March 31, 1999

* Recent Balkan History

- Multi-ethnic, socialist Yugoslavia was once a regional
industrial power and economic success. In the two decades prior
to 1980, annual GDP growth averaged 6.1 percent, medical care was
free, the literacy rate was of the order of 91 percent, and the
life expectancy was 72 years. But after a decade of Western
economic ministrations and five years of disintegration, war,
boycott, and embargo, the economies of the former Yugoslavia are
prostrate, their industrial sectors dismantled.

- The Reagan administration targeted the Yugoslav economy in a "Secret
Sensitive" 1984 National Security Decision Directive (NSDD 133),
"United States Policy toward Yugoslavia." A censored version
declassified in 1990 largely elaborated on NSDD 54 on Eastern
Europe, issued in 1982. The latter advocated "expanded efforts to
promote a `quiet revolution' to overthrow Communist governments
and parties" while reintegrating the countries of Eastern Europe
into a market-oriented economy.

- IMF-sponsored programs since then continued the disintegration of the
industrial sector and the piecemeal dismantling of the Yugoslav
welfare state. Debt restructuring agreements increased foreign
debt, and a mandated currency devaluation also hit hard at
Yugoslavs' standard of living.

- In return for assistance, Yugoslavia agreed to even more
sweeping economic reforms, including a new devalued currency,
another wage freeze, sharp cuts in government spending, and the
elimination of socially-owned, worker-managed companies.

- The reforms demanded by Belgrade's creditors struck at
the heart of Yugoslavia's system of socially-owned and worker-
managed enterprises. As one observer noted, "The objective was to
subject the Yugoslav economy to massive privatization and the
dismantling of the public sector."

- Some Yugoslavs joined together in a doomed battle to prevent
the destruction of their economy and polity. As one observer
found, "worker resistance crossed ethnic lines, as Serbs, Croats,
Bosnians and Slovenians mobilized . . . shoulder to shoulder with
their fellow workers." But the economic struggle also heightened
already tense relations among the republics -- and between the
republics and Belgrade.

- While local leaders and Western interests share the spoils
of the former Yugoslav economy, they have entrenched socio-ethnic
divisions in the very structure of partition. This permanent
fragmentation of Yugoslavia along ethnic lines serves to thwart a
united resistance of Yugoslavs of all ethnic origins against the
recolonization of their homeland.

- While rebuilding is sacrificed on the altar of debt
repayment, Western governments and corporations show greater
interest in gaining access to strategic natural resources...
"Substantial" petroleum fields lie in the Serb-held
part of Croatia just across the Sava river from Tuzla, the
headquarters for the US military zone. Exploration operations
went on during the war, but the World Bank and the multinationals
which conducted the operations kept local governments in the
dark, presumably to prevent them from acting to grab potentially
valuable areas.

- Yugoslavia has been carefully erased from our collective
understanding. Opinion-makers instead dogmatically present
cultural, ethnic, and religious divisions as the sole cause of
the crisis. In reality, they are the consequence of a much deeper
process of economic and political fracturing.

- The consensus among donors and international agencies is
that past macroeconomic reforms adopted under IMF advice had not
quite met their goal and further shock therapy is required to
restore "economic health" in Yugoslavia's successor states.

Source: Michel Chossudovsky (1996)
Department of Economics, University of Ottawa
excerpt from "Dismantling Yugolsavia, Colonizing Bosnia"
from the book "The Globalization of Poverty"
http://www.amazon.com/exec/obidos/ISBN=1856494020/emediaA

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On the historic kindness of international bankers...

"Except through a purgatory of misery and starvation, I cannot see how
Ireland is to emerge into a state of anything approaching to quiet or
prosperity."

- Charles Wood, chancellor of the exchequer during the Irish Famine.

Ireland was a net exporter of food during the famine that killed
at least 1,000,000 people and displaced another 2,000,000 in a period
of five years. British authorities actively discouraged relief efforts
saying they were an encouragement to overpopulation.