Institute for War and Peace Reporting | Giving Voice, Driving Change

Serbia's Incredible Reconstruction

Serbia's high-speed reconstruction is not the run-away success story portrayed on state television.
By Milenko Vasovic

The frenzied reconstruction of bridges hit during the NATO bombardment last year is out-stripping all predictions.


State television almost daily broadcasts pictures of construction workers promising to meet deadlines and government officials attending bridge-opening ceremonies.


Half of the 64 bridges destroyed or damaged during NATO's bombing campaign last year have already been repaired, and work on another 21 should be completed by July 7, making a mockery of the Yugoslavia's Institute for Roads' conclusion just six months ago that the reconstruction programme would take three years.


At the same time, the official cost of the work is substantially less than estimates cited by independent Belgrade economists.


Such optimistic forecasts are remarkable given that Yugoslavia has been impoverished by international sanctions.


But all is not what it seems. For the impressive pace of reconstruction has been achieved through shameless exploitation of the country's workforce. Under the slogan of "self-reliance", the government has pressured companies to toil in effect for nothing to help it fulfil its goal.


Large state-owned enterprises are being called upon either to donate money to the reconstruction effort or to carry out specific tasks for free.


One construction company, believed by the authorities to have a foreign currency bank account, has reportedly been paid for less than ten per cent of around 8 million German marks ($4 million) worth of work it has completed.


About 100 workers from another company who repaired the Smederevo-Kovin bridge decided to block it last December in protest at not being paid for having worked day and night on the project.


In a poll conducted among them by the BETA news agency, only one firm, Mostogradnja from Belgrade, said it had been paid in advance, while another survey by the Economic Institute for Market Research showed many companies are still waiting to be paid for 70 per cent of completed projects.


Ancillary industries, such as producers of concrete, iron, gravel and sand are also being forced to contribute to the reconstruction effort.


The exploitation of an estimated 200 companies and 140,000 workers involved in repairing war damage has angered trade unions.


Average salaries in construction are already among the lowest in Serbia, amounting to about 37 German marks ($18.50) a month. But many workers only receive a guaranteed minimal salary of around 11.5 German marks and even these payments are sometimes as many as ten months late.


Forcing the pace of reconstruction, in day and night shifts regardless of the weather, represented "physical exploitation of the workers that can seriously affect their health", said one union official.


In addition to taking advantage of the workforce, the government has been printing money to pay for the rebuilding programme. Ministers have admitted that this was responsible for the recent 20 per cent devaluation of the dinar.


An injection of $30 million of aid from China in December has somewhat alleviated the economic situation. But given that last year's balance of trade deficit was $1,798 billion, this sum seems like a drop in the ocean.


Economists Nebojsa Savic and Goran Pitic from the Economic Institute predict that the policy of "self-reliance" will, in a year's time, result in the collapse of Serbia's balance of payments, and, in two years' time, the bankruptcy of the state.


Milenko Vasovic is a regular IWPR contributor from Belgrade.


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