Serbia and the Balkans: An Unofficial American View* Daniel Serwer United States Institute of Peace, Washington It is a great pleasure to be back in Belgrade. This is a city where I can count many friends, a city of bustle and energy that a New Yorker finds it easy to like, a city that is not only at the center of the region but also at the center of the region’s history, for better and for worse. I have learned a great deal here. If I dare now to offer a lecture, it is not because I know something you don’t, but because the view of an unofficial Washington observer may be useful as you search for the future that Serbia has so far found wanting. Let me make one thing clear from the start: this is not the Belgrade I have visited half a dozen times over the past four years. When the Prevlaka issue finds at least a temporary resolution in direct talks between Yugoslavia and Croatia, or when the Republic of Serbia tries to integrate Albanians in the Preševo Valley, I know important changes have been made. Today’s Belgrade is a capital that has moved far in the direction of democracy, a market economy and its proper place within Europe and Euroatlantic security structures. That does not mean the transition will be an easy one, though it is sure to be easier than the last ten years. Let me review with you some numbers, the reality of which you all know too well. From 1989 to 2000, Serbia lost more than 50 per cent of its GDP per capita. If Serbia had managed to avoid the wars of the 1990s, even with modest growth, the current GDP would be quadruple what it is today. Serbia today could have been at or beyond the GDP level of the new entrants to the EU. It will now take Serbia – even with rapid growth rates of five percent per year – 20 years to reach today’s average GDP per capita in the European Union. Serbia has lost 20 years in the past 10! The damage to Serbia’s position in the region and in the world has been even greater. Serbia ten years ago stood as the central pillar in a Yugoslavia that was regarded in the West as already halfway to democracy. This in my view was an incorrect evaluation, but a Yugoslavia that had avoided war in the early 1990s would have found itself competing with Poland, Hungary and Czechoslovakia for EU membership. The wars of Yugoslav succession have instead left Serbia a country swollen with more than 600,000 refugees, deprived of many of its young people, farther from European institutions than several of the other former Yugoslav republics (though that may be changing fast), and contaminated with both organized crime and war crimes. Miloševi} even today tries to depict himself as seeking to protect Serb interests. But as you all know too well, Serbia would have been far better off had he not used force, had the issues of secession been resolved peacefully, and had he sought to protect the human rights of Serbs within their new countries rather than seeking to carve Serbian territories out of the neighboring republics. That is the past. What of the future? I would like to approach this question by looking first at Serbia’s democratic transition and then at its relationships with its immediate neighbors, with the EU and with the United States. My point will be this: where Serbia goes in the future, and how fast it gets there, depends above all on you, not on the international community. The rapid acceptance of Serbia back into the UN and other international bodies after Miloševi fell was important to stabilizing Serbia internally, but without further reform Serbia will find itself moving slowly and suffering more, and perhaps even changing its destination from Europe to some isolated and unsatisfying way station. The domestic political stalemate From a Washington perspective, it looks as if your domestic political situation has been at a stalemate. For the moment at least, the people who have slowed reform, especially when it tried to reach beyond the economic sphere, appear to have greater support in the electorate than those who wanted to go farther, faster. The reformers have triumphed lately because they control the Serbian parliament and the electoral rules turned out to be in their favor,