Who Gets the Money?

This time, the reactions were caused by the tone of the Yugoslav delegation at the latest Conference on Former Yugoslavia meeting in Geneva on the last day of November and the first day of December.

First, academician Kosta Mihajlovic, head of the Yugoslav delegation, went public with claims that, following long-standing refusal, the others had finally accepted to discuss the platform the Federal Republic of Yugoslavia (FRY) was offering. That platform will be discussed at the next Geneva meeting which hasn't been scheduled yet. Perhaps that caused a drop in the initial satisfaction over a possible turnabout. Later statements by FRY delegation members indicate clearly that no one is expecting quick results on the division of the former Yugoslavia's assets.

The fact that there was no more refusal to discuss the FRY platform practically means that the final definition of the assets to divide could be changed. Namely, at the moment that the assets list was made by specialized international companies called in by the Conference organizers. The bulk of the assets include former Yugoslavia's property and its debts.

The FRY proposal is a significant increase of the inherited assets because it covers everything that was financed by state capital from World War II to 1990. Even observers who are uninformed about the domination of state capital, especially in the first 20 years of that period, see clearly that few economic facilities and some non-economic facilities would be left off of that list. The inventory covers over 8,000 facilities, Belgrade organizational sciences professor Slobodan Krcevinac told VREME. Krcevinac also heads an Economic Institute team that drew up the state commissioned list of assets.

Judging by Croatian delegation chief Bozo Marendic's statement to the Zagreb weekly Pecat (13 December 1994), the FRY delegation is continuing its strategy of delaying and obstructing an agreement: "As soon as they got to the meeting, they attacked the working group presidency for calling the meeting without previous consultations about the agenda and insisted that all documents, which were always contrary to the demands of the other four states, be taken into consideration. They repeated claims of discrimination, that they do not accept the conclusions of the Badinter commission, that they have the right to continuity, that we are all secessionists who damaged Yugoslavia and that we should pay them damages because we broke away by force without an agreement with them." Marendic added that the Serbs have a very strange approach because "their demands are not based on legal documents or experience". He said that it wasn't right that the Yugoslav platform had been accepted at the recent meeting.

In a December 11 interview to the Belgrade daily Politika, Dragana Gajtanovic, another FRY delegation member, said: "As for our documents, their fate depends on political developments and the way the Yugoslav crisis will be resolved as a whole." She also pointed out that the FRY social and economic system is specific, i.e. that it included much greater joint financing than is usual in states with clearly defined divisions between private and public property. She also reiterated the FRY delegation's assessment that only "the agreement of the Conference for the Yugoslav side to prove the basis of its definition of social property through its own inventory" can resolve the Geneva dead end.

Krcevinac told VREME that the initial inventory of assets was made willfully and with huge accounting errors. For example, the list of military assets is wrong by about 28 billion US dollars. Military assets were increased by that amount but with no clearly corrected initially wrong assessments.

The essence of the FRY delegation's new inventory covers not only what nominally belonged to it (buildings, cars, etc.) but also everything that was financed with common funds under socialism. State property, Krcevinac says, is everything that the former Yugoslavia invested in and the state was the greatest investor for a long time. All those investments have been revalued starting from the date of the first secession from the former Yugoslavia, including a medium-sized interest rate of about 3% a year. For example, Ljubljana's Litostroj factory was built with state capital in the 1950's. Now each investor should get a part of its shares increased by the annual interest. Krcevinac said the inventory was based on official documents, most often government and other state bodies' decisions. Non-production investments were not covered by interest.

The entire inventory is divided into three parts: real estate, movable assets that can be located, and financial elements. The first step is a valuation of each of those groups as a whole and their individual parts on the day the list of assets was drawn up. The FRY wants that date to be the secession date of each of the four former Yugoslav republics that broke away. Specifically, the moment Slovenia declared its secession from the former Yugoslavia all the other republics got the right to demand their dues. Those dues include the consequences of the secession if they can be expressed in material terms.

But, Krcevinac added, there was an obstruction on that first step by the other sides who did not accept that definition of state property. They would obviously fare much worse in that case because investments in their republics were much greater than in Serbia. Asked whether the FRY platform meant that the entire policy of the former Yugoslavia would be revised, Krcevinac said that that wasn't the issue but that this was a case of listing official facts and calculable consequences. He said it was high time to settle accounts which were demanded during the Maspok (Croatian nationalist uprising in Serb-populated areas of Croatia) and other places later. He said it's better to calculate what belongs to whom than to give up any accounting because it can't be completely precise.

The Yugoslav platform, like any other, includes many other elements that would deserve attention if the division negotiations were in sight. But, since the parties in the dispute have voiced fears or convictions that the dispute will be resolved politically, there are two possible outcomes to the negotiations.

One is that the Yugoslav negotiators will drain themselves economically and be forced into concessions that allow a divorce. The other is surreal, but also realistic considering the time, place and actors. More specifically, the first version means the hunger for foreign capital among most of the parties will outweigh the division of property whose value is not as evident as they think. In that case, the effective entry into the IMF, World Bank and into the other potential creditors' coffers will be crucial.