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---------- Forwarded message ----------
Date: Mon, 07 Jun 1999 10:55:28 -0700
From: Sid Shniad <shniad@sfu.ca>
To: ccpa@policyalternatives.ca

The Daily Telegraph                                     June 5, 1999


        By Boris Johnson 

        The Yugoslav economy has been smashed by Nato bombardment 
to the kind of primitive conditions that existed at the end of the Second 
World War, according to official figures released in Belgrade.
        As Tony Blair and other leaders gave warning that the West will 
not pay to rebuild the country until Slobodan Milosevic is removed 
from power, Serbs say they are facing an economic crisis of 
unprecedented severity.
        Officials say that there are now 500,000 workers out of jobs, an 
unemployment rate of about 27 per cent, with concealed 
unemployment at 50 per cent. The elderly have been told that their 
pensions will be frozen, and payments are now irregular.
        At the latest count, Nato aircraft had destroyed at least 50 
six trunk roads, and five civilian airports. Belgrade says 20 hospitals, 
30 health centres, 190 educational institutions, and 12 railway lines 
have been badly damaged.
        Yugoslavia's ability to manufacture cars has been entirely 
eliminated with the destruction of the Zastava factory in Kragujevac, 
which has in turn left 120 contractors facing bankruptcy. While the 
Yugo cars produced at Zastava were perhaps unlikely to find an 
enormous market in the West, the demolition has fuelled Serb 
suspicions that one of the objectives was to open up Yugoslavia to 
foreign acquisition.
        A month ago the oil giant Petrohemija was one of the pearls of the 
Yugoslav economy, its value estimated by Western accountants at 
about 600 million. The company's reservoirs are now all but 
        Yugoslavia's two largest oil refineries, at Pancevo and Novisad, 
have been bombed to the ground, in addition to the Yugopetrol 
warehouses. The effect has been increasingly to pastoralise the 
economy, with agriculture rising from 35 to 50 per cent of the country's 
gross domestic product, although farmers are said to be suffering from 
popular fears about the poisoning of food.
        The price of garlic has fallen to one dinar, from three dinars 
the bombing began, and other vegetables have shown similar 
depreciation. The total bill is estimated by Yugoslav economists at 
between 30 billion and 60 billion, and Yugoslavia will inevitably try 
to claim war damages from Nato.
        Some officials are already planning on the basis that they will 
receive no such help, and are drawing up "work drives" to rebuild 
bridges and roads, similar to the reconstruction which took place after 
the Second World War.
        The reality is that sanctions and 10 years of Milosevic-style 
socialism had already done huge damage to the Yugoslav economy. 
Even before the Nato bombing commenced, economists forecast that 
Serbia would not achieve 1990 levels of productivity before 2015.
        In their campaign for reparations, the Serbs also face the problem 
that they are held by many in the West to be financially responsible for 
the cost of the Albanian exodus and attendant humanitarian disaster. 

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