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February 1, 2001
. Vreme News Digest Agency No 476
Economic (Non) equations

Settling Accounts with the Past

by Dimitrije Boarov

I heard on some TV channel that Mrs. Zecevic, wife of that arrested banker, president of the JUBMES Bank, who had been appointed to the post of the now missing Stambolic several years ago, went to the National Bank of Yugoslavia and helped herself from the state budget, taking 600,000 DM out of the bank in order to bail out this patriot and Milosevic’s crony from being imprisoned. I guess she attempted to ‘clear off’ a debt, and most probably buy her husband’s freedom of movement, who had, meanwhile, found himself in a very stressful situation. Afterwards, I could not find any news concerning this incident in the papers – maybe it was suppressed in favour of a ‘further investigation’ or maybe there was some kind of mistake. I wonder whether my wife would do something like that for me, if I happened to be in a similar situation. This question is highly hypothetical, almost astronomical, so I can easily answer that I would hardly even get an emery board, since I am very bad in metal craft.

Mrs. Zecevic’s gesture gives a more serious connotation to the statement of Serbian Prime Minister Zoran Djindjic’s speech of January 25th, in which he pointed out that one of the aims of the new government would be to ‘settle accounts’ with the previous regime, and that one of the ‘retribution’ measures would be the implementation of the once-occurring tax on extra profit, which used to be acquired by regime-run firms in irregular conditions. That once-occurring tax, which will be imposed on companies close to Milosevic’s regime – such were, for example, the Karic Brothers Company, the Delta Bank and other corporations which were in the monopolistic position and received bargain priced dinars from the primary issue and foreign currencies from the state reserves below the real exchange rate – would probably be popular, but there is a question whether it would also be ‘adequate’ and whether it would comprise all ‘extra profiteers’.

Talking about the Karic brothers, Djindjic has at least one interesting witness, and that is his present counselor Branko Dragas. Namely, he used to be the director of the Karic Bank at the time when this name was important and on the top of the issuing bank. However, back in 1992, the same counselor Dragas would say (when I interviewed him for VREME weekly) that things were going pretty well, if some people could amass enough money to build a five-story building. His subsequent critics (active today) saw a malicious self-criticism in this statement, since Dragas himself managed to purchase a half a million dollar villa in Canada (which caused a scandal among the then diaspora), Stockholm and Prague – some even claim that he possessed a house in Ulan Bator (where he used to send inspection for construction planning). Those critics add that Dragas, who publicly attacked the model of ‘pyramidal banks’, attempted something similar in the Credibel Bank, and he allegedly pauperised many trustees, while he claimed that he possessed personal capital of 30 million dollars. I do not believe those stories and features are quite true and I doubt that Prime Minister Djindjic, who is well aware of Mr. Dragas’s financial possibilities, appointed him his ‘personal counselor’ in spite of all that. History records that the appointment of the ‘royal personal counselor’ was usually a matter of acquisition – since it was very profitable.

History also teaches us why the corruption in Serbia is so deep-rooted, but lacks to explain why people appreciate impostors so much and why they are the only ones who are considered to be ‘capable’ for running the state business. In that sense, I shall give the example of Nikola Pasic. According to Slobodan Jovanovic’s claim (he has never had a high opinion of him), Nikola Pasic is a ‘forefather of the corruptive model’ in Serbia, and he had ‘always defended his political ideal and his position, while allegedly not having time (or perhaps opportunities) to win over the public trust, embarked upon the simplest and the shortest way of persuasion: corruption’. Jovanovic, perhaps in order to calm these estimates, complains that the other statesmen also made use of that method – Tisa in Hungary, for example, who was by the way a Calvinist, and ‘you know that Calvinists are scrupulous people’.

It can be deduced that Djindjic’s job of ‘settling accounts with the former regime’ will be far from easy. In 1945, when the Communists came in power, they tried to expose all businesses of King Aleksandar’s administration. In the light of that, Professor Milan Bartos had published a brochure on the Monarchy and money. In Bartos’s expert opinion, King Aleksandar had issued himself a state licence to make use of the goldmine Neresnica, and appointed his personal friend as a licencee. King Aleksandar also transformed the famous Vracar association with the 100 million dinar credit from the National Bank of Yugoslavia, due to which the shares of that bank went up on the market, so he was compelled to perform a complete normative acrobation by means of purchasing the Vracar shares from the inheritance of Luka Celovic (the University which he had inherited), but he still got hold of the package of shares of this profitable firm. To enable the king to implement the authority in that bank, Serbian law on shareholders had to be altered. The statute on Belgrade municipality had also to be changed – namely, when the king purchased real property in Dedinje, the construction was banned, but when he intended to sell them also added the example of ‘court cigarettes’, which were freed from taxes and dues, which the king used for paying off the monthly salaries to those who offered him intellectual services. Even those who consumed those highly appreciated cigarettes, sold them afterwards at a higher price.

Although it sounds quite interesting, it will not be an easy job to determine the balance with the past. Because the ‘past’ has already proved to be ready even to shoot (for example, the driver of the new chief of secret police) in order to defend its traditions. And a tradition would not be a tradition, if it were not dependent on an ideological fashion.

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