Financing the Military

The first version provided 75 billion dinars for the Army and their pensioners, which was then reduced to 70 billion. Later, in April, when it was becoming apparent that no federal budget could be agreed upon in Parliament and when the suggestion was put forth for the budget of 138 billion dinars (later for 135 billion) the military expenses were reduced to 68 billion dinars. The Army consented to such a theoretical reduction and promised to carry out "a concrete programme of measures and activities for further rationalization and the reduction of expenses".

It concerned "drastic measures for the Army personnel reduction", for cuts within the Ministry of Defence, cuts in Army cadets, the closing down of some military institutions, earlier retirement, cuts in the number of private automobiles and restrictions with regards to uniform supply and food reserves. Since the budget was not passed, not even the Army publicly announced the possible outcome of the mentioned rationalization programme. It would be fair to conclude that not only was there no cost reduction (apart from the officers' salaries, "consumed" in the inflation which was considerably higher than "the planned" from 30 to 35 percent) but that they have greatly increased instead, especially in the past three war-time months.

Leaving aside the uneducated guess concerning the possible military cost reductions, we shall here try to make some kind of budget calculation. Since the official sources say that from the beginning of this year until mid-September only 42 billion dinars were payed in instead of the expected 88,5 billion, we can assume that the Army, partly from the federal safe, partly from the note issues, raised around 50 billion dinars. At peace time this figure would be close to the dynamics' income which is estimated to amount to 68 billion dinars for the annual military expenses.

The reality of it is probably very different, so it is logical that the daily arrival of military vehicles to the Central Bank should be interpreted downtown as the military occupation of the national currency and a kind of "deblocking" of the currency issue policy. If an unofficial estimation of the true military expenses holds water, it could be said that each employed Yugoslav received nine salaries this year and gave the tenth to the Army. Even if the nominal military expenses were much lower, any calculation would have to take into account the expenses of "postponed payment warfare", since they have to be covered somehow. When the more realistic estimations arrive, they will have to include an evaluation of how much military expenses the newly shaped Yugoslavia could finance (at the time when the Yugoslav population was twenty million, we had around 60 thousand professionals within the Army).

The story would not be complete without mentioning the fantastic cost increase of other military and paramilitary formations, since the war is destroying our national currency. This, however, is a small cost compared to what the Yugoslav economies will have to face up to as the process of militarization gathers momentum.