The Political and Economic Future of Serbia After Djindjić
June 4, 2003

Staff-prepared summary of the East European Studies discussion with Obrad Kesic, Political Analyst and Consultant at Large, and Srba Antic, Economic Consultant, IMF

The March 12, 2003 assassination of Serbian Prime Minister Zoran Djindjić represented another assault against an already fragile process of political and economic development in the country. EES invited two experts to discuss the ramifications of Djindjić's assassination and the void this event has left in the Serbian leadership.

Obrad Kesic offered a glimpse at the state of affairs during Djindjić's tenure and suggested some guidelines for stabilizing the political sphere. Kesic described the rivalry that had emerged between President Vojislav KoŠtunica and Prime Minister Djindjić. This rivalry between the two largest democratic parties at the time slowed reform and paralyzed decision-making. He placed the primary blame on Djindjić for fragmenting the party system and asserted that Serbians began to view KoŠtunica as incompetent, since he was often too slow to react to political events. Ultimately, Djindjić's credibility was eroded by accusations that he routinely cooperated with organized crime figures – which has largely been confirmed by his assassination. As a result, neither Djindjić's nor KoŠtunica's parties enjoy much support, which has created a legitimacy crisis in Serbia.

After Djindjić's assassination, the government temporarily placed restrictions on the media and initiated a curfew system, hoping to bring stability through the use of emergency powers. Yet this strategy did little to address the legitimacy problem. Kesic asserted that in order to improve long-term stability, political rivalries must end and the two primary democratic parties - KoŠtunica's Democratic Party of Serbia and the coalition of parties called the Democratic Opposition of Serbia (DOS), of which Djindjić's party (the Democratic Party) is an integral part - must be reconciled. Both parties must purge their ranks of radicals and those tainted with connections to organized crime. In the short-term, Serbia must hold new elections, which will relieve questions of legitimacy. He contends that it is also necessary for the United States and Europe to stop playing personality politics and to assist in building modern government institutions.

Antic described Djindjić as the engine behind economic reform in Serbia. Djindjić focused on macro-economic policy and reforms as opposed to monetary policy, and successfully curbed government spending. He also helped the economy maintain a stable exchange rate, thereby decreasing inflation. Djindjić tried to court US and European businesses to invest in Serbia. Today, however, instability in Serbia has stalled foreign direct investment, which will hinder medium-term development. Nevertheless, parties such as G-17 Plus have taken up Djindjić's focus on reform and are likely to help place Serbia on a faster track to the European Union.