The Inheritance of Milosevic's Regime

Bankruptcy as Salvation

Why is Djindjic's government given just a hundred days as if the situation is normal, and why some parts of the administration do not realise that undertaken obligations to the international community must be met

AIM Belgrade, January 28, 2001

Even before he was elected prime minister of Serbia Zoran Djindjic had opened the will of the previous regime, which as to an ideological antagonist and opponent left him debts to the world, collapsed economy, almost 500 thousand refugees, widespread poverty among the inhabitants, empty pharmacies, bribed state administration and chaotic situation in the country in which more than 40 per cent of the working population have no permanent employment.

The foreign debt which amounts to more than 12 billion dollars exceeds the value of the annual social product, and loses of the economy are estimated at 31.5 billion dollars, while the debt to saving account owners surpasses 7 billion German marks. Mutual indebtedness in the economy and to banks is measured in hundreds of billion dinars, and out of 84 banks less than ten can appear on the market of capital. The others, when they are banned to do business, will have to shut down.

The regime which has invented 270 various taxes in order to collect money from the population for financing the bulky state apparatus, primarily the numerous police which spent more than the education system, has left an empty budget in which there was no money for pensions, health, children's allowances and covering other social needs, nothing to say about the plunder carried out with the help of pyramidal banks.

With all these “pebbles” in his shoes, the new Republican Prime Minister Zoran Djindjic is bound to limp for a long time, so the question that arises is whether those are fair who give him a hundred days for the test to what extent his ministerial cabinet is capable to turn things in the opposite direction, especially because the impression is that more steermen have boarded his ship than those who are ready to row.

After the fall of Milosevic's regime, Serbia was hit by a major wave of inflation which resulted from a sudden interruption of several-year long state control of prices that brought about the situation in which vinegar was more expensive than edible oil. Its destructive effect on the low standard of living of the population at least one third of which was living on the verge of poverty with daily income below one dollar, was gradually alleviated thanks to foreign humanitarian aid in money, food and drugs.

A clear objective and high morality are necessary for economic recovery. As easy it is to determine the objective, it is just as difficult to rely on the latter component. A good example is the transition in Poland and Russia. The former was successful because it had both, and Russia was not because the developmental objective was not accompanied by moral considerations on the necessary level.

When Serbia is concerned, it is uncertain whether in spring effects like in Poland will be felt. This does not depend only on the outcome of the announced showdown with corruption and possible bringing back of the money members of the former regime have taken out of the country, but of the citizens as well. Serbia is faced with the unpleasant truth that its citizens are not used to regular work any more. During the rule of Milosevic's regime, generations have grown up which were not given the opportunity to learn what it feels like to have a permanent employment, but live off jobs that last from day to day.

Their predecessors who once had certain jobs in factories have forgotten to do what had been trained for, because technological development has deprived them of their professions. Along with financial capital Serbia is short of, the lack of expertise of its population is the most catastrophic inheritance left to the new government by the former regime.

By pitiless draining the regime has turned Serbia into a poverty-stricken and undeveloped country, both in the economic and in the general social sense. In its enormous debts to foreign countries and its own citizens Montenegro has found one of the reasons for leaving the joint state with the explanation that with such Serbia it cannot expect its own economic revival. When this is the estimate of the Republic which in former SFRY financed its state a social affairs solely thanks to economic aid of Serbia, Croatia and Slovenia, many believe that Djindjic's cabinet ought to proclaim general bankruptcy and start from scratch. The considerable raise of salaries in the last three months of last year is not the result of an expanding production which is, on the contrary, in an even deeper recession. The incomes of the employed and the pensioners have gone up thanks to the foreign aid. Should it run dry, the standard of living will unrestrainedly tumble down. The aid is conditioned by cooperation of the authorities with the world, primarily with The Hague Tribunal. The deadline for showing readiness for cooperation expires on April 1, and Serbian public is following the actions of the new authorities with trepidation. Some obstinate moves and awkward statements of some of the officials cause fear that certain new leaders have not learnt Milosevic's lesson.

Ratomir Petkovic

(AIM)