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Update No: 058

The situation in Serbia is volatile. There are two camps, both transfixed by the trial of Milosevic in the Hague. A parliamentary session was stopped the other day so that deputies could go and watch the show. 
One side are those delighted at the turn events are taking. Former president Milosevic has been on trial since February 12th. They look forward to putting his henchmen and the whole previous regime on trial with him.
Others feel deeply affronted. They regard a prosecution of Milosevic as a trial of the entire Serbian nation. Some of this persuasion have more practical reasons for their indignation.
The division between these two camps extends into every party in Serbia, indeed almost into every Serb. But the ruling coalition are cooperating with the West up to a point. They did after all hand over Milosevic, but by no means all possible war criminals. General Ratco Mladic, who is wanted by the Hague tribunal for crimes perpetrated in Bosnia in 1992-95, has been seen openly flaunting his presence in Belgrade. Clearly he has high-up protection among the security forces - after all he is one of them.
But this is infuriating the West. The US has set a new deadline of March 31st for the handing over of Mladjc and Radovan Karadzic, his old political boss, or there will be an interruption in flows of aid and credit.
The anti-Milosevic group has one huge advantage. He is clearly an anachronism. The world has moved on since the days when he and his cronies could fleece the nation at will, citing external enemies the while as cover for so doing. It is now clear that he headed a regime of unparalleled corruption, at least for Europe.
The authorities are collecting evidence that huge sums were secreted abroad in Cyprus and Switzerland, London and Dublin. A key figure is Bogoljub Karic, a billionaire banker and sidekick of the Milosevics, having published the memoirs of Mira, Milosevic' wife. He played a key role in laundering around US$20bn, the 'theft of the century.' Other figures are being investigated too.
"Milosevic organised this baroque state," says Alexander Radovic, the director of Serbia's Public Revenue Agency, which is presiding over the investigation, concerted with the Ministry of Finance and the national bank, into the commercial crimes of the old regime. "We want to prosecute them, and we want them all in jail."
A key figure in the process is the governor of the national bank, Mladjan Dinkic, who says: "Over the years millions of dollars flowed through the Astra Bank (headed by Karic) to offshore companies…. What is certain is that this money was never returned to Yugoslavia." The culprits never suspected that they would one day be called to account for their actions, so impregnable did Milosevic's position seem.
The investigation is expected to play an important part in the case against Milosevic in the Hague. What the new reforming government is determined to avoid is the pattern of so many other countries in transition, which have sold off state assets to people of the old regime who are little more than crooks. There can be an advantage in being a late-comer if one learns from others' mistakes. 
A new generation of Yugoslav leaders, committed to the rule of law and democracy, wants the investigation to help rebuild Yugoslavia's shattered credibility abroad. "Tycoons who enriched themselves on privileges during the Milosevic period are now trying to use their dirty money to set up regular businesses here," says Mr Dinkic. "I think it is very important to avoid the scenario that most of Eastern Europe had after communism. We don't want dirty capital here because with dirty capital come dirty people and they create other social problems. We don't want them."
The new course is already leading to large aid and credit flows. A key partner here for Serbia is of course the IMF. The latest tranche, US$63m, of a stand-by credit facility of US$252m was extended in January, US$126m of which has already been disbursed. But Karadzic and Mladic must head Haguewards if the creditfest is to continue.

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AUTOMOBILES

Yugoslav car factory announces export to Slovenia, Hungary

The deputy head of the Zastava marketing department, Dragana Kilibarda, has said that the car factory in Kragujevac would "return to the Slovene and Hungarian markets" after a 10-year break, and that buyers in these countries "have not forgotten Zastava," FoNet News Agency has reported.
"We will deliver 3,200 vehicles to buyers in Hungary this year, and another 1,000 vehicles to those in Slovenia. The first deliveries will be made in March," Kilibarda said.
She said that "the interest in Zastava vehicles is very high abroad," adding that half of Zastava's production would be sold outside Yugoslavia's borders this year...

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FOREIGN ECONOMIC RELATIONS

Yugoslav, Austrian presidents discuss bilateral relations, EU integration

Austria supports Yugoslavia's integrity and its, the soonest possible, joining the European Council and other European integrations, Yugoslav President Vojislav Kostunica said on 12th February, after his meeting with Austrian President Thomas Klestil, Tanjug News Agency has reported. 
Klestil was making a one-day working visit to Belgrade. 
Kostunica said that he had informed Klestil in detail about the Yugoslav administration's stand on how the Yugoslav federation could be redefined. Kostunica explained that that would enable Serbia and Montenegro to join the European Union in easier way, which would then guarantee stability and peace in the Balkans. 
The Yugoslav president said that he and Klestil had also discussed a possible regional conference on border lines, minority rights protection, as well as on Kosovo and Macedonia, being the "Balkans' major problem."
The Austrian president expressed his satisfaction with his visit to Belgrade, and pointed out that the visit represented an "expression of support for the course Yugoslavia is taking". 
"We have fully supported Yugoslavia on its way towards European structures and organisations. I told your president that he had our full support in (the country's) becoming a European Council member and, in due time, becoming a member of the European Union," Klestil pointed out. 
The Austrian president also stressed the importance of the economic bilateral cooperation, especially if one had in mind efforts Austria made to that effect.

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FOREIGN LOANS & AID

France to help Serbian towns afflicted by water shortages

France has provided a donation of DM330,000 in order to help Serbian towns which have problems with water supplies, Serbian Ministry for Urban Planning and Construction has said, FoNet News Agency has reported.
Part of the donation, worth of DM150,000, is earmarked for Ruma. Lipovica near Belgrade received around DM90,000, while another portion was planned for Vrnjacka banja.
The donation will be implemented through the French humanitarian organisation Solidarites.

World Bank approves US$70m loan to Yugoslavia for structural reforms

The World Bank said on 29th January that it had approved a US$70m loan to Yugoslavia as back-up to the launched structural reforms, Tanjug News Agency has reported. 
The loan was approved with the objective of reducing poverty and stimulating economic growth, with guaranteed consolidation of the national finances, macroeconomic stability, and transition to a market economy, the World Bank specified. 
The programme rests on three issues - better management of public expenditures, a reform of the power department, and a reform of the pension system, labour market and medical system, the bank said. 
The Federal Republic of Yugoslavia became a member of the World Bank in May 2001, when an agreement in principle was signed on the write-off of the debts of the former Yugoslav federation. The World Bank said at the time it would be able to grant Yugoslavia up to US$540m in loans and donations for a period of three years.

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INDUSTRY

Serbian factory to buy US$4.5m of equipment from China

Uzice-based Sevojno Copper Rolling Mill is to buy US$4.5m of new equipment from the Chinese OMC Company. The business was concluded during a recent visit by the company's director, Dragan Subotic, to China as a member of the Yugoslav state and economic delegation, FoNet News Agency has reported.
Buying a hydraulic press and two induction stoves to replace the obsolete equipment in the copper rolling mill was agreed under favourable conditions. The grace period is three years, the deadline for payment 10 years, while yearly interest would be 6.5 per cent...

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INFORMATION TECHNOLOGY

Serbian government trying to tie up contracts with biggest US IT companies

The Serbian government's Agency for Informatics and the Internet has announced that it will soon sign contracts on strategic partnership with US companies Oracle and Cisco-Systems.
The secretary of the agency, Branislav Andjelic, said in a statement to FoNet News Agency that the agency had already been in serious negotiations for several months with one of the biggest US companies - Motorola Company.
"This would be the most far-reaching contract because Motorola wants to set up a large development centre here. They have just signed a contract with PTT [Postal Telephone and Telegraph Company] Serbia on protection of all premises," Andjelic said.
According to Andjelic, "Serbia needs foreign partners who can help in the transfer of knowledge in information technologies."
"We are trying to work this out in such a way that they come here on our conditions, not theirs," Andjelic said.

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