Tuesday, March 24, 2009

Serbia's economy: real devaluation still needed

Die Tageszeitung has an article (in German) about the economic situation of Serbia. Some observations:
- since the start of the economic crisis Serbia has wasted 1 billion euro to defend the dinar
- in the same period 1 billion euro has fled the country to Western banks
- About 60,000 firms with 1.3 million employees are nearly bankrupt. One reason is the Serbian state that is late with paying it bills and owns now 720 million euro to Serbian companies.
- This year 120,000 people could lose their jobs. Unemployment is at the moment 23.7%.
- Since the beginning of the year Serbia's export has fallen with 37.5% and its import with 24%. So its trade balance has worsened - and it was already bad.
- At the end of last year the dinar dropped about 25%. But since then it hasn't moved.
- Serbia is now asking for at least 3 billion dollar more mainly from the IMF.

It looks like Serbia's government is still the prisoner of the irresponsible election promises that it made. Ukraine had to drop its currency by 50% on orders of the IMF. Does Serbia's government really hope that the IMF will keep financing its leaky pockets?

Come on, Tadic, stop being a coward! Buy a Churchill biography and learn that being a leader sometimes means that you have to promise your people "blood, sweat and tears"! The situation will keep getting worse until Serbia adapts itself. The "growth" financed by foreign transfers simply wasn't sustainable. The longer you delay it the worse the situation will get. I can only hope that the IMF will make tough conditions.

This doesn't mean that I am an economic neoliberal. Serbia should never have allowed that its citizens borrowed so much in foreign currencies in the first place. And one of the ways to achieve that would have by allowing less foreign control of the banks. In the present situation I am very worried about Tadic's determination to unilaterally implement the SAA. Serbian business has enough to adapt itself to without this additional burden. Serbia's government is making some efforts to stimulate the exports (at least acknowledging the problem), but until now it has little to show for the effort.

At the head of the FAZ article and in its last paragraph it is suggested that the US might IMF aid to Serbia conditional on a change in its Kosovo policy. It would be a stupid move: IMF is about finance. Using it so rudely as a tool of US foreign policy would seriously antagonize other countries. It would signal that Obama's foreign policy is even more unilateral than Bush's.

Postscript 26 march: according to this article IMF has given Serbia 3 bln Euro. The deal still needs approval of the IMF board - expected at the beginning of may and forces. Serbia has committed to 1.0 billion euros worth of spending cuts, equivalent to three percent of GDP. About the conditions the NY Times article says "The economy minister, Mladjan Dinkic, said on Wednesday in an interview with the daily Vecernje Novosti that the measures would fall mostly on the public sector, which employs 550,000 workers, versus 1.6 million in private sector.

“We will reduce funds for cities and local administrations,” Mr. Dinkic told the newspaper. “There will be no new jobs, and those who retire will not be replaced with new staff. The position of state servants will be equalized to the position of employees in the private sector. Various privileges used by public servants will be abolished. No bonuses will be allowed. We will not allow the purchase of new cars. We decided to cut costs as much as possible.”
". The IHT is shorter "the IMF calls for drastic cuts in public spending, a freeze in wages, pensions and hiring in the state sector, and the introduction of an additional 6 percent tax on salaries and pensions to cope with the budget deficit.".

Is this good news? Not really. While I do believe that Serbia should reduce its social spending as it is at an unsustainable level, I think it is not very wise to reduce the overall amount of government spending in a time of crisis. I would prefer to see Serbia spending more on helping its business sector to overcome the damage of both the crisis and the devaluation.

26 comments:

Karl Haudbourg said...

Excellent article as per usual.

Anonymous said...

Making IMF aid conditional on Serbia' stopping its imperial posturing toward Kosovo sounds like a good idea. Why waste money on a nation hellbent to conquer and destroy another nation?

Anonymous said...

Anon, Kosovo is a part of Serbia. Never in history has Kosovo been a separate nation. Do you know what a nation is?

Anonymous said...

Kosovo is now a separate nation. It is not part of Serbia. Please do not lie about it. Lies like this resulted in hundreds of thousands of people who died in the 1990s as Serbia tried to force its will on non-Serbian nations such as Croatia, Bosnia, and Kosov.

Kosovo was forcibly annexed to Serbia against its will during the formation of Yugoslavia. This was a big mistake. This mistake has been rectified, and there is an international border between Kosovo and Serbia.

Serbia should abandon its dream of empire, and making false claims of "owning" foreign nations.

I know what a nation is. Unlike you, who makes up claims that a nation is not really a nation if you happen to want another nation to invade and annex it.

Germany has grown up. No more are there maniacs there who insist on invading and slaughtering Poland. Serbia needs to grow up too, and stop charactarizing itself by its will to crush non-Serbian neighoboring nations.

Anonymous said...

How much of the world recognizes Kosovo as an independent nation? Less than a 1/3.

Furthermore, there is no point in comparing Serbia and Germany. Serbs fought the Germans. Albanians fought alongside the Nazis and were allied with them. Has Albania grown up, yet? Stop appealing to false emotions.

Why don't you structure your arguments fairly?

Anonymous said...

"How much of the world recognizes Kosovo as an independent nation? Less than a 1/3."

That is quite a bit, considering that much of the impetus to oppose acknowledging the reality that Kosovo is an independent nation comes from powerful imperial nations. Countries like Russia and China which hold territories against their will.

Kosovo is quite like Taiwan in this respect. It is an independent nation, and everyone knows it is and tries to treat it as such, except for rabid imperialist kooks. But due to the pressure by some rabid imperialist kooks, not everyone says "officially" that it is a separate nation.

If not for pressure from China and Russia, almost every country in the world would recognize "officially" what they already know: that Kosovo is an independent nation.

"Furthermore, there is no point in comparing Serbia and Germany."

There is a a big point: Serbia unleashed a "blitzkrieg" against several countries in the mid 1990s, just as Germany did in the 1930s and 1940s.

"Has Albania grown up, yet? Stop appealing to false emotions."

I am appealing to exact history, and am consistently opposing imperialism. Albania is not relevant to this. Just as there is an international border between Serbia and Kosovo, there is one between Kosovo and Albania.

"Why don't you structure your arguments fairly?"

Why don't you realize what is fair: that to try to force dominion over a foreign territory against its will is nothing short of imperialism?

Time to give up aggression and imperialism. To acknowledge that Serbia can be Serbia without it forcing its will on foreign nations that don't want to be taken over.

Anonymous said...

Kosovo is not a foreign nation! Long live Greater Albania!!!

Tell that kook that it is not true that Albania was allied with the Nazis. Albania would never have associated themselves with Hitler, would they?

By the way, anon, at 11:53, how do you know so much about Nazis and blitzkriegs?

Anonymous said...

If the citizens of Albana and Kosovo vote to merge the two nations into one nation, that is their business. It is not the business of an outsider nation (be it Serbia, Andorra, or Thailand). If that happens, and it does not seem likely. Therefore, the "Greater Albania" you refer to is not part of any existing or potential European reality.

Likewise, I would support Serbia's claims on Kosovo if the people of Kosovo voted to join Serbia. That also does not seem likely. Because a one-sided annexation of Kosovo to Serbia without the consent of the Kosovars is imperialism.

As for why I know so much about the wars of expansion waged by the Nazis and also by Serbia, I like to study European history. Unlike some, I have no dog in the fight. I do not come from one ethnic group and then decide that no matter what atrocity that group commits, it is good and just.

Anonymous said...

Since you know so much about history, How did the Albanians fight on the same side WITH the Nazis and not be punished in any meaningful way by the Allies?

Same goes for Bosnian Muslims and Croatians fighting with and for the Nazis, since everyone keeps talking about Germany around here.

I'm sure you don't have a dog in this fight.

Anonymous said...

Oh. I do agree that the Albanians who collaborated with the Nazis should be brought to justice.

However, this in no way lends any support to the idea of forcibly annexing Kosovo to Serbia against its will. It makes no sense. None at all. I suppose since Germany fought "with and for the Nazis" it should be forced to become part of Serbia too?

You don't destroy a modern nation because a tiny handful of 90-year-olds collaborated with Hitler.

But by all means, round up these geezers.

Wim Roffel said...

I don't understand this discussion. Kosovo became part of Serbia in 1913 - far before World War II. Arguments were the role of Kosovo in Serbian history and the allegation that Kosovo only a few decades before had had a Serb majority. The latter is difficult to prove for lack of documentation in the Ottoman empire. But if you read for example the Kosovo chapters of Edith Durham's High Albania (about a visit around 1908) it is clear that Kosovo had not always a very Serb-friendly climate.

Aside from the historic argument the main argument for not making Kosovo a full republic in Yugoslavia in 1946 was that Albanians already had their state (Albania).

But the borders of Kosovo in 1946 were more along ethnic lines than today. It is very hard to find exact data, but my impression is that Serbia wanted Presevo in order to get full control over the railway to Macedonia and that in exchange it had to give up Leposavic and Zubin Potok.

Anonymous said...

Yes, it is clear that the annexation of Kosovo to Serbia was in 1913. This was around the time that Greece annexed a large part of Macedonia (a struggle that has simmered to a petty name dispute by this now).

Now, is the railroad issue still relevant at all?

Wim Roffel said...

It's obvious nobody cares about the railroad - although the EU poicy to promote rail transport may make it more important in the future. Now it is just a historic reason for not following ethnic borders while that was the general policy in Yugoslavia after World War II.

The first Balkan War in 1912 was a coalition of Greece, Bulgaria, Montenegro and Serbia against the Ottoman Empire. Serbia would get Northern Albania, Greece would get an expansion to the north and Bulgaria would get the present FYROM territory. When the international community decided for an independent Albania Serbia took FYROM instead. Bulgaria started the Second Balkan War to repair this but they lost.

So: Bulgaria agreed to the claims of Greece on the territory that is now its Macedonia province. And that FYROM Macedonia is now an independent state is a whim of history.

Anonymous said...

The FYROM name is a creation of Greece. Otherwise, everyone calls it "Macedonia" or the "Republic of Macedonia".

About the rail lines, sometimes railways are very important, even into the modern era. So it was an honest question.

Wim Roffel said...

"The FYROM name is a creation of Greece. Otherwise, everyone calls it "Macedonia" or the "Republic of Macedonia"."
I didn't want to start here a discussion about the Macedonian name question. It was just the shortest way to indicate the territory of the present day country.

Nowadays highways are much more important than railroads. Both the highway and the railroad between Serbia and Greece need major investment. But I expect the investment in the highway to happen much sooner. And I don't expect Serbia to be much attached to the railroad when it comes to border changes.

Anonymous said...

"Macedonia" is also the most accurate and most commonly-used name of this nation. Greece actually violated the UN Charter by trying to dictate Macedonia's name to it.

Anonymous said...

How did Greece violate the UN charter? Which part? Can I throw out accusations without proof too?

Anonymous said...

The UN charter requires that nations recognize the actual names of other nations. By seeking to unilaterally rename a foreign country, Macedonia, Greece did not follow this part. Likewise, if Thailand (a UN member) declares that from then on it will only refer to Uruguay as "Chopped Liver", it too violates the UN charter.

Specifically, during the admission process of Macedonia to the UN, two additional conditions were illegally imposed: (1) That it Macedonia accept the provisional name "FYROM" (2) That Macedonia negotiate with another state (Greece) over its constitutional name. These conditions are not explicitly set forth in Article 4 (1) of the UN Charter, and it was illegal for Greece to unilaterally amend this part of the charter.

Perhaps, based on Greece's assault on the rights of that nation, Macedonia could unilaterally push for Greece's recognized name to be "Sh*theads who Name Foreign Countries For Them".

"Can I throw out accusations without proof too?"

Take away the "too". I have not done this yet.

Wim Roffel said...

It was Macedonia, not Greece that chose for conflict. They keep suggesting that they have some claims on Greek Macedonia. When they withdraw one symbol (like the flag) they replace it with another (like the Alexander the Great airport).

If they wanted to help the Slav population in Northern Greece silent diplomacy would help much better. And from a strategic point of view it would be much smarter to keep silent until Greece has accepted it.

It is my impression that Macedonia is externalizing its problems. Neither the name nor the Greek Slavs are really important: if such an issue would be settled they very probably would come with the next. Macedonia's really problem is that the country is very divided and that without an external enemy they need to confront the conflicts of interest between the Albanians and the Macedonians.

Anonymous said...

if fyrom was not yet a nation in the un, how was greece bound by the charter? hat issue needed to be solved before entrance. fyrom was the one agitating and engaging in misinformation and conflict building. what does the un charter and international law say about taking the name and culture of another nation?

people in "macedonia" that is the former yugoslav republic of macedonia -fyrom-, more appropriately Vardarska, need to stop worrying about the greeks - who have no territorial claims on fyrom - and start worrying about other segments of the population in fyrom. Is that why fyrom has territorial claims on greece? because fyrom will soon be split?

Anonymous said...

ART 4 (1) UN Charter
#" Membership in the United Nations is open to all other peace-loving states which accept the obligations contained in the present Charter and, in the judgment of the Organization, are able and willing to carry out these obligations."

why did you quote article 4(1)? article 4 (1), by its language, puts obligations ONLY on the state seeking admission. you'll need to provide another part of the un charter, because i don't understant how greece violated that? how are you basing your position on such a broad statement? you're not just quoting "UN CHARTER" and hoping people take your side, are you?

Anonymous said...

Wim said: "It was Macedonia, not Greece that chose for conflict. They keep suggesting that they have some claims on Greek Macedonia. When they withdraw one symbol (like the flag) they replace it with another (like the Alexander the Great airport)."

Macedonia did not make claims on Greek Macedonia. The ancient region of Macedon was shared over a large territory. Alexander (who incidentally was non-Greek) is part of the heritage of the entire area, not just northern Greece. So is Alexander the Great, who was neither ancient Slav nor ancient Greek. The nation of Macedonia, like northern Greece, was part of ancient Macedon.

Anon: The name of the nation is "Macedonia", not FYROM. Or do you want us to stop calling Greece "Greece" and call it "The Former Turkish Province of Greece"? Greece IS bound by the charter.

"[Macedonia] was the one agitating and engaging in misinformation and conflict building."

Using its own name and symbols which it is historically entitled to (and are not being used, by thw way, as national symbols of Greece) is not "conflict-building"

"...more appropriately Vardarska..."

Macedonia is the real and traditional name of that place. No one uses "Vadarska". That was a temporary name that lasted hardly more than a decade, and is long gone. It makes as much sense as calling Macedonia "Gondor" or "Tattooine". Besides, according to international law, the government of Macedonia is the only one that can decide the name of the nation. It is the business of Macedonia, and no other nation.

"...need to stop worrying about the greeks - who have no territorial claims on [Macedonia]..."

As long as Greece wants to dictate its chosen name to Macedonia, it is a violation of sovereignty. Of the whole territory of the nation.

" Is that why fyrom has territorial claims on greece? because [Macedonia] will soon be split?"

Any idea of Macedonia claiming Greek land is a trumped-up charged to maintain an anti-Macedonian fervor in Greece. There are extremists in any nation who want to expand its borders. In Macedonia, as in many, these extremists are a small number, and their goals of expanding Macedonia into Greek land is not a government policy at all.


Not sure what your argument about the UN Charter is. Are you claiming that once countries succeed in becoming members of the UN, they are free to break rules and bully other countries and break the agreements under which they joined the organization?

Anonymous said...

i thank the fyrom proponents for not reading the above posts and not addressing the most important point that they themselves made.

Above, art 4 (1) was quoted as a basis for opinion for the fyrom case. No where in article 4 does it say what the fyrom proponent says it does. Relying on invisible law.

Anonymous said...

True. The "FYROM proponent" (the one who wants to change Macedonia's name to FYROM) does not seem to be reading or comprehending anything. (One correction to your comment, however. There is no FYROM case. The FYROM name only exists in the imagination of Greece).

It is indeed amazing that he can read that part of the UN charter and conclude that Greece is not obligated to be keep up to its obligations as a UN member.

I suspect that the ignorant FYrom name proponent is some sort of ultra-nationalist Greek person who thinks that some sort of false vision of history gives him license to choose arbitrary silly names for an entirely non-Greek nation such as Macedonia.

Whether or not it is OK to have hold to a such a false and hateful sense of Greek pride is one thing. But demanding that it go beyond Greece's borders is another.

As for me, I respect all nations (unlike the FYROM proponent). Greece can call itself what I want, and I will respect that. Just as I respect Macedonia's rights to choose its own name, as permitted under UN policy and international law.

I doubt the Proponent will ever be able to find and reference or even precedent for foreign nations dictating the names of sovereign nations against their will.

Anonymous said...

More for the proponent of imaginary names for Macedonia:

"the inherent right of a state to have a name can be derived from the necessity for a juridical personality to have a legal identity. . . . [T]he name of a state appears to be an essential element of . . . its statehood. The principles of the sovereign equality of states and the inviolability of their juridicalpersonality lead to the conclusion that the choice of a name is an inalienable right of the statefrom James Crawford, The Creation of States In International Law, 1979.

Other documents appear with titles like Legal Aspects for the Use of a Provisional Name for Macedonia in the United Nations and many other documents in international affairs and legal circles, which use the name "Macedonia" by default to refer to the place.

Even Wikipedia, after some tough disputes, has settled on the neutral name on the dispute, saying "The Macedonia naming dispute refers to the disagreement over the use of the name Macedonia between Greece and the Republic of Macedonia.".... acknowledging the actual name of the nation when discussing the dispute.

Even the United Nations skirts around the FYROM nonsense and tends to give the nation its real name. The first search on "Macedonia" brings up a map of the nation of Macedonia. No fake names are used here, and on many official pages of the United Nations.

The FYROM person is way out on a limb. And quite alone.

Anonymous said...

Further information. Checking major countries of the world:

China almost always uses the real name "Macedonia" for the nation, instead of any fake names such as Vardar*, FYROM, etc. This is according to the Mainland Chinese' government's own news source.

The same is true with Russia's main news source Pravda. One example is this story.

Looking through the list of the world's most populous countries, I come to Indonesia. The country's major news source, the Jakarta Post, only uses "Macedonia". Here is a lot of their top 10 Macedonia stories. "FYROM" turns up no hits.

The BBC (Britain's government news organization, also a major world news leader) also uses "Macedonia" not "FYROM"/etc.

In the US, I checked three of the major independent news sources (CNN, Fox, and Democracy Now). All of them use "Macedonia", and not the fake names. The government news organs in the US (examples: VOA and PBS) also use "Macedonia" and not "FYROM",etc.

The same is true of O Globo (major Brazillian newspaper) and, Times of India (world's largest democracy). As does Mexico. And even Serbia (B92).

I aimed mainly for influental/populous/major countries in the world. Every one I chose recognized Macedonia's actual name. None of them used FYROM, Var* or any other fake names, except in rare reports that refer specifically to the name conflict with Greece.
---------

Thus, it is also clear that not only has Greece lost its pointless battle in the "redefining history" front and the international law front, its idea for attempting to rename the Republic Macedonia has fallen completely flat globally.