Embarking on Transition for a Second Time

A notable acceleration of transition in Serbia came after the October 2000 fall of the Milosevic regime. The establishment of a democratic government, together with gradual reforms of political institutions, radical changes in a number of internal and foreign policy objectives, and renewal of the country’s relations with the outside world and substantial inflow of donor’s assistance, have also permitted a profound transformation of Serbia’s economic system. From early 2001 until the end of 2008, the new policies have brought a number of positive results. Quite contrary to the 1990s, when the Serbian economy was characterized by high economic instability, declining output, little or no interest from foreign investors, and extremely limited systemic changes, the reforms implemented after late 2000 have permitted macroeconomic stabilization, economic recovery, inflow of foreign direct investment, and quick progress in many areas of institutional reforms. The post-2000 period has also seen substantial political instability, but for somewhat different reasons than in the 1990s.