We're Yet to Lose 100 Billion Dollars

Suddenly, about ten days ago, after years of propagandist self-deception that "the sanctions cannot touch the Serbs" the story about huge losses was launched by Nikola Zebic, Federal Deputy Prime Minister, who said that the damage incurred through the collapse of Yugoslavia and the universal embargo totalled US $ 147.3 billion. In fact, this figure was divulged by the Federal Ministry for Science, Technology and Development in April last year in an estimate of the losses the country will sustain between 1991 and 2011.

This particular time-span was chosen because - had the embargo been lifted by the end of 1994 and an average social product growth in FR Yugoslavia of 4.1 percent ensured over the forthcoming two decades - the 1990 social product would not have been matched again prior to 2012. The losses of FR Yugoslavia since Serbia's embargo against Slovenia to this day, for instance,

are estimated at about US $ 50 billion. That was our whole achievement.

Last year's survey of the Centre for Development and Economic Policy of the Ministry for Science warrants a closer look because it contains a number of less known facts. In estimating the social product which was not achieved, the researchers assumed that a realistic base figure would be the social product of US $ 26.590 billion (according to UN methodology) in 1990 because that was when it reached its lowest point since 1980 so that "it was selected as a social product which would have been quite possible after 1991" had there been no sanctions. Estimates are that those losses in the social product alone account for the loss of the US $ 38.136 billion in 1991-94 which needs. Add to that the lack of foreign capital inflow totalling US $ 1.415 billion and US $ 497 million in wages paid to the temporarily unemployed because of the embargo. The most curious fact of all, however, is that the expenditures include the "non-economic outlay" of US $ 5.130 billion during the same period for the support of 600,000 refugees and the "economic and humanitarian aid to Republic Srpska and Republic of Serb Krajina".

When all this was added together, the result was a loss of US $ 45.1 billion and - with the further losses incurred during the first five months of this year - it adds up to the above mentioned figure of US $ 50 billion. If the sanctions were finally lifted, we would still have to work off losses worth US $ 100 billion until 2012 in order to get back to the level of 1990. Even if Milosevic was promised some compensation in return for reaching an "understanding with the world", one should expect nothing spectacular (as shown by Rhodesia's example).

Serbia's economy collapsed some time in 1989 or 1990 when the markets crashed in the socialist East and when Serbia started its battle against Markovic's reforms which abolished the inflationary financing of clearing exports and threw the country wide open to international competition. During that period, the deficit Serbia incurred in its trade with other countries rose from US $ 700 million to US $ 3 billion in only one year. Also in one year trade between the former Yugoslavia and Russia dropped from six to two billion dollars; the value of its trade with Czechoslovakia dropped by US $ 700 million , with the German Democratic Republic by US $ 900 million, with Romania it was halved, with Bulgaria it totalled only one third, and with Poland one-fourth of the former value. At about the same time US $ 1.3 billion worth contracts were lost in Iraq.

One might say that, sheltered by the war and the embargo, Milosevic's Socialists managed to survive the sanctions and delay system changes to this day. The Yugoslav economy did not survive.