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November 7, 1994
. Vreme News Digest Agency No 163

Poverty in Yugoslavia

by Dejan Anastasijevic

When this survey was made three months ago, around 12,000 Yugoslavs fed themselves in soup kitchens; in the meantime, that number has grown by almost one-half and is near 17,000 today. In contrast to some other countries, where the practice of giving out free food was established at the time of the industrial revolution, this was not the case in Yugoslavia: receiving this type of help represents a personal disgrace to the majority of people here. "The thinking exists that a person humbles themselves if they are unable to feed themselves", says Srdjan Bogosavljevic. "People rarely think to blame the government or the state which has not made it possible for them to support themselves." When asked why they come to eat in soup kitchens, the vast majority of those surveyed answer that they have no other choice. Over eighty percent fall in the category of "the new poor", meaning that they have been receiving free food for less than a year. "I expected there to be many more members of the so-called classic marginal groups such as the handicapped, Gypsies, alcoholics and the like amongst those receiving help", says Aleksandra Posarac. "However, I uncovered that they are mainly average, well-dressed people. Or, in other words, our neighbors." Indeed, the majority of those surveyed (72 percent) are people who have a regular income (salary, pension or disability aid), live in their own apartment or house with a bathroom and have health insurance. Less than seven percent drink alcohol above average, only one in three are smokers, and 99.9 percent have never had any contact with illegal drugs. Only five percent are refugees and less than half are above the age of sixty.

"If there were more kitchens, there would be more patrons", says Aleksandra Posarac. The results of the survey show that there are already around 38,000 of those who have an objective need to feed themselves at soup kitchens, but they have not yet gotten over the "threshold of shame" or they live far from the distribution centers. However, in the near future this number could grow to the frightening figure of half a million.

"The sanctions are less responsible for our economic disaster than the cumulative effect of hidden system errors that were shown at the end of the 1980's, the incompetency for reforms that brought about the disintegration of Yugoslavia and war, whose real price no one has yet been able to calculate", says Aleksandra Posarac. The statistics back her up: the social product began to drastically fall in 1989, three years prior to the beginning of sanctions, and it fell at an average yearly rate of 18.7 percent up until today.

Let us remember that, in 1989, Yugoslavia fell into the highest group of countries at the secondary level of development, with a social product of around 2100 dollars per capita. In just three years, we have fallen to 900 dollars, which means that the social product fell by some 60 percent. For comparison, one should look at the figures for other eastern European countries: during the same period, Russian social product fell by 18 percent, Bulgarian by 22, and Slovak by 25.4 percent. By all indicators, we can now be considered an undeveloped nation, and what awaits us can be seen from the following estimates: if the social product grew at a rate of five percent over the next 25 years (which experts deem extremely optimistic and highly unlikely), we would reach the level of four years ago around 2020.

The mentioned fall has truly been reflected in the living conditions of Yugoslavs: the average real disposable income per family member was ten times smaller during the middle of last year than it had been during the same month of 1990. Those who are exceptionally well-paid by current standards (the so-called highest income group) have approximately the same income as those in the poorest-paid group had in 1990. The average Yugoslav now earns five times less than in 1990, which means that the majority of families are unable to live normally from their income. One must also keep in mind the fact that the situation was far from satisfactory even four years ago: even then, the so-called "consumer basket" (basic provisions required by a four-member household) cost 8 percent more than the average salary. The same household would need four average salaries for the same "basket" today.

It is interesting to see how the positions of the average family budget changed from 1990 to June of 1993 (figures from June of 1993 can be used for the same month of this year). One-third of income was once spent on food. Today it is one-half, but taking into consideration the rise in prices of provisions from the "basket", it is clear that this food is no longer in keeping with the basic medical standards of proper nutrition. Somewhat less than five percent of income was once spent on furniture and appliances, compared to today's one percent, which means that there is simply no longer enough money for those things. Even money for repairs is fairly hard to find, so we can assume that in the near future the washing machine will become just a sad memory for many. Spending for "transport" has almost halved. When we know that the price of petrol is ten times higher than it was in 1990, it is clear why.

As an illustration, in June of 1990 the average salary could buy 486 liters of milk, 411 kilograms of bread, 48 kilograms of baby beef, 107 kilograms of detergent, or 500 liters of petrol. In May of this year, the list was as follows: 123 kilograms of bread, 16 kilograms of baby beef, 43 kilograms of deteergent, or 49 liters of petrol.

It is impossible to live from one's salary. According to the survey, around a third of family income comes from "the grey economy" (black-marketeering or other illegal activities). The portion of so-called "natural consumption", or in other words the production of goods for personal use, grows ever larger. This item, generally high for rural households (around 30 percent of total income in 1990) and generally low for urban (2-3 percent), has doubled. In the city, it is of course harder to engage in "natural production". As a result, the urban population is harder pressed than the rural.

It is interesting that, despite frequent complaints by pensioners, the real value of pensions fell more slowly than the value of salaries. In 1990 the average pension was about 20 percent smaller than the average salary; they are now almost equal. It wouldn't hurt to keep in mind that many companies (for example, the Yugoslav Army) are often many months late with their disbursements, while pensions arrive more or less regularly.

For the first six months of this year, the average salary equalled about 97 DEM. The difference between the highest and the lowest salaries fell significantly: from 7 to 1 in 1990 it fell to below 5 to 1. This is, without a doubt, equalization in poverty, characteristic of the type of social system that the SPS (ruling Socialist Party of Serbia) stands for. "In fact, a lower poverty threshold does not exist. It can continually grow, even without inflation. The economy can be altogether impoverished and altogether stable at the same time", says Posarac, and mentions countries which had such economies in the near past: Albania under Enver Hodza and Romania under Ceaucescu. "The biggest losers are the former middle and higher classes, which can be said to have sunk, if not completely disappeared", she says. "We have just begun to feel the consequences."

If a lower poverty threshold does not exist, an upper one does. That is the "line" upon which statisticians base their calculations of which categories of the population can officially be defined as poor. That category is somewhat elastic: according to the criteria of 1990, around 90 percent of today's population would be considered poor. However, if we set the poverty level at those who have an income of less than 40 DEM, or half of today's nominal average salary, then half a million people fall into that category. Those are those 500,000 potential users of soup kitchens mentioned at the beginning of this article. This "army of the hungry" still has "extra income" from black-marketeering and other forms of petty crime, but it is only a matter of time before they begin knocking on the doors of the "people's kitchens". If there are not drastic changes for the better, they will have no other choice.

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