NEW AUTHORITIES, AND THEN REFORM

Creators of the New Economic Program:

A team of 17 eminent Yugoslav economists has recently offered a program of radical economic and political reforms. Contrary to former reform projects which were conceived on the presumption that economic changes would inevitably cause a reform of the political system, the main precondition for any economic changes in this program is removal of the current political authorities and change of the entire political environment.

AIM Belgrade, 11 February, 1997

Milosevic seems to be running out of time more rapidly than ever. He had admitted defeat of his frantic project in Bosnia after three years of bloodshed, and he admitted the election fiasco and the stolen victory of the opposition in 14 biggest cities in Serbia after three months. After this, there is yet another thing he will have to admit: the economic catastrophe in the country brought about by almost a decade of his autocratic rule has become unbearable to masses of people. The short relief due to conviction about an alleged obligation of the international community to award the President's forced peace-making faded after new reinforcement of the outer wall of sanctions which took the form of freezing of business arrangements and definite blockade of all negotiations with the international financial and trade organizations. If it had seemed before the November elections that the West would give him some money, after the elections Milosevic can do nothing but wonder how much longer Serbia can survive with him.

The current authorities cannot bring about any economic prosperity, nor carry out a market reform and democratization of the society which is the necessary foundation for economic revitalization of the economy of Serbia. Explicitly convinced about it, a team of 17 eminent Yugoslav economists has recently offered a program of radical economic and political reforms. Its basic elements - urgent normalization of relations with the international financial and trade organizations, fast and limited in time privatization, development of a new economic system, banking reform and full independence of the central bank - are quite appropriate in the economic situation in this space. Contrary to former reform projects which were conceived on the presumption that economic changes would inevitably bring about a reform of the political system, in this program removal of the current political authorities is laid as the main percondition for any economic changes, as well as the change of the entire political environment.

Replacement of the authorities as the initial step of economic reforms links this program with the mass three-month long post-election protests around Serbia which also stated this demand as the condition for resolving the profound economic crisis of the country. The perspective of very close and often "red hot" encounters of the citizens with cordons of armed-to-the-teeth guards of Milosevic's power provocatively links to the stance which refers to the police as one of the unavoidable segments of economuic reform. "Enormous money is spent on expensive equipment and arms (armoured transporters, chemical war gases...) the only sense of which is repression against the citizens" it is stressed in the Program along with the only logical conclusion that only after priorities of the state shift from repressive and overheads towards its humanitarian functions, a radical economic turn shall be possible.

The truncheon has never been, nor will it ever be, a means of economic development. Autocrats before Milosevic on various levels have found that out, but he just like his predecessors does not seem to have been able to resist the delusion.

Dusko Susnjar, one of the authors of the Program, in fact of its part on financial market and stock exchange, believes that "every element of economic reform based on which economic development can start corresponds to one of the postulates of open democratic society. Breaking up of monopolies, freedom of media and information accessible to all, protection of minorities and similar are only some of the postulates which market economy cannot do without." The authorities inclined towards the truncheon cannot have economic reform on its mind. The current authorities rely on various monopolies: monopoly on information, monopoly on foreign trade business deals, monopoly on financial sources and loans, political monopoly. Susnjar warns that these monopolies are contrary to economic development and that is why the Program starts from replacement of the authorities and abolishment of all monopolies as foundations on which they were constructed.

As a man who is a connoisseur of financial market and stock exchange, Susnjar believes that these general stances are extremely important because only after they are met is it possible to come closer to the money necessary for financial reforms and economic revitalization. Milosevic's destructive rule left a wasteland in domestic finances and completely ruined accumulation. That is why the first steps towards recovery must be financed by large sums of money obtained from foreign investors (experts evaluate that a sum of two billion dollars would be sufficient).

The main stronghold of the Program is privatization. It is true though that the authors did not reach a concensus concerning the model of privatization, so it seems that is the rason why this model has not been elaborated yet. According to the opinion of Susnjar, the question of choice of the model is not of major significance, because the experience of countries in transition shows that different models offer approximately the same results: "For this society it is far more important that privatization will bring about a beneficial civilization shock which will have stimulative effects on economic life, especially on the financial market. It is important that privatization is accepted in the society, that it is carried out in a short time, resolutely and persistently", says Susnjar.

In the proposed concept of privatization, the stress is laid on change of ownership in favour of the largest possible number of owners, which means contrary to the practice of silent privatization this regime is nowadays intentionally carrying out for the benefit of just a small number of people at the top of the regime. Privatization would, naturally, accelerate development of the financial market which, as the most sophisticated part of modern market economy best reflects the situation in a state. If the program started right away, such a market would become operational in this space, as assessed by the authorts of the program, in two years at the most.

There was a time when the current regime vehemently questioned, strongly opposed and in the end shattered to pieces the reform of former prime minister Ante Markovic. Then it used and then rejected a man who deserves all the merit for overcoming the mega-inflation and the leader of monetary reform, former governor of the National Bank Dragoslav Avramovic. The group of 17 independent economists does not wish to impose its program of reform at all costs. But their proposals are a very dangerous provocation for the regime and it is possible that they will cause various counter reactions. The regime has, however, used all the time it had at its disposal for resistance and delay of reforms a long time ago.

(AIM) Drago Brdar