Protests of Miners and Metal Workers

Keeping the Social Revolt in Check

Just as forecast, social-economic pressures on the Government of Serbia intensified in September. People are demanding halting of the further deterioration of their living standards, which resulted from the spiralling prices of electricity, phone services, meat, bread, etc. The Government was thus forced to reduce the announced increase of the electricity rates and postpone until the end of the year all other price increases, except for heating and municipal transportation.

AIM, Beograd, September 11, 2001

The politically, economically and socially long-announced "hot" autumn in Serbia started rather early and stormily this year. In the day Serbian Prime Minister Zoran Djindjic had an unpleasant discussion with Kolubara miners, metal workers were at the same time protesting in front of the Government building. Before workers of these two most delicate branches of Serbian industry made their direct demands, the Independent Trade Unions had organised one-hour general strike of warning in which, according to organisers, about half a million of workers took part.

The direct cause for such tumultuous and large-scale reactions of workers is their hard social and economic position, which is shared by some 1.2 million pensioners who, same as the employees, are unable to meet their basic needs with their modest income. According to statistical data the value of the so called consumer basket for a three-member family, which includes costs of food and toiletries, as well as of utilities is DM 315 and is, in most cases, much above average monthly income. It has been calculated that in the first half of the year the purchasing power of the population has fallen by a high 35 percent, whereas according to forecasts this year's inflation rate should be 40 percent only if there are no further price increases, which means that the planned inflation rate of 30 percent will be exceeded.

Although numerous demands are made at workers' protest rallies, the key one requests the Serbian Government to improve their economic status which has seriously deteriorated after disproportionate increase of prices of basic necessities compared to the growth of incomes. After the decision of the Government of Serbia to liberalise prices in order to establish price parity between certain products, the population of Serbia has faced with enormous price rise. This caused marked rise of electricity rates, phone services, as well as of prices of meat and bread, while the increase of prices of heating and municipal transportation is also expected. The introduced 20 percent tax on textbooks also increased costs of textbooks, which was a reason why many households went bankrupt.

When it comes to the Government of Serbia, which boldly embarked upon economic reforms by implementing shock therapy with the intention of having things done as quickly as possible, but risking the large-scale outburst of dissatisfaction, it cannot afford to ignore these workers' protests. They include both those who have above the average incomes and fall into the category of relatively well-paid workers, as well as those with low and irregulars pays. The Kolubara miners and metal industry workers are an illustrative example of these two groups. The miners are paid above the average incomes and therefore fall into the category of employees whose wages have been frozen, while metal workers practically have no work and therefore receive no wages.

The Government took a rather diplomatic stand in these negotiations. It promised to pay jubilee-awards to miners but insisted on its decision on wage-freeze, also sending a clear message to metal workers that they would get the money only when they produce goods that can be sold.

The metal complex once was the pride of Serbian industry, and is being slowly extinguished today. This will put some half a million of people, whose living depends on this field one way or the other, in a very difficult situation. The first move was made in "Zastava" from Kragujevac where after a sharp cut over 15 thousand workers lost their jobs. This Government's move was interpreted as an indication of a drastic reduction of the number of employed in metal industry, which increased workers' dissatisfaction even more.

They are demanding work, which clearly shows what are the prospects of metal industry. However, Serbian Prime Minister firmly replied that the Government would not provide money for wages, but only for programmes that guarantee profitable production. This is a major turnabout in relation to the behaviour of previous Government under Milosevic's regime, which printed money so as to buy social peace. This time, the strikers are facing a differently oriented Government, which is resolved to carry out the reforms.

Despite numerous protests, Government's position is not in danger because expressing their dissatisfaction the workers are not demanding its replacement, but only financial assistance. Thanks to foreign donations the Government has space to help the most vulnerable population categories financially, but once this source is exhausted it will have serious problems. It is working on providing funds for important investment in economic development in two directions. One is turned towards foreign countries, from which it expects quick and timely inflow of donations, and the other towards accelerated privatisation of social and state firms, the sale of which would start an important investment cycle and help achieve 5 percent growth of social product planned for this year.

The Government is now in a situation in which its reforms might become jeopardised, because it must not allow further liberalisation of prices or any other radical moves in view of such low personal incomes. It has already been decided to stop the announced 40 percent increase of electricity rates, because the Government has opted for a more modest "electric shock" of 15 percent at the most. The media are filled with statements of Ministers from various departments, who are showering the public with daily messages that there will be no more price rises till the end of the year (except of the announced increase of heating and municipal transportation rates) so as to help calm down the situation.

In order to ensure conditions for the continued implementation of its reforms, the Government of Serbia must secure the writing-off of two-thirds of foreign debt, which amounts to USD 12 billion, and carry out quick privatisation of firms it could sell for a good price. In addition to these two economic moves, it also has to achieve evident results in controlling the crime and corruption, which is a precondition for the inflow of foreign capital and for attracting of foreign investors.

Without these two, the economic recovery (which was disappointing in the first half of the year with the recorded 2.5 percent fall of industrial production) is inconceivable. True, the total social product increased by almost 1.5 percent thanks to agriculture. Nevertheless, these are modest results because due to severe drought, last year's agricultural output was exceptionally low so that its growth this year is not impressive either.

The Government is faced with the growing impatience of the population which, faced with poverty, demands quicker growth of living standards than was the case till now. Those well-versed think that the Government's hard position is threatening its prospects for staying in power assessing social revolt as a form of pressure on Government to more efficiently resolve economic and social problems in Serbia. This pressure on the Government is a result of its decision to take the fate of the economy into its hands so that the public has become aware that socio-economic hardships can be alleviated only by exerting pressure on the Government.

Ratomir Petkovic

(AIM)