GRAB WHATEVER YOU CAN

Privatization Legislature

AIM Sarajevo, 4 November, 1997

After intense pressure of the international community and several months of gathering dust in various drawers, the federal chamber of nations has finally passed the fundamental laws for privatization of enterprises, housing units, and the law on claims of the citizens from the state. Since these laws had already been passed by the chamber of representatives of the federal parliament, the definite and legal transition to capitalism could finally ceremoniously begin, but a few "trifles" are still missing to make implementation of the already adopted laws possible.

The greatest problem is that the law on the initial balance sheet which should establish the methodology for calculation of the initial value of the enterprises which will be privitized, still has not even been outlined. It is clear that without this law the beginning of sale of enterprises cannot even be discussed, although the law on privatization of enterprises has already been adopted.

    "The Law on the initial balance sheet is practically

prepared for discussion by the government and it will enter the procedure very soon", says federal minister of industry, power supply and mining, Izudin Kapetanovic.

But, according to what can unofficially be heard, this law which should be strictly technical, got stuck politically, because obviously the federal partners in power, the ruling SDA and the HDZ, have different views of that which is called "real initial value of enterprises". What is evident at first sight is that on the one hand everybody, from entrepreneurs, federal and political leaders, all the way down to international community representatives, have sworn for years by privatization as the only way out of the general economic stagnation, and that, on the other, more than a year had to go by for the laws to pass the procedure and be adopted.

In the meantime, the state, but especially those appointed by it to control state property, used their property rights abundantly in nominating managers in the economy and managing the property they were entrusted with.

"If laws on privatization are not passed very soon, the existing state property will continue to be transferred into private hands, only that will be illegal privatization", says Lawrence Michael, one of the experts from the team of the best known world consulting firm Price Waterhouse engaged by the American administration to help in elaboration of federal laws on privatization.

It is clear that political leaders, despite their verbal efforts, are in no great hurry to begin privatization. The fact that both chambers of the federal parliament have passed the laws still does not mean that the date when their implementation will begin is known. According to the B&H Constitution, for a law to enter into force, identical texts must be adopted by both chambers of the parliament, which did not happen in this case.

The best example is the Law on purchase of housing units, more precisely the provision which enables the current tenants with interim papers (i.e. those who moved in during the war or after the war) to remain in them for at least three or five years from the date the law enters into force. The chamber of representatives which passed this law on the eve of the past local elections in B&H, adopted the provision about the term of five years for tenants with interim permits to remain in the housing units, if they belong in the category of families of combatants killed in battle, disabled veterans and banished persons.

The chamber of nations limited this to three years and introduced the obligation of signing a rental agreement and paying a monthly rent to the owner of the housing unit. What is still not clear is who shall be considered to be the owner, that is, who will be entitled and when to buy these housing units. Interpretations among the ministers and legal experts are controversial, so at this moment nobody can give a precise answer. This altogether leads to fear that in implementation of this law different interprepations may appear in practice, which would in individual cases depend on the closeness with the ruling structures.

Since it was clear that the texts adopted in the chamber of representatives and the chamber of nations of the federal parliament were not identical, the Constitution prescribes their unification. How this will practically be done is not clear either. While federal ministers claim that this is an obligation of a commission formed of members of both parliament chambers, and therefore, logically, has nothing to do with the government, the deputies think that unification should be done by the government and the reviewed text sent back to the parliament.

The time limit for the beginning of implementation of the law on privatization of enterprises is three months from the day it comes into force. But, how long the legal hairsplitting will last before the law is finally published in the official gazette, remains to be seen. Donors from the world are slowly becoming nervous, insisting that privatization finally begin, as the main condition for large investments in domestic economy. That is the reason why adoption of a part of privatization laws at the chamber of nations of the federal parliament should be considered more as the result of increased pressure from the West than of a sincere readiness of the ruling team to finally free the state of the trouble of managing enterprises. "If significant progress is not made soon in the direction of market economy, privatization and introduction of international accounting standards, foreign donors could lose interest for investing in B&H", claimed Rory O'Sullivan, director of the permanent mission of the World Bank in B&H, at the recently held Investforum '97.

Everyday scandals and discontent of the workers in various enterprises in the background of which is the haggling of power-wielders for who will grab what, also testify that the beginning of privatization is approaching. War profiteers are impatiently expecting privatization which will serve as money laundry for their wealth of dubious origin, and probably even make some profit. It is difficult to believe that what was seen through privatization in Croatia and other former socialist countries, quick acquiring of great wealth by a few and uncertain future for the others, can be avoided by B&H, despite assurances of the authors of privatization laws that mistakes of the others would not be repeated in B&H.

Along with increasing social tensions in all categories of the population, neither the citizens nor the state have anything to lose through privatization. How much they will gain, is a different question, and the answer to it will be known once accounts are settled and new owners of the state or social property known.

Drazen Simic

(AIM, Sarajevo)