Stability Pact points the way for Serbia to avoid disaster

It is widely believed that if only Slobodan Milosevic were removed from power, Serbia would be set on a path of renewal

It is widely believed that if only Slobodan Milosevic were removed from power, Serbia would be set on a path of renewal. But reality here is more complex and more troubling. If Serbia is to avoid a humanitarian disaster this winter, all of its politicians must put ambition aside so that the country can begin to rebuild.

Even before the disaster of Kosovo, Serbia was an economic basket case. Key economic reforms that transformed much of post-communist Europe - macroeconomic stabilisation, freeing prices and foreign trade, privatisation - were scorned in order to sustain an authoritarian regime.

Instead of integrating Serbia into the international community, the regime opted to cow its people into submission through high inflation, a brutal black market economy, and tolerance of massive corruption. NATO's bombing was the coup de grace for an economy dying on its feet.

So stark are conditions now that the very survival of the nation is at stake. Bomb damage has been estimated at $30 billion, triple this year's GDP. Industrial production will drop this year to one-fifth of its value in 1989, while GDP per capita will be only $975, a third of its value 10 years ago.

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Without international help, and if our country "relies on our own resources" to rebuild, which is the stated policy of the regime, it will take between 40 and 80 years for Serbia to return to the economic level it enjoyed when President Milosevic first took power a decade ago.

Serbia's people recognise that without reintegration into the world community, reconstruction is impossible. Continued isolation will mean generations of misery. The regime knows this, too, but seems to want the nation to go down with it.

Although the government realises that there is no money for reconstruction at home and that its accounts abroad are frozen, it tries to buy time by declaring its intention to reform and co-operate with the world, and by using pathetic marketing ploys such as opening ceremonies for pontoon bridges, ferry ports and other quick-fix rebuilding jobs. Of course, everyone is aware that the incumbent government could not, even if it wished, co-operate with the world since not a single government member can obtain a visa to travel. All that the politicians indicted by The Hague War Crimes Tribunal may do now is run a prison economy, which is what they are doing.

Discontent is mounting. Protests and rallies increase in size and frequency. Serbia could witness one of two scenarios before year's end:

1. A spontaneous, large-scale revolt whose outcome and consequences (think of the bloodshed in Bucharest in December 1989 or the Tiananmen Square massacre) are uncertain, or

2. The peaceful demise of the Milosevic regime.

The second scenario suggests change through democratic elections. But fair elections in Serbia are currently impossible, not only because the regime holds all the media cards and controls the election process, but because the country is in such ruin that no party programme could realistically be disseminated.

In any case, elections could not be organised in time to avoid a humanitarian disaster this winter.

That is why Group 17, an organisation of leading economists and social scientists who aim to create in Serbia a market economy and open and democratic society under the rule of law, is proposing a "Serbian Stability Pact" as a peaceful and fast solution to end the crisis. The pact is based on the judgment that all Serbia's political protagonists must take responsibility in the current crisis. Thus, the plan, calls for the following:

A constitutional means to remove Mr Milosevic from power, with the ruling party renouncing its executive power for a period of one year;

All opposition parties will renounce their aspirations to power for the same period and their leaders will refrain from joining transitional forms of government;

A transitional government of technocrats will be formed (the most serious candidate to head this government is Dragoslav Avramovic, who enjoys wide popular support), its members pledging not to run in the elections to follow their one-year term, and not to support any single political party that might run;

Radical economic reform.

Since its creation on July 18th, the Serbian Stability Pact has gained the backing of opposition parties and groups, previously divided - among them Vuk Draskovic of the Serbian Renewal Party, and Zoran Djinjic of the Alliance for Change. It also has the strong support of the Serbian Orthodox Church, the only institution in Serbia with its credibility intact, as it has condemned the crimes committed in Kosovo and called for the resignation of Mr Milosevic. The Serbian Orthodox Church is widely seen as a surrogate for our lost national identity. Its participation in the Stability Pact provides additional legitimacy and a guarantee for a peaceful transition.

On Thursday more than 100,000 people gathered outside the federal parliament in Belgrade to demonstrate their determination to effect political change peacefully. By rallying behind this domestic pact, Serbia can proclaim its intention to make itself a viable candidate for partnership in implementing the Stability Pact for south-eastern Europe that the leaders of the world community initiated in Sarajevo a few weeks ago.

In an incredibly short period of time the Serbian Stability Pact has united more political protagonists than any previous democratic movement in Serbia since the break-up of Yugoslavia. Our hope must be that the voice of reason will begin to prevail in Serbia, and a transitional government can begin to rebuild the country in genuine freedom and democracy.

Mladjan Dinkic, a founder of Group 17, is a leading Serbian economist and one of the principal authors of the Stability Pact for Serbia.