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Blighted Retirement

Pensioners are the group within Serbian society which has fared worst during the past decade, yet they are now expected to tighten their belts once again.
By Milenko Vasovic

The sight of the elderly begging or rummaging through rubbish containers in the streets of the Serbian capital Belgrade is becoming more and more common. Judging by their now tattered clothes, manners and sense of shame, many of these individuals once clearly led very different lives.


Today, since their pensions are at best erratic and meagre, many of Serbia's retired barely have the means to feed themselves. Instead of paying pensions for May, June and July, the cash-strapped Serbian government has decided to issue coupons, which may only be used for payment of electricity bills or the purchase of wood for heating.


About one million pensioners are affected by the decree on coupons. Those whose pensions are higher than their monthly electricity bill, are able to pre-pay for electricity - thus giving an interest-free credit to the state-owned electricity utility - but lack money to pay for other needs. Worse still, many pensioners had already paid their electricity bills in advance in response to an earlier government campaign, offering lower rates in exchange for pre-payment.


The electricity utility itself, which now has to accept coupons in lieu of cash, had no say in the new system. As so often in the past, the company's director, Slobodan Babic, a member of Slobodan Milosevic's Serbian Socialist Party (SPS, was simply instructed to implement the decision. Since the electricity utility is already one of Serbia's biggest loss-makers, the new measure will simply push it even further into debt.


With their very survival at stake, some pensioners have organised a boycott and are refusing to accept the coupons. However, their initiative has minimum chances of forcing any change out of the government. Moreover, most pensioners feel that, given current circumstances, they should take whatever they can get out of the state.


The irony is that the regime, which in past elections has relied heavily on the votes of pensioners, actually thought that issuing coupons would boost its popularity among this sector of the population. Deputy Prime Minister Vojislav Seselj signed the decree in the belief that he would be attracting retired voters to the Serbian Radical Party (SRS) and, in response to the negative reaction, declared that those who do not want coupons are free to tear them up.


The United Pensioners' Party, a political party formed to lobby on behalf of Serbia's retired, has already written to Serbian President Milan Milutinovic demanding that the decree be revoked. And similar demands have been prepared for the Constitutional Court of Serbia.


Belgrade lawyers are saying that, as a result of this decree, the Serbian government has taken over some of the jurisdiction of the National Bank of Yugoslavia, and effectively created another way to print money. Moreover, economists warn that the issuing of coupons will lead to inflation, since they doubt that the state has the money to cover the coupons.


All opposition parties have condemned the government decree. The Vojvodina Coalition calls it "fraud" and the Democratic Party says that it demonstrates the government's lack of concern for pensioners as they prepare for winter.


The average pension in Serbia, when it is paid, is equivalent to a meagre $45 a month. But about 105,000 pensioners only receive a little over $20, which just about covers heating, utility and telephone bills. By contrast, realistic living costs for a retired couple amount to at least $130 a month.


The retired are the section of Serbian society, which has probably fared the worst in the past decade. Their savings formed the bulk of the seven billion German marks ($3.7 billion) foreign currency deposits which disappeared with the disintegration of the former Yugoslavia and the billion German Marks ($53 million) lost in bank collapses during the years of hyper inflation.


By reducing the frequency of pension payments in 1994 and 1995, the state effectively stole 3.2 month's worth of income from pensioners. Though the Serbian parliament obliged the country's social security fund for pensioners and handicapped to make up the short fall, this has never been done. Again in 1998 the state withheld monthly pensions and four payments are yet to be made in 1999.


According to Milan Djuric, president of the Serbian Pensioners' Union, the state owes pensioners a total of 10 months' pension payments or about 15 billion dinars ($134 million).


Creative accounting has also reduced the official value of pensions. The government has cut payouts, which are determined as a proportion of the average monthly wage, by counting as salaried some 360,000 people on forced or unpaid vacation. Pensioners' leaders estimate that this measure costs every pensioner about $20 a month.


"About 300,000 pensioners have asked for help in food and clothing from our Union," Djuric says. Though soup kitchens now exist in all of Serbia's bigger towns, they are unable to cater for the surging demand.


In these circumstances, it is hardly surprising that the pensioners' mortality rate is on the rise. In 1997, between 25 and 30,000 senior citizens died. The figure was more than 40,000 in 1998 and is expected to rise still further this year. Although there are no official statistics on suicides among the elderly, anecdotal evidence suggests that this too is increasing. It seems that senior citizens would rather die by their own hand, than of hunger.


Milenko Vasovic is a regular IWPR contributor from Belgrade.


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