The Poverty Assessment is the first output of a multi-year program of analytical, monitoring and capacity building poverty work adopted by the World Bank to assist the Governments of Serbia and Montenegro in the development and implementation of their Poverty Reduction Strategies (PRSP). This report i s aimed at informing the Government's Poverty Reduction Strategy as well as the Bank's Country Assistance Strategy (Transition Support Strategy for Serbia and Montenegro).

The report contains the poverty diagnostics based on the 2002 data for Serbia and Montenegro, the most recent at the time of writing the report. The in-depth analysis presented in the report aims to provide an understanding of who are the poor and why there are poor, and the detailed assessment of the access by the poor to key social services and the labor market. The report identifies knowledge gaps that remain to be filled in the future work. An impressive pace of reforms in Serbia and Montenegro requires often updates of the knowledge base and data. This report will be followed by additional data collection and analytical work aimed to fill the remaining knowledge gaps and monitor changes in poverty situation in 2003-2006.

The report is organized in two volumes. Volume One (Executive summary) summarizes the Report content and covers the agenda for poverty reduction in SAM and its two constituent republics, with an emphasis on common aspects. Volume Two (Main report) provides detailed results of poverty analysis and the policy context for developing the poverty reduction strategy. It focuses partly (but not exclusively) on Serbia. Annexes to the Volume Two give a through description of the data used in preparing the report, including the most recent (2003) findings from Montenegro, discuss methodologies for poverty measurement and provide a glossary of technical terms used in the report. In-depth coverage of the situation in Montenegro using 2002 data was presented in a joint World Bank-ISSP background paper by D.Radevic (ISSP) and K.Beegle (The World Bank).