By Michael Karadjis

     One view expressed about the war in the Balkans is that NATO
is attacking Serbia because the Milosevic regime somehow stems
the advance of Western economic penetration of the region, or, in
more extreme versions, that it is "socialist".
     Yet Serbia is anything but socialist. Slobodan Milosevic
himself launched the economic program that overthrew the vestiges
of socialist planning in Yugoslavia in 1988, through the
"Commission of the Presidency of the Republic of Serbia: The
Commission for Questions of Economic Reform".
     In these "reforms" in 1988-89, the Yugoslav economy was
opened up to 100% foreign ownership (Milosevic called on
Yugoslavs to abandon their "primitive fear of exploitation by
foreign capital"). Private property was given equality with
public property; enterprises were allowed to collapse and create
mass unemployment; and "workers' self-management" was essentially
abolished, workers being encouraged to become shareholders.
     Milosevic exhorted these enterprises to "function on
economic principles, strive to create profits and constantly
struggle for their share and place in the market".
     As Milosevic used Serb nationalist crowds to overthrow the
Communist governments of Vojvodina, Montenegro and Kosova, he
blamed these bureaucrats for "obstructing" economic reform, and
told workers striking against the negative effects of the changes
to trust him to carry the reforms through more successfully.
     According to a New York Times article in 1988, top U.S.
policy makers were torn between their concerns that Serb
nationalism could tear Yugoslavia apart and "their appreciation
of Mr. Milosevic as a catalyst for sorely needed political and
economic changes".

Other Republics

     A widespread view on the left is that Croatia and Slovenia
were more pro-capitalist than Serbia and the federal government.
In fact, it was the Western-backed federal government of Prime
Minister Ante Markovic that pushed the most radical economic
"reforms", while all republics slowed it down as they squabbled
over the spoils.
     Slovenia suspended the federal scheme in 1990 and did not
pass its own legislation until November 1992 - the last country
in eastern Europe to do so. Even by 1995, only 200 of the 1500
enterprises scheduled for privatisation had passed into private
hands.
     Croatia also suspended the federal scheme and introduced its
own in April 1991, but its main results were with small
enterprises. According to the World Bank in 1996, "The largest
enterprises, accounting for some two thirds of social assets and
employment, remain in state hands, and their privatisation has
virtually stalled".
     However, according to the British Foreign Affairs Committee
in 1991, "There have been rather more economic innovations in
Serbia ... there has been some sort of effort to privatise
industries in Serbia, the like of which there has not been in
Croatia."

Privatisation

     Serbia introduced its own privatisation legislation in
August 1991, in the midst of its war with Croatia. The number of
private firms in Serbia doubled in 1991, to 42,697, about 50% of
all firms.
     Foreign capital played an important role, 370 private
businesses being fully owned by foreigners in 1991. A "free
economic zone" for foreign business was established in March
1992.
     Next to privatisation, a certain amount of "nationalisation"
occurred in both Serbia and Croatia. This meant that "social"
firms - those in theory collectively owned by the workers - were
removed to direct state control, enabling them to be privatised
subsequently. Serbia's privatisation legislation was based on the
previous federal legislation, allowing workers and managers to
buy out firms. By first removing them from workers' control, the
"Socialist Party" managers were able to take as much as they
wanted.
     According to the Alternative Information Mreza, by 1994
"half of Serbian industry has been quietly privatised at a rapid
rate ... already in 72.6% of state enterprises, 660,000 employees
have bought shares ... Behind these shares, however, hide several
hundred managers, from the Socialist Party, who make business
dealings of a frankly capitalist character and virtually thieving
manner, taking the lion's share."
     Because much of this share buying was done in house, by
workers and managers, in the murky world of Serbia's legal
system, many of these enterprises can still be called "state"
enterprises. The same process has been at work in Croatia's
"state" industries. In both countries, the shares of the workers
are often useless, not only because of the relative weight of
management shares, but because these "managers" often rob the
assets they manage to build other private enterprises they own
outright.

Snouts In Trough

     Most state ministers are also big business people.
Milosevic's son Marko owns the duty free shops at Serbia's
borders and airports. Prime Minister Mirko Marjanovic has in the
area of $50 million, largely through questionable deals by the
trading firm Progres, which he "manages".
     Former vice-premier Slobodan Radulovic runs a retail chain,
and was accused by workers of ripping off $372 million. Zoran
Todorovic, former leader of the "Yugoslav Left", set up by
Milosevic's wife, directed state petrol firms while building the
giant privately owned T&M Trade company, becoming one of the
richest men in Serbia. He was assassinated just after the latest
privatisation plan was announced in October 1997 and a scramble
for spoils began.
     The "Yugoslav Left" - part of Milosevic's four-party ruling
coalition, is ironically named: it is the major party of Serbian
big business.
     The economic sanctions on Serbia during the Bosnian war
helped build this elite while ordinary Serbs suffered. Milosevic
and his ministers stole $3.8 billion in foreign exchange owned by
citizens, under the cover of placing it in more secure places
abroad. It was deposited in their private accounts in Cyprus and
Moscow.

Foreign Interests

     Milosevic has continued selling strategic parts of the
Serbian economy. In 1997, he sold half of Serbian Telecom to
Greek and Italian investors.
     Italian capital also has an interest in the construction of
an oil pipeline from the Caspian reserves, to run from Russia
through Yugoslavia to the Adriatic and Italy.
     Greek capital has had played a major role in Serbia and
Kosova, as in the rest of the southern Balkans. A host of giant
Greek companies - Telecom, the National Bank, Kokkalis, Delta,
Viochalko and others - have become a major force in the region.
The Greek company Mytilinaos AG bought out the famous Trepca zinc
mines in Kosova, from which the Milosevic regime had sacked
13,000 Albanian workers. Kosovan leaders have called on foreign
companies not to take part in Milosevic's fire sale of Kosova's
assets.
     Following the Bosnian war, Milosevic employed the British
consultancy firm Nat-West Markets to advise on privatisation. On
the board of Nat-West is former foreign secretary Douglas Hurd,
who was chiefly responsible for Britain's pro-Serbian position on
the Bosnian war, and his former intelligence committee chair,
Pauline Neville-Jones, also a noted Milosevic apologist.
     The large Beocin Cement Factory was sold to French and
British investors in 1998, despite the new "investment ban"
following the outbreak of Kosova violence, while the giant
Pancevo Petrochemical Industry was recently evaluated at a
billion German marks and was ready to offer shares on the London
capital market.
     Imperialism is not attacking Serbia for "socialism", but
despite these considerable opportunities for investment. As
Serbian economist Mladjan Kovacevic notes, the main reason that
foreign investment was not higher was "the risk factor", i.e.,
the conflict in Kosova.
     This instability is due to the Serbian bourgeoisie's
inability to complete its nationalist agenda by subduing or
partitioning Kosova. Its chosen methods - maintenance of
apartheid, denial of all rights to Albanians and slaughter of the
first signs of opposition - gave birth to what the West saw as a
new instability, the Kosova Liberation Army fighting for
independence.
     Sometimes, imperialism can use the excuse of outrage over
the actions of extreme right-wing regimes to justify its
interventions, as with the U.S. invasion of Haiti in 1993 to
throw out the military butchers whose policies were creating a
massive refugee outflow to the U.S. The attack on Serbia is in
the same tradition - Serbia was not "too socialist", but too
racist, and these extreme methods were leading to instability.
Imperialism's aims, however, are equally opposed to the
self-determination of Kosova and of other peoples in the region.

(Source: Green Left Weekly #358 - April 28, 1999
<http://www.peg.apc.org/~greenleft/>)