A Cry from a Black Hole

With some convincing and a reminder that there are 14.000 unemployed teachers on the job market, the Serbian government sailed through the teachers strike relatively easily, called by the Nezavisnost Syndicate, the Syndicate of Education of Serbia and the Teachers Union of Serbia, while the Enlightenment Syndicate gave the government a one-hundred-day deadline. Employees in the health sector were threatening to go on strike, while employees of the Vinca Institute, the syndicate of Telecom Serbia and the PTT syndicate, miners in Vrske Cuke, employees of the Bor mine-smeltery, some thirty or so employees of the Ishrana bakery company in Smederevo and others were already on strike…

The republic council of the Syndicate of Metal Workers of Serbia was calling for a strike, warning of the difficult situation in that industrial branch, stressing that a group of companies working for the Power Industry of Serbia (EPS), in manufacturing agricultural mechanization and traffic means are especially hard hit. A possibility of organizing rallies was hinted at, to call attention to the state which companies such as Minel, Termoelektro, Gosa, Sever, MIN, IMT, IMR, Zmaj, Majevica and DMB, Zastava, FAP, Ikarbus and Neobus find themselves in. The president of the Syndicate of Metal Workers of Serbia Aleksandar Ivovic interceded in favor of the employees holding on to their demands to retain 60 percent ownership of the companies and said that the employees would be “mad” if they allowed “someone else to sell what they had built”.

Actually, it was a vain attempt to stop “insider” privatization, some kind of defense of the existing system – in essence, a rebellion of the losers. According to data cited in the Yugoslav Review (no. 3 for the year 2000) by professor Jovan Rankovic, the accumulated loss in our companies has reached the value of 26 percent of the capital, and if hidden losses are included, that level surpasses 50 percent. The largest problems are found amongst those 5000 socially-owned companies (of a total of 68.154), and the culmination of the crisis is evident in the 942 large companies with 52.8 percent of the employees which in 1999 generated 78.36 percent of industrial loss. In the year 2000, 19 power companies, five coal production companies and 476 machinery manufacturers were responsible for 99.4 percent of the overall loss.

International financial help could play a decisive role in the financial recovery of that enormous black hole, since at the initial stage of reforms one cannot further drain fixed capital into consumption. Economist Stojan Stamenkovic (Monthly Analysis and Prognosis), who evaluated the existing monetary policies as very successful, predicted that its creators could be put under great pressure by the citizens growing impatience and pressure for wage increases. He assesses that strikes which demand wage increases are at least partially organized by defeated political powers, but he also warns that objective reasons also exist for dissatisfaction with the existing standard of living.

Analysts believe that a third of the households are below the poverty limit, and 70 percent of the citizenship are around the limit, if a poverty limit is calculated at – a dollar a day for food. Minister Djelic, in explaining the budget, says that the government is projecting “target support” of 330.000 of the overall number of 2.5 million households.

SYNDICATE BRAKES: Recently, five large strike motives have been discerned – a battle for a larger cut of the budget, dissatisfaction with the management and post-October exposure of the syndicates or worker groups in the crisis headquarters, clashes with the existing teams, lobbying for new management, a battle amongst the syndicates for the position of the government’s social partner, an attempt to rescue firms which are hanging by a thread and a battle for wages. The Serbian finance minister Bozidar Djelic kept repeating that wages would depend on the state of the economy and that no strikes can bring about larger wages if no realistic possibilities for it exist. The project’s fate shall be decided on that front, i.e. will the government persevere without starting to print money. Nebojsa Savic from the Economic Institute evaluated that the average salary, which in October 2000 was between 75 and 80 DM, now does amounts to around 145 DM, although prices “in DM” have also risen, and all that combined with the fall of the industrial production and stagnation of the economy. He assesses (Press Club, Monday, March 26) that our negotiators with the international institutions could find themselves in a very difficult situation if pressure for wage increases are too great, since a more pronounced fall of the standard of living could compromise the political changes which have occurred in the country. In the meantime, IMF has asked that the sudden wage increases be returned to a considerably lower level and a lot of effort and skill will be needed to explain why that request won’t be accepted. Prime minister Djindjic announced in his parliamentary report that the government didn’t accept IMF’s suggestion to start a new shock therapy because this country already is in shock. In that context, Djindjic says the requests of the budget beneficiaries also weren’t accepted. As far as production is concerned, according to the prognosis of MAP’s analysts, after its collapse in October, a halt of November recovery in December due to a lack of power, a return to a short-term line of recovery in January for the quarter, for the third time in the last three years, it will find itself on the recession trend where it was headed in mid 1998!

Will our syndicates assist or hinder the establishment of the necessary environment? Our syndicate scene is in complicated upheaval. Darko Marinkovic, an associate of the Institute of Political Studies, detected merely minor effects of the syndicate battle prior to the October changes and pointed out that strikes by themselves aren’t enough to bring about radical changes in society. The headquarters of the Federal Independent Syndicates (the “state syndicates”) was formed in 1992, as part of the process of deinstalling the former Yugoslav Union of Syndicates. Slavoljub Lukovic, in a digest of studies “The Role of the Syndicates in Transition” (Center of Studying Alternatives, Belgrade 1999) concludes that the 18 members had 1.820.000 employees who were organized in the syndicates. Zoran Stojiljkovic, professor of the School of Political Science, believes that number was smaller and that it never surpassed 1.3 to 1.4 million members. Zoran Stojiljkovic estimates membership in the independent syndicates at 300.000 – 350.000 members. From the “opposition side”, the United Branch Syndicate Nezavisnost was formed in Belgrade in 1991, followed by the Association of Independent and Free Syndicates and many others. As illustration of the condition of atomization and divisions within Serbia’s syndicate movement, Slavoljub Lukovic in the digest of studies “The Role of the Syndicates during Transition” cites data that a single company (Belgrade Public Transport Company, GSB) had nine syndicates: the GSB Independent Syndicate, Independent Syndicate, Union of Free Syndicates, Syndicate of Drivers, Branch Syndicate, Physical-Technical Security Staff Syndicate, Independent and Free Syndicate, Employees Syndicate and Syndicate for the Salvation of GSB (in its founding period). The dispersion amongst the syndicates may be a reflection of the chaotic state in which the Yugoslav companies found themselves.

In the meantime, everything got intermingled, former state syndicates have probably weakened, independent syndicates have strengthened and have appeared as actors on the political scene (Kolubara) and have started to jostle for the role of “partnership in the changes”. On the day of the parliamentary session on March 27, around 500 activists of the Nezavisnost Syndicate protested against the government claiming that it was  disregarding them, that it has its favorite syndicates etc. The opposition in parliament (Serbian Unity Party) started claiming them on Tuesday. Political scientist Zoran Stojiljkovic reminds us that syndicates were a part of the “against coalition” and that it would now be healthy to establish new partnerships by rules which would have to be valid amongst partners – and that means regard, a definition of the task, an open assessment of the price of changes, deadlines for its realization etc. If one wants to successfully complete a program, one must establish a rather wide coalition. He believes social dialogue should be institutionalized as precondition for a consensus, and that means forming threepartisan decision-making bodies and various institutional forms of social dialogue as well as to define the procedure for such a dialogue. The problem lies in the fact that the state is both the judge and the jury – the employer and someone who regulates relations. Syndicate members reproach the government for having proposed an employment law without consulting the syndicates, that the existing law has already provided great authority, however the government has revoked that law for now. Stoiljkovic reminds us of the unfortunate experience with the moratorium in 1995, a kind of social pact on which now deceased governor Avramovic insisted – to allow them to backtrack from wage demands, he guaranteed to freeze all prices, but the then monopolized state syndicate remained mute when prices hit the roof.

From the parliamentary speaker’s platform Zoran Djindjic repeats that he is ready for a dialogue with the syndicates, but he asks that they come to an agreement on their demands and state where they believe what they demand should be procured from – he repeats that he has no understanding for a syndicate who organized a strike because of the power price increase in Nis, and another one in Obrenovac for a raise of the wages.

Economist Zoran Popov believes that a social pact is necessary for changes, in essence that pact must be made between the chamber of commerce, the syndicates and the state and says that the state must play an active role there. The state, says Popov, cannot wait for the syndicates and the chamber of commerce to transform, it has to keep the initiative – if the state wants such a pact, then it must show seriousness and offer a basis for an agreement, and that has to be a complete program of the painful changes which have to be paid by everyone, since in its essence the operation boils down to a reduction of social costs. That program cannot be made up of statements in the media, not even a dozen of them, but instead has to be a well-balanced, long-term, clear program which must contain guarantees that there will be no deviation from that program, along with a projection of who will pay the most. Everyone will pay, but if a program doesn’t exist, then everyone is afraid that they will bear the greatest burden, states Popov.

Popov believes that in these last few months the state has made some moves which are hard to understand and that is how the impression was formed in the public that the state isn’t all that competent to manage things. As an example, he cites the decision that farmers were to import fertilizers themselves, which immediately showed itself to be technically impossible. He also believes that stopping the privatization law has provoked unnecessary reaction.

PRIVATIZATION PLAN: It seems as though there is some calculation with future funds from the sales of the companies. Minister Aleksandar Vlahovic, during a discussion with businessmen from Novi Sad, states that the companies will be privatized in three groups – one group is made of public companies such as the Oil Industry of Serbia (NIS), EPS and others which will be privatized by the Agency for Privatization, once they are back on their feet (which will be difficult, long-term and expensive); the same procedure shall also be applied in the firms which the government declares important. And finally, around 4000 small and middle companies will be immediately and independently privatized with the government’s and the public’s control. It is extremely important that the government builds up credibility in this task. Juan Linch, a transition analyst, says efficient privatization can best be conducted with the backing of a relatively strong state which is capable of conducting balanced policies. On the basis of the example of Spain and Brazil, transition theoreticians conclude that with a well established regime which isn’t seriously threatened of being toppled, a cooperative opposition and relatively small aspirations of the citizens, it is extremely important to have – an innovative leadership. Portugal is the very example where the importance of the last item is seen – it’s conditions were similar to the ones in Spain, but it didn’t have an innovative leader. 

On the other hand, Nebojsa Savic and Goran Pitic in the “Eurotransition” study stress the importance of an adequate change of the system – they find that in the reconstruction of post-war Germany, for example, the amount of money wasn’t the dominating factor as the manner in which the system was established and the difficult, disciplined work which preceded that plan. The physical reconstruction of Germany was well underway when money from the Marshall Plan started trickling in and most of it didn’t, as many assume, go to Germany. From 1948 to 1952, 13.3 billion US dollars were transferred from the US to Europe, of which 3.2. billion went to Great Britain, 2.7 to France, 1.5 to Italy and only 1.4 billion dollars  (equivalent to slightly over nine billion dollars in 1997) to the western occupied zones of Germany.

Two thirds of the first quarter of this year have gone by, the initial enthusiasm abroad for assisting our country is cooling down, interest for investing capital via direct investments is progressively growing, but conditions still don’t exist for it to become effective, warns economist Stojan Stamenkovic. According to his words, it still isn’t known what the donor conference for Yugoslavia will bring, but it is clear that even that “is coming too late for its effects to be optimal”.

The clock is ticking for the government, in a clinch between the “employer” and the syndicates, but for now it has the good or bad luck that both “social partners” are fragmentized and non-consolidated. The employers, the old chamber of commerce, a relict of the former times, a parastate body and channel of influence of a couple of types of “managers”, those who had “survived October”, those who “caught the train”, those who have “come out on top”. The new employers aren’t consolidated as an association and have appeared in the form of lobby groups which are trying to preserve the sinecures of former times, for example the gas importers who are opposed to the government’s centralized control of gas imports. Some of them await “sentences” of the annouced law on “war profit” taxation. 

The social constellation, losses, widespread poverty, a powerful and corrupt layer, a lack of funds, bogged down gigantic companies and unrealistic expectations form a black hole which sucks each reformer into the quicksand despite the fact that their opponents are disunited, disorganized and defeated.

Djindjic, at the start of his prime ministerial career, is demonstrating that he has the will and a chance to consolidate a politically innovative bloc, and announcements of the upcoming legislative activities show that April and May could be the months when the first foundations of reform could be laid.

UNDERMINING OPERATIONS: The main question for the Democratic Opposition of Serbia (DOS) in this operation is - have allies become opponents, or, to put it more precisely, who is more of a threat to reformist DOS, the remnants of the Socialist Party, the old general managers, army and police or – as Vladimir Iljic used to say and whose words Slobodan Milosevic is now repeating, the “scoundrels within our ranks”, friends and colleagues, concealed opponents to reform, petty interests, small time dealers and eternal interpolators. 

At this moment, the public is not an ally of reforms because it is too immersed in euphoria, tabloid gossip, sensationalism and confusion, so the readers should once again be reminded here of a classic recommendation of the famous columnist Walter Lipman that the media isn’t suited for conducting public business, since public business cannot be conducted with dramatization and euphoria but with the help of a responsible public.

This is how in Serbia, in its fifth month after October, an “internal”, conscious or imprudent, undermining process against reforms began, by auctioning off priorities, unfounded suspiciousness, arbitrary trials, underestimation of legalism, “to have your cake and eat it too demagogy”, of everyone’s interference into everything, of overstepping authority – some are trying to prove that “after the revolution” everything has remained the same, some of the “post-modern secret police officers” are taking over the role of “moral policemen”, and accusatory sermons are being held even by the people who never were graced with seriousness… On a couple of instances, your reporter was a witness in the parliament of Serbia to the following phenomenon. When Djindjic mentions the word “economy” a group of young reporters start shouting questions which begin with “arrest”. Yes, a certain group which could be dubbed the “October hound” has grown up in the media. Some are eager for justice, others are nursing their traumas…

For now the main actors of DOS policies (meaning Kostunica and Djindjic) have remained concentrated on various segments of the crisis (Kostunica on the legal structure of the state, Djindjic on economic reforms). Both blocs are victims of infiltration of the various lobbies and would have to be immediately vaccinated. They have shown differences (disputes over the replacements of the army top ranking officials and the degree of revenge etc.) and they have made a mistake of providing too many slogans for speculations on their imminent clash. Both of them were “subjected”, Djindjic was undermined more by the various lobby groups which are protecting dirty money, and Kostunica was more ideologically contested. One part of those disputes comes from our political history in which only a few parties have written the word “law” on their banners, the majority opting for “get the thief”. Still, it is utterly incomprehensible why ridiculing legality has spread to such a degree even amongst those from whom one wouldn’t expect it. The other side of the disputes is connected to Kostunica’s “moderate nationalism” and in connection to that with the drama of the collapse, the cause of the past wars, the problems of culpability and reconciliation.

One of Kostunica’s presidential initiatives, or so it seems, aims to alleviate conflicts on that front – the composition of the Yugoslav Commission for Reconciliation has been made public, which should gather 17 prominent scientific and public workers of a diverse professional and political profile: Radovan Bigovic, Mirjana Vasovic, Tibor Varadi, Svetlana Velmar-Jankovic, Mihajlo Vojvodic, Djordjije Vukovic, bishop Sava (Vukovic), Vojin Dimitrijevic, Ljubodrag Dimic, Slavoljub Djukic, Aleksandar Lojpur, Radmila Nakarada, Predrag Palavestra, Latinka Perovic, Zoran Stankovic, Svetozar Stojanovic, Darko Tanaskovic and Sulejman Hrnjica. Judging by the composition there’ll be problems with their mutual accord, but that is also a part of “reconciliation”. In its basis, the DOS coalition has luckily shown efficiency in difficult operations. The opening up of the country and relations with the international community are improving a lot faster than anyone could have expected, even though it is now somewhat clearer that this verbal support is cooling off and is being cut down to its realistic measure.

As far as the crisis in the Presevo and Bujanovac municipalities are concerned, the “two policies” of DOS have managed to find a solid meeting point in Nebojsa Covic’s patient concept, as a result of which our army has entered into the forbidden zone and relations with NATO are gradually improving.

DOS, one shouldn’t forget that, is made up of a conglomerate of diverse political, ideological and cultural profiles. On the federal level, it is also a coalition with a one-time opponent. The whole group should have one joint positive sign – democratic. The public airing, dramatization and politicization of all conflicts which exist in that group are neither productive nor intelligent since a split within DOS is something the socialists, radicals, some Balkan experts like Ian Bugajski and even some local “October circles” are hoping for.

THE VALUE OF COMPROMISE: Despite many childish games, chasing after TV cameras, interfering into other people’s sectors and pretending to be an opposition in government, the DOS members have thus far demonstrated a flair for achieving optimal compromises (cooperation with The Hague tribunal is slowly, with occasional tension, being established; Kostunica’s objections to The Hague’s prosecutor, at first rejected, did manage to result in announcements that the prosecution policy of The Hague could become more balanced). The foreigners, or so it seems, are becoming accustomed more quickly than some domestic actors to the fact that a time has come in Belgrade in which the president of the country isn’t the one who arrests, but the police who is authorized to do so, that the prosecutor prosecutes, the lawyers defend and the courts try.

In public more than in government circles, there is an exaggerated underestimation of the significance of consolidating a state. The aforementioned Juan Linch says that on top of economic problems, problems in connection to statehood are very important for a democratic outcome. That clearly results from the fact that of the 22 independent states which emerged after the collapse of the USSR and SFRY, only two have received passing grades.

Some acts show an attempt to alleviate unnecessary conflicts. After the DOS presidency meeting last week, Zoran Djindjic states that there is no danger that this coalition could fall apart due to disagreement amongst its members in connection to the issue of the autonomy of Vojvodina. A change of 102 laws has been announced in order to ease the tensions created by Canak. Beside mentioning the social and economic crisis, the problem in Kosovo, in southern Serbia, the problem with Montenegro and Vojvodina, Kostunica, during a meeting of the main Democratic Party of Serbia (DSS) board, interceded in favor of coordination within DOS on all government levels, a continuation of resolving social issues with special attention given to those citizens who are the most hard hit, along with further work on improving minority rights.

However, he opposed the suggestion of establishing a three-year moratorium on a constitutional debate, saying that this solution, especially for Serbia, is a “rock around its neck”. In case the federal state continues to exist, he says, it will be necessary to change the existing constitution so that it would be custom made to fit both federal units. In case (and he hopes it won’t come to that) the federal state ceases to exist, new elections for the parliament of Serbia will be necessary, since those from Dec. 23 related to Serbia as a federal unit. Political scientist Zoran Lutovac believes this is a warning to those DOS members who are carrying out their own policies outside of DOS. On one hand, that announcement presents a kept promise given in October that in a year and a half new elections have to be called and points to a method of peaceful resolution of the upcoming state crisis but, on the other hand, imminent elections are bad because the upcoming election battle could shorten the time period for the necessary initial steps of economic reform. 

Regardless of the fact that DOS still enjoys relative public confidence (the euphoria from October has died down very quickly), the public and politicians would have to be aware that time moves quickly and that in such a difficult situation something called the “end of the Weimar republic syndrome” is still a threat – i.e. the moment when the collapse of a young democracy lets out a genie from the bottle. The moment when God has smiled down upon the Serbs will be over soon. From all the actors in this still uncertain atmosphere we must demand more, self-denial from the citizens and greater seriousness and resolution from the politicians.