Serbia. New stability, new alliances
BOTH PRIME MINISTER DJINDJIC AND THE INTERNATIONAL COMMUNITY AS A WHOLE AGREE THAT SERBIA HOLDS THE KEY TO FINDING LASTING PEACE AND FUTURE PROSPERITY IN THE BALKAN REGION

A HELPING HAND Prime Minister of Serbia, Zoran Djindjic, receives support from U.S. Secretary of State, Colin Powell. In November Mr. Djindjic also met President Bush in Washington.

Prime minister Zoran Djindjic is a strong advocate of the view that the landlocked republic of Serbia represents the final piece in the Balkan search for stability.
“If Serbia manages to find a model of successful economic and social development, then it can become a real factor for regional stability,” he explains. “The international community must come to understand that only by dynamic economic development in the Balkans can we prevent the reemergence of religious, national and social tensions. Through economic development permanent peace can be achieved.”
Mr. Djindjic insists that despite the question mark surrounding the relationship between Serbia, the smaller coastal republic of Montenegro and the Yugoslav federal government, there is no danger of future conflict erupting in the region.

“It is vital that in the future not a single disputed issue will be solved by the use of force. Serbia is keeping its options open. It is prepared to participate in a reformed federation, but if that does not work, it is also prepared for independence.”
Despite only recently celebrating its first year in power since the collapse of the Milosevic regime, the new Serbian government has already taken significant strides towards normalizing the republic’s political and economic situation. Serbia’s decision to turn Milosevic over to The Hague war crimes tribunal has certainly gone a long way in increasing international confidence in the new administration. As Mr Djindjic explains, “if we want international support, we have to respect our international responsibilities, such as cooperating with The Hague tribunal.”

GORAN PITIC Minister of International Economic Relations

The new administration has also pushed through a raft of reforms designed to restructure the ravaged economy and pave the way for much-needed foreign investment. Goran Pitic, Minister of International Economic Relations, points out that “this government has done more in just a few months than many countries achieve in years.”
Finance and Economy Minister Bozidar Djelic explains in turn that a number of measures to clamp down on corruption and organized crime have already been introduced, while a thorough audit of public finances was carried out last February. The bewildering tax system of old has also been dealt with and replaced by a simplified and more easily understandable set of measures aimed at improving collection and minimizing corruption. The restructuring of inefficient state enterprises is being addressed and a far-reaching privatization program has been launched.
The National Bank of Yugoslavia (NBY), the central bank, has been charged with resurrecting the insolvent banking system that had effectively collapsed under the Milosevic regime and has been at the helm in abandoning onerous exchange restrictions and tightening up monetary policy.

Serbia is also intent on smoothing the path for potential investors. The government recently announced that it is preparing new laws designed to boost investor safety and remove administrative red tape. Under the proposed law, foreign investors would enjoy the same rights as local businessmen, be able to convert dinars into foreign currencies and repatriate their profits freely.
Mr. Djelic believes the international community has an important role to play in ensuring the success of these reforms, especially when it comes to facing the social repercussions of transforming the economy. Relief from the crippling burden of debt and help from the World Bank and donor nations are seen as vital, not just as a way of cushioning the impact of the reforms, but also to enable the reconstruction of the country’s ravaged infrastructure.
Mr. Djelic explains the rationale behind the policy: “The first thing we had to do was to put our own house in order, the second was to implement structural reforms and the third is to get the economy going again.” He says his longer term goals are to ensure that Serbia becomes a fully democratic society and that all sections of society are able to share in the prospective benefits of an open economy.
Prime Minister Djindjic is under no illusions as to the difficulty of the task facing his government. “It will take time and we will have to put a great deal of effort into it. For ten years a negative image of the Serbs has been sent out to the world and it is not easy to change that, but if we are persistent we can succeed in changing things.”