Pilfering the Federation

Podgorica heralds Pobjeda's allegation that Mihalj Kertes, Director of the Federal Customs Administration, incurred the federal budget a loss of around 230 million Dinars by sending the collected customs duties and the foreign currency taken away at the border to "Serbian addresses", and the Montenegrin Government's alleged threat that it would stop paying in all the customs duties to the Federal Government - were not followed by denial and show that the imminent war between Podgorica and Belgrade will break out not only because of "Montenegrin capitalism and Serbian socialism" but because of some much more basic matters. From the economic viewpoint, the scandal is above all interesting because it provides certain arguments for the thesis that the center of the insolvency disease in Yugoslavia lies in the Federal state's capital of Belgrade and that the chain of uncovered liabilities actually begins in the Yugoslav Army.

If Pobjeda relies on Montenegrin Government data and claims that the absence of revenues from customs incurred around 130 million Dinars of damage to the Yugoslav Army in the first half of the year alone, than it can be surmised that this military deficit, together with the carried over and outstanding military debts to the economy from the previous years, approaches the critical mass of 500-600 million Dinars, which is enough to destabilize the entire Yugoslav financial system.

Dr. Tomislav Z. Nikolic, a financial expert who publicly noted the dramatic drop in Serbia's customs payments to the federal budget in late July, told Vreme that the data regarding the customs were really unusual. Serbia paid 221.8 million Dinars on behalf of customs and import duties to the federal budget Serbia in the first six months of the year, which averages to 31.7 million Dinars a month. However, if the monthly average of 45.2 million Dinars of customs duties paid by Serbia in the second half of 1994 is taken into account and multiplied by 7, it turns out that Serbia should have paid the Federal state 316.4 million Dinars. That is, according to this simplified calculation, it turns out that someone in Serbia pilfered 96.8 million Dinars from Yugoslavia.

It seems that the Federal Government has noticed not everyone has been paying what he is supposed to, and issued a statement after its session on August 8 saying that "it was underscored in the discussion that the collection of revenues has been impeded and that the lack of financial discipline is evident".

Mihalj Kertes gave an interview to Borba on July 26 this year, in which he boasted that he took away 20 million German Marks from the Yugoslav citizens at the border last year and already 22 million DEM in the first seven months of this year. It is difficult to estimate how much he has actually taken and how much foreign currency he has personally transferred through federal embezzlement to Cyprus (where he was seen twice on that mission).

Rarely does anyone recall that the Federal Government ever issued a statement after its session as the one it did on September 8 this year; in it, the Government implicitly made a scandalous assumption that the Federal Customs Director has for two years now been failing to pay the Central Bank the foreign currency taken away at the state border and that such a high-ranking official was given five days to do what he had not done for almost two years.

During his visit to Subotica (on July 28, 1995), Yugoslav Prime Minister Dr. Radoje Kontic mentioned data concerning foreign trade which have been secret for several years now because of the world embargo. According to Kontic, the country's foreign trade increased by 23% in the first half of the year, imports increased by 45% while exports remained at last year's level (a mathematician would notice something illogical in Kontic's figures and conclude that exports must have dropped seriously). Simply, the Federal Prime Minister's words gave rise to the conclusion that the belittlement of the remaining state foreign currency reserves are extremely stimulating imports and that the Federal state is not gaining anything from that - neither is it charging the real exchange rate of the sold foreign currency nor is it making real customs revenues from imports which should be generated by foreign currency. Of course, there are people who collect all of that.

The assumption that someone is always inflicting damage on someone else in the imports sphere is corroborated by rumors in Montenegro that the deliberately uncontrolled air import of cigarettes is aimed at smothering the Montenegrin tobacco industry, as well as by rumors spreading through Belgrade that Montenegrin Prime Minister Djukanovic's government has not been reporting all the state racket it has been taking from importers of fuel from Albania.

All in all, the consequences of the concept and practice of "black market economy" that was inaugurated in Yugoslavia will leave permanent scars on the Yugoslav economy and the first immediate danger of greater significance is reflected in the quarrel within the "modern federation" of Serbia and Montenegro. One must also bear in mind that the Yugoslav civil war began because the then Yugoslav Prime Minister Ante Markovic wanted to seize the customhouses in Slovenia with the help of the federal army. General Perisic, hopefully, will not launch his troops to collect the lost customs revenues in Serbia.