FROM THE FACTORIES INTO THE STREETS

Montenegro: Moonlighting

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Thousands of small-scale smugglers make daily bus cruises from Montenegro, to Novi Pazar, Budapest, Sofia, Thessaloniki or Istanbul. The goods they bring in, despite paying customs duties, travel costs and "racketeering" of all kinds, nevertheless enable them to turn a profit. Shop owners in Podgorica, for instance, bring in goods from Italy to Albania, via Durres, and then illegally, by boat over lake Skadar, thus evading to pay customs duties. The smuggling of oil and cigarettes, reportedly, yields the highest profits.

In a society of scarcity, says an economic law, smuggling must exist. The blockade in which Montenegro has found itself seems to have made God-created conditions for smuggling and additional unregistered and illegal work in which increasing number of people find their source of income. In addition, given the level of the standard of living and morals, corruption inevitably burgeons. In a word, this is called the grey economy. After political and media pressure for restoring prices to their previous levels, the new hit subject of economic policy makers has become the recently declared war of the state on the grey economy.

This subject is increasingly in the focus of interest of trade unions, tax authorities, statisticians, economic institutes, even Avramovic's working group for economic development, but, most of all in the public eye. Sociological research shows that, last year, every other household in the country took part in generating additional income through the grey economy. The involvement of the population in this spontaneous resistance to poverty is even larger in Montenegro, where as much as 62.9% families actively engage in grey economy activities.

This should not be surprising, explains Branislav Milacic, vice-president of the republican trade union council, since in the past several years, over 30,000 workers were "expelled" from their jobs, and at the beginning of the year, after the institution of bankruptcy proceedings in the "Prvoborac" in Herzeg Novi and the "Napredak" in Kotor, the number of unemployed in Montenegro rose to 60,000, i.e. as much as 10% of the population. Since about five thousand young people reach working age in Montenegro every year, and there are no new job opportunities in the legal economy, most of those who have lost their jobs, and those just entering the labour market, can find their only prospects in the grey economy, i.e. in the street.

In addition, due to the sanctions which have, says Milacic, become an excellent excuse and alibi for all the incompetence and mistakes in both the state and the economy, as well as due to the consequences of the process of transition, between twenty and thirty thousand people employed in the social sector of the economy are on forced vacations. Since the total number of employed in the social sector is less than one hundred thousand people, the entire picture of the social structure of the Montenegrin society assumes dramatic colours. There is the danger that the number of pensioners, the number of unemployed, and the number of (really) employed in the economy will become equal. Also, the process of transition, continues Milacic, has raised the issue of redundant labour in enterprises so that in Montenegro, in addition to the 30,000 already fired workers, further cuts of between 20 and 22 thousand people are planned, on the basis of redundancy.

The largest Montenegrin enterprises are continuously reducing the number of workers. For instance, the Niksic steelworks has, since 1989, when it employed 6,650 workers, already dismissed 1,830 redundant workers, and is planning the same for another 1,300. It seems that in this enterprise, 47% of those employed in a relatively stable pre-war time, now represent a surplus. In the Bar "Luka" (harbour), the redundancy is 40 %, in the Bijelo Polje "Imak" 49%, in the Podgorica "Elastik" 55%, in the Niksic civil engineering company "Crna Gora" as much as 68%, etc. According to the data of the Ministry of Labour and Social Welfare, the highest percentages of surplus labour are in trade and construction enterprises.

What does the state provide for those who lose their jobs? For instance, to those who have lost their jobs due to the bankruptcy of the enterprise, and they number about 10,000 in Montenegro, of which only 2,000 people have found new jobs, the state, within a "welfare programme", gives monetary aid in the exact amount of din. 58 per month. Thus, there is the illusion that the state and its social policy are functioning. The state has difficulties in raising the money, knowing that it enables no one to survive, and the people properly register with the Employment Bureau, knowing that it is to no avail, except for, perhaps, social insurance.

As in all other areas, there are two parallel systems in operation here, the official and the actual one. The latest data show that the number of those is growing who have lost even the little confidence they had, and simply do not report to the Employment Bureau. This at the same time gives reason to the director of this Bureau, Dragan Bulatovic, to claim that these people are wending for themselves in some unregistered economic activity, and that things are not as black as papers and registration figures show. He estimates that actually only about 35,000 people are unemployed in Montenegro and announces extensive measures on the part of the state for updating the records.

Some call the surplus workers in the economy technological, some economic, some political redundancies, (therefrom the different approaches to the solution of this problem), but, all in all, a surplus is a surplus. Under the existing circumstances, there is no place for these people in the process of work. How and why this happened, is a question to which the competent business, trade union and state authorities have no common answer. In many enterprises the workers complain that, even for the most banal trade union activities, the directors threaten them with dismissal, and that the possiblity of sending workers on forced vacations or the process of determining who are surplus workers is abused on the grounds of political affiliation, nepotism or various other interests.

The careless acceptance of the current situation as the criterion for the number of employed in enterprises, claim the Trade Unions, has numerous shortcomings which cannot be defended. The president of the Trade Union of Montenegro, Danilo Popovic, says that the sanctions have befogged the genuine criteria for establishing the optimal number of employed in different enterprises and reminds of the criterion of the number of employed in relation to the optimal exploitation of the installed capacities. Popovic says: " The workers cannot be the only to bear the consequences of a 20% use of capacities. The workers are for working and earning, but they cannot be blamed because the existing management is not able to ensure them work or because the state is not able to create conditions for the normal functioning of the economy".

Nonetheless, this continuous exodus of workers from the social sector is proceeding without major social upheavals. For, for a long time a job with an average salary has not been providing enough for a normal life. The average salary in Montenegro in January was a mere Din. 215, but it should be borne in mind that only some 70% of the employed received their salaries that month. The others wait for their "blue envelopes" for two, three or more months. The Trade Union explains that nearly all the people, both the unemployed and those employed have to additionally engage in various forms of the grey economy, which has become a general movement of resistance to poverty. Moreover, those on forced vacations are, in the eyes of workers receiving miserable salaries for regularly coming to work (because there is often no real work for them either), in a more favourable position, for they can devote more time to making "real money".

Moonlighting has created an entire parallel economic system which operates purely on the laws of supply and demand, and is a real example of the functioning of a free market with all its good, and naturally, also bad sides. The Trade Union is particularly concerned because in this area the workers are not protected, they work without insurance, without paying contributions, they have no regular working hours and other rights on the basis of labour, and that even children are frequently employed. The state, on the other hand, is worried that no taxes are derived from the overall unregistered and invisible channels of the grey economy.

Since an increasing share of economic activities is evolving through unregistered channels, the state meets its current budgetary requirements by excessively burdening that part of the economy which it can control, namely, according to the Trade Unions, the social sector, which is even further incapacitated for market competition in that way. That is why Milacic, explaining the dissatisfaction of the Trade Union with the excessive levies on salaries, claims that we have an expensive and non-rational state.

For the same reason, the Montenegrin Chamber of Economy has requested changes of tax policy, especially for the private sector. The President of the Montenegrin Chamber of Economy, Vojin Djukanovic, insists on the following: " The rate of taxes and contributions on personal incomes must immediately be reduced to the ratio of 1:1, and the tax base expanded. I bear in mind that in Yugoslavia there are about 180,000 private firms and shops, and that the number of employed in them is below 90,000. No one needs to be told what this means. The law should determine the minimum number of employed per firm, which would make the number of employed in this sector exceed 400,000, and allow the rate of levies on salaries to be reduced to 1:1 without any problems whatsover.

In this way the story about the grey economy in Montenegro is gradually turning into political guidelines for an attack on the private sector. The Trade Union is especially afraid that the entire campaign concerning the grey economy might boil down to the banishment of workers from the streets. For, the Union says, the grey economy has played the role of a specific social shock absorber and defended the population, especially in towns, from even greater poverty. The mass shift to the grey economy, (about a million people in the country are currently working illegally, according to the Trade Union) has prevented major social tensions in the society, and also mitigated the consequences of the restrictive and rigid economic policy of the state administration. "That is a substitute for a state welfare programme, says Popovic. And the fact that the black market has started overpowering the legal one is the best indication of the poor management of the economy on the part of the state".

Dragan DjURIC (AIM Podgorica)