Partial cost of the War to Yugoslavia: 29.6 bil.

Elias.Karagiannis at Elias.Karagiannis at
Wed Jun 23 12:05:51 PDT 1999

BELGRADE, June 23 (AFP) - Total damage caused by the 11-week-long NATO bombing campaign on Yugoslavia was estimated at 29.6 billion dollars by a group of independent Serb economists Wednesday.

During the NATO campaign, the Yugoslav authorities estimated the damage to the country's infrastructure at 100 billion dollars, but these figure were not backed up by details of the destruction.

Destroyed infrastructure and the loss of capital was estimated at around 4.1 billion dollars, while human capital loss accounted for an additional 2.3 billion dollars, Mladjen Dinkic of the G17 group told reporters.

The remaining 23.2 billion dollars comprise the opportunity costs 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.

Dinkic said the G17 estimates failed to include, due to incomplete or unreliable data, a part of human capital loss which concerned the Albanian population in Kosovo and damage to households in the province, as well as destroyed natural wealth, ecological damage and cultural loss.

Also not included in the G17 estimations were the destruction of military barracks, equipment and weapons, he said.

Western nations have said they will withhold aid to reconstruct Yugoslavia following the Kosovo conflict as long as President Slobodan Milosevic is in power, but have not ruled out giving humanitarian aid.

"Without financial aid from abroad, Yugoslavia will need 15 years to reach the level of industrial production in 1998, and 25 more years to get to the level of 1989," when Milosevic came to power, Dinkic said.

The most affected was infrastructure, including the electrical power system, with that damage estimated at 805 million dollars, while oil industry destruction was estimated at 600 million dollars.

Compared to 1998, the GDP fell 40.7 percent, Dinkic said.

"In 1998, annual income was of 1,643 dollars per citizen, while the estimation for 1999 is now at 975 dollars," Dinkic said.

Exports were expected to fall by 55 percent, and imports by 58 percent, compared to 1998, Dinkic said, while industrial production would be down by 44.4 percent.

The unemployment rate rose from 25.2 percent in 1998 to 32.6 in 1999, Dinkic said, adding that around 72,600 workers lost their jobs due to destroyed factories.

Another 200,000 to 250,000 were out of work since their companies worked with the destroyed ones.

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

Since Milosevic's regime came into power ten years ago, the unemployment rate has doubled from 16 to 33 percent, he said.

Yugoslavia needs financial assistance for at least five years, Dinkic said, adding that the country "urgently needs 1.2 billion dollars for humanitarian aid, renewal of the electrical network and heating stations, reconstruction of bridges and social welfare programmes."

Another 29 billion dollars are necessary in the next five years for modernisation of infrastructure, macroeconomic stabilisation and other economic reforms, he said.

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