RIGHTS-YUGOSLAVIA: Urgent Aid Needed, Economists Say

By Vesna Peric Zimonjic Reprint | | Print |

Vesna Peric-Zimonjic

BELGRADE, Aug 1 1999 (IPS) - Left out of nearly all western humanitarian and reconstruction plans, Yugoslavia is facing a grim economic picture. The country “urgently needs 1.2 billion dollars of humanitarian aid,” a leading independent economist said.

“If we don’t get any help from abroad, I expect a horror story here this winter,” Zoran Zivkovic, mayor of Nis, Serbia’s third largest town, and one of the leaders of the opposition Democratic Party, told IPS.

The Yugoslav government, meanwhile, keeps a defiant posture, claiming that reconstruction will be possible relying on domestic resources only, which the “Group of 17” independent economists finds unrealistic.

Serbian prime minister Mirko Marjanovic spent ten days in July promoting the reconstruction of apartment complexes in several small provincial towns destroyed in the 11 weeks of NATO (North Atlantic Treaty Organisation) air raids.

Ivica Dacic, spokesman of the ruling Socialist party told journalists that the government’s plan of “finishing the reconstruction of all homes, apartments, schools and hospitals damaged or destroyed during the war will be finished by November 1”.

Dacic stressed that “relying on domestic financial resources will be the basis” for such achievement. Yugoslavia, he said, is demanding NATO countries financial compensation for war damages, not aid.

The official statements caused consternation among some economists in the country, as the foreign reserves before the start of NATO air campaign were estimated adjust 180 million US dollars and the country’s economy was already in poor shape.

Since the attacks ended in June, no Serbian or Yugoslav official has publicly commented the extent of the economic damage caused by NATO.

Jagos Zelenovic, the Development minister, recently said that “so far no one has the exact statistics on the war damage…The damage was enormous, but it is being assessed by a special commission” which is yet due to announce its findings.

During the war, Yugoslav officials had calculated the total damage at some 100 billion dollars, but a recent G-17 study puts the figure at 29,6 billion.

The G-17 study, -‘The Final Balance Sheet’ – dismisses the official assertions about the country’s capacity to carry on without external help.

“Without financial aid from abroad, Yugoslavia will need 15 years to reach the level of industrial production of March 1998, and 25 more years to get to the level of 1989 (the year before Yugoslavia’s break- up)” the group says.

Destroyed infrastructure and the loss of capital in NATO air raids was estimated at around 4.1 billion dollars, while human capital loss accounted for an additional 2.3 billion dollars, Mladjen Dinkic, the G-17 coordinator told IPS.

The remaining 23.2 billion dollars comprise opportunity losses for the whole economy, based on the current value of lost gross domestic product (GDP) and assuming that the “negative effects of war will be felt over the next 10 years,” Dinkic said.

Compared to 1998, the 1999 GDP fell 40.7 percent, he added. “In 1998, the annual (per capita) income was 1,643 dollars, while the estimation for 1999 is now at 975,” the study says.

Dinkic said the G-17 estimates failed to include, due to incomplete or unreliable data, a part of human capital loss concerning the ethnic Albanian population in Kosovo and damage to households in the province, as well as military losses.

The most affected sector was infrastructure, including the electrical power-supply system, whose damage is estimated at 805 million dollars. The oil industry’s losses have been calculated at 600 million dollars.

In 1999 exports have fallen by 55 percent, and imports by 58 percent, compared to the same period of 1998, the study says, while industrial production is down by 44.4 percent. Unemployment rose from 25.2 percent to 32.6.

Some 72,600 workers lost their jobs when their factories were destroyed, while between 200,000 and 250,000 are out of work because their companies were associated to those smashed by NATO bombs.

“This dark scenario can be changed only if Yugoslavia is included in the programme of economic reconstruction of southeast Europe,” Dinkic said.

Yugoslavia needs financial assistance for at least five years and “urgently needs 1.2 billion dollars in humanitarian aid, the renewal of its electrical network and heating stations, reconstruction of bridges and social welfare programmes,” he said.

According Zivkovic, to the mayor of Nis, NATO’s destruction of the electricity grid have cut power output by 70 percent in southern Serbia.

“There is just about enough electricity to meet the consumer demand during the summer, with most factories closed, but the power grid is likely to break down as soon as the cold weather arrives” he added.

The same problem is foreseen all over Serbia, as the huge power plants near Belgrade and in eastern Serbia were also hit.

Dozens of fuel depots and Yugoslavia’s two largest oil refineries – in Pancevo and Novi Sad – were destroyed by NATO. Yugoslavia depends on imported oil and gas for household heating and most of it comes from Russia, which has opposed the hard line adopted by the US and Britain.

To add to the problem, Yugoslavia faces one of the worst harvests in recent history. Due to NATO’s air raids, spring preparations for sowing went slowly and badly, with farmers facing fuel and fertilisers shortage.

The country’s main fertilisers factory in Onacevo was destroyed by NATO in April.

“Grain harvest is pretty bad this year” says Jovan Todorovic, head of the Belgrade Institute for Market Research. “We have 25 percent less grain and due to bad agricultural preparation and pouring rains in July, the quality of harvest is very poor.”

“I would not say that we’ll be hungry in the winter, but those responsible should be aware of this fact too” Todorovic said.

A donors meeting in Brussels on July 28 pledged to contribute two billion dollars in urgent reconstruction and humanitarian aid for Kosovo, while 39 heads of state meeting in Sarajevo on July 30 signed a “stability pact” for the Balkans.

US president Bill Clinton announced a package of incentives for US investors worth 150 million dollars, as well as duty exemptions for Balkan-countries’ goods valued at 550 million dollars.

Yugoslavia has been excluded of all reconstruction and humanitarian initiatives as long as president Slobodan Milosevic remains in office.

British prime minister Tony Blair announced Saturday a 4.5 million-dollar fund to finance opposition media and political parties in Serbia, which will be added to US apportions to unnamed organisations.