The Leaking Barrel

It cancels the market economy and introduces a forced economy in the areas of disposing of one's own property and money. Apartments and cars will, in the future, be sold only for dinars and at prices approved by the government, and all employed must have current accounts (the dream of Ljuba Mihajlovic, director of the Komercijalna Banka Beograd, is finally coming true).

Except for panic, confusion, disbelief and overall dissatisfaction, this Serbian government regulation has succeeded in discontinuing the sale of apartments and has almost completely canceled cash payments at affiliates of the Institute for Payment Calculations. However, since money is like water (it makes pressure on the dams until it finds its way out), life will find a way to cheat these limitations too. One of the ideas currently in circulation is that transactions of apartment sales should be conducted by the banks, with the appropriate fee, but that the banks would issue certificates without actually seeing the money of both buyers and sellers. Another possibility is that the transactions would be conducted in the presence of two witnesses (like in Kosovo), without being registered in the books, in which case the tax would not be paid. The government would in this way lose, according to some calculations, revenue of some 200 million dinars.

What these measures will mean for the everyday, already miserable life of the citizens, is described picturesquely by Ph.D. Milan Kovacevic, freelance consultant from Belgrade: after taking a cab, we will have to exchange certificates with the driver that we have paid all the dues to the government, before paying for the ride.

"So, what? These measures are good for the abnormal conditions of life here", may say those who are well informed about the bookkeeping labyrinth in this country. On the other side, the representatives of the media close to the regime defend the whole idea explaining that "the entire developed world operates that way". It is mostly true: in those countries it is not possible that thousands of German marks change hands just like that, and cash has been completely replaced by various cards (even where coins are concerned).

But as noted by Nebojsa Atanackovic, member of the Board For Crude Oil and Derivatives Trade at the Chamber of Economy of Yugoslavia, the problems is that "first we have to mend the leaking barrel, and then pour water in it". Why would citizens keep foreign currency, why would they use it for all trade transactions and why would they prefer cash instead of checks and cards? Because of a lack of confidence in the creators of the economic policy, the completely compromised financial system and the officially overrated and unstable dinar; these are essential reasons for turning money into foreign currencies and cash. The tricks which fooled Dafina and Jezda do not work any more, and citizens do not save any more, so the state has no means to grab their money.

Kaca Lazarevic, co-owner of a real estate agency, offers a simple explanation: "The citizens don't trust the state." And Vojislav Mijailovic, director of the agency Inter Dil, claims: "Apartments have not been bought and sold for currency simply because it's more convenient, but because this is the only way to preserve the value of one's property."
The proper solution would, of course, be to solve the basic problems of the Yugoslav economy, but our government doesn't seem to recall this. Since there's no economy nor a population that, in abnormal systems, could gain as much as our government can waste and as much as it and those close to it can steal, it will soon prove that this type of violence does not suffice.

After having exhausted all other means of fining the population with new regulations, the next measure of the Government of Serbia will probably be to send the police to rob our apartments and empty our pockets in the streets.