PRIVATISATION ACCORDING TO NATIONAL QUOTAS

A PILE OF MONEY IN EXCHANGE FOR POWER

AIM, Sarajevo, July 8, 1999

By definition, money knows no national, religious or political affiliation. It seems that this rule applies everywhere in the world except in B&H which has for a long time been known as a "land of wonders and absurdities". Three and a half years after the war B&H is still divided by not so visible but firm national barriers within which each ruling national party "sovereignly" rules on its feud and all that in "the name of the people and for the sake of protecting vital national interests".

Is money, i.e. the control over its flow, the real reason for their frantic struggle for power or perhaps the money is just a means by which they manage to stay in power for ever, sounds like the old chicken-and-egg question. But,in the long run it is all the same. At this moment of utmost importance is the final result in the form of growing misery and general poverty which only a "chosen" few are spared.

The authors of the Dayton Peace Accords for B&H were fully aware of the actual situation along ethnic lines all over Bosnia and Herzegovina, but saw the money, i.e. profit as the main instrument for the removal of existing barriers because of its ability of always finding the way out. Therefore, the insistence of the representatives of the international community in B&H on the soonest possible initiation and conclusion of privatisation as well as silent resistance of current authorities to and obstruction of privatisation are easy to understand.

Namely, with privatisation the authorities would lose one of the main levers of power - rule over what is left of the once state/social property. At this moment, the privatisation process in t he B&H Federation is threatening to produce quite the opposite effect from the desired one - to shift the national divisions existing on the political and territorial plane to the economic sphere and thus definitely legalise the principle of ethnic divisions in B&H instead of introducing the desired reintegration. The concept of privatisation in FB&H was developed under the assumption that in investing his privatisation certificate each owner, i.e. some 1.9 million people in FB&H, or every citizen of age, will give priority to economic motives, i.e. potential profit.

Recently Kresimir Zubak, leader of the New Croatian Initiative and former leading HDZ man, warned the public that "through the Hercegovacka banka and its affiliated firms, the HDZ is planning to establish an investment fund which would collect certificates from all Croats in B&H and use them for the purchase of state property on its area so that the other side could not buy it".

Nevertheless, the idea on privatisation in FB&H according to the national quotas is not a novelty. Such an idea was first heard last summer at the SDA Economic Council and explained by a need to "concentrate the Bosniac certificates at one place and invest them in enterprises which are of Bosniac national interest". It remained unclear in both cases which criteria would be used in proclaiming an enterprise to be of "vital national interest" for one nation. As things stand now, it seems that the decisive factor is the territory on which an enterprise is located, while all other aspects like profit, market prospects and similar "trifles" are irrelevant.

There are no formal obstacles to the establishment of such funds because, officially, they would be open to everyone. It's quite another matter whether eg. Bosniacs would be willing to invest their certificates in a "Croatian" fund and vice versa, whether Croats would entrust a "Bosniac" fund with their certificates. Judging by all, there is a tacit consensus regarding this issue among the ruling national parties in the B&H Federation - the SDA and the HDZ - expressed in the principle "finders keepers", while the rest is a question of method.

Numerous foreign and national experts broke their necks trying to persuade future domestic capitalists, i.e. share-holders who are already totally confused, that the optimum solution for investing privatisation certificates are privatisation investment funds (PIF) which is further corroborated by the entire market economy theory and practice and is beyond any question. However, not a single request for the establishment of a privatisation investment fund has been submitted and although there were some unofficial announcements nothing specific has been done yet.

The reason partly lies in the fact that a founding deposit of 1 million German marks in cash is required for the establishment of a PIF. Needless to say, much more money than that can be found in bags and pockets of the newly emerged rich, but the question remains whether they think it interesting and worth their while to invest this sum as a founding deposit in a fund or that it would be more profitable to "turn over" this capital through half-legal and illegal deals and thus increase it many times over.

Although the so called "little privatisation" has already started, the "national" as well as other interests will come to the fore only with the sale of large enterprises which, according to the officials from the Privatisation Agency, could happen this fall.

The success of the privatisation idea according to ethnic quotas will crucially depend on the readiness of citizens to entrust their certificates to them. If only two investment funds with more or less open "national sing" appear on the market the result is certain already now - the existing state enterprises will be privatised, but under the national "umbrella", and the ruling elite will be granted the right to legally run the economy under the guise of market economy and "sacred and inviolable" principle of private property.

Then the international community will be able to come to a satisfactory conclusion that the transition of property has been carried out in B&H while the main cause of the majority of problems would still lie in a combination of money, crime and politics garnished with a national concept of power. In that case, by enthroning themselves as the new economic elite, the current power-holders might be more willing to forgo the formal political power which they hold now in exchange for the power which comes with the money,i.e. the economic control. In that way they would get only a "mandatory fine" and avoid having to account to public for all that has (not) been done and for the missed chances to make it possible for ordinary people of B&H to live at least decently of their own labour and hope for a better future. Their certificates should help them in this, on condition that they are invested in enterprises with market prospects which has nothing in common with "vital national interests" no matter how hard national spiritual fathers will try to convince their today's voters and tomorrow's share-holders of the contrary.

Drazen SIMIC

(AIM Sarajevo)