Poverty and unemployment

More than half of the Yugoslav population live in utter poverty, unemployment amounts to 50 percent. The average salary in Serbia is about € 43.60, in Montenegro it is at least twice as high. The inflation rate in 1999 amounted to 42.2 percent, but now experts expect a three-figure rate. Compared to 1998 the gross domestic product declined by 40 percent. The total economic damage of the Kosovo War amounts to € 28.34 billion. With a share of 31.4 percent in the GDP the industry is the most important economic sector.

The most important branches are the food industry, the non-ferrous metal industry, the textile industry, the chemical industry, the rubber processing industry, the electronic industry, the engineering industry and the construction industry. Imports in 1999 mainly consisted of crude oil, natural gas and derivatives, chemical products, electronic appliances, machines, vehicles and wood. The ten most important export markets of Yugoslavia are Bosnia-Herzegovina, Macedonia, Germany, Italy, Switzerland, Russia, Greece, Slovenia, France and Austria. Austria’s exports amount to 2.1 percent, and imports to 3.4 percent.

On the point of emerging

Different models shall now save Yugoslavia’s economy from a total collapse. A programme that also the new president Vojislav Kostunica supports has been generated in the think-tank G17 of the economist Mladjan Dinkic. In a first step a currency and tax reform is planned with a new currency to be introduced in 2001. This shall double or triple the monthly salaries. A leaner system shall reduce the 250 different taxes to only six.

The EU, too, is going to support the new government in Belgrade, i.e. with funds from the EU aid programme CARDS designed to further the development in the Balkans. Since Yugoslavia’s foreign debt amounts to about 14 billion dollars, the country hopes to receive a remission of debt by some of the creditors. A firm financial policy and a liberalisation of trade and the development of the private sector will both be necessary in Yugoslavia to help the ailing economy recover.

Model pupil Montenegro?

A special case is Montenegro which is already in transition. Foreign investments are already permitted, but the funds from abroad are still scarce. Privatisation, however, is in full swing; a quarter of the small and medium-size companies are already privatised. Foreign advisors shall support the sale of shares of Montenegrin large enterprises.

Montenegro has a high potential in hydro-power generation. According to its surface it is among those countries of the earth with the biggest water supplies! The potential of Montenegrin rivers is estimated to amount to 8.2 billion kWh per year. Only 30 percent of the capacities are presently being used.

Up to now five investment projects have been launched to develop hydro-power generation with an annual capacity of 2.1 billion kWh. Four of them will develop hydro-power stations on the river Moraca, another a hydro-power station on the river Komarnica. Montenegro also has many drinking water springs, but due to many unused resources many coastal strips still suffer from a lack of drinking water. Drinking water filling plants are already being planned.

It has to be noted that the success of the Yugoslav economy will depend on who controls Serbia’s budget, since Serbia has the biggest share in the total state finances. The elections in December will show who will set the course of solid economic reforms in Yugoslavia.

Yugoslavia – facts and figures

Form of government: Federal Republic (Republic of Serbia with the autonomous provinces of Vojvodina and Kosovo, Republic of Montenegro). The province Kosovo is temporarily under the protection of the United Nations. Surface: 102,173 km2. Population: 10,500,000 (63% Serbs, 16% Albanians, 5% Montenegrins, 3% Hungarians). Major cities: Belgrade (capital): 2 million inhabitants, Novi Sad, Nis, Pristina, Kragujevac and Podgorica.
(Source: aqua press Int. 06/2000)
Manuela Prusa