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The unbearable lightness of being Kostunica

by George Szamuely (10-27-2000)

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  • Yugoslavia is in default on its $14 billion of external debt. Then there is $1.7 billion owed to the World Bank. If Yugoslavia wants any more money [from the IMF], it will have to start paying its creditors off. It will also have to swallow the standard IMF bitter medicine: Pay cuts, an end to subsidies, "flexible labor markets, the closure of "uncompetitive" industries. Thus will Yugoslavia become impoverished, yet "competitive". And some day, perhaps, the standard of living will return to its current level.

There was always something extraordinarily na´ve about the idea that once Yugoslav President Slobodan Milosevic was out of power, the West would rush to Belgrade, check book in one hand, fountain pen in the other. The eight years of sanctions, not to mention the extensive bombing were not directed against one man. US Government officials have said on innumerable occasions that they considered the Serbs to have been the instigators of the Balkan wars of the past decade. The Serbs’ real crime, of course, was "nationalism"—in other words, opposition to the policies of the US Government. And now they will have to be punished for it. While very little economic aid is forthcoming, Western policymakers are not hesitating making one demand after another on the new Government in Belgrade.

Last week President Vojislav Kostunica announced that he would visit Bosnia to attend the reburial of Serb poet Jovan Ducic, who died 57 years ago in the United States. Wolfgang Petritsch, the so-called High Representative in Bosnia (a term redolent of the old position of colonial High Commissioner) announced that he was disturbed that a President of Yugoslavia should visit Bosnia. He demanded an explanation. Petritsch met Kostunica and afterwards professed himself satisfied that the "visit was of a purely private nature". Nevertheless, Yugoslavia and Bosnia must establish diplomatic relations as soon as possible, he insisted. As far as financial aid was concerned, Petritsch announced that Yugoslavia would receive about $ 180million. However, this money is Yugoslavia’s already. It is to be realized through the distribution of the country’s gold reserves with the Bank for International Settlements in Basle.

As far as more money is concerned, Kostunica will have to wait. In a recent article in the Financial Times, Petritsch wrote: "Hundreds of millions of euros in aid should not be allowed to flood into Yugoslavia without some strings attached". Kostunica would first have to recognize Bosnia and "establish diplomatic relations". Petritsch then went on to issue a threat: "I… suggest to Mr. Kostunica that the surest way of securing Kosovo, where Serbs have just as much right to live as ethnic Albanians, is to recognize Bosnian sovereignty. Then the international community will be honor bound to ensure a future for Serbs there as was agreed under UN Security Council Resolution 1244". This is essentially blackmail. The so-called "international community" will adhere to international law provided Serbs meet its requirements. Of course, the requirements can change at any time. In which case, treaties and UN Resolutions will be ignored. Petritsch concluded his article with the inevitable demand: "If Yugoslavia wants to regain full membership of the UN, it should be willing to work with its institutions. That includes the war crimes tribunal in The Hague".

The other day Petritsch met his "friend" Zoran Djindjic. According to the joint statement issued after their meeting, "the state bodies of the FRY should support the democratic process in Bosnia-Herzegovina and refrain from supporting any political party". This was an odd declaration, to say the least. Leading Democratic Opposition figures have been actively involved in the upcoming election campaign in Bosnia. The approved Presidential candidate of the Western powers, Milorad Dodik, is in some trouble. He is only President because the previous High Representative, Carlos Westendorp, had dismissed the elected President, Nikola Poplasen, for failing to conform to the requirements of the "international community". Dodik is obviously badly in need of a boost, so Western officials are shipping in Kostunica supporters in the hope that some of their glory will rub off on him. Attending a recent election rally in Bijeljina in northeastern Bosnia was Belgrade Mayor Milan Protic. He said that the Serb Republic of Bosnia had supported and helped the DOS, and "that was why DOS members had come to the … rally to share their joy with the citizens of the Serb Republic, as the democratic victory in Serbia was a victory for the whole Serb people". Also in attendance was Vladan Batic, leader of the Christian Democratic Party. He was for Dodik, he explained, because Dodik "had always supported the DOS." Vuk Obradovic, leader of the Social Democrats, was also there. He supported Dodik because he "had supported all the major battles of DOS against Slobodan Milosevic and helped democracy win in Serbia". Also in attendance was the ubiquitous Velimir Ilic, Mayor of Cacak.

Milorad Dodik himself is under no illusions as to how seriously Western powers take elections. An election victory by the dread Serb Democratic Party (SDS) in the upcoming elections, he recently stated (perfectly correctly), would lead to an end to international aid and the isolation of the Serb Republic: "If the SDS won the election, international aid would be halted, the Serb Republic would become isolated and all the stand-by arrangements with the IMF and World Bank would cease".

Perhaps the Bosnian Serbs would not be losing all that much.

Kostunica, having dismissed the Hague Tribunal as a political body driven by an anti-Serb agenda, now finds—to his surprise apparently—that the Western powers are not about to jettison their prize creation. In recent days, Kostunica’s supporters have been suggesting that Slobodan Milosevic would be put on trial in Belgrade, not at The Hague. Not for "war crimes" to be sure, but for "corruption" and "vote rigging". They are putting out chilling tales of Milosevic embezzling funds, rigging elections and transferring millions of dollars into foreign bank accounts. "There is a lot of evidence which should lead to Milosevic’s arrest", says Mayor of Cacak, Velimir Ilic. Quite how a Mayor of Cacak can possibly know that "there is a lot of evidence"—and this a mere two weeks after the overthrow of Milosevic—is a bit of a mystery. Mladjan Dinkic of the economic think-tank G17 today heads the National Bank He claims the level of embezzlement and corruption during the Milosevic era was "huge". It need hardly be pointed out that lurid tales of "corruption" and "embezzlement" in the previous era are a very useful way of distracting the public’s attention from the economic failures of the current era.

The US media and policy elites remain unimpressed by these loud condemnations of Milosevic. They could not care less about Milosevic’s alleged "corruption" or "vote rigging". They want him punished for "nationalism". Kostunica, having sold himself as a Serb "nationalist" who can, nonetheless, work harmoniously with the Western powers, now has to choose between "nationalism" or good international relations. Since Kostunica had promised in his election campaign that he can deliver economic aid from the West, he now has little choice but to follow the path of accommodation. He is busily disowning the Serb "nationalism" he once professed, while cheerfully accepting "guilt" for war crimes—something he had said he would never do. In the "60 Minutes" interview on CBS he declared: "But those are the crimes and the people who were killed are victims. I must say also there are crimes on the other side and the Serbs have been killed. I am ready to accept the guilt for all those people who have been killed. I am trying to take responsibility for what happened on my part. But what Milosevic has done as a Serb I don’t take responsibility for many of these crimes". Kostunica’s reluctance to dispute these accusations, to mount even a half-hearted defense on behalf of his countrymen was staggering in its abjectness. The CBS interviewer asked him: "Is there any doubt in your mind that Milosevic is guilty of crimes against humanity?" Kostunica’s response: "Yes, well he is among those responsible". In which case, the interviewer asked, "why has your government not arrested him?" Kostunica responded with his by-now familiar mantra: "Ah, there are too many things to be done at this moment, too many priorities".

One of these priorities is to get hold of some cash. But the powers that be will not be whipping out their checkbooks any time soon. Yugoslavia has been seeking $500million from international donors to help finance imports of food, medicines, medical equipment, and fuel. The Government wanted the money right away. "Much better we have $100million right now than $500million in a year’s time" says acting Yugoslav Prime Minister Miroljub Labus, "We took big risks making these promises in the election campaign. Now we are vulnerable. If the West wants to build stability in the region it must build stability here". But, instead of the expected $500 million, Yugoslavia has been offered something on the order of $173 million. The European Union has also declared that it plans to support the revival of Serbian economy with a total of 2.3 billion euros (around $1.8 billion) by the end of 2006. The sum sounds large. In reality it is a pittance. Tiny Montenegro has received a lot more, just for pushing for independence from Serbia. The United Nations special envoy for the Balkans, Carl Bildt, informed Belgrade the other day not to expect large amounts of financial aid: "You are not interested in making a Third World economy dependent on handouts".

The attitude of the IMF is much the same. IMF External Relations Department head Thomas Dawson has already made clear that before Yugoslavia is even considered for membership of the IMF it will have to clear up the matter of the debt: "There needs to be first a clear agreement on how to clear the arrears of about $128 million to the Fund". Yugoslavia is also in default on its $14 billion of external debt. Then there is $1.7 billion owed to the World Bank. If Yugoslavia wants any more money, it will have to start paying its creditors off. It will also have to swallow the standard IMF bitter medicine: Pay cuts, an end to subsidies, "flexible" labor markets, the closure of "uncompetitive" industries. Thus will Yugoslavia become impoverished, yet "competitive". And some day, perhaps, the standard of living will return to its current level. Earlier this year the IMF’s Stanley Fischer was in Bulgaria speaking enthusiastically, as usual, about the transition to a market economy. If the Balkan countries continued "down the path of reform . . . [then] . . . these efforts will ultimately be rewarded". Bulgaria had to continue with its structural reform program if it was "to achieve its ambition of joining the EU in the next few years and to begin to catch up on West European living standards". But output per head in Bulgaria, as a recent article in the Guardian pointed out, is still down at around a third of its 1989 level.

Even before the arrival of the boys from the IMF, Yugoslavia’s new rulers have adopted an IMF-style program. Price controls have ended. The results were predictable: The price of bread has doubled, and the price of cooking oil has tripled. The Government was quick to find the culprit for this debacle. It was all the fault of Milosevic and his supporters. According to Miroljub Labus, "their strategy now is to do anything they can to turn the economy into chaos". Meanwhile, the "international community" is preparing another large dose of bitter medicine for Kostunica’s Government to swallow. Earlier this week a commission set up by Swedish Prime Minister Goran Persson handed UN Secretary General, Kofi Annan a report recommending so-called "conditional independence" for Kosovo. "Conditional independence" is just a polite way of saying "independence". Doubtless, Kostunica will protest that this would violate UN Security Council Resolution 1244. And doubtless he will be reminded, as he has already been on many occasions over the last three weeks, that he is only nominally in charge in Yugoslavia. The country’s real rulers reside elsewhere.

***

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