THE SHOCK OF NORMALIZATION

AIM, BELGRADE, September 9,1994

Serbia and the Alleviation of the Sanctions

" We do not wish to live under pressure or the sanctions," Slobodan Milosevic, the President of Serbia finally said at a rally in Vranje, on the very same day when in Berlin the Russian diplomat, Vitaly Churkin tried to convince his collegues in the Contact Group for Bosnia, that the alleviation or even lifting of the santions against Yugoslavia should be proposed to the Security Council, and thus reward Belgrade's change of policy.

Due to a number of reasons, the Serbian leader urgently requires even the slightest evidence that the quarrel with the Serbs in Bosnia will result in economic benefits to Serbia, since it is clear to everyone here that even "symbolic support", such as the opening of the airport for international traffic, would carry a very tangible message to the neighbouring countries not to "split hairs" over the entry of imported oil or exit of compositions with Yugoslav wheat.

Actually, at this point the "alleviation of the sanctions" would suit Milosevic's strategy much better than their complete lifting, since in the case of the former the extremely high foreign debt (approximately 6 billion dollars) would not be triggered off, conditions would not be imposed for renewed membership in the MMF, problems of the possible "unitaleral moratorium" which Yugoslavia would have to proclaim would not be initiated, etc. In other words, the lifting of the sanctions without immediate foreign financial support would reveal to the general public at home the fact that Serbia simply does not have sufficient funds for the import of required supplies (medicines, oil, basic spare parts and intermediate goods). That fact is at present hidden by the sanctions.

"Alleviation" seems better likewise because the Serbian Socialists are still not through with some dirty jobs they have to complete in the domestic economy before the full opening of the country. These "dirty jobs" most certainly include the squaring of accounts with the workers who have only now come to understand what they have lost in terms of economic and market performance with the disintegration of former Yugoslavia. The recent strike in the foundry of the Motor and Tractor Industry in Rakovica, which was the workers' response to the management's attempt to send approximately 1200 workers on "forced leave", actually to prepare the laying off of every fourth employee (making excuses by saying that Beogradska banka, their main creditor required that the firm be "relieved" of the redundant workers), represented the first " measuring of strength" between the authorities and the workers.

The Serbian Government is not so illiterate economically as not to know that even in the case of the alleviation of the sanctions it shall have to withdraw the law currently in effect which bans the firing of employees during the world blockade if it wishes to create even an illusion of a systemic environment in which enterprises would be compelled to begin more efficiently, owing to economic coercion, the difficult struggle for survival on the domestic, and even more so on the international market.

Serbia has no more time to wait for the spectacular lifting of all world sanctions, so that the more serious "alleviation" of the blockade on the roads, at the Surcin airport, and perhaps on the Danube could be used, as a "positive normalization shock" in the mass-scale, risky sweeping operation of laying off the redundant work force in state and para-state organizations,in order for them to survive at a time when the opaque curtain of the world blockade will longer be there to hide their technological, financial, organizational, professional and nnovational impotence.

Stopping this summer the process of privatization of the economy, the Serbian authorities intentionally exposed themselves to the threat of taking the blame after the sanctions for all the unpopular measures they will have to take in order for the industry to achieve basic efficiency. By that move, the authorities have publicly declared themselves the owners of the overall economy, and employer of all the Serbs working in the big firms of the traditional branches of the industry. And both the owners and the employers are usually looked upon by the employees as "class enemies" - except if by means of "the dictatorship of the proletariat" or some "dictatorship of the initiated masses" these laborers are kept under control and in the "safe poverty" of a full employment society.

This is approximately where the beginning of the unravelling of this paradoxical operation can be discerned, namely that the state, aware that the tornado of the economic contest is approaching, is not running away from its accountability to the working class, by washing its hands from ownership of dead capital through some form of privatization, but on the contrary is doing exactly the opposite. The question is will it have the political power to fire nearly 900,000 employees which have become, owing to the contracted Yugoslav market and changes in the East European space, redundant?

In these intricate maneuvers, the highest representatives of authority in Serbia have certaintly weighted out what is to their best advantage - whether to reduce for themselves the burden of responsibility by, according to the assessment of their Socialist Party, transferring ownership over the remains of the state capital to the "upstarts, rascals from their own ranks, war profiteers, corrupt status seekers, emigre maniacs, members of the international mob, victors of every war" or else take over themselves the entire capital, and thus risking a conflict with the people, keep all the privileges, much greater than those they could have if their power were narrowed down only to the functions of "popular tribune."

After all, the authorities which pulled all the strings in Serbia, precisely at the time of the colossal Yugoslav chaos at the end of the eighties, know well that its model of rule could not function "in parts" (an expression frequently used by the Serbian leader himself on various ocassions, but always with the deepest indignation). A model in which all the ministers are actually "executive secretaries", and the entire Parliament only an "exhibitionists club" for entertaining television viewers, could not function without the absolute right of disposing with public, social and private property, the entire work force and all other "national resources."

The internal reining up of the economy after the "state socialism" model should alleviate the opening up towards the world, including the easing of the monetary policy. The alleviation of the anti-inflationary therapy and the renewed setting in motion of the dinar issue and gold coin minting, is justified by Governor Avramovic by the claim that the social product of the FR of Yugoslavia will exceed 18 billion DEM this year, and that such a social product cannot be serviced by a money supply of only 2,5 billion dinars (15 percent of the money against the product, while in the countries previously treated for inflation, the share was often about 30 percent).

The pragmatical Dr. Avramovic is very well aware of the fact that this fall there will be no other sources for raising about 700 million dinars (Deutsch marks) required for the purchase of the autumn sunflower, sugar beet and maize harvest - except the minting of gold coins and issuing of fresh money. While the previous inflation was justified by the pressure of world sanctions, some future inflation can once again be justified by the sanctions, only this time by their alleviation or lifting. Someone might call this a paradox. But what is not a paradox in the Balkans?

Dimitrije Boarov