NO MORE MONEY FOR SOCIAL PEACE

Number of the Poor Increasing

If the Serbian ruling coalition (Yugoslav United Left-Socialist Party of Serbia-Serb Radical Party) does not manage to discipline the nation as it has done with university professors, students and physicians, a social rebellion is in view. Apart from a small number of nouveaux-riches everybody is impoverished, from the state to the citizens. Serbia is taking away from the citizens and the economy in order to finance engagement of the police and army in Kosovo. The industries have no money to pay for gas, and the citizens have no money to pay for electricity. Debts are high and enornmously increasing every day. Economists have estimated that engagement in Kosovo costs Serbia two million dollars a day

AIM Belgrade, 11 June, 1998

Along with the armed copnflict in Kosovo, another fire is smouldering in Serbia: exceptionally hard economic and social circumstances in the country due to which an increasing number of citizens is approaching the threat of being pushed to the verge of extreme poverty, and many of them have already become paupers.

Citizens bear the brunt of state expenditures increased by engagement of the police and army in Kosovo, because the country is economically exhausted. The estimate is that the conflict in Kosovo costs Serbia two million dollars a day. Because of the empty state cashbox and impoverished economy, import of gas from Russia has become questioned, and without it a big part of industries would have to stop production. Serbia has no possibility to pay Russia the debt of 270 million dollars, because in the meantime, according to conviction of the economists, foreign currency reserves have decreased by 100 million German marks. On the other hand consumers have no money to pay for the consumed gas since a large part of the economy is operating at a loss which will this year, according to estimates, reach the record 40 billion dinars - more than one third of the planned value of this year's social product.

About 115 large factories have not paid for the consumed gas, and shutting down of the tap on the gas pipeline for the Serbian economy would be a catastrophe. The public has already been informed that priority in supply with this fuel will be given to health institutions and pharmaceutical industries. That quantity of gas can be provided from domestic sources. It seems that in the meantime a compromising solution was found with the Russian supplier, so the Republican minister Milan Beko declared that delivery of gas has continued. Until when, nobody can tell with certainty.

The citizens are in a similar position of debtors, because they owe the electric company for consumed electric power several ten billion dinars. Salaries of many families put together do not amount to the cost of their monthly comsumption of electric power. The electric company is trying to collect what they owe it by a stimulative discount of 20 per cent, but the citizens are not financialy capable to use this convenience, although it is more convenient than when the debt for oil or electric power is paid in foreign currency. The electric company does not dare start disconnect the consumers because the regime fears that it would be the last drop which would spill the cup of accumulated discontent.

That economic operation has become hopeless is also illustrated by the fact that at this moment four different exchange rates are in circulation, depending on who participates in the transaction. One is applied between banks and the industries, another between companies, the third is the so-called "street" exchange rate, and the fourth is official - and the difference between them is a whole dinar per German mark. The exchange rate has become unstable even before positive effects of the devaluation were felt, because instead of an increase, the export experienced a fall. Due to the policy of its regime, Serbia is abandoned by many of its possible business partners and at the moment there is nobody in sight who would come to the country with capital and start business in the country where war is possible, and the economic system and legal regulations uncertain. Export is diminishing and preferences for Yugoslav goods on the European Union market were abolished after the regime had refused mediation of the inetrnational community in overcoming the crisis in Kosovo.

Economist Mladjan Dinkic, member of the group of "17 Economists" estimates that this year's inflation will exceed 100 per cent. His forecast is based on considerable increase of prices in the past two months which is higher than the whole last year's inflation. The record is held by the rise of the price of telephone services which went up by 40 per cent in a single day, but it was announced that in the course of next month these prices will be changed two more times so thet the total increase of prices will reach 93.5 per cent.

The recent statement of president of Serbia Milan Milutinovic that citizens had no reason for concern because Serbia produced three times more food than it needed did not have a pacifying effect because the purchasing power of the population is decreasing. The average salary has nominally exceeded one thousand dinars, but it is actually reduced by one third. In the past months prices are going up at an increased rate. In the green market where the prices are freely established, food is very expensive, and foodstuffs the prices of which are controlled by the government in order to maintain the standard of living, cannot be bought in the shops but only on black market, like edible oil, for instance.

The main characteristic of the rule of the new coalition regime is the manifested intention to discipline the nation. Under the slogan of introducing order, first university professors and students were disciplined, and then physicians who were forbidden to practice medicine in private clinics in their spare time. Perhaps it would be justifiable if the medical staff could live on their salaries. Physicians announced that their response to this measure would be taking money from the patients which they had done before but secretly.

And while their income is decreasing, the citizens have increasing expenses. The number of patients in hospitals is decreasing because the sick do not have the money to cover the expenses. Money is saved mostly for medical treatment of children. The impression is that Serbia is quickly approaching the threat of a social rebellion, because the state has no resources any more for buying social peace, as it has done before by paying (small) salaries even to those who have had no work for years.

The best example is Zastava company from Kragujevac. Its workers received salaries for years although they did not go to work. Recently they went on a hunger strike and then had their demands met, because their strike threatened to develop into a major rebellion. In the meantime, more than two thousand best qualified workers have left the factory, so that great suspicion exists about its capability for car manufacturing, even if money for it were found. Potential foreign partners are avoiding contacts with its representatives.

Because of the lack of foreign buyers of domestic companies, there are attempts to sell them to domestic persons about whom it is impossible to establish with certainty whether they have acquired their enormous wealth legally. At one time it was determined that individuals got rich mostly thanks to evading paying taxes. At the moment the process of privatisation is "covered" by banks which are appearing as potential buyers because companies owe them enormous sums of money for unreturned loans and unpaid interests. Beobanka has made out a bill to Belgrade department stores for about 100 million German marks, asking the company's buildings in return. A tractor factory received a similar bill. Workers are refusing to pay the debts because they calculated that they have reached such an enormous amount because of very high interest rates introduced by the banks which reached 15 per cent a month.

It is interesting that many banks are managed by officials of the Yugoslav Left which presents itself as a protector of interests of the working class. However, the entire financial sector, from the central bank, the Republican ministry of finance, health fund, down to the banks, is "covered" by cadre of YUL. That is why it is expected with interest how the process will proceed in which the "avantgarde" will privatise its electorate.

Ratomir Petkovic

(AIM)