Interview With Nebojsa Savic

"The first and crucial precondition is to attain a social and political consensus on proposed measures. What I mean by this is an agreement among all leading parties as well as an agreement with the state, unions and managers. In brief, there must be a general state interest in carrying out the program, i.e. an equal distribution of burden. Numerous threats can be heard at the moment - pensioners in Montenegro are afraid that their pensions will be cut down, workers fear that they may not receive salaries at all, etc. But, the following must be said: salaries and pensions will definitely be smaller if such program is not carried out. Its implementation will ensure that the salaries correspond with the current level of GNP. They would be higher than they are right now, as a loss due to inflation would be avoided. Our program offers the salaries of about 100 DM, as soon as the monetary system has been reconstructed which will take no longer than two or three months. Otherwise, salaries might drop to 50 Pfenig," Nebojsa Savic said.

VREME: What obstacles to the program are there?

Savic: An expert team is necessary to carry out the program which has to be both politically and socially accepted. This implies a strong governor and a strong prime minister as well as central banks. We have also proposed that two additional teams of experts are formed since the program will be implemented at a very delicate moment. These teams would monitor the process of the program's realization and adjust it in accordance with new developments. It is necessary to react on a daily basis if one wants to avoid deviating from the program.

Could you specify how much power would these teams have if there is a governor and a federal prime minister?

They can give expert advice but it is up to the executive branch to choose one of the offered solutions. Moreover, experts would compile a report every month or every three months about the program's realization and inform the public. But, it is also important that the authors of the program take on responsibility that the program is carried out in a consistent and competent way. However, the main obstacle are those who still believe that it is possible to live with hyperinflation and who will probably continue to conduct last year's economic policy even in the new year.

What do you think about a lack of foreign capital to help stabilization of the dinar?

The Yugoslav economic crisis did not begin with sanctions but with the break-up of the former Yugoslavia. 50 per cent of goods produced in Serbia were disposed on the market which no longer exists. Other shocks, both international and domestic, followed. Yugoslavia entered the zone of hyperinflation in January 1992 before the imposition of sanctions. The inflation rate was quite high even before that, so that there has been a constant lack of readiness to come to grips with major economic problems. There is no dilemma that the sanctions have had a negative effect and that some problems, such as re-structuring and creating an exports-oriented economy, cannot be solved under sanctions. However, hyperinflation can be curbed even if there are sanction and there is no foreign financial aid. The reason is that the current economic policy has been exhausted.

Have you offered this program, like some previous ones, to the Federal Government on your own initiative?

We have worked on this program upon the invitation of the Serbian Government since last September. A team of 70 experts in various fields from two institutes and the Economic Faculty in Belgrade was formed.

Does that mean that your program is actually a proposal by the Serbian Government to the Federal Government?

I cannot answer that question. Not yet. The Serbian Government will decide whether it will accept the program or not. However, I get the impression after the talks that we have had so far that the program will be accepted.