Unemployment is high, with the unofficial rate approximately 35-40%. Democratic reform in 2000 influenced significant changes throughout social, political and economic spheres. However, it was accompanied by increased prices and uncertainty, causing former nationalist regime to benefit largely in the 2003 elections. Serbia's economic difficulties are many. Kosovo, constituting 20% of Serbia's population, is without a solution. Status of the union of the republics of Serbia and Montenegro is uncertain. Serbia's relations with its neighbors have improved only slightly. In addition, foreign direct investment has been scarce. Still, Serbia has a highly educated workforce and the last government's reforms, if fostered, may begin to take hold. The international donor community has focused significant attention on Serbia which is an important link between Western Europe, Greece, Turkey and Asia.
The Problem
Almost 70% of Serbia's energy is consumed by the residential sector, which owes more to the dilapidated industrial sector than personal use. Frequently, homes of poor quality are heated with electricity. This drains energy resources, particularly in the winter months. Electricity prices have almost tripled in three years causing major financial pressures for many consumers. Nonetheless, electricity is heavily subsidized by the Government. Further, imports during the winter are prohibitively expensive, and the distribution system cannot handle the loads when there is a prolonged and substantial temperature drop, causing brownouts. Also, energy prices for district heating, oil and gas have increased substantially. Municipalities are having difficulty adjusting to new costs of energy use and supplying it to their buildings and residential consumers, as they own the district heating companies. Municipalities no longer receive the usual financial support for operation of district heating plants, schools and hospitals. District heating tariffs have risen by 20-50%, varying by municipality, creating a strain on consumers, who have no effective means of reducing consumption and cost. A new Energy Law that would provide a process for privatization, reform and tougher codes and enforcement has languished in the Parliament for several years.The Alliance's Response
Since 2000, the Alliance has worked closely with four ministers of energy to address the issues facing Serbia. Our efforts have covered three main areas: residential awareness and education, municipal training and project development, and national policy and capacity building support.For more information,please visit www.MUNEE.org
Contact Angela Morin.
