Union of Serbia and Montenegro, instead of the Federal Republic of Yugoslavia.

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