From Sat Oct 21 13:26:38 2000
Date: Fri, 20 Oct 2000 22:55:07 -0500 (CDT)
From: IGC News Desk <>
Subject: ECONOMY-YUGOSLAVIA: The Uphill Task Of Rebuilding The Economy
Article: 107302
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The Uphill Task Of Rebuilding The Economy

By Vesna Peric Zimonjic, InterPress Service, 18 October 2000

BELGRADE, Oct 18 (IPS)—The deep turmoil in Serbia, that culminated in street protests and Slobodan Milosevic's being forced to accept defeat has another side to it.

The aftermath of the change is marked with battles regarding the future of the several remaining strategic firms and enterprises.

On the one side there are the so called “crisis committees” of the employees, who demand that things be corrected. On the other, there are Milosevic's cronies who are trying desperately to hold onto economic power obtained during his rule.

In the years of strict economic sanctions, since 1992, key aides of Milosevic simply took over many of the successful firms. Strategic imports and smuggling operations brought enormous wealth to the circle of Milosevic's family and most loyal friends.

“The Serbian economy is reduced to Mafia mess, it's a disaster area that will take years of hard work to put right,” Carl Bildt, the United Nations (UNS) special envoy for the Balkans said in Belgrade a few days ago.

“This is probably the poorest economy in Europe and it is certainly the most corrupt economy in Europe,” Bildt said at a news conference.

“It has developed into a Mafia economy…nothing is going to be sorted out very fast.”

Bildt's visit coincided with the wave of actions by crisis committees in number of firms. The employees named new managers, usually the ones removed by Milosevic's regime eight years ago.

Milosevic's loyalists were removed, but at the several most important firms, they fought back to remain in their positions. Milosevic's loyalists dubbed the crisis committees as “illegal”. Some demanded that the shareholders' assemblies be held and had to give away their posts after those meetings.

“No matter how Milosevic's apparatchiks call this, it is an effort of people to fight for social justice,” former Supreme Court judge, Zoran Ivosevic, told IPS.

“People saw the grand theft in the past years. They now want clear accounts and the responsible people brought to justice.”

Before Milosevic rose to power in 1989, Yugoslavia looked certain to become the regional economic power. It was considered well ahead of other East European countries, as it was not under ultimate Soviet control.

But wars, international sanctions and misuse by Milosevic and his circle brought unprecedented wealth to the five percent close to the regime and unimaginable poverty to the rest of 7,5 million people.

The biggest battles between crisis committees and Milosevic's loyalists were fought in the largest Serbian bank, “Beogradska Banka AD”, “Progres” and “Genex” export-import companies and ICN Galenika pharmaceuticals.

“Beogradska Banka AD” managers and its head, Borka Vucic (72), one of the most loyal aides of Milosevic, are blamed for stashing the illegally obtained family fortune of Milosevic abroad. The fortune is estimated at several hundred million US dollars, taken to Cyprus, Russia, South Africa and China.

In the future, Vucic will have to say where the gold and hard currency reserves of the country were taken since 1992 and what happened with the private foreign currency savings worth 4,5 billion US dollars that were simply “frozen” at the time.

“Progres”, the firm that deals with grains, maize, gas and oil exports and imports, is run by Mirko Marjanovic, prime minister of Serbia, a close friend of Milosevic and high official of his Socialist Party.

The crisis committee wants clear accounts on whose behalf all the monopoly business deals were done since 1992. The current account of the firm seems to have now only the minimum operational sum, members of the committee say.

“Genex”, once the most powerful trading firm of former Yugoslavia that included charter company “Aviogenex”, saw the return of Miki Savicevic, its manager until 1989.

According to Savicevic and documentation found in “Genex”, it seems that even several “Boeing 737” airplanes were sold by former management as private property, to obscure firms abroad.

ICN Galenika pharmaceuticals saw the return of its owner, Milan Panic, Serb-born American businessman. In February 1998, the state simply took away the company from Panic, although he owned 75 percent of it.

ICN Galenika was exempt from strict international sanctions, as it produced goods described as “humanitarian needs”. It made dozens of millions of dollars of profit and kept regular supplies of drugs in the country.

When ICN Galenika was taken by the state in 1998, it was shut down and the imports of drugs started from China and India. The imports went through a few monopoly companies established by a group of people close to Milosevic and his family.

“We have to make an inventory of what we found in ICN Galenika and to rehabilitate the production,” Milan Panic said at a press conference in Belgrade.

“It will not be easy, but it's a new start from now on,” he added.

The crisis committees demand that records of business in the past years become public. Real balances of those firms can not be established soon due to the clandestine operations and false records of business.

“The bunches of skeletons are literally falling from economic closets,” Miroljub Labus, member of the prominent Group 17 of economic experts told IPS.

“A decade of war, mismanagement and sanctions have crippled us. Inflation is running at some 50 percent a month, the unemployment rate is also estimated at around 50 percent and foreign reserves stand at a meagre 385 million US dollars. It's the hardest situation ever, but we’ll have to engage into hard work”.

According to judge Zoran Ivosevic, in the future there will be another big task. “The individual responsibility for this collapse will have to be established, based of facts and rule of law. This is another big step that this country will have to take.”