[2] The United States seized all FRY-owned assets and maintained an “outer wall” of sanctions after the war that prevented the FRY’s membership in International Organizations including the IMF.
[3] During the Kosovo War, sanctions expanded to include bans on oil exports to the FRY and the freeze of government assets in the EU.
[8] The FRY experienced impressive growth and commitment to structural reforms in the 2000s, but faced a renewal of economic difficulty after the global financial crisis.
The IMF imposed four conditions for approval of the FRY’s membership, stating the authorities must agree to assume responsibility over its allocated share of the SFRY’s assets and liabilities,[11] notify the Fund of its agreement to the terms and conditions, settle any of the SFRY’s outstanding arrears with the Fund, and be found to be capable of fulfilling the terms of the Articles of Agreement.
The FRY was not found to meet these conditions until December 20, 2000, when the Democratic Opposition of Serbia (DOS) assumed power after the ousting of President Slobodan Milošević.
The SBA sought to build upon the initial progress made by the previous program to encourage the FRY’s macroeconomic and financial stabilization.
[15] However, as the crisis deepened, Serbia’s GDP continued to contract, inflation rose, and the IMF viewed their growth model as unsustainable.
The program’s goals included macroeconomic rebalancing, restoration of confidence and fiscal sustainability, and structural and institutional reform by curbing mandatory spending, reducing state transfers to state-owned enterprises, and improving tax collection efficiency.