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By M. Bozinovich In a recent, and a rather damning, 400-page inventory report by a consortium of Serbian, Montenegrin and German economists the only good things done in the post-Milosevic Serbia are privatization and stability of currency and prices. As a matter of pride, of course, the report attempts mightily to put a lipstick on the long list of ugly economic jargons by blaming them on another long list of excuses: absence of vision, indecisiveness, politically motivated policies, import "lobby", export "lobby", crime and mafia, insecurity, poverty, state paternalism... Uninterested in the blame game, the average citizen may have a much harder time remaining just above the poverty line when even the Serbia's wealthy spend more then half of their income on food while 90% of others lose 80% of their income on feeding. Since very little is left for any discretionary spending there is no demand side economic policy, short of starving people to extract forced savings, that will kick-start the economy. Of course, it is the existential concern that is the motivating factor behind recent wave of worker strikes across Serbia demanding wage hikes from the government. Although it is very easy to sympathize with the demands striking workers are making, it is also that much easy not to notice from whom are they demanding their wage increases. In Serbia, the government is still the omnipresent and omniscient institution
and, probably, the most secure source of individual wealth.
Meanwhile, employers that wish to hire in order to support expansion of their business may be sidelined not just by an endless list of necessary compliances to the government but also by the prohibitive tax on employing an additional worker. Until recently, for example, cost of employing a worker entailed little over 100% of the paid wage. To alleviate the burden that stacks heavy penalty on expansion of any business, the Serbian Parliament reduced employer social security contributions from 53.2% to 33.6% although even that measure did not yield "expected results". While one may applaud any reduction in taxes anywhere, the failure of the social security tax measure to kick-start the Serbian economy raises concerns for the legislative capabilities of Serbian parliamentarians. "Our politicians and representatives are applied intellectuals. They do not discover laws. Maybe divine them but not discover." explains Marko Lopusina, a journalist for the Belgrade independent Weekly Telegraph. As it turns out, however, Serbian legislators do not discover nor divine their laws - they simply approve ones served to them. World Bank Diktat Absence of legal discovery may not be Serbia's exclusivity, although making a tradition out of this noble source of "good laws" may require more then just a letter by the World Bank. Immediately following the formation of the current government in February 2004, then World Bank chief Rory O'Sullivan sent a letter to the chosen Prime Minister Kostunica outlining "The list of laws important for the continuation of the reforms". The letter demonstrates that the World Bank has monopolized financing of Serbian government and through such monopoly is, in effect, coercing change in the country, to much of the laziness of the domestic politicians. To make this point very clear to the Serbian government, Rory O'Sullivan presented himself not as a World Bank chief but a speaker for the "Law in Transition Group", a lending cartel composed of the world's top sources for financing governments, bluntly demanding that the new government adopt their laws. "The Donors expect these Laws to be adopted within the first month of normal parliamentary procedure of the new Serbian Parliament since they are ready for implementation." says the letter. Therefore, of the 44 laws on the cartel's list, 11 were already in the Serbian Assembly ready to be voted on, 19 were already drafted, 5 were in the drafting stage, 8 yet to be written and one, Law on Budget, needing some amendments. In addition, the lending cartel attached a $240 million carrot at $40 million increments, $200 million of it front loaded if passed within 30 days of the new legislature. By now, only 16 were passed by the Parliament, and in a remarkable legislative action on August 4 the Parliament managed to pass, in a single day, 4 of the listed laws - of course each legal document had the $40 million World Bank attachment to it. While much of the laws written by the World Bank may, in fact, be a great improvement over the ones replaced, it is rather apparent that the Serbian legislative agenda is not domestically controlled affair. In turn, the economic transition by a diktat induces Serbian legislators to be more interested in appearance then substance and rely heavily on political stalling on the passage of these laws as an appearance maneuver in creating a political mirage for the domestic audience. In fact, while the cartel demanded that 9 of the 44 laws get passed by the end of March of 2004 only 5 got passed by June and the remaining 4 in the past few days. Irrelevance of the Assembly? Much more has in fact been done then the privatization and price stability, as claimed, but the achievements are not Parliamentary but executive. The process of restructuring of Serbia's debt is an example of the heavy reliance on the Serbian executive branch, and by implication, irrelevance of the Parliament. Finance Ministry, for example, managed to have a rather successful negotiating dialogue with the Paris and London Club, financial borrowing gatherings of government and private sources, respectively. The points of the deal, where each lending outfit slashed over 60% of Serbia's debt, were quickly passed by the Assembly with superficial discussion or inquiry into the details of the deal. The massage is that the political dealing in Serbia is not done through the representatives of the people but through the front door of the executive branch that has very little time to implement laws let alone discover them. The dangers of a diktat-democracy are, of course, numerous and chief of which is the solid support for the laicism of the extreme nationalists who keenly remind people that a "patriotic despot" would quickly solve Serbian problems. While the despot may be the only patriot standing, the effects of the
irrelevance of the Serbian Assembly are then a consoling tribute to the
words of John Stuart Mill: "Let a person have nothing to do for his country,
and he will not care for it."
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