Yugoslav Elections by Michel Chossudovsky and Jared Israel (9-28-2000)

Yugoslav Elections by Michel Chossudovsky and Jared Israel (9-28-2000)

                               www.tenc.net
                             [Emperor's Clothes]

               "We want to be open colony and open society." G-17
               coordinator VESELIN VUKOTIC interviewed on "The News
               Hour with Jim Lehrer", US Public Television, July 14,
1999.
               How the International Monetary Fund and World Bank
               operate: "First, they force governments to do away with
any
               social protections - subsidized food or rent, free
               transportation, free medical care. Second, they force
               businesses - public and private - into bankruptcy. Then
these
               businesses are taken over by a small clique of leveraged
               buyout speculators and other powerful foreign economic
               interests. They purchase the businesses at rock bottom
               prices. This is called "Privatization through
Liquidation"
               which is standard practice in the Balkans and Eastern
               Europe." (From the text below)

          Recently there's been a lot of interest in the economists in
the Yugoslav
          group G-17. They wrote the Program adopted by the
so-called         "democratic" opposition and its Presidential
candidate, Vojislav Kostunica. (For a
          discussion of that Program, see "US Arrogance & Yugoslav
Elections" at
          www.emperors-clothes.com/engl.htm )

          The G-17 likes to give the impression it is independent and
          Yugoslav-oriented. In fact it is funded mainly through the
          Washington-based Center for International Private Enterprise
(CIPE). CIPE
          describes itself as "an affiliate of the U.S. Chamber of
Commerce." But in fact it is "a core institute" of the National
Endowment for Democracy which has
          nothing to do, as far as we can tell, with Democracy. Rather,
the Endowment
          was created in 1983 to solve a problem of Empire. People knew
that the CIA
          bribed intellectuals and leaders and set up front groups to
carry out US
          policy:

               "When these covert activities surfaced (as they
inevitably
               did), the fallout was devastating." ('Washington Post',
Sept.
               22, 1991).

          This is why Congress created the National Endowment for
Democracy.

          Allen Weinstein, who planned the Endowment, said:

               "A lot of what we do today was done covertly 25 years ago

               by the CIA." ('Washington Post', Sept. 21, 1991)

          The National Endowment for Democracy (a sort of CIA spin-off)
controls
          and pays for the Center for International Private Enterprise
which in turn
          funds the G-17.

          Three of the leading members of G-17 are Washington-based
staff members
          of the International Monetary Fund and World Bank. They are,
Dusan
          Vujovic, Zeliko Bogetic and Branko Milanovic. In addition,
G-17 coordinator
          Professor Veselin Vukotic has worked closely with the World
Bank. He was
          in charge of the World Bank "bankruptcy program" in Yugoslavia
during
          1989-1990, which led to the devastation of the Yugoslav
economy and set
          the stage for the breakup of Yugoslavia. While on IMF/WB
payrolls, they
          are heavily involved in politics in Serbia and Montenegro.
Other members of
          the G-17 consult for the World Bank and attend World
Bank-organized
          meetings.

          The "democratic" opposition works with the G-17. It has
endorsed the G-17
          Economic program. If it got into power, the G-17 economists
would be in
          charge of remaking Yugoslavia. This is not a guess. The
opposition Program
          calls for working closely with the International Monetary
Fund. The Fund
          always insists that its men run the show. That is not open for
negotiation.
          And the IMF's men can conveniently be found among the leading
members
          of G-17.

          On their Website, the G-17 states that their aim is to
establish: "...a network
          of experts in all Serbian towns able to create and practically
implement
          necessary changes in all fields of social life."

          This is not simply a group of economists. It is a network. The
International
          Monetary Fund and World Bank are using this network to impose
their
          policies on Yugoslavia. Meanwhile they tell everyone the
fiction that G-17 is
          a home-grown alternative.

          G-17 Coordinator Mladjan Dinkic is right now on his way to
Bulgaria to draw
          up a "Letter Of Intent" with his colleagues at the
International Monetary
          Fund. This will be the first step toward enforcing IMF
"economic medicine."
          "We hope they will accept it," Dinkic said to a Pacifica Radio
reporter.

                  Economic Medicine Worse than Russia and Ukraine

          What happens when the IMF takes over a country?

          One of writers, Prof. Chossudovsky, studies the International
Monetary
          Fund and World Bank and what their policies do to countries. .
The G-17
          Economic Program contains the same measures they forced on
Russia, the
          Ukraine, Bulgaria and Peru, and many others. The results:
social and
          economic devastation.

          But Yugoslavia has resisted NATO's attack on its national
sovereignty. So
          the IMF will hit Yugoslavia with even harder economic
medicine.

                       Forced Bankruptcies and Mass Misery

          G-17 economists like to talk about "free markets" and
"privatization." But in
          fact their International Monetary Fund wrecks countries.

          First, they force governments to do away with any social
protections -
          subsidized food or rent, free transportation, free medical
care. Out the
          window.

          Second, they use economic manipulation and new laws to force
businesses -
          public and private - into bankruptcy. Then these businesses
are taken over
          by a small clique of leveraged buyout speculators and other
powerful
          foreign economic interests. They purchase the businesses at
rock bottom
          prices. This is called "Privatization through Liquidation" and
it is standard
          practice in the Balkans and Eastern Europe.

                        A case in point: Yugoslavia, 1989

          The elder statesman of the G-17 is Professor Veselin Vukotic.
Presently he is
          one of the economic brains behind Montenegrin secessionism.

          But what was he doing before the breakup of Yugoslavia?

          In 1989 he was appointed Minister of Privatization under
Yugoslav Premier
          Ante Markovic.

          Yugoslavs have bitter memories of 1989-1991. But do they "put
a human
          face" on the nightmare? Perhaps people think the economic
disaster resulted
          from "market mechanisms" or "incompetent government." In fact
it resulted
          from a World Bank plan.

          People in Ante Markovic's government pulled the strings. In
1989-90,
          Professor Vukotic worked with his Cabinet colleagues and an
army of
          Western lawyers and consultants. They imposed the Financial
Operations
          Act. It was a World Bank plan.

          Under this law, companies were carefully selected for
bankruptcy or
          liquidation. They were forced to meet impossible conditions.
In this way, the
          World Bank, through the Ministry of Privatization headed by
Professor
          Vukotic orchestrated the breakup of fifty percent of Yugoslav
industry.
          World Bank data confirms that under his direction more than
1100 industrial
          firms were wiped out from January 1989 to September 1990

          And that was only the beginning.

          Over 614,000 industrial workers were laid off out of 2.7
million. The areas
          hardest hit were: Serbia, including Kosovo, and
Bosnia-Herzegovina and
          Macedonia. Real wages did a nose-dive. Social programs
collapsed.
          Unemployment shot up.

          And now this same Professor Vukotic, a key man in the G-17,
wants to return
          to power. When the IMF gets its jaws on a country it forces
the government
          to work under people who have already served the IMF and World
Bank
          before., People like Professor Vukotic. Vukotic could finish
the job he started
          in 1989 under the World Bank, a job ironically discontinued
when economic
          sanctions were imposed in 1992. (Bulgaria would probably be
better off
          today if it had been hit with sanctions instead of with the
International
          Monetary Fund!)

                  Giving Montenegrin Property to Foreign Speculators

          While Prof. Vukotic hopes to regain cabinet status in a
"democratic"
          opposition government in Yugoslavia he has also been working
closely with
          the secessionist government of Montenegro. Montenegrin
President Milo
          Djukanovic, his former student, had put him in charge of the
privatization
          program which is auctioning off state property in Montenegro.

          Recently we found a US Commerce Department advertisement on
the
          internet. The title is: " Montenegro: Seeks Privatization Fund
Managers."

          The advertisement explains that these Managers are needed in
Montenegro,
          where US officials are "providing technical support" for
so-called
          privatization. The managers would control "funds" that would
take over
          ownership of what is now public property. The Managers could
          "restructure" these privatized companies - lay off the workers
and sell the
          most valuable components. The Commerce department promises
that this
          "should be quite profitable." Note how brazenly the U.S.
Commerce
          Department celebrates turning Montenegrin property into
foreign profit.

                                  Kosovo

          Professor Vukotic has also been vocal on the political and
economic status
          of Kosovo. Last June NATO marched into Kosovo, and the UCK (or

          Kosovo Liberation Army) along with them. Wherever they went,
they drove
          loyal Yugoslav citizens from their homes, stole or destroyed
their property
          and threatened them with death. By June 26, the expulsions
were at a peak.

          While Kosovo was devastated, Professor Vukotic said: "Kosovo
should
          also have its own currency." That's virtually the same as
saying Kosovo
          should be a separate country. ('Associated Press,' June 26,
1999)

          The Deutschmark was adopted as legal tender and almost the
entire banking
          system in Kosovo was handed over to Germany's Commerzbank A.G.
And
          the G-17 economists applaud...

                      The G-17 on the IMF-World Bank Payroll

          One of the most prominent members of the G-17 is Dr. Dusan
Vujovic, a
          senior economist at the World Bank. He acts as a link between
the G-17 and
          Washington. He has been very active overseeing "reforms" in
so-called
          "transition countries". In August 2000, Vujovic was put in
charge of
          negotiating one of the World Bank's most deadly economic
packages. It was
          imposed on the Ukraine, already devastated by earlier
IMF-World Bank
          reforms.

          What happened to the Ukraine? The Ukraine disaster started in
the fall of
          1994. Prime Minister Vitali Masol signed an agreement with the
International
          Monetary Fund. In exchange for accepting "economic shock
treatment"
          Ukraine got a 360 million dollar loan. That's a very small
amount for a
          country.. "Reforms" began in mid-October, 1994. The IMF
ordered the
          Ukrainian authorities to end State controls over the currency
exchange rate.
          This led to the collapse of the currency. The price of bread
shot up
          overnight - 300%. Electricity- up 600%. Public transportation
- up 900%.

          The population was forced to buy necessities based on
"dollarized" prices.
          Meanwhile people were earning less than ten dollars a month.
Credit was
          frozen. With electricity prices sky high and no credit, public
and private
          industries were destroyed. The international speculators moved
in like
          sharks in a frenzy.

          Then in November 1994, World Bank negotiators were sent in to
further
          "advise" the government. This time they overhauled Ukraine's
agriculture.
          The grain market was deregulated. This allowed the US to dump
grain
          surpluses on the Ukraine market. Ukraine went from being a
grain exporter to
          begging for Food Aid from the European Union and the U.S.
Thanks to the
          International Monetary Fund, Ukraine is now a starving
political
          protectorate of the US and Germany. And remember, Ukraine
never did
          anything to offend the U.S.. It didn't rebel for 10 years,
like Yugoslavia.

                             The Case of Bulgaria

          Another key member of the G-17 is Dr. Zeliko Bogetic who holds
a senior
          position at the International Monetary Fund. The International
Monetary
          Fund has been the doctor in many economic cures. The patient
always dies.
          In 1994-96, Bogetic participated on behalf of the IMF in
forcing a structural
          adjustment program (SAP) on Bulgaria. All social defenses -
price controls,
          subsidized food, housing and medical care - were stripped
away.

          The program led to mass poverty and terrible suffering. By
1997, old age
          pensions (according to World Bank sources) had collapsed to
two dollars a
          month. The World Bank admits that 90 percent of Bulgarians now
live below
          the poverty line but, they announce, much economic progress is
being
          made. Perhaps when all the Bulgarians are dead they will
announce the
          achievement of perfection.

          In early 2000, Bogetic was dispatched by the International
Monetary Fund
          to Podgorica, Montenegro to advise the pro-secessionist
government of
          President Milo Djukanovic. Bogetic was to help set up a
currency board
          modeled on that of Bosnia under the Dayton Accord. Bogetic's
advice was
          to stop using the Dinar, the Yugoslav currency. He said that
under no
          circumstances should Montenegro establish a Central Bank. Now
remember,
          the Djukanovic government in Montenegro says it wants
"independence"
          from Yugoslavia. But a Central Bank is the requirement for
real
          independence. No, said Bogetic, that is the "worst possible
solution". So
          this "independence" really means "colony"!

          Bogetic would be the likely candidate for Yugoslav Central
Bank Governor if
          the "democratic" opposition were to win. He'd do the same
thing he's doing
          in Montenegro. He'd establish a colonial style currency board
linked to the
          Deutschmark. Then monetary policy would be controlled by the
country's
          creditors. This would be a excellent for the creditors but
very bad for the
          common people including local businessmen and farmers. It
would make it
          impossible to finance economic reconstruction through the
mobilization of
          Yugoslavia's own domestic resources. The country would be in a

          straightjacket.

          If the "democratic opposition" came to power they have said
they will
          introduce International Monetary Fund medicine. That's what
they say in
          their Program. But would this be the same medicine that the
IMF have
          prescribed for Russia, Bulgaria and Ukraine?

          Russia, Bulgaria and Ukraine cooperated fully with Washington.
As nations,
          they never resisted being turned into colonies. Was the West
merciful?
          Consider Russia. During the first year that the reforms were
applied, which
          was 1992, wages collapsed by 86 percent. And in many of the
countries of
          the Balkans and Eastern Europe, economic activity has been cut
in half. And
          these are cooperative countries. As everyone knows, the U.S.
is very
          annoyed with Yugoslavia. Yugoslavia has not been a good slave.
It has not
          kissed the hand of the bombers.

          History shows that if the International Monetary Fund gets
hold of a
          country that has been rebellious the treatment is vicious. And
we are not
          talking about major rebels, like Yugoslavia. We are talking
about very
          moderate rebels, like Peru.

          In Peru, the government of President Alan Garcia (1985-1990)
refused to do
          some of what the International Monetary Fund ordered. In 1985,
it decided
          to pay international debts at a reduced rate. It instituted an
economic
          program that would help (instead of destroying) the economy.

                     The International Monetary Fund Responds

          The country was immediately put on a black list by the . This
disrupted
          Peru's foreign trade. It damaged the economy. It produced
discontent.

          Enter Professor Alberto Fujimori. It was the 1990 elections.
With help from
          Washington, Peru was having economic problems. Many people
wanted
          change. Professor Fujimori was unknown. People felt he was
"honest" and
          "promising". He led a tiny party that had never held power. He
was the
          winner in the 1990 elections.

          Once in office, Fujimori caved in to the International
Monetary Fund's
          demands. What followed was the most deadly economic "reform"
in Latin
          American history. From one day to the next, the price of fuel
increased by 31
          times (2,968 per cent). The price of bread increased more than
twelve times
          (1,150 per cent).

          People could no longer afford to boil water. A cholera
epidemic broke out.
          The social consequences were devastating. An agricultural
worker in
          August 1990 was paid $7.50 a month (US). That was enough to
buy two
          hamburgers and a drink at McDonalds. Consumer prices in Lima
were higher
          than New York. Real earnings dropped by 60 per cent. By
mid-1991 the
          standard of living had declined by 85 per cent compared to the
levels in the
          1970s.And this was the just beginning of ten years of deadly
reforms under
          Fujimori.

          And remember, Peru didn't really do anything. Just resisted a
few
          International Monetary Fund Measures. But Yugoslavia?
Yugoslavia
          resisted colonial domination by Germany during World War II
and now by
          the U.S.A.

          Washington and Berlin would like nothing more than to make
Yugoslavia an
          example of what happens when you resist. That is, they would
like to make it
          a "model" protectorate.

          Haven't the U.S. and Germany made this perfectly clear in
Kosovo? A
          gangster-fascist regime with links to the drug trade has been
installed. And
          Western leaders are fully aware of the horror they have
wrought in Kosovo.
          UN Secretary General Kofi Annan received a special report
about this. The
          report was discussed by the British newspaper, The Observer':

               "Murder, torture and extortion: these are the
extraordinary
               charges made against the UN's own Kosovo Protection
               Corps in a confidential United Nations report written for

               Secretary-General Kofi Annan.
               "The KPC stands accused in the document, drawn up on 29
               February, of 'criminal activities - killings,
ill-treatment/torture,
               illegal policing, abuse of authority, intimidation,
breaches of
               political neutrality and hate-speech'. " (quoted in "How
Will
               You Plead at your Trial, Mr. Annan?" at
               http://emperors-clothes.com/news/howwill.htm )

          What would Washington do if it's G-17 employees got hold of
Yugoslavia?
          They would institute the most extreme economic "reforms".
Prices would go
          sky high. Farmers would lose their land. Businesses would be
bought up
          and closed down.

          This kind of suffering produces ethnic tension. Washington
would whip this
          up by sending in their UCK (KLA) terrorists. Why does
Washington keep
          the UCK in power in Kosovo? Because they want to use them
again. For
          what? They are incapable of fighting a real army. What are
they good for?

          They are good for driving 350,000 unarmed civilians from their
homes,
          kidnapping hundreds of people, killing hundreds or perhaps
thousands.
          They can be used again in Serbia north of Kosovo - if the US
gives them the
          nod.

          A Washington-controlled government would bring in NATO troops
to "help
          keep order." The troops would never leave. The hunt for
imaginary war
          criminals would go on, a thousand times worse than it is in
the Bosnian Serb
          Republic. Croatians, Bosnian Muslims and ethnic Albanians who
fled to
          Serbia to escape fascist persecution would be put on the list
of phony war
          criminals. All loyal Yugoslavs would have to pay for their
(imaginary) crimes
          so that "healing can begin."

          Every effort would be made to humiliate the people, to break
their spirit, and
          to eliminate potential leaders of resistance.

          The example of post-war relations between the US and Vietnam
is
          informative. When the Vietnam War ended, the US government
ordered an
          embargo which seriously hurt Vietnam, socially and
economically. A few
          years ago, Washington agreed to lift the embargo following a
secret
          agreement under the Paris Club of official creditors. Vietnam
agreed to pay
          the debts of the former South Vietnamese government. This was
a puppet
          regime set up by Washington. It had gone into debt borrowing
money from
          the US, money which was mainly used to buy weapons from the US
to kill
          Vietnamese. And now Vietnam must repay Washington this odious
debt.

          While Kostunica presents himself as a nationalist critical of
NATO, he also
          wants to "normalise" Yugoslavia's relationship to the IMF and
the OSCE.
          But these are "sister institutions", they work together in one
big family.
          NATO is the "military arm" of Western financial interests. It
does not
          operate independently but works in close consultation with
Wall Street and
          the IMF. In Bosnia and Kosovo, NATO military repression is
coordinated
          with actions of the IMF and the World Bank.

          Under the IMF, the country would be transformed into a
protectorate.
          "Economic warfare" would devastate the society. The Yugoslav
people have
          done remarkable work rebuilding what was destroyed by the NATO

          bombing last year. But the IMF working through G-17 economists
would
          work to liquidate national industry . (We have seen a sample
of this in
          Kosovo with the Trepca mining complex. It was handed over on a
silver
          platter to the powerful "Washington Group", a US based
construction,
          mining and defence contractor. The local employees have been
discharged,)

          This economic assault would tend to increase ethnic tensions,
providing
          opportunities for provocateurs. NATO could use the excuse of
"age old
          ethnic hatreds" to bring troops into the country. Meanwhile,
as indicated in
          the G-17 Program, the IMF would order cuts in military
spending. With a
          weakened army it would be much more difficult to deal with the
influx of
          Kosovo Liberation Army terrorists.

          Of course, the Yugoslav people could and undoubtedly would
organize to
          oppose these measures. But people should be aware that this
can be the
          result of letting the International Monetary Fund get a grip
on Yugoslavia.

          ***

          Michel Chossudovsky is Professor of Economics at the
University of
          Ottawa. He is author of "The Globalization of Poverty, Impacts
of IMF and
          World Bank Reforms," TWN, Penang and Zed Books, London, 1997.
His
          special expertise is studying the consequences of the
intervention by
          Western dominated economic institutions such as the IMF and
the World
          Bank in Third World and former Socialist countries.

          Jared Israel, the editor of Emperor's Clothes, was a leader of
the student
          antiwar movement in the 1960s. The Yugoslav resistance to U.S.

          government bullying inspired him to return to antiwar
activity. He has
          written about the struggle in the Balkans in newspapers around
the world.

          International Action Center
          39 West 14th Street, Room 206
          New York, NY 10011
          email: iacenter@iacenter.org
          web: www.iacenter.org
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          phone: 212 633-6646
          fax: 212 633-2889




--
Mine Aysen Doyran
Ph.D Student
Department of Political Science
SUNY at Albany
Nelson A. Rockefeller College
135 Western Ave.; Milne 102
Albany, NY 12222



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