Regime Set to 'Buy' Votes

In what many see as an attempt to bolster its electoral prospects, the Serbian government has introduced legislation to compensate its impoverished citizens and starve its political rivals of funds.

The government is to offer state-owned property for sale to holders of frozen hard currency savings and pay long overdue family maintenance allowances by selling off state bonds. At the same time, the regime will take charge of much of the revenue generated by opposition-controlled municipalities.

The compensation plans however appear completely unrealistic - merely intended, it seems, to cast the government in a favourable light in advance of the federal and municipal elections, expected later this year.

The government's move to control municipal finances, meanwhile, looks like an attempt to bankrupt its political rivals.

Serbia has over the years frozen around 3.6 billion German marks worth of savings accounts. The regime promised to start paying the money back but will struggle since its foreign currency coffers are empty.

Instead, it is offering account holders state-owned business premises. The compensation scheme, however, is not quite what it seems.The buildings are not considered a good investment. When the regime tried to sell them off last year, there were few takers.

The government says it will give away the properties to savers on condition they pay 20 per cent of an over-inflated valuation of the premises in hard currency. The deal, understandably, is not proving very attractive.

"I have 20,000 German marks of savings frozen. Even if I wanted to buy this worthless business space I couldn't afford it, " said Gradimir Djurdjevic." How can I find 20 per cent of the asking price of 2,800 marks per square metre. They've really thought this one out nicely!"

In a similarly cynical move, the government is planning to remunerate families who've not received government subsidies for the past two years with the proceeds of the sale of state bonds.

The bonds will be offered at a 'fair' price to public companies who will, in turn, use them to pay taxes and state loans. But in reality, only the bigger concerns closely tied to the regime will benefit from the scheme as only they have sufficient funds to pay for the bonds. The authorities' belief that they will be able to raise 4 billion dinars for families seem wildly off the mark.

In economic terms, the state is attempting the impossible with the aforementioned laws: paying back its debts when it has no money and making money in the process.

The government is likely to have more luck with a law which puts it in charge of local public companies. Profits from these concerns used to be channelled into the municipal budget but will now go straight to central government. As the large local authorities are controlled by the opposition, the move is intended to starve the government's political rivals of cash.

Branislav Pomoriski, an opposition politican and director of the Novi Sad public company, SPENS, has warned that municipal services will be the biggest victims of the government legislation.

He says revenue generated by public companies like SPENS, a sports business centre, are crucial for maintaining local infrastructure. "Profit from SPENS were used to maintain street and control traffic. The town is losing its source of income and is completely at the mercy of central power."

Opposition parties themselves are not likely to be seriously affected by the move as most of their revenue comes from the grey area of municipal finance, such as deals over business space and state-owned flats and illegal transactions involving local authority concessions and permits. The government simply can't control this and would need to introduce new laws to do so.

The recently introduced laws strongly suggest that Belgrade is planning to buy off voters and squeeze the opposition in advance of the next elections. But few of the electorate are likely to be fooled by the inducements and most opposition parties should be able to scrape together the funds needed to contest the forthcoming ballots.

Dimitrije Boarov is an IWPR contributor