The NATO bombing of Yugoslavia in 1999 inflicted serious damage on industry and the infrastructure that reduced the economy to half the size it had been in 1990. Only after Milosevic bowed out of the political arena in 2000, did any serious reform begin as denoted, among other matters, by the fiscal policy and privatization of government companies. At present, economic progress faces problems such as a high external debt and a significant rate of unemployment. The joint future of the two republics, Serbia and Montenegro, is unclear. As at 2005, the two republics have separate central banks, separate budgets and also separate governments. The subject of Montenegro's independence is expected to be decided by referendum in 2006.
Serbia and Montenegro are members of a number of organizations such as UNESCO, UNIDO, IBRD, EBRD, IMF, the UN and WTO (observer status).
The service sector contributes approximately 56% to the economy in Serbia and Montenegro, industry approximately 28% and the balance has its source in agriculture and forestry at about 16%.
The main exports from Serbia and Montenegro comprise agricultural produce, metals and medications.
The main imports to Serbia and Montenegro are machinery and equipment, chemicals and fuel.
Serbia and Montenegro's main trading partners are Germany, Italy and the USA. In 2004, the main exports, approximately 30% went to Italy, some 16% to Germany and approximately 7% each to Austria and Greece.
The main imports into Serbia and Montenegro in 2004 were from Germany (approximately 19%) Italy (approximately 18%) and from Austria (approximately 9%).
From the aspect of natural resources, coal gas, copper, zinc, silver, gold, lead magnesium and more are to be found in Serbia and Montenegro.
An analysis of the main indices shows that the GDP in Serbia and Montenegro over the years in 2001 - 2004 (apart from 2003) was fairly high. Inflation in these same years dropped dramatically from 2000 - 2001 to a forecast 9.8% in 2004.
Unemployment rate forecast for Serbia and Montenegro for 2004 is 31.9%, an extremely high rate in relation to the accepted rate in the West.
According to the CIA Factbook, in 2004, the per capita GDP in Serbia and Montenegro was 2,400 dollars, compared to a world average of $8,800.
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