Government Vs. Rest of the World

Whether the Yugoslav economy will soon be profitable or continue dealing with projects like "Europolis" (Belgrade on the Sava), "fast railways" and other similar ones, will depend on what the Federal Parliament adopts in the session which begins on 14 May, said National Bank of Yugoslavia Governor Dragoslav Avramovic on 3 May, in the first official session of an expert group preparing a draft of privatization law.

Influential Federal Government member Tomica Raicevic a few days later (6 May) publicly said that the Government worried neither because of the forthcoming debate in the Parliament nor because of the future of the Yugoslav economy. Raicevic said that key economy laws which were soon to be adopted would bring Yugoslavia closer to modern market economies, i.e. that these laws were of great importance because they offered new solutions in ownership transformation.

In the meantime, there has been no public debate of the Government's draft. There are two courses running alongside each other: the ruling circles are praising themselves and are promising foreign capital, while everybody else says that the worst possible solution has been adopted because the Government chose to prevent privatization. The proofs offered by the former are verbal. The latter base their attitude on an article from the draft which leaves it up to the socially-owned companies to decide on a possible ownership transformation. This is mimicry, critics say, because company managers are still under the control of the ruling party and its state and the government had a way to protect itself from dissidents by requiring "workers' consent" for ownership transformation.

The exclusiveness of the proposer and the contents of the proposal can best explain why Avramovic gathered even those experts who rarely agree with one another (the group includes representatives of all important groups of economists - even of the one which is the official advisor of the Serbian government, the two unions, certain opposition parties, private businessmen's association and the Academy of Sciences and Arts). The unusual concord shows that without privatization and the transition of the whole system, a long and severe isolation is ahead of F.R. Yugoslavia. There are already some hints of such a sequence of events - financial aid which developed countries had promised to send before the normalization of relations between Yugoslavia and international monetary institutions, the IMF in particular, is not arriving and there is strong competition from other countries in transition. The members of the expert team did not waste time to prove what had already been proved - which of the two concepts will be chosen will not depend on expert opinion but on the political will. The loss of the Yugoslav economy equaled the overall depreciation after six months last year and doubled by the end of the year, said Stojan Stamenkovic, the editor of the "Monthly Analysis and Prognosis" magazine published by the Belgrade Institute of Economic Studies. In addition to this, total capital does not exceed 30 billion U.S. dollars, and the state's public debt (to creditors in the country and abroad) is about 15 billion dollars which equals about one and a half year's GNP.

The experts believe that social ownership cannot be economically efficient. In a meeting last Friday, Avramovic said that he had been "pushed into privatization" the moment he saw the farming prices remained the same for a year - and there is competition in farming - while state-owned and socially-owned companies were causing a monthly inflation of almost 10 percent. This is why the monetary policy of the National Bank of Yugoslavia is successful wherever there is competition.

There is no reason to say anything about the privatization concept prepared by Avramovic's expert team but that it is entirely different from the Government's - one concept offers privatization and the other wants to block it. Avramovic's group will complete the proposal on the evening of 10 May, after this issue of VREME is published, so we shall publish their proposal in the next issue.