[balkanhr] IWPR'S BALKAN CRISIS REPORT, NO. 47, 16 June 1999 Via NY Transfer News Collective * All the News that Doesn't Fit source - Greek Helsinki Monitor WELCOME TO IWPR'S BALKAN CRISIS REPORT, NO. 47, 16 June 1999 THE ECONOMIC COST OF MR. MILOSEVIC. Economists estimate that it will take Serbia 40 years to recover from the costs of the NATO bombing and return to the level achieved before Milosevic came to power. Dimitrije Boarov in Novi Sad and Christopher Bennett assess the damage. SESELJ AT THE GATES. Having resigned from the Serbian government and disassociated himself from the peace agreement, Vojislav Seselj is now poised to bid for power. A journalist in Novi Sad reports. ***************************************************** IWPR's network of leading correspondents in the region provide inside analysis of the events and issues driving crises in the Balkans. The reports are available on the Web in English, Serbian and Albanian; English-language reports are also available via e-mail. For syndication information, contact Anthony Borden . Balkan Crisis Report is supported by the Department for International Development, European Commission, Swedish International Development and Cooperation Agency, MacArthur Foundation, Press Now and the Carnegie Corporation. IWPR also acknowledges general support from the Ford Foundation. *** VISIT IWPR ON-LINE: www.iwpr.net *** To subscribe to this service, send an e-mail to ; in the body of the email write the message . To unsubscribe, write , Alternatively, contact Duncan Furey for subscription assistance at . For further details on this project and other information services and media programmes, visit IWPR's Website: . Editor: Anthony Borden. Assistant Editing: Christopher Bennett, Alan Davis. Internet Editor: Rohan Jayasekera. Translation by Alban Mitrushi and Mira Jovanovic. "Balkan Crisis Report" is produced under IWPR's Balkan Crisis Information Project. The project seeks to contribute to regional and international understanding of the regional crisis and prospects for resolution. The Institute for War & Peace Reporting (IWPR) is a London-based independent non-profit organisation supporting regional media and democratic change. Lancaster House, 33 Islington High Street, London N1 9LH, United Kingdom Tel: (44 171) 713 7130; Fax: (44 171) 713 7140 E-mail:info@iwpr.net; Web: www.iwpr.net The opinions expressed in "Balkan Crisis Report" are those of the authors and do not necessarily represent those of the publication or of IWPR. Copyright (C) 1999 The Institute for War & Peace Reporting . ***************************************************** THE ECONOMIC COST OF MR. MILOSEVIC Economists estimate that it will take Serbia 40 years to recover from the costs of the NATO bombing and return to the level achieved before Milosevic came to power. By Dimitrije Boarov in Novi Sad and Christopher Bennett The war over, Kosovo effectively lost and Serbia devastated, Yugoslav President Slobodan Milosevic is telling Serbs that so long as they pull together they can rebuild their country. On a visit to Serbia's second city of Novi Sad this week, Milosevioc promised that the bridges across the Danube, which had been early casualties of the NATO bombing, would be rebuilt within 40 days. Wider reconstruction would follow and so too, Serbia's re-entry into the international community. The message is exactly what Mr. Milosevic's long-suffering fellow countrymen want to hear. But it is also what he has been promising ever since he came to power more than a decade ago. In many respects, the most costly aspect of the NATO bombing to Serbia is not the physical destruction--put at between $20 and $100 billion--but the fact that it failed to dislodge Mr. Milosevic. This is because the Yugoslav President stands as the primary obstacle to both the kind of reforms needed to put the economy right and allowing foreign investment back in eight years after sanctions were first imposed. The peace agreement ending the war, which was ratified by the Serbian parliament on June 3, suggested that, under certain conditions, Yugoslavia would not be excluded from "comprehensive access to the economic development and the stabilisation of the crisis region". The UN Security Council resolution of June 10 authorising international deployment in Kosovo was more specific and promised reconstruction assistance to the southern Serbian province. However, there was no mention of aid to the rest of the country, which, without fundamental political change,seems highly unlikely. Both Washington and London have made it clear that financial support to help with Serbia's reconstruction is fully conditional upon Milosevic's removal. Given the terms of the peace agreement, any assessment of the economic cost of having Mr. Milosevic as president must factor in the loss of Kosovo. This involves writing off about 11 per cent of Yugoslavias territory, some 15 per cent of its population and five per cent of gross domestic product (GDP). Mr Milosevic's two-and-a-half month war with NATO is likely to cut this year's official prediction of Yugoslavia's GDP by up to a half. At the official exchange rate, of just over 11 dinars to the US dollar, this would mean a GDP of $14.3 billion, compared with last year's figure of $18.5 billion--a drop of close to 30 per cent. Using the popular black market exchange rate, of about 18 dinars to the US dollar, this year's GDP could easily drop below $9 billion. A decade ago, before the break-up of Yugoslavia, the combined GDP for Serbia and Montenegro was close to $25 billion in 1989. The bombing has therefore halved this year's productivity which is itself just one third of what it was at the beginning of Mr. Milosevic's rule. Using last year's growth rate as an basis, Mladjen Dinkic of Group 17, a gathering of Serbia's independent economists, has calculated that Yugoslavia would need 16 years to reach the productivity level enjoyed prior to the launch of the NATO campaign and a generation to attain the level of 10 years ago. Other economists are not so pessimistic. Former National Bank governor Dragoslav Avramovic, views the destruction caused by the bombing as an "opportunity". He believes that much of what has been destroyed, in particular the military industry, was not productive and served only as a drain on the rest of the economy. Avramovic, nevertheless, fears the winter as a result of damage inflicted upon oil refineries and power plants as well as the oil and trade embargoes imposed against Yugoslavia. The damage to the country's two oil refineries is so great that more than $100 million new investment is needed simply to process the 1 million tonnes of domestic crude oil it currently has. And with its foreign currency reserves exhausted, Yugoslavia can no longer afford to pay for these imports, even if the oil embargo were to be lifted. The government has announced that the electricity-generating plants in Obrenovac, Kostolac and Drmno as well as the high-voltage power lines from the Djerdap hydro-electric power plant on the Danube have been destroyed. Moreover, since Serbia can no longer count on electricity from Kosovo, the country's capacity has been reduced by a third. Of some 30 billion kilowatt hours of electrical energy produced each year, one third is consumed by industry, and two thirds by the public. It is more than likely that the short-fall this winter will fall on the public. Dimitrije Boarov, an economics journalist based in Novi Sad, writes for the Belgrade weekly Vreme. Christopher Bennett is a senior editor with the Institute for War and Peace Reporting. SESELJ AT THE GATES Having resigned from the Serbian government and disassociated himself from the peace agreement, Vojislav Seselj is now poised to bid for power. By a journalist in Novi Sad The resignation of Serbia's deputy Prime Minister Vojislav Seselj and the withdrawal of his ultra-nationalist Serbian Radical Party (SRS) from the government is subject of much speculation among what remains of Yugoslavia's chattering classes. Is this, political analysts wonder, a step towards the oft-predicted civil war in Serbia? Or is it yet another cynical ploy by Yugoslav President Slobodan Milosevic to retain power by presenting himself as the moderate alternative to Seselj? The SRS--which has the second largest political presence in the Serbian parliament with 75 deputies and held 15 out of 35 ministerial posts in government--pulled out of the ruling coalition because it could not accept the terms of the peace agreement ending the war in Kosovo. In explaining his resignation, Seselj claimed the peace accord was a total capitulation to NATO's demands and while he did not mention Milosevic by name, he made it clear that he held the President personally responsible. In an interview for the biggest-selling Belgrade daily Glas Javnosti, Seselj forecast a stormy period ahead for Serbia, saying that after Kosovo there will come similar temptations in Montenegro, Sandzak and Vojvodina. And he warned darkly that the greatest risk to Serbia would now come from "traitors" who would be working against the interests of the country with American encouragement. Seslj also predicted instances of food rationing and social unrest. In contrast, Milosevic has been travelling the length and breadth of Serbia, extolling the virtues of the peace agreement, promising economic rebirth and seemingly presenting himself as the one man who can keep Seselj's extremism at bay. A number of analysts see the apparent conflict between the two men as nothing more than a co-ordinated ploy designed to bolster Milosevic's position. However, although Seselj has in the past served Milosevic in this way, others believe that the radical is now positioning himself ready for the day when Milosevic can no longer control Serbian society. In the working class suburbs of the largest Serbian cities, the electoral bedrock of the ruling parties, the population is already on the verge of hunger. Moreover, the prospects are worse since, according to official statistics, some 500,000 workers lost their jobs during the war. An estimated 50 per cent of the population are now out of work. In these circumstances, it is difficult to see how the employment and reconstruction programme drawn up by the Serbian parliament can have much impact. If, therefore, Milosevic's promises prove hollow and conditions deteriorate as predicted, Seselj may well make a bid for power. In such a case, the threat of civil war becomes real. Some people here are already comparing the situation in Serbia today to the Weimar years in Germany at the end of the First World War. Like Germany, Serbia has been defeated militarily and humiliated, its economy is in tatters and it faces massive social dislocation. At the same time, like Germans in the aftermath of the First World War, Serbs have not understood the real causes of their defeat and are convinced that they have suffered an injustice which they did not deserve. In the absence of any objective reporting, Seselj stands to be the ultimate beneficiary of the frustration felt by ordinary Serbs. Indeed, the greater Serbia's social and political disintegration, the better his chances of gaining power. In this respect, his appeal does indeed resemble that of Hitler who managed to win over Germany's defeated and humiliated population with his demagogic populism. Moreover, like Hitler, Seselj could achieve his goals via the democratic process. In Serbia's last presidential elections in 1996, Seselj was narrowly defeated by Milosevic's candidate Milan Milutinovic in a poll which observers believe was marred by widespread fraud in the latter's favour. Moreover, since then, Seselj's popularity has risen among the electorate and he has acquired key allies in the upper echelons of the police and army. The author is an independent journalist from Novi Sad whose identity has been concealed. ================================================================= NY Transfer News Collective * A Service of Blythe Systems Since 1985 - Information for the Rest of Us 339 Lafayette St., New York, NY 10012 http://www.blythe.org e-mail: nyt@blythe.org ================================================================= nyteeu-06.19.99-18:18:58-18285