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Dear friends,
After considerable time, I succeeded to get the article on the lessons of Polish privatisation experience for privatisation in Serbia published in the paper "Trade union commissar" , N0. 3124/155, 18 May 2001. I hade to remind the editors that even if they did not like the content, the debate was necessary and that I was taking the responsibility for the content and all the consequences, not them. I hope there will be some organised resistance to the acceptance of the proposed new privatisation/robbery law. All the best, Vera ------------------------------ ----------------------------- Vera Vratusa Faculty of Philosophy Department of Sociology Belgrade University, Yugoslavia Bitter Polish experience - Contribution to the privatisation debate in Serbia "Let post-communist Poland be a warning to Serbs and other nations who are entering the path to 'democracy' and a 'free-market' economy. This message was sent through Internet in December 2000 by Piotr Bein, the author of "A travelogue: To Serbia VIA Poland" ([EMAIL PROTECTED]), and the economy professor Kazimierz Poznanski ([EMAIL PROTECTED]), the author of "Wielki przekret" (grand swindle), the best selling book in Poland since it was published in February 2000. By this alarm sounding they wanted to stimulate the public in the countries of Central, Eastern and south-eastern Europe were it was still not too late, to prevent serious mistakes of Poland's privatisation to be repeated. Their main warnings can be resumed as follows: 1. Public discussions about privatisation must begin on time, before the government pushes the laws harmful for the future of the nation through the Parliament. Public was the accomplice of the criminal sell out in Poland by accepting without questioning domestic and foreign propaganda, that all accomplishments of the nation after Second World War were worthless and that therefore "our assets are worth nothing" and "foreign is better". Using this propaganda the members of the ruling coalition (composed mainly of the members of once rebellious "Solidarnosc", but also of former communist nomenclature) have deceived the nation that inherited assets were worthless and that only foreign capital can restore their value. 2. The politics of International Monetary Fund, World Bank and European Bank are harmful because they request the elimination of every sort of priority and support to development of domestic owners. Today 70% of industry and 90% of the mass media in Poland are in foreign hands, which present the world record. Even though the economists from the countries that are militarily organised within NATO request complete opening of the economies of the former "real socialist" countries, the share of transnational capital having the seat outside their homeland, does not exceed around 10%. 3. The laws against corruption in administration, that soon became larger than during the communist era in Poland due to its filling up with the favourites of the new ruling coalition, were not immediately enacted and later on were applied only against the political adversaries. This freed the hands of Polish bureaucracy and officials to rob public property under their control. In the attempt to maximise private gain through serving to foreign interests, they permitted the ruining of public enterprises in order to justify ridiculously low selling prices. Entire book could be written on legal and administrative tricks that were used for the reduction of tender value. Foreign investors were able to offer greater bribe than the domestic ones. Government officials and bureaucrats received for the cheating sell-outs the bonuses according to the rule "The lower price you help arrange, the bigger your 'commission'.". In this way they have "given away the 'goose that lays golden eggs' for the price of an egg". They have thus exposed both domestic and foreign Polish policy to the influence of alien interests by the way of financial extortion. 4. Foreign investitors have manipulated the privatisation process through tenders by eliminating real market competition. For example, in 1992 international tobacco companies have on the basis of mutual agreement succeeded to buy Polish plants worth hundreds of millions of dollars each, for only little fraction of their market value. Foreign investors have than changed the original production in accordance with their own business aims into one less healthy and directly harmful. Tobacco that was previously fermented in a natural way, so that many toxins would be eliminated from Polish cigarettes, presently is prepared with chemicals and genetically modified tobacco, so that smokers would become more dependent, even though it is known that such procedure three times increases the mortality due to lungs' cancer. 5. After buying industrial enterprises at a very low price, foreign alleged investors often used to close them down in order to eliminate competition to western products or to change the use of acquired property in the search for bigger profits through real estate speculation or establishing of wholesale trade. Thousands of workers dismissed from their jobs were thrown out on the streets. They were not absorbed through opening of new work places, because no programs for this were provided for. Consequently 65% of Poles arrived at the poverty line or below it in 2000. Among economy branches, the most devastated were mining and agricultural production, while foreign hybrids, manure and subsidised but unhealthy agricultural products were imported from European Union. Typical example of harmful privatisation is the case of famous Gdansk Shipyard in which originated the trade union "Solidarnosc", the mass power of the overthrow of the communist nomenclature rule. Its value together with the land is 3.3 billion zloty (around 0.8 billion US$). Polish investors and foreign group made a bid. Through administrative manoeuvring, the offer of Polish group of 640 million zloty was eliminated, while the foreign investors took the shipyard for just a bank guarantee of 73 million zloty instead of money. Namely, Polish officials allowed equipment to be sold beforehand and production to be discontinued. The board of directors intentionally underestimated commercial value of the shipyard (227 million zloty), while at the same time overestimated the indebtedness by over 6 times (377 million zloty), in order to announce insolvency. As if this was not enough, the foreign purchaser immediately received 43 million zloty from the shipyard's treasury. The remainder was planned to be paid over a long period, causing thus progressive reduction of the proceeds due to inflation. The new owner finally procured a change of the land use, making it possible to speculate with the first class land in the heart of the city, after elimination of ship building production and loss of thousands of jobs. It is hard to believe that the new government of the Democratic opposition of Serbia will listen to this warning from Poland, having in mind that the new finance minister, Mr Djelic, acquired his experiences about "transition" among other places precisely in Poland, in which according to data gathered in the summer 2000 survey, 68% of respondents expressed their dissatisfaction with the economic reforms carried out. The same reforms are being carried out in Serbia by the new government, including the restrictive monetary policy, elimination of protection of domestic production and subsidies of basic staple foods and public medical, educational and communal services. The result of such policy have been felt by all citizens in the form of the fall of the index of industrial production in comparison to September 2000, with simultaneous dizzy growth of prices. Earnings have nominally increased, but remained in real terms unchanged or even diminished. In contrast to prices, that keep on rising, the earnings are frozen. The key move of the new government even before its official inauguration, was the taking over of the control of the People's Bank. This is in full accordance with the maxim of Mayer Amschel Rothschild(1734-1812), founder of one of the most powerful banking houses: "Give me control over a nation's currency, and I care not who makes its laws". At the same time in enterprises and institutions the supporters of new government were installed in ruling positions, in order to control the further privatisation process. Through the suspension of the Law on privatisation from 1997 which was supported by than the most numerous Trade Union since it stipulated that 60% of the stock be distributed to the employees and retired people as recognition of their work contribution to creation of social wealth, the new government seams to want to eliminate even the theoretical possibility that the greater part of national wealth remains in the hands of local population, opting for the sell out of up to three fourths of assets to the so called "strategic partners". Judging from the announcements of the law that will provide "safety" and "privileges" to foreign capital, no conditions significant for the restructuration and development of domestic production will be posed. They will be on the contrary endangered further. The lessons from Polish warnings for the domestic trade union public impose themselves. Before privatisation it is necessary to acquire through all means of trade union fight the active participation in making of communal and regional economic and social development plans, in their consequent realisation and distribution of proceeds, as well as in the conceptualisation of the comprehensive system of laws. Among them are especially important those that should discourage and sanction corruption, as well as forbid or limit both foreign and domestic private ownership of strategic sectors of economy, natural resources, communal systems and social services. This limitation is essential in order to make these resources and services accessible to all social strata and to the future generations. Legal norms should also oblige foreign investors to continue the production in plants taken over and to reinvest at least 50% of the profit into local work places. On the basis of proceeds of the sold enterprises for which the good price was attained, the funds should be provided for the social protection and retraining of unemployed workers, as well as for cheap credits for small and medium enterprises producing ecologically safe and energy saving products of the information era, including the organic production of healthy food. To the possible critique of the bearers of "foreign propaganda disguised as a domestic one", that such demands would "scare of" and "repel" foreign capital, it can be answered that speculative capital is better not to come at all into the country, because it destroys society and economy. IBM for instance did not want to do business under such conditions posed by the government of India, but other micro-electronic companies understood that under these conditions, acceptable to the economy of the host country, they still can make profit. According to the assessments of the NATO aggressor countries, the 1999 bombing inflicted 35 billion US$ direct material damage. Indirect damage is at least three times higher - while the human losses and long standing contamination and radiation is almost impossible to quantify. The present debt of Yugoslavia to foreign creditors, even though the geometrically progressing interest rate debt payments have long ago exceeded the entire originally borrowed sum, is almost three times smaller than the direct material damage. In stead of accepting all sorts of blackmails for getting just few hundred thousand millions of US $ (mostly again usury credits), it should be demanded from the government to insist on the reparations and the return of the usurped social, state and private property in Kosovo and Metohija. |
