The More Things Change...

Exactly one year later, the Serbian government headed by prime minister Mirko Marjanovic is exactly where it was on the night of March 17-18 1994 when it was voted in by 128 of the Serbian parliament's 224 attending deputies. They're repeating that the solid dinar has no alternative, that prices have to remain stable, that state financing has to be balanced, that a market economy has to be developed, that we should urge a lifting of the sanctions...

The largest amount of "anti-bureaucratic creativity", as Socialist leaders like to call activities outside legal channels, was shown by Dragan Tomic, minister without portfolio, who coordinates the implementation of the Avramovic program through informal coordinating bodies. He has created a parallel authority of the gray economy which spent the past year sharing out state privileges and is now "cutting back" prices to last July's levels and punishing the disobedient. There was a time when the rumor was that Marjanovic is a minister in the Tomic government. Informed sources said that isn't even close to the truth and added that the prime minister made sure his company Progres got or kept its import privileges. The rumor now is that Marjanovic is going to Moscow as ambassador which is more important to his business.

The duplicity in the government is two fold: one side is the urging of policies of a "sound, convertible dinar" which the prime minister has been saying all along. He even opposed national bank governor Avramovic (and indirectly Milosevic) when the governor praised the so-called Hong Kong model of high salaries and began promising unbacked loans to industry.

Marjanovic cautiously noted just prior to the adoption of the law on revaluing privatized property, that there are two possible solutions to neutralize the inflationary profits of privatization: "One possibility is to revise those transformations, the other is to find a solution is to reach into the profits of the shareholders". He also spoke out in favor of a different solution for apartment purchases; compensating state losses fiscally. But to combat the remnants of the old system Serbia does not need a government made up of socialist company directors.

The negative side of the "pragmatic government" is everything that was necessarily produced by the old system. Serbia is still burdened by sanctions, inflation keeps creeping back, prices are being set administratively, the state is overly expensive, the economy's capital is slowly melting away, it is turning to the problematic Russian market, pressure on the media is increasing, power supply problems, shortages etc.

The government's inability to change things is reflected in budget spending. Marjanovic promised to keep public spending under 42% of the social product and even lower but the figure didn't even reach down to 50%. It also adopted a budget which is 75% higher than in 1994. A wave of price rises ensued, followed by the campaign to cut prices back.

Its latest program, legalizing the gray economy, has been defined very widely in the hope of increasing income and not extinguishing the private sector.