Hostages of Hostages

Two Serb leaders outside Serbia - Goran Hadzic and Radovan Karadzic - have started blackmailing. Karadzic was the first to caution that "Yugoslavia has perhaps really become worn out, so we too can be its enemies, and create an alliance of Serbian states in Serbian territories". Hadzic was more direct: "... If Yugoslavia turns its back on us, Mr. Panic had better know that we will take up arms and solve the Serbian issue in Serbia. The solution is not for us to get killed here. Now is the moment to resolve the Serbian issue". According to Hadzic, a "turning of back", would pertain to the FR of Yugoslavia's recognition of the Republic of Croatia. Milosevic's regime had proclaimed these two men Serbian leaders outside Serbia. Why the sudden ambition for resolving the Serbian issue in Serbia and elsewhere, and , as Hadzic said, "with arms". Vojislav Seselj (a Herzegovinian) in an interview to the weekly "Javnost" from Pale says: "The position of the Serbian people in the Serbian Republic (of B-H) and in the Republic of Serbian Krajina will be stable if the political situation in Belgrade is. To be honest, I truly fear treacherous activities in Belgrade, because the traitors have multiplied greatly and receive enormous financial aid from the West, so that they are ready for anything, including bloodshed. I am afraid of bloodshed in the coming months which could intensify dissatisfaction among the workers, primarily because of their exceptionally bad social position. These social disturbances (Seselj's personal nightmare, ed. comment) could threaten all that has been achieved by war and political efforts at preserving Serbian territories, or the goal for all Serbs to live in one state... The fifth column is strongest in Belgrade, there are still many Croats, many Muslims who are anti-Serbian, many members of various nationalities. There are still many individuals who lack national consciousness and belong to the Serbian nation...", etc. Seselj, as usual, is more precise than his disciples and much better at perceiving the essence. The matter pertains to the winter ahead of us and Milosevic's chances of staying in power. Karadzic and Hadzic are slowly becoming aware of all that has happened in the past year and of the difference between last year's winter and this year's. Slobodan Milosevic is probably even more aware of the facts because last year he presented himself as the victor of a war which formally did not exist, and he could guarantee the Serbs survival in Croatia through the internationalization of the problem, UNPROFOR's involvement and so calm them. However, the war in B-H has destroyed this concept. On May 19, Serbs in Krajina were left without the JNA at the border with B-H, without JNA promises and guarantees. The war in Bosnia cut off safe routes for sending aid to Serbs in Croatia, which had been organized with the connivance (if not outright cooperation) of the local authorities and B-H Minister of Interior Delimustafic. Without the JNA at the Bosnian border and with Croatia hastily arming, without money coming in from tourism and transportation, Krajina has found itself in difficulties. It faces hunger, cold and, possibly, war (Tudjman has repeated on several occasions that Croatia will not agree to a prolongation of UNPROFOR's mandate in March). Karadzic's Serbs face a similar difficulty: they have more ethnically cleansed territory than they can control. They have destroyed all sources of income and find themselves the main guilty party for the war in B-H. The ethnically cleansed (expelled) Muslim population - mostly peasants - have been left destitute and with an elementary choice between fighting or dying. This has raised their fighting morale, guerrilla units have sprung up spontaneously, and their leaders were forged in battle. These groups are now a threat to territories which were considered cleansed and safe. Guerrilla group are make life miserable for Serbs in Eastern Herzegovina and are increasingly endangering vital communication lines; it can be expected that this trend will grow during the winter. Karadzic's Serbs have spread themselves to thinly over a wide area. Their numbers are decreasing as the richer and more intelligent among them leave. Eastern Herzegovina is half lost, winning an outlet to the sea has failed, and the future does not look too bright. Serbian Republic is in much greater difficulties than it is aware of.

Milosevic isn't in a much better position. Sanctions are choking Serbia's economy, trade, society, social security, medicine, infrastructure and state services (of which the YA is hardest hit). Winter brings the cold, hunger, a general paralysis and - Milan Panic. Spring, if it comes, will bring the danger of a possible Croatian offensive (March or May, depending on their faith in armored units). Zagreb's decision will depend on elements which the Serbian side, unfortunately, cannot control: international sanction, the long-term effect of sanctions on the YA and Serbs in Croatia, and Croatia's political situation at home. Milan Panic - the greatest threat to Milosevic's regime, is gaining in momentum and the dynamics of his political moves. He has gained public sympathy and the support of the Serbian opposition. But, Panic's time is running out too. Unless he manages to surround himself with an efficient power base and starts toppling Milosevic, the regime's survival plan might show up on the horizon. Milosevic will wait for poverty and winter to reach a climax and then, with the help of Seselj, Hadzic, Karadzic, paramilitary units trained by Arkan and parts of the Army and police, he will "resolve the Serbian issue in Serbia". These are logical assumptions of what the winter is bringing. What about the material suppositions?

Serbs outside Serbia - in Croatia and B-H - face three basic material problems: hunger, cold and death. In early August VREME analyzed the situation in Serbian territories outside Serbia; now we can compare the current situation with that during the summer. At first glance it is obvious that things are getting worse.

First of all, the whole of the Balkans share the same problem this year - drought. Bosanska Krajina, the richest part of the Serbian Republic, has been seriously hit. According to reports by the Banja Luka newspaper "Glas", maize yields (on 13,000 hectares) are less than half; soya and vegetables are nearly "ruined"; there will not be enough maize "for basic needs", and there are no vegetables. The cattle fund is close to devastation because there is no electricity so that cattle are slaughtered mercilessly and exported. The same case holds true in Krajina... As far as corn is concerned, director of the Banja Luka agri-business Milivoje Zaric, said: "We'll survive the winter", because "We have reached an agreement with the Republic and have secured 60,000 tons of corn from Vojvodina". Of payments, later. It should be said that the total needs of the two republics (Serbian Republic of B-H and Serbian Krajina) amount to about 120,000 tons annually. The average purchase from these territories is around 20,000 tons annually, with only 6,000 tons this year. The black market in food threatens both Serbian republics.

The shortage of electrical energy in Krajina and the Serbian Republic are linked to food. What is gained in normal agricultural production is lost because of electricity shortages. This refers above all to cattle and meat, mills and bakeries. When we add the fuel shortage and lack of transportation, the situation bring to mind the worst circumstances under Austria-Hungary prior to W.W.I, while the population and needs have remained the same. The Serbian Republic requires 150 MW of energy in order to function normally. Since the hydro-electric power plants "Jajce I and II" are in the hands of the Croatian Council of Defense (HVO) and the Tuzla TD, only 10% of needs are being covered - as electricity supplies now come from the hydro-electric power plant "Bocac" and the "Incel" power plant. This means that households in the entire area of Bosnian Krajina (with the exception of Cazin) have electricity every fifth day. Kninska Krajina has self-sufficient electricity sources. Krajina has a strong source of electricity in the hydro-electric power plant "Obrovac" - which as part of the entire power system made sense. Outside Croatia's power supply system, this power plant cannot continue producing electricity for long. The "Obrovac" hydro-electric power plant is a good example of the absurdity of war: Croatia does not have access to it, and the plant is too strong for Kninska Krajina. The disintegration of the power supply system has been to everybody's loss. Croatia can live without Krajina, but Krajina cannot do without Croatia.

The drought has take its toll here. Regardless of the agreement between the Croatian and Serbian sides on the joint exploitation of the hydro-electric power plant "Peruca", the lack of rainfall resulted in the whole of Kninska Krajina being left without electricity last week.

This is not the only problem. Electricity shortages have led to the destruction of the cattle fund, because the meat cannot be preserved, nor is there any future in saving the cattle. The peasants see no interest in raising cattle so that one kilo of ham sells for about 7000 Krajina dinars (KRD) in Krajina, while it costs three times as much or 2300 KRD in Belgrade (Thursday prices). In both Krajinas and the rest of Serbian B-H, the woods are being cut down increasingly and sold cheaply. The matter pertains mostly to compensation transactions (exchange for food and other goods). Serbs from Croatia and B-H claim the price of wood is scandalously low.

The problem of survival of Serbs in the Krajinas and B-H is, above all, a civilizational problem. They have inherited (or seized) economic facilities developed and adapted to normal peace conditions and the common YU market which had access to the rest of the world. The disintegration of Yugoslavia has greatly devalued these facilities; war and sanctions have rendered them practically useless. It is now necessary to make a civilizational somersault and return to the paleo-technical era of steam machines (1908), and a time when the hungry and destitute fled to America by steamboats. However, the Immigration Office won't let them in today.

Another attempt at solving the problems of Serbs outside Serbia are financial conjuring tricks, such as the Krajina dinar (KRD).

The dinar in question is a highly unreliable currency - at least for everyday purposes. It has no value outside the mother country and according to the Federal Customs Administration, the KRD "is not a convertible currency". Black marketeers will have nothing to do with it, and private banks even less. Only one bank in Belgrade will exchange it at a 1:1 rate, but only 10,000 and with an ID card. The notes are signed by B. Peruaca, and it is obvious that the Governor started using the Cyrillic script only recently.

This, however, is no hindrance to large scale transactions. The Government of the Serbian Republic (as they prefer to style themselves) recently printed "cheques" (a legal means of payment, as written on them) in the printing works of the Banja Luka newspaper "Glas" - totaling 4 billion KRD (14 million DEM at the black market rate). They will be used for salaries, pensions, and other transaction in the Republic. At the same time, Bozovic's government issued a decree ordering the Serbian Auditing Office to exchange the KRD at the rate of 1:1 to the YU dinar. In short, this means that the inflationary KRD will devastate stocks of goods and food in Serbia, which then will not be able to buy anything with the KRD except wood (depending on quantities cut down), meat (depending on the number of cattle slaughtered) and possibly furniture (depending on the quantity made in Zvornik using wood from Pale, and on condition that there is electricity). All possible machinations with the KRD are best seen in Knin, where hard currency was cheaper a month ago than it was in Yugoslavia. One DEM cost 200 KRD in Knin and 280 YU din. in Belgrade. In practice this meant that it was profitable to buy goods in Yugoslavia and sell them in Knin at the same price (even though it was usually higher), to buy DEM for the money earned and then buy good in Yugoslavia again, and so on. This resulted in an outflow of hard currency from Krajina, so that the DEM is now more expensive there than it is in Belgrade. Serbia's inflationary policy carried out via the printing works in Topcider (Belgrade), the KRD, and Bozovic's monetary policy have all helped to lay the bill for the bankruptcy of Milosevic's national strategy at the door of Serbia and Montenegro. This dud cheque has been written out in the name of "Serbian historical interests", "national solidarity", "all Serbs in one state" and packages of a similar nationalist-chauvinist nebulous content.

And what is life like for the ordinary people in the Serbian territories outside Serbia? Electricity shortages and shortages of everything else means that no single enterprise in Krajina is functioning. One of the rare sources of a stable income is the Krajina police (salary around 20,000 KRD); and they will take anyone. Those who don't wish to join can turn to some shady business because looting has become an important economic branch. There is a shortage of everything in Krajina. The black market is rife. Small, privately owned shops are cropping up like mushrooms after rain and survive thanks only to their owners' resourcefulness. Those in the know claim that it would not be worthwhile to acquire larger quantities of goods as this would lower prices. Life is at survival level and it remains to be seen what it will be like during the coldest winter months. Krajina has wood from the Plitvice area; if only there were fuel to cut it down and transport it.

Prices have started to jump at Bosanska Krajina. A loaf (700 grams) now costs 190 KRD, one liter of milk costs 120 KRD (if you can find it), one egg costs 100 KRD, meat and cream (when found) cost 1000-1200 KRD. The lowest wage is 5000 KRD, the average pension received by some 20,000 pensioners in Banja Luka is 4040 KRD.

Serbs outside Serbia, with Kninska Krajina in the lead, now face a Kosovo-type of dilemma. Milan Babic did not want UNPROFOR, so Milosevic got rid of him with a minimum of fuss; Hadzic does not agree to a special status within Croatia (put differently, he wants into "Yugoslavia" at all cost); Karadzic wants a new "alliance of Serbian states", because "Yugoslavia is perhaps worn out". Where does all this lead? What are the differences in circumstances? Babic and Karadzic, during the critical moments of the war in Croatia and Bosnia, were Milosevic's hostages. Thanks to war developments, the internationalization of conflicts and the fact that no one in Serbia dares cut off or abandon the Serbs outside Serbia any more, have led to Milosevic becoming their hostage. Karadzic and Hadzic now legitimately demand that promises be fulfilled. The fact that it was not Milosevic who made them but Kertes, Seselj, Crncevic and others is Serbia's internal affair. Hadzic and Karadzic know that if Milosevic falls, they do too. The opposite does not hold. This is why they want Milosevic to survive - at any price - even to the extent of engaging their troops in "resolving the Serbian issue in Serbia". Milosevic can use them for any purpose; they can only use bluffs to blackmail him - more or less.