How the West Killed Djindjic

By: Dr. Sam Vaknin

Also published by United Press International (UPI)

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Written March 13, 2003

Updated March 2005

Precisely two years ago, in March 2003, the West killed Serbia's Prime Minister since January 2001, Zoran Djindjic. By forcing him, at times against his better judgment, to surrender one more war criminal, to pursue yet another mobster, to eliminate the remaining subsidies that rendered tolerable the drab and destitute lives of Serbs - the West cast Djindjic as its lackey.

His compatriots often accused him of being a supine American stooge. According to recent opinion polls, Djindjic trailed 10 other politicians in popularity. In truth, people also resented his vainglorious athleticism, conspicuous consumption, incisive intellect, his good looks, youth, energy, inexplicable wealth and meteoric rise to power.

He was a difficult man: haughty, stubborn, outspoken, abrasive and impatient. Aleksandar Tijanic, a Serb polemicist and columnist, called him "Little Slobo(dan Milosevic)" in an article in the daily Danas. His supporters dubbed him "The Manager" in recognition of his organizational skills.

Nor the did the West sweeten the bitter nostrums it so liberally administered. Money promised never arrived, sanctions were repeatedly threatened, ten years worth of onerous - and much disputed - economic reforms were unwisely compressed into the past 26 months. Foreign investors - with the exception of a few multinationals - abstained.

In a belated attempt to emulate his erstwhile ally and current archival, the ubiquitously popular Milosevic-lite Vojislav Kostunica, Djindjic demanded a final settlement of the Kosovo gaping wound and courted the hitherto hostile Orthodox Church. But this turnaround was deemed by his countrymen to be merely his latest cynical ploy to revive his sagging political fortunes.

As leader of the Democratic Party in the 1990s, Djindjic cultivated a relationship with Yugoslavia's president, Slobodan Milosevic and his reviled regime. He fraternized with the likes of Radovan Karadzic, the Bosnian Serb leader and war criminal and Zeljko Raznatovic ("Arkan") the bloodstained militia chieftain and mafia capo.

During the Kosovo war in 1999, he infamously fled from bombed Serbia to tranquil Montenegro, claiming implausibly that, being branded by Milosevic "NATO's mercenary", his life was in the balance. An opportunistic dealmaker, he was dogged to his dying day by persistent rumors about his alleged contacts with the mob.

The head of the Zemun gang, based in a suburb of Belgrade, is Milorad Lukovic a.k.a. Legija. The municipality was formerly run by Vojislav Seselj, an indicted war criminal, now incarcerated at the Hague. When Lukovic commanded an elite police unit, the "Red Berets", he helped Djindjic attain power by refusing Milosevic's orders to suppress dissent. His lot now stand accused of the assassination.

Paradoxically, the death of Djindjic restored stability to Serbia. A state of emergency was declared, tantamount in some ways to a military putsch. But the army, police and security organs did not leverage this fortuity into full control of the tormented country and Kostunica re-emerged in due time to capture the Serb presidency and then appoint a reformer to the premiership.

Shocked by the atrocity, the umbrella grouping of 18 political parties, the Democratic Opposition of Serbia, now in power, re-coalesced around a single leader. Radicals of all stripes were flogged by a disgusted electorate. The relationship between the two uneasy constituents of "Serbia and Montenegro" weakened further, as the latter drifted away.

But in one respect Djindjic may be irreplaceable. He was a true economic reformer with the will to proffer painful solutions to apparently intractable problems.

The Djindjic-prodded government liberalized prices, restructured state finances, rescheduled Serbia's international debts, cleaned up the banking sector by closing down otherwise dysfunctional money laundering outfits, freed the labor market, widened the tax base by eliminating loopholes and exemptions and privatized aggressively.

The much-lauded governor of the central bank, Mladjan Dinkic, stabilized the Yugoslav (now Serbian) dinar, cut hyperinflation to low double digits and succeeded to have some Milosevic-era debts written off.

This earned them a three year standby agreement with the International Monetary Fund, World Bank soft loans and close to $300 million to overhaul the crumbling energy infrastructure.

But the economy, despite growing at an annual rate of more than 3 percent since 1999, is still less than half its already depressed 1989 level of about $2700 in gross domestic product per capita. Serbia endured a decade of war, sanctions, civil wars, international pariah status, bombing, and refugees.

Its infrastructure is decrepit, its industry obsolete, its agriculture shattered to inefficient smithereens, its international trade criminalized. The foreign exchange reserves are depleted by years of customs evasion and theft. Serbia's exports may have climbed by one tenth on Djindjic's watch- but imports surged by one third. The country's yawning trade deficit is menacing as is the stagnation in its dilapidated industrial output.

Serbia is destitute. The average monthly salary is $100 (or c. $140 in Belgrade). In 2000, more than one third of the population subsisted under the official poverty line. Things got worse since then. One fifth of the populace survives on $1 or less a day.

Privatization resulted in mass layoffs - 15,000 were made redundant when the Zastava factory in Kragujevac was sold. Another 10,000 lost their jobs when the licenses of four banks were withdrawn due to illicit activities. In a workforce of about 1.5 million people - such numbers hurt.

No wonder that the government took a breather, relegating to the sidelines legislation pertaining to mortgages, bankruptcy, denationalization and the financing of political parties. A White Book published in February 2003 by the Foreign Investors Council in Belgrade recounted the unfinished agenda of languishing reforms:

"The civil, in particular commercial, procedure should be strengthened to facilitate the speedy conduct of the trials; Judgments of superior courts should be made binding on inferior courts; A larger number of judges need to be trained and the current case-load per judge should be reduced; Banking legislation should be enhanced with respect to loan loss provisioning and establishment of the legal lending limit; Repayment history (should be used) for the purpose of the calculation of loan loss provisions; Increase the legal lending limit, where transactions are backed up by quality collateral; Allow investors the right to re-sell the right to use of land; (Provide) option for subdivision of the land use obtained; Allow buyer to collateralize the 'irrevocable right of use' after transfer."

The document also calls for objective criteria in the granting of tax holidays, the speedy introduction of the value added tax, a reform of the antiquated payment system, the formation of a special unit to handle the tax affairs of expat confidentially. A new law on concessions should streamline the application procedure by unambiguously identifying the authorities in charge and by rendering the process transparent. The requirements for work and residence permits should be simplified and made less exacting.

Next Djindjic moved to tackle the murky underbelly of Serbia's thoroughly criminalized economy.

Albeit reluctantly, he clamped down on arms sales to the likes of Iraq - an important source of foreign exchange and employment. The decision to hand Milosevic and a few other henchmen to the war crimes tribunal in the Hague was largely economic, too, in that it released $1.2 billion in international aid.

Djindjic curbed petrol smuggling by permitting only the importation of crude oil and by obliging importers to refine locally. Illegal construction was demolished in accordance with stricter new statutes, incurring the wrath of many penumbral figures, collectively decried as "the construction mafia".

The next target was the mob's extensive and all-pervasive pecuniary and commercial reach in cahoots with the ministry of interior, the secret services and the military. This particular ambition may have cost him his life.

In a public debate with Dusan Djordjevic on the Web pages of Central Europe Review, I wrote in October 2000:

"There are undercurrents and overriding themes in Serb history that perseverate and appear immutable. There is no reason to believe that the election of the hitherto non-corrupt and fiercely nationalistic law professor, Vojislav Kostunica, will miraculously transform the apparently ineluctable essence of Serb history and its salient proclivities ... Balkan societies are organized in (often regional) networks of political patronage, business and crime in equal measures. Politicians, criminals and businessmen are indistinguishable and interchangeable.

Perhaps as an inescapable consequence of all the above, the Balkans (and Serbia) lack institutions (though it fanatically maintains the verisimilitude of having ones). The ultimate arbiters have always been raw force or the threat of using it. The disempowered are passive-aggressive. Recondite sabotage and pertinacious stonewalling are their modes of self-defense and self-expression. The unregenerate power elites react with contemptuous suppression and raging punishment. It is a war from within to mirror the war from without. The result is a moral quagmire of depravity and perfidy."

Djindjic was a consummate philosopher. He studied under Jurgen Habermas in Germany. The titles of his four books are his most precise and comprehensive obituary: "Serbia - neither East nor West," "Subjectivity and Violence," "Yugoslavia - the Partially Formed State" and "The Fall of the Dialectics".

Also Read:

After Milosevic, Milosevic

New Serbia's Old Economy

Yugoslavia Turns to High Return

The Hungarian Kosovo

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