United Nations
Office for the Coordination of Humanitarian Affairs - Belgrade

Review of Urgent Assistance Needs for the Federal Republic of Yugoslavia (Excluding Kosovo)

Winter/Spring 2000/2001

December 5, 2000

Executive Summary

The dramatic political changes occurring in the Federal Republic of Yugoslavia (FRY) and the country’s fragile economic and social conditions call for a prompt response by the international community.

Urgent needs are detailed in the areas of energy, food and agriculture, health, education, social welfare, and the special needs of refugees and IDPs. The paper considers needs in both FRY republics of Serbia and Montenegro, with a primary focus on Serbia where the most urgent unmet needs exist for the next six months, and where donor funding has been limited.

The energy sector represents one of the most important. The power industry in Serbia meets about 75% of basic domestic needs for electricity and systems are rapidly deteriorating due to lack of investment and poor management. The shortfall of 25 M KWH per day must be made up by imports of electricity. Current donor commitments will meet this gap only into January. Provision of gas is the most urgent need. Financial arrangements with Russia, the largest supplier of gas to Serbia, for continued delivery of adequate quantities through the winter are not in place, and US$ 151 million are required to meet demand through March 2001. Large quantities of crude oil or diesel and heating oil (about 400,000 tons) are also needed for heating, power plants, and agricultural and fertilizer production, for which about 50% is covered by FRY and donors. Provision of crude oil, to be refined into heating oil and diesel in Serbia, represents an economical alternative to provision of refined products. Spare parts, particularly in the electricity sector are in critical need. In all, approximately US$ 262 million are required for unmet energy needs. In Montenegro, electricity production exceeds normal energy demand by about 12%. However, lack of adequate coal and system failures during the winter could result in a supply shortfall, particularly for industrial production, which would require imports of electricity, for which external funding would be needed.

Access to adequate food is a problem for a significant portion of the population, particularly for vulnerable groups totaling about 1 million persons including refugees, internally displaced persons (IDPs) and social welfare dependents. Additional food to contribute toward price stabilization is also required. A number of factors have contributed to the severe decline of the agriculture sector resulting in significant reduction in output and export potential. Inputs to the agriculture sector are urgently needed to help the country begin to return to self-sufficiency for wheat and other basic essentials. In all, about US$ 33 million is required for the food and agriculture sector over the next 6 months, in addition to commitments already made. Fuels needed for the agricultural sector are included in the energy sector gaps.

Investment in the health sector has declined dramatically from US$ 200 per capita in 1990 to US$ 35 today. Lack of medicines, broken equipment, and inadequately maintained facilities disrupt health services. The Health Insurance Fund is insolvent, owing nearly US$ 100 million, much of it to the pharmaceutical industry. In the medium and longer-term, reforms and investments are needed to place the health care system on a sound financial footing. Assistance totaling about US$ 63 million is needed to meet urgent material, maintenance and other basic support needs. Heating fuel needs are accounted for in the energy sector gaps.

Problems facing the education sector include chronic under-funding, overuse and poorly maintained facilities, lack of materials, low pay of teachers and outdated teaching methods and curricula. Immediate needs are to allow schools to function during the winter and spring by providing winterization of schools, school materials, heating (needs included in the energy sector gaps) and repairs. A total of approximately US$ 35 million is required.

Welfare and support systems are available in the country with the intent of providing assistance to vulnerable groups (the poor, elderly, invalids, disabled and children with special needs), child-care and support for pensioners. Perhaps as many as 10 times more than those on the welfare roles are in need of assistance. These systems suffer from chronic under-funding, including insufficient allowances to meet basic needs, significant arrears in payments and lack of funds to maintain facilities. Arrears amount to an equivalent of US$ 190 million, most of which relates to the pension fund. Structural reform and investment are required. Funding requests to address these arrears are not included in this paper. However, donor assistance to meet the 12% - 25% expected shortfall in government funding of these various social welfare and pension funds are urgently needed during the next six months to help these vulnerable groups to maintain basic subsistence levels. Support in the amount of $42.5 million is needed.

Refugees and IDPs continue to represent the most significant groups of vulnerable population, having inadequate access to basic services, income earning opportunities and adequate housing. Programmes of UNHCR, the ICRC and NGOs provide nearly all of the support received by these groups. While durable solutions are sought, continued emergency relief is required especially for the winter months. US$ 50 million is requested for the next 6 months, of which about half is covered by current donor commitments.

Table 1 below and Charts 1 - 9 in Annex 1 (pdf) summarize the urgent needs, donor-funding commitments, national resources to meet those needs and gaps that remain. The total gap amounts to US$ 460 million for the period December 2000 – May 2001 for all sectors but energy, where needs are estimated only to the end of March. The UN recognizes the urgent need for the government to address arrears in the social welfare, pension funds and for salaries in various social sectors. However, while these problems are addressed in the sector discussions, the requirements for these arrears are not included in the gaps presented in this paper. Definitions of sectors and sub-sectors are included in Annex 2.

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