The Crazy and the Confused

The first birthday of the Federal Republic of Yugoslavia (April 27,1993) will also be remembered by the fact that the new Security Council Resolution 820 came into effect on this very day - the situation was somewhat similar when the Serbian Constitution was being adopted several years ago: it was ceremoniously proclaimed amidst the bloodshed in Kosovo.

Memory is becoming shorter. Would anyone remember today that the Federal Government announced several weeks ago the reduction in the production rate to reach only 12 % this year, the annual GNP of 20 billion dollars (or a third of former Yugoslavia's GNP in 1989), and, generally speaking, an approach to the transition of the slackened state-owned economy, which slackened off even before the sanctions and the war.

And, then, there was the announcement, followed by the adoption (with a delayed implementation) of the world community resolution on tightening of sanctions and enforcement of new ones. The Federal Government called a press conference four days before the Resolution 820 came into effect. The ministers of information, culture, sport and science addressed surprised and confused journalists. The heads of economic sectors were not there. Tomislav Sekulic, the Minister of Economy, was also missing. He stated in Podgorica a day earlier, according to the state news agency, that we must not even announce a prognosis as to what it would mean for our exhausted economy if the new sanctions against the Federal Republic of Yugoslavia are implemented.

At the above mentioned meeting with the journalists the Minister of Information stated that the outcome of the negotiations with the world was to be expected. He also said that Yugoslavia did not have a decisive impact on the outcome, as she only offers good services to the warring sides in Bosnia-Herzegovina and supports any agreement of the three sides. His counterpart from the Ministry of Culture assessed that the announced sanctions were anticultural and as such push Yugoslavia into the isolation, while the Minister of Sport said that the threat was unsportsmanlike and urged all athletes to appeal against such injustice. "The international community violates the principles of science to such an extent that it refuses to publish the research which the Yugoslav scientists conducted on AIDS," said the Federal Minister of Culture and Technology.

Two days after such a convincing explanation of the international injustice, the Federal Government acted somewhat more realistically. Federal Prime Minister, Radoje Kontic, got together about fifty managers and announced the commanding (directive, war-time, casement) economy as the self-defense against the new sanctions. The Federal Government compiled basic balance sheets and a list of priorities: military, energetics, food and medicaments fall into the first category. Those who are currently on forced vacations (about one million people) will be offered to work in one of these war-economy sectors. Preparations for a social program, which is much more comprehensive than the current one (and not adopted) are also underway is what the Federal Prime Minister said.

As far as the military sector is concerned, all the Prime Minister had to say is that the balance sheet was based on good methodology. The energetics balance sheet is "tight", even though it is founded on the inaccurate data which the Federal Prime Minister had at his disposal that the domestic production of oil covers one half of the consumption (the prospects that the domestic production will exceed one quarter of the production are poor). Food represents the "Serbian trump card" in the federal balance sheets: there will be enough of it for export, so that the hard currency for the dramatically lacking medical supplies will be obtained.

The Federal Prime Minister also failed to mention the hard currency reserves (the experts assess them at no more than 300 million US dollars; he never even hinted at the financial sources of the announced "rich" program for the social security. When it comes to the food balance sheets, in good tradition with the socialist planners, the Prime Minister disregarded the fact that there are not enough oxen, cows and horses which could to a certain extent replace stationary tractors; he also discounted the fact that available draft animals are not fully usable, as the horseshoe nails are also in short supply (the production of them was allotted to the Bosnian industry in the unfortunate Yugoslav division of labor).

The story is not about the Federal Prime Minister, nor about his Cabinet, except when it comes it their irresponsible signing of unsubstantiated decisions made by others. It goes without saying that the Federal Government does not have it easy. This would be clear even if it had not refuted itself three days after Kontic's public address: the state news agency reported on Tuesday that the competent federal and republic ministries "were intensely working on establish of the possibilities for the functioning of the economy in the conditions of new, rigorous United Nations sanctions."

Mladjen Kovacevic, the University professor, got involved in Kontic's talks with the economists, by asking the question, how much longer the Serbian people will have to make sacrifice if it is not known when the new state will be created. According to the last Saturday's issue of the Belgrade daily "Politika", a unique answer came from Kontic and the manager of the furniture producer "Simpo", Dragan Tomic: the sanctions are extremely unjust and we cannot go below a certain minimum of the national interest. The manager of the Vranje-based furniture producer has been recently noted as saying that the business at "Simpo" had never been better than last year, during the economic blockade. Slobodan Stojanovic, the sales director at "Simpo" told the Belgrade daily "Borba" on Wednesday, "We have been left to deal with the domestic market only. It is certain that the last ties "Simpo" had with its foreign partners on four continents will be broken, which will have far-reaching consequences on the business transactions of this big company in many years to come." This salesman also said that they had conducted business until now, thanking to the stock stored in the middle of last year before the sanctions were imposed.

It seems that there are no differences in the assessments made by the economists from the University and the institutes, some of whom even attend the sessions of the Economic Council of the Serbian Government: the "imitation of life" under the current sanctions can last a half a year or a year at most; the collapse of the national economy in this time period is inevitable. It can also be heard that the sanctions are only speeding up the collapse of the "national" economy, Serbian and Montenegrin, which was unavoidable even before the war and the embargo of the international community. Therefore, if this is translated into the political language, the latest sanctions only provide a pretext to the wrong policy, and, more importantly, prolong the suicidal life to its leaders. Some of them, as the Director of the Institute for the Economic Sciences in Belgrade, Tomislav Popovic, suggest not only a quick economic collapse but also a serious lack of understanding of difficult consequences in store for this state over a long time in the future, beginning with how long it will technically take to return Yugoslavia to the World Bank and the International Monetary Fund.

At the moment when this text is going into print the President of the Yugoslav state, Dobrica Cosic, once again instructed the uninformed (journalists) to refer to his books, in order to understand what this is all about...