War in Yugoslavia and Economy of RS

Factories Shut Down, Workers Sacked

AIM Banja Luka, 10 May, 1999

Workers in Republika Srpska spent the past 1 May, in a gloomy atmosphere. On the eve of Labour Day, the government of RS came out in public with the fact that "due to the situatin in FR Yugoslavia", 30 thousand people have lost their jobs.

However, this statistical datum is not the end of the story. Since NATO attacked Yugoslavia and destroyed factories over there, nobody in Republika Srpska, especially among industrial workers, is certain any more that they will not be sacked, become "technological surplus manpower", or at least be issued a decision on forced leave while "waiting" for the job. The economy of RS is linked to Yugoslav economy which is the source of raw materials, but also the market for its products, which is clearly illuastrated by the fact that last year 43 per cent of the total import into RS was from FRY, and that as much as 75 per cent of the export from RS ended up in Yugoslavia.

The additional problem especially in industries is that entrepreneurs in RS cannot simply "switch over" to other markets, either when import of raw materials is concerned, or export of products, because a large number of factories in RS operate on the principle of cooperation with large companies in Yugoslavia. A drastic example is Cajavec from Banja Luka, holding company which employs more than 4.5 thousand workers. Most of the plants of Cajavec produced parts for Yugoslav car and military industries and as director of Cajavec Vito Rakic said to a western diplomat, only by demolishing Kragujevac Zastava, the greatest enterprise in Banja Luka has lost two thirds of its market. Electrical mechanics department of Cajavec is already shut down, and if a miracle does not happen, the whole company will soon have to lock its gates.

The Republican chamber of the economy announced that it would present to the public all the data about damage done to the economy of RS directly caused by the war in Yugoslavia. However, so far these data did not reach the media. Not even in the government of RS, which is busily preparing for the forthcoming donors' conference, did anybody indicate that special demands will be made to international donors because of economic damage caused by NATO bombs thrown on Yugoslav factories.

Ministry of Industries and Technology was the only one that issued an information on export-import balance of industrial enterprises in RS with Yugoslavia already in the beginning of April, and offered data about the damage that could be expected in RS because of NATO aggression against Yugoslavia. In industries which are affected the most by the newly developed situation, 49 per cent of the total production was expected to be exported to Yugoslavia this year, and about 28 per cent of the total of needed raw materials and manufacturing components were to be imported from FRY. The metal processing and electrical industries are affected the most, the latter having planned to export 63 per cent of its products to FRY and import 41 per cent of raw materials and components from it. They are followed by chemical, wood processing, textile, tobacco and food processing industries. Judging by the stated percentages of export into and import from FRY, for none of these branches would it be possible to continue normal manufacturing in case of complete interruption of economic relations with Yugoslavia. Only printing industry is not essentially threatened by the war in Yugoslavia, because this branch exports nothing to FRY and imports only about 2.5 per cent of manufacturing components from it.

According to forecasts of the Ministry of Industries and Technology, because of the war in Yugoslavia, just in industrial enterprises in RS, about 22 thousand workers will lose their jobs, that is half of those now employed. The biggest number of dismissals would be in metal processing and electrical industries in which 10 thousand workers would be sacked, and textile and wood processing industries follow.

The collapse of industrial production would bring greatest problems to cities. Apart from Banja Luka where even before the aggression more industrial workers were on forced leave than they were working, workers in Bijeljina, Brcko, Doboj, Prijedor... will also be left without work.

According to the data of Doboj Regional Chamber of the Economy, production in industrial enterprises of this region is reduced by more than 90 per cent, and several thousand workers were sent on leave. In Modrica oil refinery, Trudbenik from Doboj, Zrak factory from Teslic and Doboj Hemoprodukt production has been interrupted altogether. Electrical industries in Bijeljina called ELVAKO and metal industries Panafleks which worked in cooperation with Yugoslav enterprises are facing shutdown. Zenit footwear factory from Bijeljina has already been shut down because of problems with raw materials from Yugoslavia. It is highly questionable what lies ahead for the known manufacturer of batteries Tesla from Brcko which is linked both by raw materials and market with Yugoslavia.

Without full and systematised data on "war damage" done to the economy of RS, listing of all these data resembles the experience of six blind men who were touching an elephant and then every one of them had a different impression about the being standing in front of them.

One need not be too smart to reach the conclusion that in the economy of RS industries results of NATO strikes against FRY will be felt the most, but it will not be only them that will be affected. Electric power industry, crafts, trade, tourist companies and agencies, but also "budget consumers", such as health, social and similar institutions and enterprises "protected" by the state, sooner or later will have to face problems brought about by destruction of Yugoslav economy.

When agriculture is concerned, according to data of the relevant ministry, in this significant branch of the economy, there is no problem for the time being. What is most important, sufficient quantities of oil have been provided at subsidised prices, so that the most important job of the season, spring sowing, is proceeding without interruption. However, it should be kept in mind that agriculture is an activity with "slow turnover" and that problems with the supply of artificial fertilisers, animal feed, veterinary drugs for cattle, herbicides and who knows what not will spring out in the coming months.

In the current chaos, trade as usual is doing the best. The expected shortages of food and other consumer goods in the cities of RS have not occurred. The number of goods from Croatia, Slovenia, Hungary, Italy and Hong Kong is increasing, and there are less and less from Gornji Milanovac or Padinska Skela. The question arises, though, who will be buying all that when the people who are poor as it is lose their jobs.

Milkica Milojevic

(AIM)