FAIRNESS OF ROBBERS

Privatization in the Republic of Srpska

Between economic logic and political voluntarism the ruling party chose the latter and thus brought into question the sincerity of its intention to approach privatization as a strategic interest of the economic development of the society.

AIM Banja Luka, 2 February, 1997

Regarding privatization which was launched in the Republic of Srpska with the adoption of the Law on Privatization in mid 1996, the only thing that is known for certain today is that each citizen must previously obtain a voucher book. All the rest is unclear and vague, so that an average man no longer believes that much good will come from the state. Even the price of a voucher book has not been yet determined, but an information leaked out from expert circles that it could be around 100 dinars. Having in mind the size of the population it is easy to calculate what will be the Government's profit even before citizens get anything on the basis of privatization.

According to the Law privatization will be carried out by transfer of enterprise shares into funds, free of charge distribution of the state capital to citizens through vouchers and sale of 15 percent of the value of shares through the state capital fund. The free distribution to citizens would be carried out by means of vouchers the face value of which would be expressed in dinars.

Contrary to some earlier announcements that even unborn children would have a right to a voucher, this time this right is recognized only to citizens of the Republic of Srpska born by the date of entry of this Law in force. Persons of age must prove that they have resided in the Republic of Srpska at least 48 months prior to the entry of the Law into force, which means that all those who, irrespective of reasons, were out of the Republic of Srpska in that period have no right to participate in privatization. The provision according to which the right to voucher is also denied to persons who avoided their work and war duties and left the Republic of Srpska without the approval of the competent authority, labels this law as a discriminatory law which denies or restricts civil rights, especially the rights of members of other nations who have left the Republic of Srpska for known reasons. Just on account of this fact this Law is unconstitutional and it is impossible to carry out privatization in a legal and constitutional manner, based on it.

According to the legislator, privatization campaign should have already entered the evaluation stage. Recently, the Government adopted a decision according to which this evaluation should be concluded by the end of 1996 for five economic fields of the tertiary sector. It turned out that all that has been done so far was printing of contracts which have been sent to enterprises for signature, according to which they they have to pay large amounts into the Privatization Directorate account within eight days for costs of their evaluation. This money snatching for a job that has yet to be done (the contracts do not specify time limits) the economist see as taxation of sorts with the objective of patching up the state budget until some new plunder for the benefit of state is invented.

For propaganda-political purposes privatization was presented to the public as the best and, for the people, fairest model of ownership restructuring. Subsequently, as a culmination of fairness, the Privatization Directorate came up with a new method for the distribution of shares which General Manager Milojevic compared to the drawing of lottery prizes.

In his interview to the "Serbian Voice" (Glas sprski) Dr.Milojevic explained that he received objections from the field that the present legal solution makes it possible for those better informed to subscribe shares of better standing enterprises. In order to avoid this type of manipulation the Government, according to Milojevic, proposed an amendment to the Law "so that the distribution of state property would be done by a computer, according to the method of random sampling". How will that look in practice Dr.Aleksa Milojevic explained on the example of 400 trade enterprises envisaged for privatization in the first round: "The names of all 400 enterprises are fed into the computer, as well as the number of inhabitants entitled to free shares. By a system of random sampling an enterprise is first selected, and according to that same system, the computer selects its shareholders". Judging by all, thanks to the imagination of its authors, the law could undergo a radical transformation before its application could even commence.

The envisaged privatization model was unanimously criticized by scientific and expert circles. The undivided criticism refers to the previous procedure of nationalizing enterprises, which was carried out according to the infamous 1993 Law on the Transformation of Social Property into State Property. Dr.Mladen Ivanic, Professor of the Faculty of Economy in Banjaluka warns: "With state enterprises there can be no modern economy nor successful privatization".

"The management of state enterprises will strongly oppose this process, because their present position provides the luxury of state protection and because a great part of that establishment has come to that position on account of their political suitability, and not on the basis of their capabilities and achieved results." Between economic logic and political voluntarism the ruling party chose the latter, and thus brought into question the sincerity of its intention to approach privatization as a strategic interest of the economic development of the society. Pointing to the still present inertia of the war economy, voluntarism and improvisations in the economic system, Dr.Rajko Tomas, also a Professor of the Banjaluka Faculty of Economy, says: "This is an environment to which it is impossible to apply a concept of modern market economy advocated by the international financial institutions".

Not denying the need for transforming property relations, the majority of economic and legal experts also warn of the fact that there is still much political uncertainty present for the process of any privatization to be successful. Dr.Mica Carevic, professor of constitutional law, thinks that all forms of ownership should be equally and successively subjected to continuous transformation. "What has been offered to us are not forms of transformation in the economic sense, but plundering, speculative and ideological forms and ways of acquisition of the means of production", says Carevic.

The road to privatization by means of state property will be remembered in economic theory as another failure born in the socialist minds of ideologically loyal reformers. If Dr.Aleksa Milojevic, the state's front man of privatization, truly believes that this is the best way for a successful and just privatization, then his effort reminds of the story about a Russian biologist who, following Michurin, came up with an idea to cross a tomato and potato on a tomato stock. The experiment gave an unexpected result: it produced plant with a tomato root and potatoe shoot!

(AIM) Branko Peric