PRICES UP, LAYOFFS AHEAD: IMF POLICIES MAKE INROADS IN YUGOSALVIA
By P. Chin
Oct 25, 2000--It's been less than a month since the U.S.-funded counter- revolutionary coup by election in Yugoslavia installed Vojislav Kostunica as the new president of that Balkan country.
But the people of Yugoslavia are already beginning to feel the bite of the International Monetary Fund.
No formal agreement has yet been signed with that predatory financial institution. But Kostunica's Democratic Opposition of Serbia coalition has already started to implement its deadly provisions.
Shortly after Socialist Party of Serbia head Slobodan Milosevic conceded defeat in the Yugoslav presidential elections, the new regime lifted price controls on basic consumer goods, fuel and services. Since then, costs have risen sharply. In Belgrade, for example, the price of one liter of oil has reportedly jumped from 15 to 51 dinars, a kilo of bread from 6 to 14, a liter of sugar from 6 to 45, and three kilos of detergent from 180 to 220.
Mocked as "democratic prices" by consumers, the increases have caused deep dissatisfaction. The removal of price controls is being blamed on the Serbian Parliament, which is dominated by SPS loyalists. But it was initially praised by the Western news media and trumpeted by the DOS as a great achievement
Most state institutions--including the Central Bank--were forcibly seized by small groups of CIA-trained counter- revolutionary gangs following the imperialist-backed coup disguised as a "popular uprising." Their leaders include the G-17 group of economists who wrote the IMF-approved program adopted by Kostunica's coalition.
"Immediately after taking office," reads G-17's "Program of Radical Economic Reform," "the new government shall abolish all types of subsidies. This measure must be implemented without regrets or hesitation, since it will be difficult if not impossible to apply later, in view of the fact that in the meantime strong lobbies may appear and do their best to block such measures....
"This initial step in economic liberalization," warns the document, "must be undertaken as a 'shock therapy' as its radical nature does not leave space for gradualism of any kind."
When G-17 seized control of the Central Bank in the name of "democracy," it stopped the outflow of cash used by the government for price controls on basic consumer goods. This effectively blocked the financing of state subsidies, and was done under the guise of "preventing the Socialists from transferring money abroad."
NEW MANAGERS SEEK HIGHER PROFITS
In addition, reported the Oct. 15 Los Angeles Times, "When Kostunica supporters forced out most managers in state-owned shops and factories and put their own people in charge the system of controls collapsed and prices immediately shot up." Moreover, the new factory directors "are moving quickly to make their plants more profitable."
Faced with simmering resentment over spiraling prices--and with elections for the new Serbian Parliament set for Dec. 23--G-17 director Mladjan Dinkic has tried to blame the SPS- dominated governing body. He says he now favors a "return to regulations of prices for certain basics as well as imports of cheaper equivalents from abroad to tackle unjustified price hikes." (French Press Agency, Oct. 16)
Dinkic is using a potentially explosive situation to feign concern for the "suffering of the people." But it was this demagogue who agreed to the IMF demand for an end to price controls and government subsidies. Dinkic's collaboration with NATO and IMF officials took place secretly in Bulgaria just before the Sept. 24 elections. The IMF plan stipulates "price liberalization" as a precondition for loan negotiations.
The consummate opportunist, Dinkic would use the crisis, if allowed, to open Yugoslavia to a flood of cheap imports, which would destroy local businesses and farms.
WHO'S BEHIND G-17?
G-17 is funded by the Washington-based Center for International Private Enterprise, which is linked to the National Endowment for Democracy. The NED was created in 1983 as an "acceptable" front for subversive counter- revolutionary plots hatched by the CIA.
Three of G-17's leading members, Dusan Vujovic, Zeliko Bogetic and Branko Milanovic, are Washington-based staff members of the IMF and World Bank. Others also have strong ties to these imperialist financial institutions. ("Lethal Medicine" by Michel Chussodovsky and Jared Israel)
G-17 coordinator Prof. Veselin Vukotic is also linked to the World Bank. He was the minister of privatization in 1989 under Yugoslav Premier Ante Markovic. It was just before-- and part and parcel of--the cataclysmic breakup of the Socialist Federation of Yugoslavia instigated by the United States and Germany.
Vukotic helped implement the World Bank Financial Operations Act, which forced many companies into bankruptcy. From 1989 to 1990 he directed the liquidation of more than 1,100 Yugoslav industrial firms, according to the World Bank.
"Over 614,000 industrial workers were laid off out of 2.7 million. The areas hardest hit were Serbia, including Kosovo, Bosnia-Herzegovina and Macedonia. Real wages did a nosedive. Social programs collapsed. Unemployment shot up." (Chussodovsky & Israel)
Devastation of the economy was calculated to create severe hardship and inflame ethnic rivalry. This set the stage for the breakup of the Yugoslav Socialist Federation and expansion of the capitalist empire in the post-Soviet era.
BRINGING IN THE DEUTSCHMARK
After NATO marched in and occupied Kosovo-Metohija last June, Vukotic declared that the southern Serbian province "should also have its own currency." (AP, June 26, 1999) Since then, the German Deutschmark has become legal tender, and Germany's Commerzbank now controls almost the entire banking system there.
This "elder statesman" of G-17 is also reportedly "one of the economic brains behind Montenegrin secessionism." Vokotic has in fact been put in charge of auctioning off state property by the puppet Djukanovic regime in Montenegro.
World Bank Senior Economist Dr. Dusan Vojovic is Washington's link to G-17. In August he was put in charge of negotiating "one of the world's most deadly economic packages" for the Ukraine, already blistered by IMF-World Bank reforms. (Chussodovsky & Israel)
Then there's Dr. Zeliko Bogetic. This IMF adviser--also to Djukanovic--holds a senior position at the financial institution. In 1994-96, he forced the IMF's structural adjustment program on Bulgaria. All social defenses were stripped in the onslaught. Price controls, subsidized food, housing and medical care, among other things, were devastated.
"This is not simply a group of economists," explain the authors of "Lethal Medicine." "It is a network. The International Monetary Fund and World Bank are using this network to impose their policies on Yugoslavia. Meanwhile they tell everyone the fiction that G-17 is a homegrown alternative."
This is the reactionary cabal aligned with Kostunica's coalition that claims it will lead Yugoslavia to prosperity.
SYMBOL OF RESISTANCE
The Federal Republic of Yugoslavia has been under brutal U.S.-instigated sanctions for 10 years for its resistance to NATO expansion and IMF plunder. This led to a steep decline in the standard of living. But the country was kept from total collapse--unlike Bulgaria--because of price controls and state subsidies.
Milosevic and his Socialist Party coalition had become a symbol of resistance. That's why Washington wants his administration crushed.
In an arrogant and open display of interference in the affairs of a sovereign nation--something the U.S. government would never tolerate here--Washington shamelessly earmarked close to $200 million of the wealth created by the working class to oust Milosevic. That's money that could have been spent on education, childcare and health care, housing for the homeless and the poor, food for the hungry.
"In Yugoslavia," writes Belgian journalist Michel Collon from Belgrade, "the game is far from being over. A lot will depend on the capacity of workers to resist. Some leftist alternative is indispensable, and resistance is being prepared."
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