Serbia's economic aims fuel war

Wednesday, October 30, 1991

By Peter Annear

PRAGUE — As the pattern of the Serbian-federal army assault on Croatia starts to jell, and the contested regions are more clearly identified, it is evident that economic designs and not national antipathies are the prime source of the conflict.

Not long ago, the Croatian town of Ilok was evacuated following a referendum in which its people were offered a choice between leaving and having the town shelled. Ilok is unimportant except that it lies strategically outside Vukovar, the centre of the fighting in eastern Croatia. Federal troops are trying to take Vukovar from defending Croatian forces.

Vukovar is the gateway to Croatia's Slavonia region, which Serbia intends to annex. The region is on the western plains of the Danube, across the river and across the border from Vojvodina. It has Yugoslavia's most fertile and productive agricultural land.

Towns under attack on the Dalmatian coast of Croatia are also economically strategic. In the north, Knin (capital of the so-called Serbian Krajina) is a rail and communications centre which opens the whole south coast to transport, industry and tourism.

Split, another focus for federal army and Serbian attacks, is Croatia's second largest port and a centre of chemical and other heavy industries. It's said that three people in Knin and three in Split, by dynamiting the rail lines, could cut off the Dalmatian region from the rest of Croatia.

Ancient Dubrovnik, in the south, is the home of Croatia's rich, though currently devastated, tourist industry. In recent weeks it has been the target of seemingly senseless shelling from land and sea.

Changing aims

Until Slovenia and Croatia declared their national independence following referendums in December, Serbia's aim had been to rule over the old federation.

With this in mind, it incorporated both Vojvodina in the north and Kosovo in the south into the Serbian republic. It had no qualms about trampling on national rights in those provinces, especially those of Albanians in Kosovo, where Serbia simply claimed the land was historically its own.

But after December the Serbian rulers changed course. First they moved to force Slovenia out of the federation. Now they would be happy to see Croatia out too, but not before key strategic and economic questions are resolved.

National hatreds have been stirred up to serve political ends, and licts in World War II rekindled. But in the towns and villages of the contested areas, people have lived side by side for decades not caring about ethnic background.

One example I heard recently: the young daughter of a liberal academic and opponent of the war in Zagreb came home from school and announced to her father that Serbs are barbarians. Well, he said, what do you think of your grandfather and grandmother, and your uncle? I love them she said. They are Serbs, he replied.

Postwar Yugoslavia was formed as a federation based on the cooperation of its constituent republics, says peace activist Vedran Vucic. But, still under Tito's rule, in the 1970s inter-republican antipathies were engendered. From those years, a growing economic isolationism of the republics under the Communist administration was very apparent.

Professor Gajo Petrovic, a veteran of the 1960s Praxis group of Marxist intellectuals, believes Tito's strategy was divide and rule.

Originally, official economic policy was based on the Stalinist idea of gearing everything to building up heavy industry, and the Tito regime said most would be achieved by first developing those regions that already had some industry. In the first decades, most money from the central funds went to Slovenia, to protect it against competition from imported Western goods.

Competition

In comparison to heavy industry, prices for agricultural products, which came largely from Serbia and parts of Croatia, were very low. However, while economic development benefited Slovenia most, and was not as advantageous to the agricultural republics, Tito's internal policies were detrimental in some way to all the republics.

The republics began to compare themselves, and, when they became more autonomous, to compete. If one republic established an industry, the others would follow, with negative consequences. Important party leaders encouraged the building of industries in their own regions for political reasons, regardless of economic considerations.

As the federation began to fall apart in the 1980s, most of the political aspirants based their platforms on republican national interests. National equality was closely identified with the economic equality of the republics and provinces. But, between the republics, there was considerable inequality.

By 1988, with 20% of the population, Croatia created 25% of the Yugoslav social product, mainly through tourism and engineering. Relying on construction and trade, Serbia supported 25% of both population and social product. Including Vojvodina and Kosovo, though, Serbia had 42% of the population and 38% of the social product.

Due to its agricultural wealth, Vojvodina created 10.4% of social product with only 8.7% of population. And Slovenia, the leader in financial services, with only 8.2% of the population, created 16.7% of

These were the relatively wealthy regions. In underdeveloped, agricultural Kosovo, for example, 8% of the population survived on only 2.2% of the social product.

Trade

Autarky increased during the period 1970-1987. On average, internal trade within the republics rose as a proportion of total trade (including trade between the republics) from 69% to 76%.

The greatest self-sufficiency, the best inter-republic "export" performance and the least dependence on "imports" were in the developed republics — Croatia, Serbia and Slovenia. The poorer areas, especially Kosovo and Montenegro, were more dependent on the rest of the country for the supply of essential items. Late in the period, one important feature was the increase of Kosovo's trade with Macedonia and Montenegro.

Because Vojvodina is the country's main supplier of agricultural produce, with its incorporation Serbian dependency on "imports" became an approximate symmetry between "exports" and "imports".

Without Slovenia and Croatia, both of which have better access to Western markets, Serbia's economy would be much less viable. But adding Slavonia to its territory would have an effect similar to that achieved by the addition of Vojvodina.

The addition also of tourism, transport and industry on the Dalmatian coast could reverse the economic balance between Serbia and Croatia. Once that is accomplished, it is very likely Serbia would no longer oppose Croatian independence.

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