[ Note: Here is an admittedly somewhat onesided article that someone posted to
the NETSOURCE list. It does, however, contain additional economic background
information that i think one needs to have. ]

-- begin forwarded message: --

Date:  Sun, 9 May 1999 11:57:22 +0900
From: Michael Kepinski
To: Multiple recipients of NETSOURCE-L <netsource-l@mail.think.service>
Subject:  [NS] Background Info on Serbia (to counter the lies)

I am sick and tired of the sanctimonous lies that we are being fed by the
US. Like Noriega, Saddam Hussein, and other thugs, the Serb Milosevic is a
pawn of of larger powers that operate behind the scenes.

Thanks to Arm The Spirit <ats@locust.SPAMTRAP.etext.org>

Background Info On Serbia


Is Serbia Socialist?

By Michael Karadjis

One view expressed about the war in the Balkans is that NATO is attacking
Serbia because the Milosevic regime somehow stems the advance of Western
economic penetration of the region, or, in more extreme versions, that it
is "socialist". Yet Serbia is anything but socialist. Slobodan Milosevic
himself launched the economic program that overthrew the vestiges of
socialist planning in Yugoslavia in 1988, through the "Commission of the
Presidency of the Republic of Serbia: The Commission for Questions of
Economic Reform". In these "reforms" in 1988-89, the Yugoslav economy was
opened up to 100% foreign ownership (Milosevic called on Yugoslavs to
abandon their "primitive fear of exploitation by foreign capital").
Private property was given equality with public property; enterprises were
allowed to collapse and create mass unemployment; and "workers'
self-management" was essentially abolished, workers being encouraged to
become shareholders. Milosevic exhorted these enterprises to "function on
economic principles, strive to create profits and constantly struggle for
their share and place in the market". As Milosevic used Serb nationalist
crowds to overthrow the Communist governments of Vojvodina, Montenegro and
Kosova, he blamed these bureaucrats for "obstructing" economic reform, and
told workers striking against the negative effects of the changes to trust
him to carry the reforms through more successfully. According to a New
York Times article in 1988, top U.S. policy makers were torn between their
concerns that Serb nationalism could tear Yugoslavia apart and "their
appreciation of Mr. Milosevic as a catalyst for sorely needed political
and economic changes".

Other Republics

A widespread view on the left is that Croatia and Slovenia were more
pro-capitalist than Serbia and the federal government. In fact, it was the
Western-backed federal government of Prime Minister Ante Markovic that
pushed the most radical economic "reforms", while all republics slowed it
down as they squabbled over the spoils. Slovenia suspended the federal
scheme in 1990 and did not pass its own legislation until November 1992 -
the last country in eastern Europe to do so. Even by 1995, only 200 of the
1500 enterprises scheduled for privatisation had passed into private
hands. Croatia also suspended the federal scheme and introduced its own in
April 1991, but its main results were with small enterprises. According to
the World Bank in 1996, "The largest enterprises, accounting for some two
thirds of social assets and employment, remain in state hands, and their
privatisation has virtually stalled". However, according to the British
Foreign Affairs Committee in 1991, "There have been rather more economic
innovations in Serbia ... there has been some sort of effort to privatise
industries in Serbia, the like of which there has not been in Croatia."


Serbia introduced its own privatisation legislation in August 1991, in the
midst of its war with Croatia. The number of private firms in Serbia
doubled in 1991, to 42,697, about 50% of all firms. Foreign capital played
an important role, 370 private businesses being fully owned by foreigners
in 1991. A "free economic zone" for foreign business was established in
March 1992. Next to privatisation, a certain amount of "nationalisation"
occurred in both Serbia and Croatia. This meant that "social" firms -
those in theory collectively owned by the workers - were removed to direct
state control, enabling them to be privatised subsequently. Serbia's
privatisation legislation was based on the previous federal legislation,
allowing workers and managers to buy out firms. By first removing them
from workers' control, the "Socialist Party" managers were able to take as
much as they wanted. According to the Alternative Information Mreza, by
1994 "half of Serbian industry has been quietly privatised at a rapid rate
... already in 72.6% of state enterprises, 660,000 employees have bought
shares ... Behind these shares, however, hide several hundred managers,
from the Socialist Party, who make business dealings of a frankly
capitalist character and virtually thieving manner, taking the lion's
share." Because much of this share buying was done in house, by workers
and managers, in the murky world of Serbia's legal system, many of these
enterprises can still be called "state" enterprises. The same process has
been at work in Croatia's "state" industries. In both countries, the
shares of the workers are often useless, not only because of the relative
weight of management shares, but because these "managers" often rob the
assets they manage to build other private enterprises they own outright.

Snouts In Trough

Most state ministers are also big business people. Milosevic's son Marko
owns the duty free shops at Serbia's borders and airports. Prime Minister
Mirko Marjanovic has in the area of $50 million, largely through
questionable deals by the trading firm Progres, which he "manages". Former
vice-premier Slobodan Radulovic runs a retail chain, and was accused by
workers of ripping off $372 million. Zoran Todorovic, former leader of the
"Yugoslav Left", set up by Milosevic's wife, directed state petrol firms
while building the giant privately owned T&M Trade company, becoming one
of the richest men in Serbia. He was assassinated just after the latest
privatisation plan was announced in October 1997 and a scramble for spoils
began. The "Yugoslav Left" - part of Milosevic's four-party ruling
coalition, is ironically named: it is the major party of Serbian big
business. The economic sanctions on Serbia during the Bosnian war helped
build this elite while ordinary Serbs suffered. Milosevic and his
ministers stole $3.8 billion in foreign exchange owned by citizens, under
the cover of placing it in more secure places abroad. It was deposited in
their private accounts in Cyprus and Moscow.

Foreign Interests

Milosevic has continued selling strategic parts of the Serbian economy. In
1997, he sold half of Serbian Telecom to Greek and Italian investors.
Italian capital also has an interest in the construction of an oil
pipeline from the Caspian reserves, to run from Russia through Yugoslavia
to the Adriatic and Italy. Greek capital has had played a major role in
Serbia and Kosova, as in the rest of the southern Balkans. A host of giant
Greek companies - Telecom, the National Bank, Kokkalis, Delta, Viochalko
and others - have become a major force in the region. The Greek company
Mytilinaos AG bought out the famous Trepca zinc mines in Kosova, from
which the Milosevic regime had sacked 13,000 Albanian workers. Kosovan
leaders have called on foreign companies not to take part in Milosevic's
fire sale of Kosova's assets. Following the Bosnian war, Milosevic
employed the British consultancy firm Nat-West Markets to advise on
privatisation. On the board of Nat-West is former foreign secretary
Douglas Hurd, who was chiefly responsible for Britain's pro-Serbian
position on the Bosnian war, and his former intelligence committee chair,
Pauline Neville-Jones, also a noted Milosevic apologist. The large Beocin
Cement Factory was sold to French and British investors in 1998, despite
the new "investment ban" following the outbreak of Kosova violence, while
the giant Pancevo Petrochemical Industry was recently evaluated at a
billion German marks and was ready to offer shares on the London capital
market. Imperialism is not attacking Serbia for "socialism", but despite
these considerable opportunities for investment. As Serbian economist
Mladjan Kovacevic notes, the main reason that foreign investment was not
higher was "the risk factor", i.e., the conflict in Kosova. This
instability is due to the Serbian bourgeoisie's inability to complete its
nationalist agenda by subduing or partitioning Kosova. Its chosen methods
- maintenance of apartheid, denial of all rights to Albanians and
slaughter of the first signs of opposition - gave birth to what the West
saw as a new instability, the Kosova Liberation Army fighting for
independence. Sometimes, imperialism can use the excuse of outrage over
the actions of extreme right-wing regimes to justify its interventions, as
with the U.S. invasion of Haiti in 1993 to throw out the military butchers
whose policies were creating a massive refugee outflow to the U.S. The
attack on Serbia is in the same tradition - Serbia was not "too
socialist", but too racist, and these extreme methods were leading to
instability. Imperialism's aims, however, are equally opposed to the
self-determination of Kosova and of other peoples in the region.

(Source: Green Left Weekly #358 - April 28, 1999

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