AIM
Poverty and inequality spreading over Serbia

MISERY - THE TRUMP CARD FOR THE ELECTIONS

Ratomir Petkovic

MON, 28 FEB 2000


PODGORICA, February 10, 2000 - While in developed countries it is considered that the poverty line is reached when the population uses half of its average earnings for food, for underdeveloped ones, such as Serbia has become, poverty line is the line separating life from death. It is estimated that poverty and inequality will have a decisive influence on the results of the forthcoming elections (no matter when they are held) unless tension, which is a consequence of growing poverty, provokes conflicts.

Elections in Serbia, which the opposition wants as soon as possible, have not been scheduled yet, but it is evident that election campaign has already begun. For the time being, the regime and the opposition are bandying words in mutual accusations thus making life here even more unbearable. The authorities are trying to convince the citizens that the opposition, which is in power in Belgrade and some other larger towns in Serbia, has made life even more difficult with poor city transportation and other municipal services, while the opposite side blames the regime for shortages of food and drugs and low living standards.

It is up to the people to say what hurts them most, but irrespective of their opinion one thing is certain. Poverty and inequality will be the "trump cards" in the electoral campaign and will exert a decisive influence on the electorate’s decision whom to put their trust in. Pre-election times have coincided with the holding of congresses of the two out of three ruling parties (the Serbian Radical Party and the Socialist Party of Serbia), so that Congress preparations have been used to convince the public that the ruling parties are the only ones that can offer better prospects to the people. As it usually happens on such occasions, more promises are given than are carried out in deed.

The economic-social picture of Serbia is "as bad as can be". Even some regime controlled media have are devoting greater attention to growing poverty as it is impossible to avoid it in everyday life. And while titles are optimistic, the data given in articles are rather disquieting.

Poverty and inequality lead to tensions which, when they reach critical point, result in inevitable conflicts. And while developed countries have determined that the poverty begins when people have to give half of their incomes for food, in underdeveloped countries that line has not been determined, i.e. it is the line that separated life from death. Some non-governmental institutions claim that the poverty line begins when the population has to allocate USD 0.85 for food daily. It has been calculated that the majority of population in Serbia spends as much as USD 1.15 a day for these purposes. These statistical figures are deficient as they were obtained on the basis of official prices at which some articles cannot be bought since they are not available on the market. That is why it is considered that people spend much more on food, i.e. that the average December income of 1,890 dinars (according to statistics too) is insufficient for a "consumer’s basket" which costs 5,830 dinars.

In Serbia 120 thousand workers earn less than 600 dinars a month. Textile and leather industry workers get only 540 dinars. The former middle class, to which 70 percent of the population belonged a decade ago, has been divided into a narrow circle of rich people who, according to estimates, number some 200 thousand, then middle class which now includes less than 20 percent of the population and 2 million of people living in extreme poverty. The poor spend barely 2.9 percent of the national product. Some 20 percent of Serbia’s population spend 7.9 percent of the national product. Those well-versed in the situation here say that Yugoslavia is the poorest country in Europe and, in that respect, can be compared with some poor African countries.

Stratification of the population occurred under the current regime which explains this phenomena with sanctions imposed by the international community. According to the ruling structures, that is a price we have to pay for freedom and independence. These were key notes in the inaugural speech of the current President of Yugoslavia on his election to that function.

At the time of congresses and before the elections, the authorities endeavour to alleviate social and economic decline of the population by preventing the increase of prices. Since there are forces in the economy which cannot be stopped and which, like water, find the way out even through tiny cracks, this measure has its reverse side, which has turned into its opposite because it has caused shortages and opened the door to speculations despite all measures of the police and inspection services.

Dominating administration has caused the flourishing of the grey economy against which the authorities are officially waging a "war", but are actually encouraging with their measures. The fact that the population is actively engaged in grey economy has helped preserve social peace, since social justice leads to an even greater misery. Many rich people openly admit that they have become wealthy through their dealings in the sphere of grey economy. They have achieved this as they are in a privileged position and have taken advantage of a possibility of mediating in the turnover of strategic and attractive goods, both by importing as well as exporting them.

A specific segment of country people have also significantly improved their material status because they produce food which they directly sell at the marketplace where prices are not controlled. It is estimated that some 10 percent of the rural population has joined the rich. On the other hand, urban population is rapidly growing poorer, although they have always been in a better position than farmers.

It is estimated that about 20 percent of the population is unable to ensure its own reproduction with its earnings as they are below the amount necessary for meeting basic needs. People who officially do not earn anything should also be added to this group. This group accounts for some 20 percent of the population. They all see the way out in grey economy. Those well-versed say that in Belgrade alone, there are approximately five thousand people who peddle plastic bags, i.e. supply bakeries, butcher shops, pharmacies and other private shops.

Peddling is a profession of several thousand people who live in the capital by selling various products they carry in their bags.

They, as well as foreign currency and cigarette dealers, are the target of inspection and police teams, but the struggle of the authorities against grey economy has not yielded any results for two reasons. The first is that influential people are also actively engaged in the grey economy, and second that this kind of activity is for many people the only way to survive. Grey economy is the last chance of salvation so that it gives greater guarantees for the preservation of social peace than economic measures.

An increasing number of people engaged in grey economy has created competition and reduced profits which no longer guarantee earnings sufficient for covering basic needs. That is why many think that its possibilities have been exhausted so that poverty and inequality are approaching a critical point after which come tensions and conflicts. Since almost one half of the population has reached the level of bare survival, the consequences are reflected in increased morbidity and mortality, especially among infants and old people, growing number of suicides and spreading crime.




Original article