Economy in the Service of Politics

(AB)USE OF MANAGERS

AIM Sarajevo, 2 September, 1998

This year's August, but especially its second half will be remembered - except for the red-hot pre-election political atmosphere - for the start-up of several significant industrial plants and other facilities and for signing of contracts on the beginning of their operation. Let us mention just a few: in Bihac the new telephone exchange started work, two days prior to that in Donji Vakuf a newly-constructed factory of cellulose boards called Samoborka was opened, in Sarajevo Teloptik juice factory s production, and then in Vogosca, in UNIS plant, mounting of Felicia cars officially began. Just a few days before that, representatives of a Kuwait consulting and investment company, and UNIS and Zenica steel-works signed a contract on joint investment in Zenica steel-works. Last week at the session of the Chamber of representatives of B&H federal parliament, prime minister Edhem Bicakcic via modern computer techniques presented to the representatives the report on work of the government for the first six months of 1998, stressing - among other - that the average monthly production amounts to 25. 8 per cent of that in 1991 and that since 1995 to this day tax and contributions rates have gone down for as much as 48 per cent.

At a normal time the mentioned and other economic achievements in B&H Federation would attract genuine exceptional attention, although they are not negligible as it is either. But, August and the beginning of September is the time of pre-election party gatherings in B&H when every move is in the service of political marketing aimed at collecting points in the elections scheduled for 12 and 13 September. This is done solely by the ruling parties not just in the Federation but also in Republika Srpska

By stressing achievements, opening of new factories, reconstruction of infrastructure or underlining achieved results in production, signing of contracts on re-start of neglected facilities and plants, but also pointing out that the economy has been relieved of a part of its duties through taxes and contributions - the intention is to show skill and efficiency of managers and politicians. An attentive analyst (but any citizen as well) of economic developments in B&H - because pre-election activities is time observed from that aspect - cannot avoid the impression that more facilities and plants have been opened in the past month than in the past two years. And all that is intended to create the impression on the voters that the authorities are exceptionally capable and that they pursue an excellent personnel policy by appointing capable men to manage the successful enterprises.

But is this really true?

For majority of facilities which started operation (or contracts were signed on the beginning of their operation), money was provided by humanitarian organizations or foreign investors (and very few local investors who deserve praise for it), and the ruling parties are now trying to take the credit. If anyone should be underlined as meritorious for re-start of production and other facilities, it is the state, that is the B&H Federation. And at party conventions political parties claim the credit for lves. Have you ever heard of a business success in West-European countries attributed to the party in power? It is usually the state and a successful company. But not in this part of the world.

It is interesting to note that there was not a single gathering (it need not necessarily be a political one) at which a politician would demand who is to blame, for instance, for the fact that last year the greatest losses were registered in state-owned enterprises (Zenica steel works, Tuzla coal mines, B&H Electric Company and others). Are their managers to blame, the government, the state or somebody completely different? Or why did every fourth enterprise in B&H Federation operate at a loss last anagers of these and other enterprises are elected by management boards which are mostly nominated by the parties in power, and the managers mostly stick to the platforms of political parties in their work. Often managers take the policy and platform of the party they belong to as the foundation of their business operation, which often leads the enterprise to ruin. Because politics is one thing, and business something quite different.

This negative side of business dealing and failures of personnel policy are not presented to the public and that is why they are not mentioned at promotive gatherings of political parties, since their analyses would be counter-productive for the parties in power. (Ab)use of the economy and managers for political purposes does not end with the listed examples. It was obvious in the past and it is also reflected in financing political parties with the money of the economy. It is difficult to give exam ich would illustrate this because data are kept as top economic and political secret. It is no secret, however, that through various donations, secret and other loans, a large part of the profit made by enterprises ends up in cashboxes of political parties. And as long as managers invest money earned by employees in enterprises - sometimes even their guaranteed minimum salaries

• into the party which brought the manager to the head of the company, managers are "apt" and promotion is guaranteed to them, rega rdless of the results of enterprises they are at the head of. But when a manager changes the party or refuses to allocate the capital of his enterprise to the party, he becomes "inapt" and loses his position regardless of capabilities. Party interest overpowers organizational, professional and other capabilities. Hardly anyone (except workers) is concerned about the fact that the enterprise is losing business deals, profit and reputation.

It is therefore no wonder that the experienced and distinguished manager of a public enterprise in Sarajevo has lost his job for the described and similar reasons, and seeks satisfaction at court. Since the ruling parties have great influence on the judiciary (although much is being said about independent judges), chances are small that this manager will be able to prove that this is a conspiracy against him.

In countries with developed market economy, the state does not interfere much in the operation of companies. It is present in the enterprises only to determine the legal framework and the ambience in which the company will operate. Aptness of managers in state enterprises is determined by business results, or more precisely by profit, and everything else is unimportant. We are still far from this philosophy of business dealing, since the ruling parties keep everything under control, even the money m state enterprises. It is sad that capital made in profitable business deals is used for political purposes and not for new investments into the enterprise in order to introduce modern technology or raise the standard of living of the workers.

For as long as things are done thin way, political parties will be able to abuse bothe managers and profit acquired in state enterprises.

Samuel SKOPLJAK

AIM, Sarajevo