BYLINE: By Jeremy Scahill; Jeremy Scahill is the Belgrade correspondent for Pacifica Radio's Democracy Now! He reported from Yugoslavia throughout the NATO bombing and was one of the few foreign journalists in Belgrade during the overthrow of Milosevic.
DATELINE: BELGRADE
...[I]t seems the economic aspirations of the United States and its European allies for Yugoslavia are secure. The very figures who propelled Kostunica from relative political obscurity to president -- mainly the politicians he criticized during the NATO bombing -- are working diligently to put Yugoslavia on the globalization fast track. "The new government will have a program of economic reform and we are sure that this will be acceptable for the International Monetary Fund and World Bank," says Mladjan Dinkic, head of the pro-West economists group G-17, which has authored the economic program adopted by the opposition. "We will start to make an economic environment favorable for private and other investments."
In addition to increased management by the IMF and World Bank, the economic program of the new government, endorsed by Kostunica, calls for rapid privatization and foreign investment. As one high-level opposition official says, "The process of destroying the old political establishment will be finished in one month."
Though the country remains in a state of euphoria over the ousting of Milosevic, there are those who fear the fate of Yugoslavia's neighbors who have recently found "Western democracy." In places like Bulgaria and Romania, workers face high inflation and rising prices, while social welfare programs have been gutted by IMF austerity measures. The most vulnerable in these countries face increasingly bleak realities. "I am very much conscious and aware that this is going to happen," says political scientist Novak Gajic. "The rhetoric here right now is about integrating with Western Europe, but the reality is that, with the planned economic reforms, Yugoslavia will look more like the newest members of the Third World -- the countries of Central and Eastern Europe -- than France or Britain. As a region, we in the Balkans are quickly becoming part of the Third World."
Serbia's honeymoon with "something, anything but Milosevic," as one young protester put it, is beginning. But the "economic shock therapy" the new government speaks of may not be well-received by the broader population. "All these people celebrating are living in a fantasy land," says Nebojsa Djordjevic, 30, who voted for Milosevic and comes from five generations of Communists. "What will they say when the foreign companies own this country? I'm not for Milosevic, but I am against globalization."...
GRAPHIC: Picture, Vojislav Kostunica and supporters in Belgrade on the night of October 5. BRACA NADEZDIC/NEWSMAKERS *****
***** Yugoslavia's new rulers plan economic potpourri
Oct 10, 2000 19:05 Hrs (IST)
Belgrade: Yugoslavia's new rulers plan to adopt a mix-and-match economic policy drawn from successful European models to breathe life back into a nation devastated by a decade of war, mismanagement and sanctions.
Analysts said the ambitious program might just transform Serbia into a modern market economy so long as experts are allowed to take over from self-seeking politicians.
"We want to implement Polish shock therapy, Scandinavian social security systems and Slovenia's model of gradual privatizations," said economist Mladjan Dinkic, who is widely tipped to become the next Yugoslav central bank governor....
Kostunica has already signed up to the economic blueprint, which was thought up by Dinkic's independent G17 think-tank.
The program starts with instant monetary reform that would introduce a new currency by 2001....
The fiscal system will also be simplified, with the number of taxes slashed to six from around 250....
Independent economist Goran Pitic said the new government would have to tackle immediately institutional reform, and introduce tight monetary control, partial price and trade liberalization, private sector development and privatization.
But Pitic liked the sound of the G-17 plan.
"It's an ideal combination of policies from eastern Europe's two most advanced transition economies and a Swedish-style welfare state. But it will take time to reach the levels of those countries," Pitic said....
Independent estimates suggest it will cost some $4.0 billion to right the damage caused by NATO's 1999 bombing campaign, money the country does not have.
Yugoslavia's 2001 budget shortfall is forecast to hit $1.0 billion, which might be partially covered by an expected $385 million in direct foreign investment and $150 million from short-term overseas borrowing.
But with an estimated $14 billion of total external debt and foreign reserves put at a paltry $350 million, Dinkic has warned that Yugoslavia cannot honor all its liabilities.
Belgrade reached an accord in principle on debt rescheduling with the Paris Club of creditor nations last year, and the new administration is hoping that the London Club of commercial creditors might write off up to 80 percent of debt owed to it.
"We expect some debt forgiveness from commercial creditors. The International Monetary Fund and the World Bank would not be such a problem," Dinkic said....
<http://a228.g.akamai.net/7/228/289/4748e0fc085a38/news.indiainfo.com/2000/10/10/10yugo.html> *****
Here's a link to the Dinkic-led G17's "Program of Radical Economic Reforms" at <http://www.g17.org.yu/english/programm/program.htm>.
For now, I simply note that "Polish shock therapy, Scandinavian social security systems, and Slovenia's model of gradual privatizations" can't go together.
Yoshie