August 15, 1994 Vreme News Digest Agency No 151


The Krajina Economy

by Filip Svarm

Krajina's Prime Minister Borislav Mikelic admitted that ``the assessments of the state of the economy were more the result of talk, individual experience and impressions than reliable figures.'' The figures he disclosed in Knin on April 21 do not leave much room for optimism

EMPLOYMENT: ``Assessments are that today the Republic of Serb Krajina (RSK) has a population of 430,000 and just 36,000 employed or 8.3%. The situation would be even worse if the figures included technological surpluses or lists of people who are only formally employed.''

WAGES AND TAXES: ``The level of average salaries is not even close to the existential minimum and the level of tax income to cover the budget is just eight percent. Wages are below the existential minimum and crime has become a legal way of survival.''

AGRICULTURE: ``The situation in the agriculture is illustrated by the following fact. Eastern Slavonia entered 1994 with unharvested mercantile corn, mainly on state owned land, on 15,000 hectares or 30% while winter preparations for sowing were done on just 45% of arable land. Cattle farming recorded even worse results. Breeding herds face destruction. The private sector is almost producing only for its own needs. meat and cattle sales face even worse problems. If the negative trends are allowed to continue the RSK could face problems in feeding its population.''

TOURISM: ``The use of tourist facilities presupposes the lifting of sanctions and a political solution. Tourism has to have complete personal and material security for the tourists.''

INDUSTRY: ``Most industrial facilities were linked to the large systems in Croatia and have been left without a market and management. The second important characteristic of the RSK economy is that we do not have virtually any facilities in branches like electronics and chemical engineering. The third characteristic is its great dependency on imports and low level of reliance on local resources (insufficiently developed food and lumber industries).''

ELECTRICITY: ``In 1993, we achieved a production of 275,972 MWh which is 648% of the planned production while consumption stood at 540,153 MWh or 90.5% of the planned.''

TRADE: ``The RSK registered hundreds of new companies, mainly in the sales sector. The RSK has very little benefit from those companies since their dealings mainly fall into the category of the gray economy and cause great damage...''

PERSONNEL: ``One of the greatest problems in the RSK economy is the lack of experts and managers. The economy today is headed by people with very little management experience. On the other hand there is a lot of pressure from unqualified workers who want employment at any cost and the companies are more social institutions than economic subjects.''

CAPITAL: ``Although we don't have any precise figures, the economy's financial potential is minimal and it cannot sustain the existing level of production with its own potentials.''

RESERVES: ``The goods reserves were almost emptied during the war and the economy instead of recording a rise in substance is recording a rapid loss based on social expenditure and wide-spread criminal activity.''

Mikelic also listed measures to revive production, most of them based on integration with the Yugoslav economy. He said Slavonia, Baranja and Western Srem should link up with Vojvodina while Northern Dalmatia, Lika, Kordun, Banija and Western Slavonia should turn to the Banja Luka region and through it to Serbia. In other words Krajina's survival depends solely on Belgrade.

Assessments are that the figures were revealed dramatically to let the RSK political structures know who's in charge.

As if in confirmations Mikelic said: ``I would like to specially thank distinguished leader and statesman Slobodan Milosevic. I am convinced that Serbia and FR Yugoslavia will not abandon us.''