Dead and Owing

Following the European Union's decision not to consider arguments for even a partial lifting of the sanctions against Serbia, the opposition will really have to reconsider its relationship with the international community, according to Ognjen Pribicevic, Foreign Relations Advisor to the President of the Serbian Renewal Movement (SPO), Vuk Draskovic.  First and foremost, the opposition will have to decide whether it is capable of convincing its western partners that sanctions are affecting the citizens of Serbia and not Milosevic' government in Belgrade.  If they are not able to this, all their promises will sound false and opposition leaders will continue to run the risk of being stopped by pensioners who will ask them - what happened to the 20 German marks you promised us every month?

LOOMING RUIN: "There will be haggling yet around sanctions.  Who can guarantee that a partial or complete lifting of sanctions against Serbia would not benefit the regime of Yugoslav President Slobodan Milosevic, because of whom the sanctions were put in place, to begin with," Andrew Cunningham, Financial Analyst with London's Merrill Lynch Bank, told VREME.  Joan Hoi of the Economist Intelligence Unit (EIU) shares this opinion.  The last EIU report on Yugoslavia indicates that chances are small that America will change its attitude toward the lifting of sanctions as only being possible after a fair and democratic election is carried out in Serbia.  According to these sources, the governments of Great Britain and Holland will continue to behave as they have done so far - they will continue to vote against any decision by their European partners for suspending sanctions against Yugoslavia.

The EIU analysis concludes that regardless of the recent NATO intervention and the continuation of sanctions, Milosevic will only face real economic problems by the second half of next year.  While European economists are predicting the total collapse of the Yugoslav economy for July 2001, and that only "maybe", the Belgrade economist Ph.D. Jovan Rankovic thinks that our economy is in such a state of ruin that the lifting of sanctions could itself result in the collapse of our economy.

It is not a matter of a bad joke.  Yugoslavia and its citizens are living on credit because they are not returning their considerable debts to the world, and this is an issue which will be raised as soon as the FRY comes even close to getting back into any of the international financial institutions.  Certainly long before the issue of new credits ever reaches the table.  At that point we will have to face the fact that we will be born into a life burdened with debt.  Namely, our country entered year 2000 with a debt of 13 billion U.S. dollars, a sum that is equal to our gross domestic product in the last year, if not smaller than it.  This would mean that the citizens of Yugoslavia would have to work for a full year without any pay, without eating, drinking or clothing themselves, and even then it would be iffy whether they would manage to clear their debts.  Simply put, the main issue is whether this year's GDP will equal last year's, let alone the fact that the annual interest on our foreign debt amounts to around 900 million dollars.
However, as Ph.D. Milan Kovacevic points out, we do have this working for us, the fact that the rest of the world still holds to the principle that a dead debtor is no longer a debtor.  David McWilliams, Analyst with the Banque National de Paris, says that this is the only situation under which Yugoslavia could expect a substantial right-off of its foreign debt.

Miroljub Labus, Associate of the Economics Institute in Belgrade and Coordinator of G17 Plus, states for VREME that it is difficult to say how much sanctions contributed to the deterioration of our economy, and how much the disintegration of the country, the constant wars on the territories of the former Yugoslavia, the conflicts in Kosovo and finally the NATO intervention also played a part in that deterioration.  However, Mioljub Labus does predict that the sanctions cost us at least 125 billion dollars, which amounts to about ten last year's gross national products of the Yugoslav economy.

EXTENDED CONSEQUENCES: All of our interviewees agree in the fact that sanctions are likeliest source for the fact that Yugoslavia is presently the poorest country in Europe.  Serbia and Montenegro entered the last decade of the 20th century, along with the rest of the republics of the former Yugoslavia, with a per capita gross domestic product of over three thousand American dollars, thus becoming part of the upper percentile of the group of developed countries.  Already by 1990 that figure dropped off to $2,230 U.S., only to fall to $1,000 U.S. by 1995, and to under $900 U.S. last year.

The conclusion reached by the economists gathered in the G17 points to what seems to be the biggest problem, and that is that the effects of the NATO intervention and the isolation of the country will be felt at least for another ten years.  In the event that Yugoslavia remains isolated from the rest of the world and no radical economic reforms from within occur, the G17 economists calculated that we will need at least 40 years in order to reach the economic levels we had prior to the disintegration of the SFRY.  And this is assuming that we register annual growth of four percent.  The G17 also point out that a continuing fall in the GNP will lead to a plummeting in the level of our health care, our social services and our educational system, and will contribute to the emigration of the educated, employable segment of our population.

The Serbian opposition hopes that if it comes out before the ministers of the European Union with such data, that it will manage to convince them that sanctions did more harm to the common citizen of Yugoslavia, than to the Yugoslav regime.  Our interviewees, on the other hand, predict that they will get the same answer as the one the present Government in Montenegro got in response to similar queries - i.e. prove yourselves, and you pick the way in which you want to do it.  To be more precise, Montenegrin Prime Minister, Filip Vujanovic, had to come a long way before going to Washington for talks there with American officials about millions of dollars of aid to Montenegro.

Grim Indicators

Beside using the drop in the gross domestic product as an indicator, the authors of the study "State of Economic and Social Laws in Yugoslavia" under the auspices of the Belgrade Human Rights Center, track other, every day indicators in measuring the Yugoslav downfall.  In 1990 the average Yugoslav spent $200 U.S. for medical care, with that figure dropping to $91 U.S. after five years.  In the period between 1995 and 1996 alone, the number of people treated in health institutions dropped by 40 percent.  At the same time the mortality rate kept rising, along with inflation and several other indicators, so that the annual mortality which was 97,588 persons in 1985 reached 107,535 persons, ten years later.  For every 100,000 thousand citizens the mortality rate increased in the last ten years from 956, to 1020 persons.