WORLD

Paying the price

LOUISE BRANSON November 1 1993
WORLD

Paying the price

LOUISE BRANSON November 1 1993

Paying the price

SERBIA

Milos is lucky. The Belgrade barber has a job at a time when more than 70 per cent of his fellow Serbs are unemployed. But daily life in the Serbian capital is still a struggle for him. When he gets paid, he leaves work early to buy whatever food he can find in the stores. He knows that by the next day prices may have doubled. In fact, sometimes they rise as much as tenfold overnight. Statistics released in late September show that prices have risen by 500,000 per cent since the beginning of the year. Even heavily rigged official figures, which take no account of the rampant black market, show that the monthly inflation rate was 643 per cent in September. Based on the average rate recorded in the past nine months, Serbia’s annual inflation would be 1.7 billion per cent—truly incomprehensible to Canadians, who live with annual inflation in the three-per-cent range and less.

Since the United Nations imposed sanctions 17 months ago on Serbia and Montenegro, the remaining parts of Yugoslavia, for their involvement in the Bosnia war, record levels of hyperinflation have devastated what was once the most prosperous nation of Eastern Europe. One recent survey suggests that more than 90 per cent of Serbs are living at or below the poverty level. Those with cash to spare for purchases find many shop shelves empty. As winter sets in, there is not enough fuel available for adequate heating. Well-dressed people foraging through garbage cans have become a common sight. Behind the scenes, social, legal and other institutions have all

but broken down. In such an environment, sanctions-busting gangsters and war profiteers have become the most powerful economic forces in Serbia.

As its currency has lost its value, the government has issued ever-larger denominations of bank notes. The largest in circulation is a 50,000-dinar note, which has a value of 50 billion dinars, or about $5 last week, because the government took off six zeros for ac-

counting purposes. It eases the strain on people accustomed to carrying huge amounts of cash to pay for the few small items they manage to find on the depleted shelves of stores. Serbs have had to become adept money changers to survive in a society where their paycheques become almost worthless overnight. As soon as many

people get paid, they exchange their constantly devaluing dinars for stable German marks, the currency most in demand in Serbia. Then they change the marks back into local money in smaller amounts as needed to buy necessities. The constant demand for currency has created a new service: unemployed young men have staked out their territories on Belgrade streets where they act as black market currency dealers. Nobody goes to the uncompetitive state banks any more because black market traders offer exchange rates that are at least 10 times higher.

Unquestionably, the rapid inflation has made life hardest for those living in Belgrade and other large centres, far from the sources

Inflation ravages a once-rich country of food in the countryside. Serbia has always produced enough to feed itself, but now many farmers are hoarding their harvests because the money the government is offering for the food is worthless. Even those who are prepared to sell find themselves crippled by transportation problems because gasoline and spare parts are in short supply.

But one group profiting from the economic collapse is the new gangster class, typically men in their 20s and 30s who had been members of paramilitary groups in Croatia and Bosnia. They made fortunes there circumventing sanctions and looting towns. The gangsters can be seen in the

restaurants of Belgrade’s fanciest hotels, wearing designer clothes and spending an average Serb’s monthly salary on a piece of cake. The government of President Slobodan Milosevic has made only a halfhearted attempt to crack down on those criminals because the economy depends on their ability to smuggle in embargoed goods. One young man who calls himself Toma is a typical member of the new gangster class. He was among an estimated 2,000 criminals living it up last summer in the luxury sun-drenched resorts of Yugoslavia’s Montenegro Riviera. The beaches were otherwise deserted because most Yugoslavs could not afford to take holidays. ‘You want a case of Marlboros from Italy?” Toma asks a visitor. “A new Mercedes? Come to me and I can get you anything. UN sanctions don’t apply to me.” Toma is wearing a Giorgio

Armani suit and dark sunglasses. His gun holster is clearly visible as he peels a 100-mark ($800) note off a bulging wad to pay for his vodka. His white Maserati sports car is parked nearby. Toma alludes to a lucrative past as a war profiteer in Croatia before his “retirement.” Except for a small circle of intellectuals in Belgrade, few Serbs

blame the miserable economy on their president and his pursuit of the war in Bosnia. ‘Yes, we are suffering, but it is not our fault,” declared a retired schoolteacher in a typical remark. “It is the outside world which has done this to us. I still think Milosevic is doing the right thing.” One man recently returned to Belgrade from a posting overseas and visited his elderly father. When he began badmouthing the Serbian leader, his father shook his fist at his son. “If you want to talk against Milosevic, you can get out of my house,” he said. As the price of daily survival increases, so, too, does the resolve of defiant Serbs.

LOUISE BRANSON in Belgrade