Economics of Malice

Where can you buy a good shirt for 30 dinars, a good pair of shorts for 20, or a dress for 60 dinars?  Even at this time of year, “second hand shops”, stores with imported used goods, of which there are more than a hundred in Belgrade, are full of customers.  Why would they not be when you can buy pants or a skirt in these stores for 40 dinars, while a jacket can be had for a little over hundred dinars.  The goods come from Holland, Germany, and France, while these stores are noticeable by the loud signs “Sale” and “Discount”.  Along with this, the displayed clothes does not look bad at all.  “It mostly isn’t”, says a manager of one such store in the center of town.  “The greatest part of the goods arrive from foreign sales because of bankrupcy or closure.  Outside you can purchase cheaply even last year’s collections.  Even Benetton sells the remains of its collections from several years ago for dirt cheap.  There are also goods with manufacturing errors (hardly visible to the untrained Serbian eye — ed.), so that now we carry no more than 30 percent of actually used goods.”

Last week, the Federal Government, under Momir Bulatovic’s direction, has adopted a package of measures which increases some old and institutes some new duties and taxes.  The package, which has been described in our editorial office as “scratching the bottom”, includes a ban on the importation of second hand clothing.  This practically means the end of the hiatus for “second hand shops”.  For now the effect of this decision has not been felt.  “We still have stores, while sales had dropped several weeks ago, since the beginning of the vacation season,” states our shop manager.  “Only citizens are visibly disgruntled.  Many of our customers cannot purchase anything else.”

PROTECTION FROM PROTECTION: Federal Minister for Foreign Trade Borisa Vukovic explained the decision on sealing up second-hand shops with the necessity for protecting our domestic textile industry “which has over 200,000 employed.”  The explanation is senseless for more than one reason.  First, officially the country imports only several tens of thousands dollars of used goods, while only imports of basic materials for domestic textile manufacturers amounts to nearly 20 million dollars.  Even though it is a growing business, imports of second hand clothing is still not at a level at which the domestic clothing industry could be threatened.  The second reason is price.  It simply cannot be supposed that in the absence of dresses costing 70 dinars, potential customers will hurry to purchase dresses costing 300 to 500 dinars, which is the usual price of such goods in public enterprises.  If we overlook the difference in quality, which unfortunately also favors second-hand clothing from abroad, the products of our textile industry are simply beyond the reach of a majority of our citizens.  “Even with a sale in effect, for a Yumco dress you can purchase three in our store,” states our store manager.  In the absence of imported second-hand clothing, the greater part of the population will not be able to afford any kind of clothing articles (this group includes, above all, textile industry workers who should be protected because their average wage amounts to 327 dinars).  In any case, our clothing industry does not depend greatly on its domestic shops, which for sometime now have more salesmen that customers, but rather it survives thanks to so-called “lone contracts” — a cheap service which it performs in finishing goods for a foreign partner.  Those former customers of second-hand shops who will still continue to buy clothes, will revert to smuggled or flea-market clothing, which they bought until the appearance of second-hand shops.  Even this clothing is noticeably cheaper than the “governments”, and appears to be of a better quality that it simply stands no competition.  The textile industry is its own biggest enemy — along with an insatiable government, but that is a general fact.  Even if purchasing power were not so feeble in Yugoslavia, is it reasonable to expect than someone would take out a three- to four-figure amount of money (state stores virtually do not carry any article with a two-figure price tag), only to end up looking like a tourist from the rural part of Kazakhstan?

NAKED GOVERNMENT: How will the efforts of the government end up in the creation of the first nudist state? People whose existence depends on the resale of second-hand clothing are hoping, “This cannot hold up, just like the last decree.”  If the decision does remain, no one will be protected, but they will be harmed.  Around 60 percent of the second-hand stores get their goods from four big importers, of which the biggest is “Holand partner” from Batajnica.  Even though they will lose the opportunity for good profits (it was often necessary to give the customs more than the imported goods were worth, because Kertes’ people refused to apply the 30 duty to the ridiculous amounts cited on invoices), the import companies are sufficiently strong to reorient themselves toward other goods.  The owners of the remaining 40 percent of shops who supplied themselves, will probably go under.  Along with this, the government will do without the mentioned duty tax.  The ministry led by Borisa Vukovic is doing quite well with the distribution of import quotas (the minister himself recently completed the adaptation of two apartments — both of which are larger than a hundred square meters and in an elite part of Dedinje) and would not profit by completely stifling importers, but merely wants to crowd them.  The complete ban on imports of certain goods, in this case of second-hand clothing, is only applied when the entire operation ruins the plans of someone who is very near the top.  It appears that someone has decided to clothe us, after having stripped us all to the bone.  Looked at from this perspective, the unusually enthusiastic control of smuggled clothing from Turkey in recent months also represents a curiosity.