Is the Governor Out in the Cold?

The federal government said in an April 23 statement that it had discussed the report on the recent talks with the IMF and World Bank in Paris and "concluded that the talks in Paris were the start of normalization of relations with the IMF and World Bank". It also concluded that "further steps need to be taken to normalize relations with international monetary institutions" and appointed Jovan Zebic, deputy prime minister and finance minister, coordinator of those activities.

NBJ Governor Dragoslav Avramovic was ousted as the FRY's chief negotiator. The statement said nothing about the fact that the IMF had informed the Belgrade authorities that it won't continue the talks based on the platform the federal government offered. That platform was sent to Paris late and it undermined the talks. So it's unclear with who and about what the federal government intends to talk, the more so since the statement added: "the federal government concluded that there were discussions outside the established basis for the talks but the delegation did not take on any obligation that would run counter to the platform defined by the federal government".

The Serbian Renewal Movement (SPO) called a press conference that same day and SPO spokesman Ivan Kovacevic told reporters that the party would call for a special session of the federal parliament. He said the federal government session saw a clash flare up between Avramovic and Prime Minister Radoje Kontic: Kontic said he doesn't want to talk to the IMF if it doesn't recognize the FRY's continuity, that the talks were meaningless because there is no chance for foreign loans before the US presidential elections (he probably meant before Clinton leaves the White House) and he warned the governor not to dabble in politics but only deal with monetary problems because only one man is charged with contacts with the world and that is Slobodan Milosevic.

Initial reactions were contradictory: was Kontic truly bringing a stubborn Avramovic into line or using the opportunity to say that the federal administration is just a pawn in the Serbian president's hands. That position is not very pleasant but it lowers responsibility if and when that responsibility is discussed.

At the same time Kontic is right when he says Avramovic is dabbling in politics but he's wrong when he pushes him out of politics and restricts him to monetary issues. We've know for a long time that a healthy currency is the most dangerous opposition to the authorities. That is true in all countries even countries that are much better organized than Yugoslavia.

Paul Walker, the legendary chief of the US Federal Reserve, wrote that healthy money is endangered most in contacts with politicians: they should be kept far away from money because they promise voters things that are not financially realistic.

Avramovic became an embarrassment to the authorities the moment he refused to print money without backing and he's spoiling their calculations in the IMF talks only because he's publicly revealing how much the country will have to pay for the conviction of the authorities that the world is smaller than Serbia and Montenegro and depends on them. The governor confirmed that on Tuesday after the government session when he told representatives of the Belgrade metal workers' union that the establishment of cooperation with international monetary institutions depends on how far the state is prepared to lower its excessive budgets.

Membership in the IMF and World Bank does not automatically bring loans. Very precise conditions have to be met for loans; credit lines aren't opened to countries that suppress the economy with huge state expenses (the Serbian government says the budget isn't too big, the social product is too small), people who obstruct market prices, monopolize foreign trade and people who refuse privatization and an overall transition.

In that regard, Radoman Bozovic's question was indicative. He wanted to know if there's any sense in sending another draft privatization law to federal parliament when the government proposed it's draft last week. Experts are almost unanimous in the opinion that the government proposal is worse than could have been assumed because it prevents the transformation of state property in several ways (as the recent SPS congress was told). Bozovic's question was in reaction to Avramovic's privatization proposal presented to a gathering of prominent economists. In it the governor slid into pure politics. Nasa Borba reported that Avramovic said: "It's strange that the SPS, which calls itself a leftist party, and JUL say the workers and citizens can't get anything for free. What kind of leftist parties are they?"

A look at this week's continued clash between economy and society concepts is not complete without saying that one leads to digging in at the bottom of the rating list of countries in the world, under all important criteria, while the other means a return to the normal world.