It Is Not Possible For Every Fifth Citizen To Have A Telephone

The longer the war continues, and the longer salaries and pensions keep dropping and becoming less and less frequent, the number and intensity of detonations is becoming less and less the main subject of daily conversation, giving way to subjects like phone and electricity bills.  Citizens who did not get their phone unhooked exactly eleven days after the deadline for payment has expired are beginning to ask themselves whether the state is beginning to give them credits or whether this is a matter of a freak occurrence.  Whatever the case, the time is drawing near when even common people will have to chose between a telephone, a TV and a daily shower, against bread, milk and cheap chicken pate.

Yugoslav chambers of commerce did not even get an official notice from the federal government where it is assessed that the Gross National Product this year will amount to approximately ten billion American dollars, that is to say fifty percent of what it was last year, when NATO decided to introduce into its war strategy an unpleasant novelty.  Instead of using so-called soft bombs, graffiti warheads, the western military alliance air force began dropping "real" rockets on the hydroelectric system in Serbia, a development that advanced the destruction of the Yugoslav industry into a new phase.  Given that the Yugoslav industry uses a third of the electrical energy produced here, and given that the gasoline embargo is already in effect and is already being respected, it is not very difficult to conclude that should our industry remain without electricity, the Yugoslav Gross National Product will have to change - downwards.

G17 experts already estimated that the standard of living of an average citizen of Yugoslavia has halved in the two months of war, and that the per capita national product will amount to no higher than $1,000US, that is to say less than during the harshest sanctions.  Taking into account enormous destruction, the Government further calculated that agriculture will be responsible for 50 to 70 percent of everything produced in the country, while Mikhail Arandarenko, member of G17, responded to the question, which group of countries this relegates us to, by briefly saying: "Into countries gripped by war."  As a well known economist from Belgrade who did not want to speak with VREME because of his "personal pessimism" commented: "There were always the poor and the hungry in Serbia, but after this war there will be many more of them."

Given that it is not known how long the war will last, nor how great the final damage will be, economic experts did not want to respond to hypothetical questions posed by VREME - will we wake up one day in a country which looks more like Albania than a republic of the former Yugoslavia.  Judging by the national product, we are somewhere in between - we are better off than Albanians and only slightly better off than Bosnians and Macedonians, but worse off than Bulgarians, Croats and Slovenians.  From this perspective there is not much consolation in a statement we got from one of the experts we talked to that Yugoslavia will not be reduced (at least not in the near future) to the level of the number of cars, fridges and phones which the poorest country in Europe, Albania, enjoys.

Considering such consumer articles we are already somewhere at the lowest level in Europe, although statistics indicate that we still manage to live better than our reality permits.  Thus, for instance, for every 100 citizens of Yugoslavia there are 21 telephone lines; Yugoslavs drive cars which are on the average 11 years old; and as far as fridges and freezers are concerned, we are slightly better off.  Nearly every household has at least one fridge, while every second household owns a freezer.  Where Albania stands is best indicated by the fact that this country does not have any such statistics, although it should be kept in mind that in the last two years they are not worried about phone lines because they all use cellular phones, nor do they worry about TV cables since they all have satellite antennas.  This picture is made complete with the statistic that we are at the level of Macedonia, but that in the last decade Bulgaria has jumped ahead of us considerably.

One expert on national infrastructures told VREME that the drawing near between our and Albanian national products does not mean that we will soon drop to the level of our poorer neighbor.  "There is something which is called national wealth which is accumulated through generations, and as far as this goes an average Yugoslav is far better off than an average Albanian," this expert told us, adding that the real question is what will happen to us in the long term.

Regardless of the enormous destruction suffered by the Yugoslav national infrastructure, according to economic theory this is something which could operate on a loss for a long period of time.  Translated, this means that both the telephone and electrical utilities in Yugoslavia will be able to endure for some time non-payment on the part of citizens resulting from a drop on their standard of living.  From the telephone utility's perspective this means that this company will not be able to a lot funds for renewing facilities and investments, that is to say that new telephone lines will not be coming into use.  Well, if in ten years for every hundred citizens of Yugoslavia there are only 21 who have telephone lines, it is not beyond the realm of imagination that even Albania will jump ahead of us.

Regardless of the destruction of war and unpaid bills in this segment of the economy which otherwise contributes significantly to economic growth in Yugoslavia, these utilities are already suffering direct losses.  Whenever half-baked bread comes to stores and whenever citizens miss their morning shower, the electrical utility and the water utility are left without that which economists call potential profit.  Whenever a citizen gives up on placing a call to Podgorica or Skopje, unable to endure the frustrations of endless dialing, the telephone utility, which is a highly profitable venture in peace time conditions, foregoes that income.  Thus, if all these frustrating situations for "common people" are looked at from the perspective of the economy then the question which we are all asking these days - what will happen when all this stops - gets completely new meaning.

The answer, above all, depends on how long the war will last and how much destruction will occur, but it can be partially answered all the same.  According to Ph.D. Bosko Mijatovic, Associate with the Economics Institute, our national product will diminish for at least three reasons.  First, because destroyed facilities of the economy, then because of a stoppage in transactions withing the economy itself (either because the chair of production has been stopped, or because roads have been destroyed, or because there is no gasoline), and finally, because the standard of living of the average citizen of Yugoslavia will drop, forcing him to change his consumer behavior.

"A drop in the national product leads to a drop in personal spending.  In such a situation people forego everything which is not essential, everything which is not food.  This is in the interest of the food industry, but it is catastrophic for manufacturers of furniture and luxury products," Ph.D. Mijatovic explains.

Ph.D. Dana Popovic, Professor at the Faculty of Economics in Belgrade states, by analogy with the time of sanctions and hyperinflation when we also experienced a sharp drop in per capita income, that the first to suffer will be services: "first a drop in tourism, than the hotel industry and transportation."  The fact that the food industry and agriculture remain stable cannot lead to economic growth.  The situation is quite clear - as long as tourism and the hotel industry inspire production in a number of sectors, including agriculture, agriculture simply cannot fulfill that function.

What holds true for the economy also holds true for all the citizens.  According to statements issued by the Serbian Prime Minister Mirko Marjanovic and members of his Cabinet, the principal task facing the Government of Serbia at this moment is assistance, followed by the creation of permanant jobs for 58,000 people who have been left without work after their factories have been destroyed.  However, the workers' union of Serbia claim that closer to a half million people have been left without jobs, that is to say that every fifth employed person has lost a means of making a living, and that the existence of their families is under direct threat.

Ph.D. Mijatovic warns that a general drop in the standard of living will not follow immediately because the citizens of this country have at their disposal a certain amount of savings which they are presently living.  According to G17 estimates, such savings amounted to about six billion German marks at the time of sanctions, and is presently somewhere in the range of two to four billion marks.  Looked at in the long term, the Government must find finances for social assistance for those who have been left without jobs, as well as for paying out pensions and salaries in the public and government sectors.  Experts see three ways in which this can happen, the first of which is at present unrealistic, while the other two are catastrophic for the economy: selling some company to foreign investors, printing money and added tax pressure on those who have some sort of income.

Vladimir Milovanovic

Caption

How Quickly Can We Expect Ruin

Given that war and sanctions are once again working hand in hand against the Yugoslav economy and against our standard of living, it should be remembered that in 1991 the average salary in Yugoslavia took care of 105 percent of the costs of a consumer basket, while only two years later it took care of only 6.5 percent of the same basket.  After a certain period of recovery during the first three months of this year it was necessary to spend 2.2 average salaries on taking care of a consumer basket, staple foods, clothes and footwear.  Last year average per capita annual income was 9,680 dinars, i.e. 807 dinars per month, with one percent of the poorest citizens of Yugoslavia earning 120 dinars per month.  Perhaps the soundest indicator of the permanence of our state of poverty is the fact that, according to official statistics, in 1998 the most well to do citizen of Yugoslavia has a monthly income of 2,113 dinars which is, the truth be told, 18 times higher by comparison with the poorest citizens of Yugoslavia.
In keeping with the principle that the manner in which someone spends their income tells more about their standard of living than absolute figures, let us mention the following information: the average citizen of Yugoslavia spends 45.7 percent of his income on food and beverage, 6 percent on clothes and footwear, 5 percent on health and hygiene, and less than 2.5 percent on education and culture.