By SLAVA GOVEDARICA
As 1999 progressed, optimism coupled with official "firm assurances" slowly melted away. These days workers are preparing to bid farewell to 1999 with a general strike. Of course, the minimum wage has not changed since then. If the key players find a compromise among 70 marks offered by the government, 85 marks advocated by the Chamber of Commerce and 100 marks demanded by the RS trade union, it is possible that the strike will be avoided but the generally difficult impression which this year leaves behind is nevertheless inescapable.
Rhetoric: The projected growth of the national economy in 1999 of 17 percent in the end was reduced to less than seven percent. There was a fall in the average income of 6.5 percent, an increase in prices of 13 percent, while the cost of living rose 21 percent in comparison with the 1998 average. During 1999 seven thousand more people joined the ranks of the army of the unemployed, which already numbered 142,000 people. In addition to the 5,000 people who had been placed "on hold" previously [these workers officially keep their jobs and some benefits, but do not work and are not paid], 20,000 more were added to that category in 1999. The bombing of FR Yugoslavia helped the RS economy in 1999 to become the worst that it could be. The loss of the Yugoslav market which constituted 80 percent of the total trade of the RS and where 50 percent of the national product of RS was previously sold, resulted in plant closures in many of the local companies; many of these have remained closed.
The promises of finding alternative markets were realized only partially; the problem of imports was solved quickly and easily while breaking into new markets with local products has remained chiefly in the domain of rhetoric. Because of the lack of measures protecting the few remaining domestic producers and preventing uncontrolled imports, RS brought 1999 to a close with a foreign trade deficit of 940 million convertible marks.
Expulsion of the dinar: Anything that NATO and other "objective circumstances" might have missed in 1999 was taken care of by the governments of RS and FRY which broke off financial relations at the beginning of 1998. During 1999 Yugoslavia definitely became a foreign country for RS with the same trade policies as any other foreign country, regular customs tariffs and payment in hard currency.
This was the year, as well, when the dinar was expelled from RS and the common BH currency, the convertible mark (KM), came into use. The government long avoided introducing measures specifically withdrawing the dinar from use in order to avoid public criticism. Because of this it introduced a series of ad hoc measures, such as the decree regarding mandatory payment of public fees [taxes, fines, customs duties etc.] exclusively in KM or the decision by which other participants in transactions are given complete freedom in selection of currency.
The final result was the complete withdrawl of this currency. Probably to the relief of a large part of the citizens who until recently were receiving their salaries in dinars converted to marks according to an exchange rate far smaller than the exchange rate in effect on the payment date.
The vacillation in exchange rate was favorable only to black market currency dealers and similar "business people". Although the ministry of trade claims that only "a small quantity of merchandise" passed through the currents of the gray economy, according to unofficial estimates more than 70 percent of the trade in 1999 was illegal. The authorities attempted to convince the public of their determination to end fiscal crime with a campaign called "Stop Smuggling". However the scandals that were revealed at the same time made this campaign appear, at best, not very serious.
Privatization: In addition to the negative statistical indicators, 1999 will be remembered for the long awaited beginning of the process of privatization. After the proposed legal framework for property transformations got the green light, the first problems appeared. Business people obviously were a bit lost in the new set of conditions and the process of determination of the previous ownership of organizations, which should have been concluded by March 1999, was extended until the end of the year. At that time the starting balance sheets were due, together with programs for privatization of all companies; nevertheless, it is clear that a number of companies will be unable to meet this deadline. According to the Directorate for Privatization, court proceedings will be initiated against them. Despite the obvious delay, officials of the Directorate claim that everything is proceeding as planned and that there is no reason to doubt that voucher privatization, too, will be complete by the middle of 2000.
In the middle of the year a pilot project for privatization of companies whose net worth is less than 300 thousand marks was also started.
Of 23 companies offered up to now, nine have already been sold, mostly for the initial asking price. The greatest attention went to the public tender and sale of the Prijedor company "Javor"; the company was offered for an initial price of 210 thousand KM and reached the sale price of 15 million and 800 thousand KM. In the end the new owner paid 220 thousand for it because both bidders who had offered multimillion sums withdrew their offers.
Since the process of privatization has just begun, there have been no unavoidable social shocks just yet; however, that is certainly not an excuse for the nonexistence of a program of social welfare which should have been completed a long time ago. The working group charged with the development of the program prepared, they claim, a very good program, but it has no financial support.
Deafness: Those employed in the majority of industrial giants already have begun in 1999 to encounter the problems which will probably take on true dimensions with privatization. As is apparent from the "Incel" case, where workers unsuccessfully went on strike, demanding the payment of their wage arrears, the authorities were not able to find a solution for problems of this sort nor did they display any great inclination to look for one. During the entire year, not a single article of law relating to labor issues was changed even though the trade union worked persistently on this. The same effect was achieved by their attempt to reach a consensus with the government regarding the minimum wage. Prime minister Dodik, according to the trade union, remained deaf to over 200 invitations to negotiate.
The past year has also been marked by a lack of investment in production. If the government intervened anywhere, its goal was to prevent social unrest, not to foster long-term investment. Foreign investors were even less interested in investing in local companies until they become privately owned.
To judge from the significantly reduced amount of credit and donations in comparison with 1998, foreigners are less and less interested in channeling any sort of funds into RS. There is no doubt that there will be even less of them in 2000. If we know that RS survived previous years primarily thanks to those funds, its citizens are entering a period that will not be a happy one. To make things even worse, RS is entering the new millennium without a strategy for financial development, even a short-term one. All this makes the claims about a self-sustaining economy, to which the ministers are clinging stubbornly, even more untenable.