Global Policy Forum

Strike Wave Sweeps Serbia

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By Vesna Peric Zimonjic

August 31, 2009

A very hot summer of workers' discontent has taken over Serbia. Some 33,000 people go on strike daily in 40 to 45 firms, according to union statistics. They are mostly employees of privatized companies who have not been paid salaries or social and health security benefits for months now.

Since mid-August, protesters have been blocking traffic for hours outside the offices of the Serbian Privatization Agency and other government buildings in Belgrade.

Earlier this month, in central Serbia, police were called in to remove hundreds of workers who lay down day after day on railway tracks near Lapovo town 150 km south of Belgrade. The now private owner of the company manufacturing spare parts for automobiles and electricity generation has not paid them for months.

In a dramatic case, a worker from the southern Serbian textile factory Raska, 254 km south of Belgrade, cut his finger off in public to protest against a new business owner.

"We are desperate, afraid for our future, betrayed by our new owner," says Stevan Sreckovic from the Ikarbus bus factory in Zemun. "Ours is one of a thousand factories throughout Serbia that have been ruined by privatization," he told IPS at a protest last week outside the offices of the Serbian Privatization Agency.

Since the ousting of former leader Slobodan Milosevic in 2000, the Serbian government has relied heavily on privatization to revitalize the economy. The state has received some 2.9 billion Euros (3.7 billion dollars) through privatization since 2002. The government has sold 1,828 public firms, and now only 300 remain to be privatized. That is due by the end of 2009. The protests this summer point to what workers call "the ugly face of privatization". They come after the Privatization Agency admitted in mid- August that of the 1,828 privatization contracts, 472 - almost 25 percent - have been annulled because the new owners failed to honor the deals.

According to the law on privatization, the new owners are obliged to pay the government for their newly acquired companies in up to five installments. They are also obliged to compensate workers they cannot keep in line with an agreement with the Privatization Agency. The sum mostly ranges from 100 to 800 dollars.

The agency is obliged to monitor developments in newly privatized companies for two years. "After that, we practically have no further obligations," head of the Privatization Agency Vladislav Cvetkovic told IPS. "Our task is to prepare privatization, announce tenders and collect necessary documentation, and to make this part completely transparent."

Analysts say that the state sold many assets hastily because of an urgent need for fresh funds. Most sales were done by early 2006.

"The climate for such sales was very good, and the state filled its coffers with badly needed money," economics professor Milojko Arsic told IPS. "The money was supposed to go to pension fund, further investment in Serbian industry, and bring new jobs."

But things have been going wrong over the past year after the end of supervision by the agency. In March, machinery from the privatized textile factory Clothing in Leskovac, 282 km south of Belgrade, was taken by its Cypriot owner to Romania earlier this year. In May, workers from the textile factory 7. Juli in the southern town Kursumlija learnt that their machinery was gone. The Serbian owner apparently sold it abroad as scrap.

"New owners refraining from fulfilling their obligations, such as revitalizing production, paying regular salaries and health insurance to workers is surfacing now," analyst Slobodan Kostic told IPS. "This is bringing people to the streets and is leading to strikes."

International consortiums from tax paradises are often involved in purchases. Kostic says many assets were sold to people with a murky past and with murky money.

Several heavy industry machinery and textile factories have been sold to consortiums located in Cayman Islands, Cyprus or Virgin Islands, only later to be made sites for luxurious apartment blocks or shopping malls. The agency says merely that new owners did not meet their obligations. "It is not our job to control financial resources," says Cvetkovic.

A major tycoon sought earlier this year to buy the industrial zone of Belgrade harbor and turn it into a marina to be surrounded by lavish apartment blocks and high rises. Public outcry stopped the sale.

Amidst mounting speculation that privatization was not regular in many cases, Serbian Prime Minister Mirko Cvetkovic (not related to Vladislav Cvetkovic), who was head of the Privatization Agency in 2003 and 2004, admitted to reporters last week that "by the end of that period we became aware that something was wrong." He did not elaborate.

"I will personally insist that all the contracts that have been annulled be checked," he added. But to many workers this is not enough.

The striking workers have their critics. "What we hear more often now among workers' demands in strikes is calls for the state to take over their companies," Miroslav Prokopijevic from the Free Market Centre told IPS. The Centre is one of the leading Serbian NGOs backing a free market economy.

"That sounds like the times of socialism (the Serbian and former Yugoslav version of communism), when the state took care of everything, and provided lifelong guarantee of employment, but those times cannot come back," he said.

 

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