The spoils of another war: Five years after Nato’s attack on Yugoslavia, its administration in Kosovo is pushing through mass privatisation

September 21, 2004 | The Guardian

by Neil Clark

‘Wars, conflict – it’s all business,” sighs Monsieur Verdoux in Charlie Chaplin’s 1947 film of the same name. Many will not need to be convinced of the link between US corporations now busily helping themselves to Iraqi state assets and the military machine that prised Iraq open for global business. But what is less widely known is that a similar process is already well under way in a part of the world where B52s were not so long ago dropping bombs in another “liberation” mission.

The trigger for the US-led bombing of Yugoslavia in 1999 was, according to the standard western version of history, the failure of the Serbian delegation to sign up to the Rambouillet peace agreement. But that holds little more water than the tale that has Iraq responsible for last year’s invasion by not cooperating with weapons inspectors.

The secret annexe B of the Rambouillet accord – which provided for the military occupation of the whole of Yugoslavia – was, as the Foreign Office minister Lord Gilbert later conceded to the defence select committee, deliberately inserted to provoke rejection by Belgrade.

But equally revealing about the west’s wider motives is chapter four, which dealt exclusively with the Kosovan economy. Article I (1) called for a “free-market economy”, and article II (1) for privatisation of all government-owned assets. At the time, the rump Yugoslavia – then not a member of the IMF, the World Bank, the WTO or European Bank for Reconstruction and Development – was the last economy in central-southern Europe to be uncolonised by western capital. “Socially owned enterprises”, the form of worker self-management pioneered under Tito, still predominated.

Yugoslavia had publicly owned petroleum, mining, car and tobacco industries, and 75% of industry was state or socially owned. In 1997, a privatisation law had stipulated that in sell-offs, at least 60% of shares had to be allocated to a company’s workers.

The high priests of neo-liberalism were not happy. At the Davos summit early in 1999, Tony Blair berated Belgrade, not for its handling of Kosovo, but for its failure to embark on a programme of “economic reform” – new-world-order speak for selling state assets and running the economy in the interests of multinationals.

In the 1999 Nato bombing campaign, it was state-owned companies – rather than military sites – that were specifically targeted by the world’s richest nations. Nato only destroyed 14 tanks, but 372 industrial facilities were hit – including the Zastava car plant at Kragujevac, leaving hundreds of thousands jobless. Not one foreign or privately owned factory was bombed.

After the removal of Slobodan Milosevic, the west got the “fast-track” reforming government in Belgrade it had long desired. One of the first steps of the new administration was to repeal the 1997 privatisation law and allow 70% of a company to be sold to foreign investors – with just 15% reserved for workers. The government then signed up to the World Bank’s programmes – effectively ending the country’s financial independence.

Meanwhile, as the New York Times had crowed, “a war’s glittering prize” awaited the conquerors. Kosovo has the second largest coal reserves in Europe, and enormous deposits of lignite, lead, zinc, gold, silver and petroleum.

The jewel is the enormous Trepca mine complex, whose 1997 value was estimated at $5bn. In an extraordinary smash and grab raid soon after the war, the complex was seized from its workers and managers by more than 2,900 Nato troops, who used teargas and rubber bullets.

Five years on from the Nato attack, the Kosovo Trust Agency (KTA), the body that operates under the jurisdiction of the UN Mission in Kosovo (Unmik) – is “pleased to announce” the programme to privatise the first 500 or so socially owned enterprises (SOEs) under its control. The closing date for bids passed last week: 10 businesses went under the hammer, including printing houses, a shopping mall, an agrobusiness and a soft-drinks factory. The Ferronikeli mining and metal-processing complex, with an annual capacity of 12,000 tonnes of nickel production, is being sold separately, with bids due by November 17.

To make the SOEs more attractive to foreign investors, Unmik has altered the way land is owned in Kosovo, allowing the KTA to sell 99-year leases with the businesses, which can be transferred or used as loans or security. Even Belgrade’s pro-western gov ernment has called this a “robbery of state-owned land”. For western companies waiting to swoop, there will be rich pickings indeed in what the KTA assures us is a “very investor-friendly” environment. But there is little talk of the rights of the moral owners of the enterprises – the workers, managers and citizens of the former Yugoslavia, whose property was effectively seized in the name of the “international community” and “economic reform”.

As the corporate takeover of the ruins of Baghdad and Pristina proceeds apace, neither the “liberation” of Iraq nor the “humanitarian” bombing of Yugoslavia has proved Chaplin’s cynical anti-hero to be wrong.

Neil Clark is a writer and broadcaster specialising in Balkan affairs.

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