Using Avramovic

This is more an insight into the possible fate of the announced policies, which initial reactions describe as more of an attempt to get the Dinar stable than care for some public figure and its political future. In that context, we should recall that Dragoslav Avramovic, Governor of the Yugoslav National Bank (NBJ) completed his address to the nation on TV last Monday with the words: "I want to finish. I want only the best for our suffering people. Nothing more."

A day after the Governor appeared on state TV, a meeting of the working group for taxes (one of three drafting a three-year development program drawn up last autumn by Serbian President Slobodan Milosevic) calculated that next year, if budget proposals are adopted, public spending will stand at around 60% of the social product: not the 41% which all three governments promised. Avramovic agreed with those working group predictions.

At the first step of the announced Dinar preservation policy, the authorities said they would respect that policy by earmarking everything they need for themselves. So how can anyone expect them to keep to a consistent policy of a healthy national currency?

Initial reactions to the announced economic policies were not surprising. The economy praised them in principle and demanded moderation in implementing some measures, i.e. exemptions paid for by others. Economists, even those listed as Avramovic's enemies, say the package, most of it at least, is market oriented, which is good. Everyone avoided specific assessments since no one knows how the policies will be developed and turned into regulations. The measures encourage any market oriented businessman, says Danijel Cvjeticanin (Economics Institute). But he says the tragic rocking between "populist and market concepts" has been shortened to 6 to 7 months. Cvjeticanin was alluding to last summer's abandonment of the healthy currency policy. One of his colleagues asked why a restrictive monetary policy was announced now if it was adopted late in October. Tomislav Popovic (Economic Sciences Institute director) welcomed parts of the package, but warned that the announced policies were unachievable with the projected budgets and added that even frozen salaries would not be paid out unless the 350,000 or so workers on temporary leave are made temporarily or permanently unemployed and a social policy is formulated.

Another dimension to the overall economic situation was voiced by balance of payments expert Jovan Rankovic in Borba when he said that the economy is now facing a situation much worse than late last year. He predicted a financial collapse in the economy and called the official federal government stand (the budget for next year based on an unchanged exchange rate and stable prices) "pure nonsense".