Crawling Along the Bottom of the Gorge

DIRECT DAMAGE FROM NATO'S BOMBING CAMPAIGN - 30 BILLION US DOLLARS:

According to Group 17 estimates presented in the Final Account study, direct damage from NATO's bombing campaign amounts to around 4.1 billion US dollars. Direct damage on the territory of Serbia without Kosovo amounts to around 3.8 billion USD. The overall economic damage, which, along with direct damage (the loss of national wealth) includes the loss of human capital (2.3 billion USD) and lost gross domestic product (indirect damages of 23.2 billion USD), is estimated at around 30 billion USD.

With the "rely exclusively on your own strength" policy, five percent of the war damages were reclaimed.

Up to now, the value of the works on the reconstruction of the country amount to around 191 billion USD. Meaning that in the time period of one year, five percent of direct war damages were reclaimed. This data applies only to the territory of Serbia without Kosovo, since the Serbian government is not in charge of the reconstruction of Kosovo. In case reconstruction would continue at this pace, an additional 19 years would be needed for a full compensation of direct bombing damages.

INDUSTRIAL PRODUCTION 21 PERCENT LOWER THAN IN 1998:

Beside the slight recovery following NATO's bombing campaign, industrial production in Serbia in the first four months of the year 2000 was 74 percent lower in comparison to the same period in 1989, and 21 percent lower in comparison to the same period in 1998. In order to reach the same level of industrial production from 1989, Serbia will need at least 40 years. Namely, production in the first four months of 2000 was only four percent higher in comparison to that same period last year, and around 11 percent higher in comparison to the average level in 1999.

A BILLION DOLLARS DEFICIT FOR FIVE MONTHS:

In the first four months of 2000, export from Serbia (without Kosovo) was around 60 percent lower in comparison to the same period in 1989, and 50 percent lower in comparison to the same period in 1998. This dramatic situation with regards to foreign competitiveness of Serbian economy is also illustrated by the fact that the export value in the first four months of this year was lower even in comparison to that same period last year, in the midst of the war activities, and that by about 12 percent. Unlike exports, the value of this year's imports is around 20 percent higher in comparison to the same period last year, which deepens the foreign trade deficit. In the first five months of the year 2000, the foreign trade deficit amounts to almost a billion dollars.

WAGES 88 DM - 34 PERCENT LOWER THAN IN 1999:

Average earnings in Serbia in April 2000 amount to 88 DM. In the first four months of 2000, realistic earnings fell by around 72 percent in comparison with the same period in 1989, and by 52 percent in comparison with the same period in 1998. In the first four months of 2000, a realistic earnings drop of 34 percent was noted in comparison to the same period last year.

This data illustrates the fact that the reconstruction of the country is usually covered by the wages of the employed citizens.

THE RISE OF THE BLACK FOREIGN CURRENCY EXCHANGE RATE 113 PERCENT:

The monetary issue of the National Bank of Yugoslavia (NBJ) was used as one of the most significant sources from which the reconstruction of the country was financed. In the period of one year (May 2000) the nominal monetary stock was increased by 6.1 billion dinars. That caused the rise of the black foreign currency exchange rate by 113 percent (rise of the exchange rate on the street), that is of 161 percent (rise of the company banking transactions exchange rate). On account of non-objective monitoring of the price fluctuation recorded in official statistics, the manifested increase of prices in the same period amounts to "only" 55 percent. The deep crisis in which Serbian economy finds itself is also illustrated by the fact that the realistic monetary stock in this period fell by 40 percent to the level of only 690 million DM.

35 BRIDGES WERE RECONSTRUCTED - WHICH IS 10.4 PERCENT OF THEIR INVESTED VALUE:

The overall value of the investments poured into the reconstruction of the bridges and overpasses amounts to 31.6 million USD, which represents 10.4 percent of the overall invested value of the demolished or damaged bridges. 35 bridges were reconstructed in their entirety while five bridges were partially repaired.

The extraction of the destroyed bridges in Novi Sad and cleaning of the Danube will demand more than 2/3 of the funds which were thus far spent for the reconstruction of all bridges in Serbia. Instead of the Varadinski bridge, a pontoon bridge was placed while instead of the Zezeljev bridge a prefabricated bridge from the federal reserves was placed.

15 PERCENT OF THE ELECTRICAL INDUSTRY INFRASTRUCTURE RECONSTRUCTED:

15.5 percent of the capacity in the electrical industry was reconstructed by a 40 billion USD investment. The reconstruction of the electric power system infrastructure commenced during the bombardment had, just like in the period immediately following the end of the bombing campaign, the form of gigantic urgent interventions. These measures achieved a configuration of transmission which could transmit maximally up to around 140 million KwH per day.

However, during the last year, five second hand transformers were imported and a large amount of measurement equipment were produced in the country. It is evident that the financial sources for the electrical industry are not transparent and not much is spoken of them in public. The electrical industry is mainly financed by foreign credits (the electrical industry is one of the beneficiaries of the Russian and Chinese commodity credit) and from NBJ's primary issue.

RECONSTRUCTION OF 3.8 PERCENT OF RTV'S INFRASTRUCTURE:

Around 3.6 million USD were invested into the reconstruction of RTV's infrastructure by which 3.8 percent of the estimated damage was repaired. Most of the funds went towards reconstructing RTV's transmitters (10 percent were reconstructed) and repetitors (reconstructed 6 percent).

ONLY THREE PERCENT OF THE INDUSTRIAL CAPACITY RESTORED:

The reconstruction of the industrial capacities is a lot slower. In the course of the year only around three percent of the damages were restored. The restoration of the industry is usually based on clearing away the demolished factories. In the majority of the plants, there is either no production or it is merely symbolic. The only exception are fields such as the tobacco industry and to a lesser degree the production of oil derivatives.

There are sectors which are recovering at a quicker pace than presented in  state-owned media. Primarily the oil and gas sectors along with the tobacco industry, in certain cases the chemical industry and the metal processing industry. A quicker pace of recovery in certain companies is financed by means which come from abroad.

NINE PERCENT OF APARTMENTS RESTORED, FIVE TIMES LESS ARE CONSTRUCTED THAN IN THE 1980'S:

In the period of a year, 843 living quarters were restored or built which can be estimated as a highly modest output. Around nine percent damages suffered in the housing fund were restored. What one should keep in mind is the fact that only two skyscrapers in the Belgrade suburb of Banjica have a larger number of apartments than those which the Directorate for the Reconstruction of the Country had restored and constructed in a year. To compare, one should be reminded that during the 70's and 80's between 50.000 and 60.000 apartments were constructed in Serbia per year.

RECONSTRUCTION WAS FINANCED BY: THE INFLATIONARY TAX OF 186 MILLION DOLLARS, SOLIDARITY DAILY WAGES 70 MILLION:

For the reconstruction of the country during one year around 190 million USD were maximally used. Works on the reconstruction were financed from the daily wages of solidarity, NBJ's primary issue, foreign credits, special taxes, forced contributions of domestic companies and organizations and donations given by individuals from the Diaspora... The most significant sources of financing the reconstruction were most definitely the daily wages of solidarity, inflationary tax and the Chinese credit which was approved under mysterious circumstance. On the basis of the solidarity daily wages 70 million USD were thus far collected which make up more than a third of the overall funds which have thus far been involved in reconstruction... The overall amount of inflationary tax which the government realized during this first year of reconstruction amounts to 186 million USD. The amount of the inflationary tax approximately equals the overall value of works on the reconstruction of the country. That demonstrates that the monetary issue  wasn't only used for financing reconstruction works but for covering other public expenditures as well.

THE CHINESE CREDIT AND CONTROL OF THE ELECTRICAL INDUSTRY:
It is more than certain that word is of a credit in commodities and money which is in one part intended for the reconstruction of the country. It is certain that a part of the Chinese credit has already been used for restoring damages in the electrical industry and that it shall be used for new investment needed in this field. However, what isn't known are the conditions under which this loan was approved. The only thing that the government can offer its Chinese partners is a conversion of claims into ownership rights of Serbian companies. According to our assessments, China's interest could be put into certain potentially profitable economic activities in Serbia under its control, such as the electrical industry and telecommunications.