As the economy of the Socialist Federal Republic of Yugoslavia collapsed and entered a prolonged decline in 1989, the country broke up into five new sovereign states by 1992, independence of which was fought over in a series of Yugoslav Wars. The rump state that continued to designate itself as 'Yugoslavia' (Federated Republic of) was established as a confederation of two of these successor states, Serbia and Montenegro.
With hyperinflation exacerbated by the economic embargo imposed during the Bosnian War, the Federal Republic of Yugoslavia (FRY) economy's downward spiral showed no real sign of recovery until 1995. GDP was nowhere near its 1990 level, but the 1999 NATO bombing of Yugoslavia of the basic infrastructure of the country and many factories, as well as a renewed embargo, caused a further huge drop in GDP in relation to the 1991 level. The first sign of an economic recovery occurred in 2001 after the overthrow of Slobodan Milošević, which occurred on 5 October 2000. A vigorous team of economic reformers worked to tame inflation (non-energy inflation is less than 9% in 2002, down from over 120% two years earlier) and rationalize the Serbian and Montenegrin economy. By January 2005, GDP recovered to 55-60% of its 1990 level, due to GDP growth of 8.5% in 2004.[ citation needed ]
Following the 2006 Montenegrin independence referendum, the union dissolved as Montenegro became an independent country. Thereafter, the economy of Montenegro and economy of Serbia would follow different trajectories.
The FRY's monetary unit, the dinar, remained volatile throughout Milošević's rule. Alarmed FRY officials took several steps to tighten monetary policy in 1998, including ruling out a devaluation in the near term, increasing reserve requirements, and issuing bonds. During this period, Montenegro rejected the dinar and adopted the Deutsche Mark (now replaced by the euro) as its official currency. As 1999 began, the damage control operation had succeeded in returning the exchange rate to reasonable levels. However, it was not until 2002, after intense macroeconomic reform measures, that the dinar became convertible—a first since the Bretton Woods Agreements laid out the post-World War II international exchange rate regime.
Privatization efforts have not succeeded as well as macroeconomic reform. The process of privatization was not popular among workers of large socially owned companies, and many citizens appeared to believe the tendering process was overly centralized and controlled from Belgrade. Furthermore, international investment was lagging in Serbia and Montenegro, as a result of both domestic and international investment climates. Managers tended to blame the dearth of interest on the current negative business climate in Serbia and Montenegro.
Purchasing power parity - $25.98 billion (2004 est.)<, $27.5 Billion predicted for 2005 br> Real growth rate: 8.5% (2004 est.), 6.5% (2005 est)
Real GDP Per capita - nominal: $2900 (2004 est.), $3200 (2005 est.)
Composition by sector:
Population below poverty line: 10%
Inflation rate (consumer prices): 12-13% (2004 est.)
Labor force: 3,596,282 (2005 est.)
Budget:
Industries:
Industrial production growth rate: 6.5% (2004 est.)
Production: 31,710 GWh (2001)
Production by source (2001):
Consumption: 32,370 GWh (2001)
Exports: 446 GWh (2001)
Imports: 3,330 GWh (2001)
Production: 15,000-barrel (2,400 m3) 2001
Consumption: 64,000-barrel (10,200 m3) 2001
Exports: NA (2001)
Imports: NA (2001)
Proved reserves: 38.75-million-barrels (6,161,000 m3) January 2002
Proved reserves: 24.07 km3 (January 2002 est.)
Cereals, fruits, vegetables, tobacco, olives; cattle, sheep, goats.
Total: $5.5 billion f.o.b. (2004 est.)(goods and services)
Commodities: manufactured goods, food and live animals, raw materials
Partners: Bosnia and Herzegovina 19%, Italy 12%, Germany 12%, Republic of Macedonia 8%, Russia 4% (2004)
Total: $11.5 billion f.o.b. (2004 est.)(goods and services)
Commodities: machinery and transport equipment, fuels and lubricants, manufactured goods, chemicals, food and live animals, raw materials
Partners: Russia 13%, Germany 13%, Italy 9%, China 5%, USA 4% (2004)
External: $12.6 billion (2004 est.)
-As a percentage of GDP: 55-60% (2004 est.)
Economic aid - recipient: $2 billion pledged in 2001 (disbursements to follow for several years)
Serbian dinar (CSD). Note - in Montenegro the euro is legal tender; in Kosovo both the euro and the Yugoslav dinar are legal (2002)
Code: YUM
Exchange rates: Serbian dinars per US dollar - official rate: 60 (2004); Fiscal year: calendar year
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The State Union of Serbia and Montenegro or simply Serbia and Montenegro, known until 2003 as the Federal Republic of Yugoslavia, FR Yugoslavia (FRY) or simply Yugoslavia, was a country in Southeast Europe located in the Balkans that existed from 1992 to 2006, following the breakup of the Socialist Federal Republic of Yugoslavia. The state was founded on 27 April 1992 as a federation comprising the Republic of Serbia and the Republic of Montenegro. In February 2003, it was transformed from a federal republic to a political union until Montenegro seceded from the union in June 2006, leading to the full independence of both Serbia and Montenegro.
The world economy or global economy is the economy of all humans in the world, referring to the global economic system, which includes all economic activities conducted both within and between nations, including production, consumption, economic management, work in general, financial transactions and trade of goods and services. In some contexts, the two terms are distinct: the "international" or "global economy" is measured separately and distinguished from national economies, while the "world economy" is simply an aggregate of the separate countries' measurements. Beyond the minimum standard concerning value in production, use and exchange, the definitions, representations, models and valuations of the world economy vary widely. It is inseparable from the geography and ecology of planet Earth.
The economy of the Socialist Federal Republic of Yugoslavia (SFRY) was a unique system of socialist self-management that operated from the end of World War II until the country's dissolution in the 1990s. The Yugoslav economy was characterized by a combination of market mechanisms and state planning, with a focus on worker self-management and a decentralized approach to decision-making. Despite facing numerous challenges, including political instability and external pressures, the Yugoslav economy achieved significant growth and modernization during its existence, with a particularly strong emphasis on education, health care, and social welfare. However, the system ultimately proved unsustainable in the face of the global economic changes of the 1980s and the political tensions that led to the breakup of Yugoslavia in the 1990s. Despite common origins, the Yugoslav economy was significantly different from the economies of the Soviet Union and other Eastern European socialist states, especially after the Yugoslav-Soviet break-up in 1948.
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The dinar was the currency of Yugoslavia. It was introduced in 1920 in the Kingdom of Serbs, Croats and Slovenes, which was replaced by the Kingdom of Yugoslavia, and then the Socialist Federal Republic of Yugoslavia. The dinar was subdivided into 100 para.
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The Republic of Serbia was a constituent state of the Federal Republic of Yugoslavia between 1992 and 2003 and the State Union of Serbia and Montenegro from 2003 to 2006. With Montenegro's secession from the union with Serbia in June 2006, both became sovereign states in their own right for the first time in nearly 88 years.
The Republic of Montenegro was a constituent federated state of the Federal Republic of Yugoslavia and then Serbia and Montenegro between 1992 and 2006. The declaration of independence of Montenegro in 2006 ended the ex-Yugoslav state. After the collapse of the Socialist Federal Republic of Yugoslavia (SFRY), the remaining republics of Montenegro and Serbia agreed to the formation of the Federal Republic of Yugoslavia (FRY) which officially abandoned communism and nominally endorsed democratic institutions. Montenegro was a constituent republic of the FRY and its successor state until June 2006 when Montenegro declared independence from Serbia and Montenegro following the 2006 Montenegrin independence referendum.
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