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July 6, 1992
. Vreme News Digest Agency No 41
Mr. Bozovic's "Moderation" Program

The Internal Blockade of Economic Reasoning

Already the "prime decision" to peg the dinar, instead to the German Mark, to the US dollar demonstrates that Mr. Bozovic is obsessed with Ante Markovic's anti-inflation program. The trouble is only that the alleged "pegging" of a non-convertible dinar to any world currency is practically senseless, while in a country in total blockade - it makes no sense at all. All jabber of the experts that around 45% Serbia's foreign trade transactions are effected in dollars, that many countries peg their currencies to this particular currency etc., are now nothing more than pure gibberish. The foreign exchange rates in a country isolated to such an extent, serve predominantly as a guide for calculating diverse transactions between the business sector and the government. The German mark still remains the key hard currency parameter for every citizen of the most recent Yugoslavia, no matter how "hated" the country that issues it might be, and not even the Serbian authorities' "pro-American" gesture (made on the day when US warships sailed into the Adriatic Sea) can help it. And that key European parameter, despite the news that the mark's exchange value is falling in Kosovo, went up for further 15 and more percent on the black market, on the very first day after the offical devaluation.

Of course, the "prime measure", i.e. the dinar's devaluation and denomination (one zero was crossed off), was announced by the National Bank of Yugoslavia (NBY) Governor Dusan Vlatkovic, and not by the Serbian PM, but Mr. Bozovic, at a press conference, did not try to hide the information where all these decisions were conceived. Namely, he said the following: "Since the talks about the new federal executive authorities are objectively lasting longer than expected, we have adopted measures which are (normally) in competence of other institutions."

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