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As Serbian workers threaten nationwide General Strike -
The Issue is, Who Gets the Shares?

By Milos Zorich - Special to Emperor's Clothes
Belgrade, 2-12-2001
Translated by Tika Jankovich and Jared Israel

 

  • Will the ranks of 800,000 already jobless Serbian workers be swelled by thousands laid off following planned changes in the Privatization Law?
    • Belgrade is being watched carefully by international business. They want auctions where they can buy companies at bargain prices and they want legal guarantees protecting investments. Meanwhile, the Serbian Parliament will decide whether to halt a wave of privatizations by workers. And the workers are threatening a General Strike

    A Proclamation to the People

    "In short, the state is selling. Foreigners are buying. Workers and citizens are loosing. We workers are not for sale. Let's stop the plunder!"

    Thus writes the Association of Serbian Unions. Urging the Serbian people to protest changes in the Privatization Law announced by the Serbian Government, the unions have called a General Strike starting February 14 at 8:00 AM.

    The Core of the Conflict

    The current Privatization Law was passed during the Miloshevich administration, a coalition of the Yugoslav Left, the Socialist Party and the Radical Party. If a company was privatized, the first priority in obtaining shares would go to the workers who invested their labor for many years.

    Anticipating the present regime's intention to sell companies which are supposedly in bad financial shape to foreign bidders, workers and managers have speeded-up privatization under this law. They are trying to preempt the process before a government sell-out to foreign interests can take place.

    Thus a race is underway, with the workers privatizing state and public property, and the government trying to halt it.

    This reporter spoke to several people on the street about the proposed sell-off. Here are the words of Vladimir Matvejevic, an engineer and one of 800,000 men and women in Serbia who are unemployed and looking for work:

    "Before our eyes we have the examples of Bulgaria, Romania, Russia and other economies in "transition" where the largest industrial enterprises have been handed over to foreign corporations. As a consequence, thousands of workers were fired, in obedience to rules imposed by the International Monetary Fund and the World Bank.

    "One should bare in mind that for decades our Yugoslav model of social-economy differed from those in Eastern Europe. They had central state economic control. We built a system where businesses under workers' self-management existed side by side with others that were privately owned. In the self-managed sector, the companies were run by elected representatives. Workers shared the profits."

    Workers Ask: Why Give Up Our Shares?

    So, nobody is against privatization per se. The conflict is over how to do it. The workers demand to be the majority shareholders. The present regime insists that the major shareholders be investors, whose money, they say, can revive production, introduce more economical operating structures based on up-to-date technology and maximize savings in production.

    While this battle escalates, Belgrade is being watched closely by foreign investors and businessmen. Last week a delegation from the European Union visited Belgrade. Also, there was a two-day meeting of the Business Council of the Stability Pact for Southeastern Europe with representatives from sixty companies in Europe, Asia and the U.S.

    This "Investors Mission" met with 150 leading Yugoslav industrial managers. Mr. Bodo Hombah, special coordinator for the Stability Pact, and Manfred Nusbaumer, Vice-President of the Business Council, held a press conference where they demanded that: "the Belgrade Government provide suitable conditions for business, along with a law that it will guarantee the safety of foreign investments."

    "Please, no more help," says Mrs. Brezovacki

    "They are offering to help us from abroad? Please!" says Mrs. Goritsa Brezovachki, who works at a garment factory . "First they impose sanctions. Then they instigate civil war, stop production, bomb our factories. Now finally after devastating our country and putting us in a desperate position, they swarm in with their bags of gold to buy our businesses cheap and make us a colony. No more help!" (1)

    The above opinion is not shared by Mrs. Mirosinka Dinkich, a member of the G-17 group of economists. (2) Says Mrs. Dinkich:

    "It is better to be a well paid employee in a foreign owned company, than a poor shareholder in a company that makes no profits."

    But workers counter this, asking, "Who says we will have any job at all if these foreign interests get a hold of our companies?" And Mrs. Dinkic admits that in the first year of the regime's proposed economic reforms approximately 300,000 more workers would be left jobless. Out of these, some 50,000 could find jobs in reconstructed companies and another 50,000 in new companies. What about the remaining 200,000 desperate, hungry people? She recommends spending around $400 million. But this is only to help them during the first year. What about later on? And in any case, where would this money come from? The government has no answer.

    "Stop stealing the Electrical Power Assets"

    Today (Monday, February 12) the Government will submit its proposal for changing the old Law on Privatization to Parliament. Meanwhile, workers are angry and getting angrier.

    Mr. Radomir Smiljanic, President of the Council of the Serbian Association of Unions, says that:

    "This Government 'writes the lunch bill for the waiter,' avoiding consultations with the workers. As proposed by the Government, workers are entitled to 10% of the free shares. Other private parties may obtain 15%. But 60% of the shares are earmarked for bidders in public auctions to be run by the state. The money thus obtained is to be used by the state to meet its obligations, including providing pensions."

    Many workers feel this amounts to blackmail. If you want your pensions, the argument goes, you have to give up your right to shares in companies where you labored with the understanding that you were the shareholders.

    Mr. Aleksandar Vlahovic, the Minister of Privatization, argues that, "it is essential that 'strategic partners', those with a fresh money supply, enter the company."

    To secure this plan, the new law would immediately halt the current wave of worker-oriented privatizations.

    While the conflict between the regime and the workers intensifies, workers in major Serbian companies are sending out urgent messages about the "organized plunder" of national economic assets. "Stop the stealing of Serbian Electrical Power Assets", alerts the paper of the Serbian Electrical Power Industry. The employees say there's been a rapid erosion of asset-value by management. Last Fall management declared the assets to be worth more than $20 billion. Now the figure is down to $4.2 billion.

    Social Upheaval?

    Last year, around 870 facilities out of a total of 7,000 were privatized under the old Privatization Law. But this year, in the past three months alone, 630 state and public companies have gotten new, private owners.

    The Deputy Minister of the Ministry for Economical International Relations, Mr. Boran Karadjola, says "Whether we like it or not, globalization is an unstoppable process, which has to enter Yugoslavia, if it wants to be a part of the world." He has recently signed a document bringing Yugoslavia into the WTO as an observer.

    Similarly, the head of the new Serbian Government, Mr. Zoran Djindjic, told a meeting with the Serbian managers of major companies three days ago that, "We want strong foreign capitalists to come in, not shaky ones."

    Clearly the government won't willingly back down. It intends to open the door to foreign capital although it is fully aware that foreign bidders will collude to keep the selling price low. (3)

    The ongoing conflict between the government and workers is entering a period of great uncertainty. Social upheavals and the further destabilization of the otherwise poor Serbian economy are quite possible. Interviews I conducted with a dozen employees of the largest companies point in this direction. For example, a woman who works at Yugoslav Airlines, told Emperor's Clothes:

    "I have been working here 25 years and have acquired certain rights to the property of my company. Why should I agree now to be hired by a new owner who would buy our airplanes, buildings and technical equipment dirt cheap? If it happened, I would feel deceived and ripped off."

    And other workers ask, after they buy our property dirt cheap, what prevents them from taking the assets and closing us down?

    Such sentiments - that the country’s economic assets are being ripped off, that the country is becoming dependent on foreign powers which, during a protracted agony of economic transformation that they would impose on Serbia, would care only for their own interests - these sentiments of rebellion are the driving force behind the planned General Strike by the worker unions.

    ***

    Further reading -

    1) Two very good background pieces on the so-called civil wars in Yugoslavia are: 'German and U.S. Involvement in the Balkans' by T.W. Carr, at http://emperors-clothes.com/articles/carr/carr.html and Diana Johnstone's classic study, 'Seeing Yugoslavia Through a Dark Glass' at http://emperors-clothes.com/articles/Johnstone/1yugo.htm

    2) 'The International Monetary Fund And The Yugoslav Elections' by Michel Chossudovsky and Jared Israel. This article has been reprinted around the world. It documents the connection between the G-17 economists, the present Serbian regime, and the nation-destroying International Monetary Fund and World Bank. It can be read at http://emperors-clothes.com/analysis/1.htm

    3) We came across a most revealing U.S. Commerce Department Document, see Grand Theft: Montenegro... at http://emperors-clothes.com/news/commerce.htm

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