Economy and Politics

Beginning his report on the Serbian economic system, President Milosevic claimed that Serbia took its orientation towards market economy in 1990. That process of changes is now in progress, although it has been somewhat slackened due to non-economic obstacles. Nevertheless, "Serbia manages to carry out the changes it has opted for." President Milosevic supported this statement by the fact that all the forms of property ownership have been enjoying an equal status now, pointing out that "changes in the structure of property should strengthen and not decrease the economic power, a consequence which will undoubtedly take place if we disregard the evident efforts to turn that process into a brutal plunder of property that has been created by so many generations since the War". The president proceeded by saying that the fear among the people in respect to the situation of fishing in muddy waters was justified, and that the ones who would profit from it most of all would be "looters and swindlers". He also said that the social and economic interests of Serbia should be considered when importing foreign capital. Finally, President Milosevic refuted the statements made by those who claim that Serbia is in the midst of an economic disaster: first of all, from 1988 till 1991 "the Serbian share in the formation of the Yugoslav GNP rose from 35% to 38%", and secondly, despite the difficult situation, "Serbia has managed to enable normal functioning of the economy and supplying of the population, without any shortages which are common in times like these".

Prime Minister Bozovic also lent his support to market economy, adding that it could not be introduced by a decree since it was in process. He also stated that the Serbian government was not against private initiative but only against speculators. At the same time, Bozovic warned about the danger of a great social unrest, reproaching the opposition for not having offered any solutions to the problems facing the companies, as the government has been doing these days. He reiterated that the government would not determine prices and salaries, except for the infrastructure and the fields where salaries are not in accordance with the possibilities of the Serbian economy.

The regulations of the government, as interpreted by its president, represent a mechanism for easing inflationary pressures.

Batric Jovanovic (MP of the Socialist Party) explained the economic necessity and benefit from a possible future association of Serbia and Montenegro, stating the following arguments: there are more Serbian goods that pass through the port of Bar (Montenegro) than the Montenegrin ones, a natural end point of the Serbian railway is in Bar, Serbs spend their summer holidays on the Montenegrin part of the coast and all the tourists there are offered Serbian food. But who is to say that the Montenegrin part of the coast suits Serbs best, even if it will not be occupied by the navy of the new state and where does one get the idea that Montenegrin caterers, and even the population itself, will prefer Serbian food together with the price of the Serbian state and politics?

The way Prime Minister Bozovic presented the work of the Serbian government was even more precise and worse than the way critics would have described it; by boasting about the way problems have been solved in certain firms, he has only revealed that the government has been meddling with something which is not its business - meaning, of course, market economy; by attributing lesser importance to current politics than to social unrest, he has shown that economic subjects will not be relieved from the untenable marriage of economic and social functions; by imposing regulations to slacken the rate of the inflation, he has deprived the government of a possibility of getting a true picture of the situation on the market and of the appropriate economic policy; by announcing "a process" and a cautious approach to the privatization because of all sorts of speculations, he has overlooked the fact that the people know who the true power holders are, or rather, who will be in the position to conduct "murky business".

The Serbian president stated that there had been an increase in the Serbian share in the Yugoslav GNP: according to that indicator, the share of Serbia will soon exceed 90%. But leaving cynicism aside, it is more important to consider the extent to which we should rejoice at such indicators, since the former socialist regimes are facing a classification of their industrial plants to those that will go to scrap and those that stand a chance of doing business in market conditions. In this topsy-turvy state of affairs, the drop in industrial production might signify a wise economic authority which has quickly been getting rid of everything that does not seem to bring profit.

The Serbian economic concept has been put to one of the possible tests. The government has been relying on other views of the economy, which are in complete accordance with its political concept.