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July 02, 2001

NEWS RELEASE

Embassy of the United States of America, Belgrade

On behalf of the United States of America, I would like to express our appreciation to the World Bank and the European Commission for organizing this second donor coordination meeting in support of the Federal Republic of Yugoslavia and its constituent republics, Serbia and Montenegro.  We commend the World Bank, the EC and the FRY, Serbian, and Montenegrin authorities for their preparation of an impressive and comprehensive needs assessment.  Much has been accomplished since we met in this city last December to address the emergency winter needs in the FRY. The collective efforts of the authorities in Belgrade and Podgorica and the international community alleviated hardship and avoided a humanitarian crisis last winter.  It is now appropriate for us to move ahead together to assess and address the long term requirements for economic recovery and reconstruction, as well as continue support for refugee returns and internally displaced persons in the FRY.

The United States wishes to express its strong support for the efforts now underway in Belgrade and Podgorica to overcome the pernicious legacy of the Milosevic regime and to build a society based upon democracy, market economics, the rule of law, and respect for fundamental human rights.  Since we met here last December, free and fair elections have been held in Serbia on December 23 and in Montenegro on April 22. The FRY has rejoined the community of democratic nations and is now a member of the United Nations, the World Bank, the International Monetary Fund, and other major European and international organizations.  The FRY and Serbian authorities have cooperated closely with NATO and the OSCE to improve dramatically the security situation in Southern Serbia and to put in place confidence building measures and bring new hope for economic development for all the people of that region. 

We applaud the step taken yesterday by Belgrade to transfer Slobodan Milosevic to the War Crimes Tribunal in The Hague.  As President Bush has stated, and I quote, "This very important step by the leaders in Belgrade ensures that Milosevic can finally be tried for his crimes against humanity."  This action is a strong sign of the commitment of Yugoslav authorities to cooperation with the Tribunal.

Since donors last met in December, the FRY authorities have released hundreds of Albanians from Kosovo imprisoned by the Milosevic regime on political grounds during and after the Kosovo conflict.  We commend the FRY authorities for release of these political prisoners but have not forgotten those who remain wrongfully detained.  We strongly urge Belgrade to release all remaining Kosovar Albanian political prisoners immediately.

We also commend the courageous course being taken by the FRY authorities to restructure the economy and to implement market reforms.  The FRY has begun a number of urgently needed initiatives, including reduced subsidies, tax reform, and greater budget transparency.  Foreign trade has been liberalized, military spending brought under civilian control, and a new privatization law is being prepared.  In Montenegro, market reforms, which were launched even during the Milosevic period, have continued to make steady and significant progress.  In both Belgrade and Podgorica, strong economic teams are in place and have the support of the political leadership for ambitious but far-sighted reform programs.

However, economic conditions in the FRY are poor and the authorities face a daunting series of challenges.  Real GDP is about 45% of the 1989 level and official unemployment has risen to 25%.  According to the World Food Program, approximately one million people in Serbia (out of 8.4 million) live in poverty while another million are on the brink of falling below the poverty line.  As we have heard from the World Bank and IMF today, the FRY also faces an extraordinary foreign debt burden and external financing need.

Clearly, the FRY, Serbia, and Montenegro need the strong support of the international community at this critical juncture.  I am proud to announce today that the United States will do its part to meet this urgent need.  Today the United States announces a total of  $181.6 million in new pledges of grant assistance for the FRY.  This pledge includes $8 million for refugee assistance and returns.  In addition, the United States already has ontributed some $33.5 million to the Balkans programs of the U.N. High Commissioner for Refugees in 2001, a portion of which supports refugees and others of concern in the FRY. 

The Administration's pledge includes $75 million in SEED assistance funds for the FRY from President Bush's FY 2002 budget request.  These funds still must be appropriated, but since the Congress took the initial steps yesterday to fulfill the request, we have every reason to believe they will be available.  We are making this pledge confident that Yugoslav authorities will continue down the path of Dayton implementation and full cooperation with the Tribunal, including the transfer to the Tribunal of all other ICTY indictees on the territory of the FRY as well as all other necessary measures, including the furnishing of requested documentation to the Tribunal.

The President stated yesterday, and I again quote, "The United States stands ready to assist the people of Yugoslavia as they continue to take the difficult steps to advance its democratic and economic reform."  Having overcome dictatorship and courageously chosen the democratic path, the people of Yugoslavia now confront a deep economic crisis not of their making.  They are struggling to overcome the legacy of the Milosevic years and build a prosperous market economy.   The United States is confident that this conference today will send the brave peoples of Yugoslavia the strong signal of support that they need and deserve.