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COMMENT

A FALSE IMAGE OF “SUCCESSFUL” PRIVATIZATION




Belgrade, January 21, 2007
Serbia is a leader in privatization. The receipts from the privatization brought a budget surplus. The Government’s success is reflected in the privatization results. These are only some titles by which the present, as well as the former government are trying to convince us of its unerring privatization policy in Serbia. If someone “leaps out” from this usual scheme, such as unfortunate Marsicanin and Pavlovic, then the clerks of the World Bank and the IMF rush to help, supported by the economists on duty who will put everything under control by means of statistics. Rare criticism of the privatization flow in Serbia are silenced promptly, often by a real torrent of accusations of heretics who dared to disrupt the idyll called privatization. That things are not such as the officials present to us, there is a proof that no one in Serbia conducted a serious research on the subject of privatization effects in Serbia. It’s not difficult to guess why?!

Two researches conducted by the Education, Research and Privatization Center of the UBU “Nezavisnost”, showed that the privatization in Serbia wasn’t an accidental failure of this and the former Government, a failure Serbia should be faced with soon and the effects of which would be felt in the near future.
What is wrong with the privatization in Serbia? By the changes since 2000 and forming Serbian Government in 2001, it was expected that the privatization of the public sector would be Serbia’s transition promoter, toward a modern, market-oriented state. It only appears that an effective Privatization Law has been passed which should have enabled a prompt, efficient and transparent privatization. Nothing would have been debatable except a small detail. The concept of the Law has not been determined by the state but by future buyers through their “experts” who entered the new governmental authority, and our troubles with privatization began at this spot. The future buyers enabled their people to enter the Privatization Agency, through political parties, which is authorized by the law to sell and conclude the Purchase and Sales Contracts with buyers. The job has started. How far it reached, we are witnesses today, five years after. Approximately 2000 companies have been sold so far and direct budgetary revenues earned amounting to about €2 billion.

In five years of privatization, many government agencies, commissions, committees employing a large number of people, “dealing” with privatization, were formed. The children of the same economists on duty are employed in various agencies, which is often the case, and those economists took part in creating the law and proving to us today that their children were leaders of the privatization in Southeast Europe.

Furthermore, agencies hired certain consultant firms for the sale of companies, which firms are owned by future buyers, former ministers, employees of the same Agency. In this way we have an absurd situation that the son is in charge of sale of certain company on behalf of the Privatization Agency, and that the consultant firm, hired to prepare the program of privatization and assessment of value of company’s capital – is managed by his father! In five years of privatization, such a network of bureaucratic structure was created, which has taken over even the interventions and actions of judicial authorities. They make decisions on everything associated with the privatization, from taking the initiative up to concluding a Purchase and Sales Contract and supervising the performance of the Contract or discharge of contractual obligations by the buyer. A recent sale of “MOBTEL 063”, for €1 billion and 500 million, being a record, dashed a false image of “successful” privatization in Serbia. The sale of “MOBTEL 063” was managed by the Minister of Finance, Mladjan Dinkic, together with the personnel from his Department, and not the Privatization Agency.

It means that a company fetched the price as 2000 companies did, sold by the Privatization Agency, with a great many advisers, consultants, brokers and broker firms. Among 2000 sold companies there are the best Serbian companies such as: SARTID, Cement Factories and almost complete Construction Material Industry, Tobacco Industry, Breweries, Agricultural Complexes with thousands of hectares of own land, Car Transport Companies, Flour Mill and Baker’s Industry, Non-Ferrous Metal Manufacturing Companies, etc. Is it possible that those 2000 companies are worth as a “MOBTEL 063”? Of course, they are worth much, even much more, and the buyers knew this, creating such law and sales. What is worse, the state took on itself the obligation to pay the debts of some companies instead of the buyer. Only SARTID’s debt, taken on by the state, amounts to $1 billion and 700 million, and the debt of RTB Bor, privatized lately, amounts to about €600 million. Only the debts of these two companies, which we are going to pay back in the future, exceeds the sum of overall receipts from the privatization, that has flowed into the budget, and this is a real image of “successful” privatization in Serbia.

An awful plunder of enormous property is in question. A small number of privileged individuals took part in the plunder, who were preparing many years for this moment. Nothing is left to chance. The descendants of the people who carried out the nationalization and introduced communism in Serbia after World War II, carry out the privatization today. The former minister in charge of the privatization, now a great oppositionist, hasn’t criticized his colleague in the government authority, even praised the success of the present minister several times.

The director of the Privatization Agency, Mirko Djordjevic, a man who, during his term of office at the head of the Agency, carried out the privatization of about 800 companies and annulled about 200 privatizations, resigned, and that the public hasn’t been informed so far of the reasons of his resignation. In addition, when the President of the Commercial Court of Belgrade, Goran Kljajevic, was arrested, namely, of the Court competent for most disputes and lawsuits concerning the Purchase and Sales Contracts and a major Commercial Court in Serbia, the picture of privatization in Serbia is even more somber. The price of “successful” privatization in Serbia shall be paid even by our grandsons and great-grandsons, while the descendants of Tito’s military intelligence generals will become real proprietors of Serbia. Already today some of them behave in this way. But this is not the end of their ambitions. By imposing their rule over the entire economic resources of Serbia, their interest is also directed to conquering the political power through careful engagement of personnel in almost all relevant parties, this objective will soon be reached.

And then, God help us!

 
     
 
 
 
 
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