Michael Karadjis
Five years after North Atlantic Treaty Organisation (NATO) troops entered Kosova, occupation authorities have begun a program of privatisation of state and social enterprises.
The surprise is not that NATO and the United Nations authority that governs Kosova (UNMIK) want to privatise enterprises, but that it has taken five years of imperialist control to privatise 19 firms that worth just 16 million Euros. These firms — supermarkets, brick-making plants and printing works — are of little interest to large western investors.
By denying Kosova independence, imperialist powers aim to control its economy and prevent what they consider the regionally destabilising effects of such a move. However, the occupation was initially portrayed as "liberating" the Kosovars from the brutal apartheid imposed on them by the previous Serbian occupation regime of Slobodan Milosevic. The rhetoric of "liberation" initially meant giving into Albanian demands to restore the socialist constitution in relation to state enterprises. This constitution, set up in the era when Kosova was part of Yugoslavia governed by Josip Broz Tito, was ripped up by Milosevic in 1988-90.
Under Tito's system of "self-management", workers elected the management of "social firms". This system came under attack in the 1980s as the International Monetary Fund and World Bank pressured Yugoslavia for repayment of massive loans and to implement a privatisation program. Milosevic, the leader of choice for these neoliberal bodies, carried through their proposed economic "reforms". In 1988, the position of managers was strengthened against the workers' collectives, and from 1990 managers were appointed by the regime.
The Yugoslav government launched a privatisation program, and when the country broke up, the new independent republics continued it. In Serbia, 2500 firms had begun privatisation by 1994. However, years of war in the region ensured that in none of these states was the program a huge success.
Yugoslav privatisation
In 1997, the Milosevic regime announced plans to privatise the top 75 strategic state firms, including Telecom, the Beocin cement works, the Pancevo petrochemical complex and the state Electric company; the whole of Kosova was also put up for sale, including the Ferronikeli and Trepca mining and metallurgy complexes.
Less strategic socially owned firms were to be privatised via turning the "self-managing" workers into private shareholders. They were to be offered up to 60% of the value of the enterprises as shares, like similar schemes in Croatia and Slovenia. Yet this was farcical — once privatised, workers were forced by economic circumstances and hyper-inflation to sell their micro-shares to the managerial elite.
This did not apply to the strategic firms. When Milosevic sold half of Serbian Telecom to Italian and Greek capital, in a deal organised by British Nat-West Industries, headed by former British Conservative defence minister Douglas Hurd, no "workers' shares" got in the way. Nor did they block negotiations with French capital over buying Beocin, with Italian capital over buying the Electric Company, or with Greek and French capital buying into Trepca.
War a dampener
However, the Kosovar Albanian intifada of 1998 did get in the way of privatisation: the renewal of war put off investors. In addition, the underground Kosova parliament denounced the privatisation drive and warned foreign firms buying in that they would be treated as "neo-colonialists". When the Kosova Liberation Army (KLA) appeared, US Balkans envoy Robert Gelbard labelled it a "terrorist organisation". The Serbian elite reacted to the uprising by burning villages and driving out the population, leading to the mushrooming of the KLA into a country-wide guerrilla army overwhelmingly backed by Kosova's terrorised peasantry.
To stabilise the situation for imperialist investment, and to prevent the destabilisation of the southern Balkans, Western powers decided to get their own troops into Kosova to disarm the KLA and prevent Kosova's secession. When Milosevic refused entry of imperialist troops into "his" province, NATO used this to launch a brutal "humanitarian" bombing of Serbia, timed for the presentation, on NATO's 50th birthday in April 1999, of a new doctrine to justify its post-Cold War existence.
Following NATO's victory, Kosova was handed over to a UN administration. The peace deal reiterated that Kosova remained part of "Yugoslavia", the state that took advantage of NATO's bombing to drive half the Kosova population — 850,000 people — from their country.
Because the Kosovars are denied a state, their economy remains paralysed, with unemployment at 60%. UNMIK has the responsibility to administer "state" and "social" property in Kosova until its final status is worked out. Meantime, the lack of a state means these enterprises sit idle, with no capital to get them running, and unable to gain international credit. It is therefore difficult to resist pressures by investors to buy into the economy on terms more favourable to themselves than Kosova workers — UNMIK now allows the sale of 99-year land-leases to privatised firms.
Yet the charade of "liberating" the Kosovars initially meant that the greatest service Milosevic had performed for future investors was reversed. When Kosovar autonomy was suppressed in 1989-90, the entire Albanian work force was sacked from state and social firms. This dealt a deadly blow to the power of the organised work force to resist privatisation, and denied these workers the shares they were entitled to in non-strategic firms under Serbia's privatisation law. There was little the UN authorities could do to prevent Albanian workers from returning to their former workplaces after June 1999.
As Tito's constitution had been in place when Kosova had autonomy, Albanian workers demanded its return, rejecting the one imposed after autonomy was suppressed. Early UNMIK policy ceded to this. Workers' committees took control of many enterprises — not as "share" owners, but as "self-managed" owners, electing and sacking their managers.
The European Union's "European Stability Initiative" complained about "one of the paradoxical effects" of the restoration of "self-management socialism".
This was blocking privatisation: "All twelve successful concession agreements [UNMIK's policy of leasing state-owned enterprises] were concluded with companies where no workers' council election had been held. Wherever an elected workers' council was in place, negotiations to lease the company were protracted and ultimately unsuccessful, the workers predictably reluctant to relinquish control to an external investor."
Confusingly, when workers took over state firms, this was sometimes called "privatisation". So UNMIK had to stop this kind of "privatisation" in 2003, before preparing the real one. The European Union report explains the UN Department of Trade and Industry "briefly argued that state-owned enterprises in some sense already 'belonged' to the workers, and were therefore not state property. Yugoslav self-management always produced a strong subjective sense of ownership on the part of workers. The reconstitution of workers' collectives has created the expectation that workers are to become the new captains of industry. These expectations must eventually be shattered."
While the privatisations so far have been of minor enterprises, the November bidding process for Ferronikeli, a large nickel producing complex, will be of more significance.
Trepca
The most contentious issue is the massive $US5 billion Trepca mining and metallurgy complex, based in northern Kosova, but including assets elsewhere in Kosova and Serbia. Following Serbia's defeat, NATO troops sealed off the region from northern Mitrovica to the Serbian border as a Serb mini-state to ensure the main Trepca facilities were kept out of the hands of Albanian workers, 17,000 of whom were sacked by Milosevic in 1989-90.
In September 2000, just before the Serbian elections, NATO troops used teargas and rubber bullets to seize Trepca's smelter in Zvecan, which was then closed allegedly to stop pollution! This theatrical excess was aimed at delivering a blow against Milosevic in the elections, enabling the opposition to claim "Milosevic lost Trepca".
Yet neither the Milosevic regime nor its successor made the kind of fuss one would expect if Trepca was "lost". What Trepca needs to take off is massive investment in technology and reconstruction. A joint US-French-Swedish consortium is currently administering Trepca to invest in its rehabilitation, but has not claimed ownership.
Serbia's argument for avoiding sale of Trepca is that it is not a social firm, and thus not among the firms UNMIK administers, but a private Serbian firm. UNMIK agrees, claiming, in an August 17 report, "the difference between Trepca and some other socially and state-owned enterprises is that Trepca's private ownership is not in dispute".
Trepca was made a "joint-stock" company in 1992. Shares were first given to a number of state or social firms which were themselves transformed into joint-stock companies. For example, one part-owner of Trepca was Jugobanka Mitrovica, which is half owned by French capitalist Pierre Rozan, owner of the Societe Commercial des Metaux et Minerais (SCMM). Trepca's manager, Novak Bjelic, also owned two private construction materials companies, INOS and FAGAR, to which he transferred work and assets from Trepca. In 1996, Bjelic was given a seat in government by Milosevic.
The problem remains the denial of Kosova's right to independence. The main excuse for continuing the UN/NATO occupation is to protect the Serb minority from Albanian vengeance, yet the denial of independence fuels this Albanian radicalism. The vicious circle can only be broken if Serbia gives up its pretensions to Kosova, and the Serb minority and Albanian majority join hands to push for a multi-ethnic independent state, which could inherit the state firms and decide what to do with them.
From Green Left Weekly, November 24, 2004.
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