Q&A: Yugoslavia donor conference

The U.S. had threatened to boycott the conference if the process to extradite Milosevic did not move forward quickly

LONDON, England (CNN) -- Yugoslavia hopes to raise $1.2 billion at an international donors conference on Friday in Belgrade. CNN's Alessio Vinci explains the issues behind the meeting.

Q: What state is the Yugoslav economy in now?

A: After 10 years of sanctions and mismanagement, the economy has been described as a shambles.

Q: Why is the donor conference critical to Yugoslavia's economy?

A: Yugoslavia hopes to raise up to $1.2 billion in direct aid from the donor conference. This money will be spent to restore the capacity of basic public services such as water supply, electricity importation, water sanitation, heating plants and road repair.

Also, the money will be used to finance the social sector. Pension funds, salaries, education services, urgent health system supplies and other programmes aimed at stabilising the social sphere will be funded by the contributions.

Q: How likely is it that Yugoslavia will reach its $1.2 billion goal?

A: It depends on who participates in the conference. If all the countries and organisations invited to attend participate, then it is possible Yugoslavia could make a good portion of that amount.

Yugoslavia's Deputy Prime Minister Miroljub Labus is already in Brussels, and he has a well-prepared detail reform agenda for Serbia that he will present at Friday's conference to convince donors that their money not only is desperately needed but has already been targeted for specific projects, hoping no waste or mismanagement will occur.

The reform agenda focuses on three main areas: Firstly, the establishment of rule of law in the Yugoslavian state, secondly renewal and revamping of the economy, and thirdly, fighting poverty and establishing social protection for vulnerable groups.

Q: What influence did the threat by the U.S. and top lending institutions to boycott the meeting have on the Yugoslavian government's actions regarding Milosevic's extradition?

The U.S. had significant influence. It is among the countries that have pressed the Yugoslav government the most to extradite Milosevic. The Yugoslav government has all along taken significant steps toward cooperation with The Hague.

The problem of course, lays within the U.S. administration itself. The government may be more inclined to help out while Congress and non-governmental organisations have taken a tougher stance on Yugoslavia saying that a promise to extradite Milosevic is not enough. They want to see him in The Hague, not just extradited.

Q: Why is the European Union so intent on U.S. participation in the conference?

A: Belgrade has made significant progress by adopting a decree on cooperation with The Hague tribunal. However, the U.S. has said it would like to see one or more suspects physically at The Hague before pledging more aid. For this conference Washington has set aside $100 million and an additional amount for Montenegro itself. While this is just a fraction of the $1.2 billion that Yugoslavia needs, the U.S. exercises significant influence on other donors. Their non-participation in the conference would certainly impact on how much other participating countries would pledge.

Q: Is the desire for strong participation by other countries in the donor conference symbolic of Yugoslavia's desire to get back into the international field?

A: Yugoslavia has made significant steps to re-enter the field and has been very much accepted in the international community. It needs to now consolidate its position and show the world that it is moving forward. It needs a rehabilitation process, not just internationally but also internally.

Q: How committed is Yugoslavia to co-operating with The Hague?

A: Yugoslavia is committed to co-operating with the War Crimes Tribunal, but they do not want to sound like they are selling Milosevic. They need assistance but do not want to seem like they are giving up Milosevic for foreign funds. The majority of the population here appears to favour seeing Milosevic tried in Serbia first and then eventually at the War Crimes Tribunal. It's like being stuck between a rock and a hard place.