PRIVILEGES OF SUBSIDIZED DAILIES

Shortage of newsprint

AIM, Belgrade, January 18, 1995 Shortage of newsprint in Serbia, which is approaching a catastrophe and due to which publication of all journals independent of the authorities and absolutely all weeklies is delayed from the first days of January, has not come as a surptise. Back on November 18 last year, the Government of Serbia has secretly reached the decision to distribute the newsprint output of the only Yugoslav producer, "Matroz" from Sremska Mitrovica, to daily newspapers loyal to the regime at half of its price - practically with no left-overs. Such privileged distribution came out in the open only afer the leading privileged journals - "Politika", "Ekspres politika" and "Vecernje novosti" - started racing to determine which one would take the leading position in the market of daily press, after "Borba" was liquidated.

The ambitious Director of the Newspaper Enterprise "Politika", Dragan Hadzi Antic, having acquired practically half of the output of "Matroz" from the Government of Serbia, in other words 40 tons of newsprint a day, out of the total output which is between 80 and 90 tons a day, he started to push a rise of circulation of the central "national daily", even at the cost of failing to print the weeklies published by his very firm (Ilustrovana Politika, Huper, Bazar, Ana, Svet kompjutera). It was necessary to flood the market with the traditionally "moderate newspaper", so that the average circulation of "Politika" grew in the end of the year from about 217 thousand (the average for 1994) to about 250 thousand copies a day. This soaring of the circulation was assisted by its dumping price, as well, because Hadzi Antic, by a decision of the Government of Serbia, had to continue selling the newspaper per 30 paras a copy, although the cost of its production has exceeded one dinar.

After all, reconstruction of the "priority list" in supply of newsprint paper can best explain most of the issues which appear as a conflict among the media and those with "Matroz".

According to the mentioned November decision of the Government of Serbia, "Matroz" is obliged to supply the Newspaper Enterprise "Politika" with the mentioned 40 tons of paper, "Vecernje novosti" with 20 tons (the average circulation of 230 thousand copies last year), "Politika ekspres" with 8 tons ((90 thousand on the average), and four regional dailies (Pobjeda, Dnevnik, Magyar Szo, and Jedinstvo) all with the quota of 7 tons. Altogether, out of the average daily output of the only producer of paper in the FRY, out of the 83 tons last year, 75 are distributed to "loyal" dailies.

The most important thing is that these privileged quotas are also subsidized, so that out of the price fixed at 800 dinars per ton, the Government of Serbia pays "Matroz" 400 dinars per ton. The subsidy is actually much higher, because the the price of newsprint in the country (and in the world) is somewhere about 1600 dinars per ton, which simply means that the system of state determined price of paper, actually subsidizes "loyal dailies" with 800 dinars per ton.

If this decision is calculated on the annual level, it turns out that the Government of Serbia has set aside over 27 thousand tons for "its daily newspapers" out of the annual production of "Matroz" of about 30 thousand. The total annual subsidy to all the privileged dailies according to this calculus amounts to 22 million dinars, and only NP "Politika" participates in it with 11.5 million dinars.

The most perilous resistence to such privileged position of "Politika" is offered by "Matroz" itself, which due to state "concern" (and command) cannot make any extra profit in the market. In this firm they say that they do not understand why Director of "Politika" was allocated the privileged 40 tons, when his journal even with the increased circulation does not "weigh" more than 25-27 tons. They believe that the "surplus" in this quota was provided for Hadzi Antic by the Republican Minister Dragan Tomic, who is now the key coordinator of the new Government program, as a specific additional subsidy, since by "valorisation" of this surplus through non-political editions or reselling, an additional profit is made (and both Hadzi Antic and Dragan Tomic are known as persons from within the closest circle around Mirjana Markovic, the wife of President of Serbia.) The mentioned resistance of "Matroz" consists of simple sabotages of daily deliveries under the pretext that the factory does not receive enough gas, that it has not sufficient quantities of cellulose, spare parts etc. The Director of "Politika" himself claimed in a statement made to his journal (on January 18) that during December he received from "Matroz" only 32 tons a day instead of the fixed 40 tons. Mr Hadzi Antic manifests great nervousness in public protests, because inside the company "Politika" (with the newspaper entrprise being its part) he is fighting a battle for prestige with the President of the whole firm, the well known Zivorad Minovic who is publicly pointing out at him for being inexpert and superficial, especially after his announcement that a pompous volume on 72 pages would be published on New Year's eve in 401 thousand copies, and then succeeded to publish just some 100 thousand copies.

Political motves of such sharp rivalry are still not quite clear, because both the involved personalities are well known for doing political favours to the current regime. Allegedly, President Slobodan Milosevic has already tried to settle this quarrel. The essence of the dispute about privileged distribution of domestic newsprint output in Serbia lies in the fact that after complete monopolization of television, the market of daily press is also being monopolized, and that after the attack on "Borba", this is actually an attempt to prevent its new life as some future "Our Borba", and at the same time to suppress, by "economic measures", production of independent political weeklies. This scenario is supported by the recessionist anti-inflation policy which the Government of Serbia set out with in the New Year, because apart from having practically frozen the prices of the press, it put entire import under full control, and all the commodities on the strictest possible regime of quantative regulation of imports. Simply, the entire domestic paper production is subjected to quantitative regulation and control, and it will be the same with imports, so independent press is threatened to be closed down "by means of economic measures". Of course, such a regime of import can be efficiently prevented by the aid of international associations which have supported the survival of free media in Serbia. The threat is even greater because Milosevic has got nothing he expected from the Security Council in the "process of alleviating sanctions", and a rumour started that this process was interrupted because of the clumsy moves in relation with "Borba". Should this assessment spread, it will probably result in a "campaign of wrath" against independent journals which already have not what to be printed on as it is.

Dimitrije Boarov, AIM