Re: Political Economy of Yugoslavia

[phillp2@xxxxxxxxxxxxxxx (ts99u-1.cc.umanitoba.ca [130.179.154.224]) by]

Barkely,
I don't know if I can answer your question.  I don't have any
contacts within the Bosnian Muslim community and, quite frankly, I
have lost touch with what is going on there.  I can, however,
speculate on your question, for what it is worth, based on
Slovenian experience with perhaps some reference to Serbia's.

Slovenia's early experience with (foreign) privatization was bad.
The most notorious case was a cigarette company that was bought
out by an Austrian company that promptly came in and physically
carted off all the capital equipment of the Slovenian firm (which was
state of the art) for use in Austria and replaced it with old, outdated
equipment thereby raising costs and lowering productivity.  I believe
the new firm then demanded the employees take a wage cut
because of their low productivity.

As you know, Slovenia has been loath to open itself to foreign
investment because of the inflationary and destabilizing impact, a
fact that has bothered the EU which, of course, has demanded that
Slovenia open its borders to international capital flows.

However, the main point is that 'privatization' has not, and did not,
bring in any influx of new capital but, rather, allowed foreign firms to
buy capital equipment at firesale prices and either strip the assets
or engender profits that are promptly exported from the domestic
economy.  I believe this has also been the case in Russia.  I think
this was one of the reasons that Serbia also balked from the
market 'reforms' required by the IMF previously.  My experience is
old now, but talking to managers in Serbia earlier in the decade,
there was a great fear that privatization, which could only occur by
foreign capital or by managerial take-overs (without real
compensation) since there were no pools of private domestic
capital to inject into the economy, would lead to increased
exploitation of workers and enterprises without any commensurate
stimulus to economic growth. (By the way, I have survey evidence
of this in the case of Slovenia.)

As I indicated in another post, self-management has I think been
given a 'bum rap' in that it was much more successful than has
generally been credited by the capitalist press (and economists) in
the west.  Whatever its faults, it was popular with workers -- at
least in Slovenia where public opinion polls gave it overwhelming
support.  I believe the same was true throughout Yugoslavia.  My
meetings with workers and trade unions in Serbia and Cerna Gora
would support this view.  Opposition to self-management and social
capital came largely from economists and managers (cum
capitalists).

So, to answer your question, why have the Bosnian Muslim
opposed privatization despite the fact that their mini-country was
the creation of American designs to incorporate the region in the
'American Empire', I can only suggest that they have looked at the
results of privatization in Croatia, the Czech Republic, Macedonia,
etc. and realized that its a mug's game.  As others have noted,
little if any net inflows of capital have come to Bosnia since
Dayton, and what money has come in has gone to pay the
international money lenders.  Privatization would do little to bring in
new money so it is counterproductive to sell out to foreign capital
which will either raid the real capital stock, or buy out at firesale
prices to repatriate any profits abroad.

I must admit, I have never understood the allure of privatization of
social capital which is merely a shift from public ownership of
mutual funds to private ownership of mutual funds with no essential
change in management or capital access.  Am I missing
something?

Paul
Paul Phillips,
Economics,
University of Manitoba

Date sent:      	Fri, 4 Jun 1999 13:14:50 -0400
Send reply to:  	pkt@xxxxxxxxxxxxxxxx
From:           	"J. Barkley Rosser, Jr." <rosserjb@xxxxxxx>
To:             	POST-KEYNESIAN THOUGHT <pkt@xxxxxxxxxxxxxxxx>
Subject:        	Re: Political Economy of Yugoslavia
Originally to:  	<pkt@xxxxxxxxxxxxxxxx>


>        Question for Paul Phillips:
>       I grant that Warren Zimmerman's sandbagging
> of the de facto cantonization agreement in Bosnia-
> Herzegovina in 1992 contributed significantly to the
> outbreak of the war there.  If this was done for motives
> of imperialist economic domination, then why do we
> now hear that the Muslim Bosniaks are resisting
> privatization?
> Barkley Rosser