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This article provides information on Serbia and Montenegro. The Serbian state as known today was created in 1170 A.D. by Stefan Nemanja, the founder of the Nemanjic dynasty. Montenegro's history is almost inextricably tied to Serbia's. Montenegro was the only Allied country in World War I to be annexed to another country at the end of the war. Military branches of both countries include the Army of Serbia and Montenegro, which includes ground forces with internal and border troops, naval forces, and air and air defense forces, and Civil Defense. Civilians fit for military service are estimated at about 2,088,595 (2001 est.). The 2002 estimate for military expenditures as percent of GDP is 3.6%. Following the assassination of Serbian Prime Minister Zoran Djindjic in March 2003, the Ministry of Defense has undertaken significant reform initiatives, which have been successful in moving Serbia and Montenegro closer to Euro-Atlantic integration. The economy of Serbia and Montenegro entered a prolonged decline in 1998. Privatization efforts have not succeeded as well as macroeconomic reform. The process of privatization is not popular among workers of large socially owned companies, and many citizens appear to believe the tendering process is overly centralized and controlled from Belgrade.

Discusses the political conditions which have developed after the failure of the Presidential elections in Serbia and Montenegro. Turnout of voters in presidential elections held in Serbia; Invalidation of Presidential election in Montenegro; Role of the failure of presidential election in Serbia in delaying the constitutional blueprint of the future of Serbia & Montenegro union.

The article focuses on political and economic conditions in Serbia and Montenegro as of October 2003. Violence in Kosovo has been escalating with the UN Mission in Kosovo frequently the subject of attacks, prompting a meeting of the UN Security Council on August 18 to discuss the security situation. Montenegro, which the authorities expect to be adopted by parliament, says Kosovo is part of Serbia, whereas most ethnic Albanians there want independence.

The article presents political and economic risk summary of Serbia and Montenegro as of July 2003. Criticism will continue to grow over the Serbian government's efforts to quash dissent from the media and political adversaries-in particular the reformist G17 Plus group that emerged from a prominent think-tank at the end of 2002. It is driven in part by an accelerated privatization process. However, there are significant downside risks, not only from a still-tough external environment, but also from the risk that the privatization drive will fail to attract sufficient good quality investors prepared to pay sensible prices for the assets on offer. The government of Montenegro will be hoping to avoid the controversy that has accompanied the sell-off of Serbia-based steel mill Sartid, with the launch of an international tender for the sale of a 57.99% stake in its sole Niksic steelworks in mid-July 2003.