THE PENSIONERS' SORROW

AIM SPLIT, September 30, 1996

Recently the Government of Zlatko Matesa promised a five percent increase of all Croatian pensions as of October. In view of the Croatian circumstances and pending elections many have interpreted this as just one in a series of pre-election moves of the HDZ authorities aimed at alleviating the prevailing disastrous social situation, particularly of the pensioners, so as to buy their votes in that way. As Croatia has about 850 thousand pensioners many think that they will decide the elections, as they make one fourth of the total Croatian electorate.

Still, irrespective of the pensioners' protest against the miserly 50 kunas which should come in a month, it should be noted that this is a second move of the Government aimed at stifling the increasingly loud criticism of the pensioners. Namely, in July they were given a 100 kunas allowance, which is still coming regularly. The key thesis of all government officials, when speaking of pensioners' problems, is to praise them for carrying an enormous burden during the war and transition process, but also to demand their patience as things are not so bad after all. Thus, Borislav Skegro, Vice President of the Government, said in a TV show that although low, the pensions were not a disaster, while Joso Skara, Social Welfare Minister, claimed that pensioners were better off today with an average pension of DM 250 than they were in 1993 when they got only DM 70.

Ministers are certainly right, especially when they point out that there is no money to pay the pensioners what they are entitled to. Namely, the retired workers have calculated very precisely that the current authorities owe them as much as 34 pensions and that the amount they are receiving now is as much as 42 percent below what they should receive according to the law. It would take enormous funds to cover this difference, and it is a fact that the Croatian economy is in no position to secure them. This is also used an explanation for the indecisiveness of the Constitutional Court in responding to months old pensioners' request for the evaluation of the Governmental Decree on freezing pensions.

The explanation offered in May by Jadranko Crnic, the Court President, by which he tried to justify the delay, has called into question the role of court as an impartial party. Namely, Crnic said that the implementation of the law could cause inflation so that it was left to political factors to find the solution. As the supreme legal instance, the Constitutional Court has also made it possible for the authorities to leisurely postpone the finding of a solution and has thereby created conditions for even greater social tensions and consequently the instability of the society in general.

It is a fact that the economic policy of the Croatian government has resulted in a disastrous situation. On the foreign-economic plane this is reflected in a growing deficit, while on the internal the best indicator is the ratio between the employed and retired population. While before the war, or better said, transformation, there were 500 pensioners per 1.6 million employees, now these figures are almost equal. There are 830 thousand employees, excluding the Army and the Police, per 850 thousand pensioners. Also, apart from the fact that there is a large number of unemployed on the labour market, the employed have no other motivation to work. For every 100 kunas of their salaries the state takes 124. Also, through the system of public enterprises the state has become the main economic factor which controls almost 90 percent of the overall production, while only some 15 percent of the national product goes directly to the market independently from the state. Such centralization of funds and indesputable state control over such funds have created favourable conditions for manipulations, which no one has been charged for and which have caused much harm, especially to the pensioners.

The State Auditing report has shown that irregularities in the allocation of 1994 state budget, excluding the auditing of Defence and Internal Affairs Ministries operations, have reached such proportions that the funds would be sufficient to pay the pensioners seven additional pension. Also, speculations with the Pensioner's Fund are talk of the town, while its already relieved management is accused of not only incompetence, but also corruption. If the tangle ever really starts unravelling, it will probably lead up to Ivan Parac, former Minister of Social Welfare, against whom legal proceedings have been instituted for malversations in state Radio and Television at the time he was the General Manager. Will the things possibly untangle is a question to which the answer, because such high numbers are involved, no longer depends on only investigation and judicial bodies, but on the authorities themselves.

Thus, in late April an information was released that a new privileged pensioner's circle was set up including only selected individuals. The highest pension for this group amounted to 5,100 kunas, while for the others it hardly reached 3,000 kunas. Consequently, 70 percent of pensioners live on 25 kunas a day, while the privileged receive 170. At the same time, the Government does not pay a penny out of the state budget for the privileged pensioners, although the amount of 130 million kunas is in question, i.e. 14 percent of the Pensioner's Fund. Further, despite stories on Government's full control over business operations and efficient tax system, as well as mythological tales about financial police, lack of financial discipline is being tolerated, so that as a result wages are paid but without contributions so that during 1995 only 73.7 percent of resources came in because of which the Fund lost 280 million kunas per a month, and employers got rich at the expense of pensioners.

The Pensioner's Fund is also melting because the pensioners pay 38 percent for health insurance and the employed only 18.4 percent, which means that the Pensioner's Fund pays 40 million kunas more. Through transformation, which many are already calling the greatest robbery of the Croatian national wealth, a significant amount of shares was put at the disposal of the Fund whereby, as a rule, it obtained majority ownership over many Croatian firms. At the same time people began pointing an accusing finger at it as a nest of corruption and crime with a political background. These accusations surfaced after seemingly inexplicable disintegration of enterprises which, after their value dropped, were bought by people close to the most influential political circles.

The public thus learned that one-time tennis star and the President's tennis coplayer Bruno Oresar, has bought the Brac firm "Jadrankamen" whereby the Fund suffered damages in the amount of DM 350,000. Last September the deficit caused by such shady dealings reached the amount of DM 10,5 million. Maybe to most notorious case is the sale of shares of "Karlovacka Pivara" (The Karlovac Brewery), one of the most profitable Croatian enterprises which, according to the new business orientation the Fund swore by, should have yielded constant dividends and thus replenish the empty Pensioners' Fund.

Incompetence, crime and war which the war conditions contributed to, have thus enabled unsuspected years-long plunder of the Pensioners' Fund. Still, the highest price was paid by the so called military pensioners, i.e. retired officers of the former YPA - 17 thousand of them. Apart from that they also paid the price to the revanchism of the victors, who halved their pensions. At first they received advanced payment in the amount of 50 percent of their pensions, and after that in October 1992 the Government determined the retirement-benefit base at 63.22 percent of the December 1991 pensions, which was confirmed by the Assembly in October 1993.

For some time no one, and after that some of military pensioners, got nothing and when the balance was paid it did not include the accrued interest for the money withheld from them. Also, they never got the difference between the received advance payment and the rate determined by the Assembly, nor were their pensions revalued. At the same time, despite their secondary level education, the former YPA officers were put into the category of workers' insurance without any valorization of the balance, so that their average pension amounts today to 965 kunas and is three time lower than the pension of a lowest-ranking officer of the Croatian Army.

Also, the highest pension of the former YPA officer is more than four times lower than the highest pensions in the Croatian Army. When it is known that only 2 percent of pensioners are military pensioners, it is clear that this is neither a fiscal problem nor savings of the budget, which everyone squandered to his liking, but a political stand of the current authorities who are not carrying out obligations they had undertaken before the international community. Thus, they have violated the 1991 agreement, by which the Croatian Government committed itself before European Community that it would guarantee former YPA members the exercise of all civil rights. What gives the problem of "military pensions" its special political dimension is a fact that 70 percent of them are veterans, anti-fascist fighters from World War II. All their appeals and demands for redressing the wrong that had been done addressed to their until-yesterday fellow combatant, a Partisan general, and present President Tudjman, remained unanswered.

The fact that not even two average salaries of 2,000 kunas are enough for covering living expenses, which exceed 5,000 kunas, with the present pensions amounting to only 36 percent of an average salary, caused tensions and dissatisfaction among the pensioners. Threats of taking to the streets have been heard at many of their gatherings. The malcontent have established the Party of the Pensioners of Croatia, whose president is a former Yugoslav diplomat in Pittsburgh and Buenos Aires.

The establishment of this unique political association is a result of the fact that the opposition has not articulated the interests of a large number of pensioners whose survival is endangered in the most banal sense of the word, while the ruling and opposition elite compete at nation-building abilities. Although immediately after the establishment of the party there were those who contested it as superfluous, it is clear that a fight over pensioners' votes lies behind such claims. That is why it doesn't come as a surprise that the strongest criticism of the pensioners' party project came precisely from the SDP which was counting on pensioners' votes, although as the only left parliamentary party, it did not succeed in affirming itself as adequately resolute proponent of their interests.

At the same time there is a dilemma whether this is just another of HDZ plots for taking away pensioners' votes from the opposition, which was indicated in several statements of the President of the Party that it will support the current authorities if they manage to resolve pensioners' problems, and some programme guidelines which emphasize patriotic orientation and forbid anti-Croatian actions. The elections will soon tell whether a true aim of the party is to rescue the pensioners from the extremely humiliating position and create a democratic atmosphere in Croatia, or whether this is just another trick up the authorities' sleeve.

What is important is that the establishment of the Pensioners' Party is a proof in itself of a wide spread dissatisfaction with the functioning of current authorities, but in contrast to other post-communist countries, the electorate here has not yet "recognized" that the reformed communists could be the force needed to successfully resolve social problems in the process of transition. Therefore this could create quite a confusion at the forthcoming elections, because if the voters know whom they will not give their vote to, the situation in Croatia will make it even more difficult for them as the opposition was the one which left them in the lurch in many respects.

PERO JURISIN