Occupation Regime in Kosova Begins Privatisation Program 2004

Occupation Regime in Kosova Begins Privatisation Program

A Response to Neil Clarke in the Guardian

By Michael Karadjis

Neil Clark (‘The Spoils of Another War’) in the September 21, 2004 Guardian reports on the beginnings of privatization of Kosova’s state and ‘social’ enterprises by the UN-NATO occupation authorities.

Clark’s point that western occupiers would try to privatize economies and get their hands on any valuable assets is reasonable enough, and not particularly surprising. It is more surprising that it has taken 5 years for them to get around to privatizing the first nineteen firms. Clarke does not take this on, because it would get in the way of his main aim in the article: another of his constant attempts over the years to dress up the ultra-rightist, pogromist-Islamophobic Milosevic regime, which previously occupied Kosova, as a beacon of socialism in the region.

Among the myriad of reasons for wanting to reply to such views is because of the degree to which dressing up such a regime offends my understanding of socialism. But apart from that, it is the almost complete absence of facts that makes a reply necessary.

Clarke begins, for example, by describing Serbia under Milosevic as “the last economy in central-southern Europe to be uncolonised by western capital.”

What does this mean? That everywhere else foreign companies completely dominated the economy, or that Serbia had no foreign companies? In either case it is simple fiction. British, French, German, Italian and Greek companies were buying into the Serbian economy. British NatWest industries, headed by former Tory foreign minister Douglas Hurd, was organizing the privatization of the Serbian economy after a million dollar breakfast deal with Milosevic in 1997. The first result was the sale of half of Serbian Telecom to Greek and Italian investors in 1997. This was two years before “colonized” Croatia under Tudjman sold only 33 percent of Telecom to German investors, and several years before “colonized” Slovenia even began on Telecom. Croatia had to wait for the ‘left’ Social Democrats to replace Tudjman before Telecom privatization was increased to the Milosevic-era level of 49 percent.

If Croatia under Tudjman, a clone of Milosevic, was “colonized”, then why did the right-wing Heritage Foundation assert in 2003 that “the relatively low level of foreign direct investment in Croatia is due to the political instability of the last decade as well as the policies of the previous regime. The former regime under Franjo Tudjman went out of its way to obstruct foreign investors and award the spoils of industry to political cronies”? If Slovenia was “colonised”, why did Heritage assert that “The establishment has never accepted the need for radical economic reform. For a number of years, the sale of key assets to foreigners has encountered widespread hostility. The government has been slow to privatize the banking and insurance sectors, and foreign direct investment has been modest because of the high level of bureaucratic red tape”? If Bosnia was “colonised”, why did heritage assert that “a lack of privatization caused the United States to suspend aid in December 1999”? All much the kinds of things they said about Milosevic’s Serbia. None were either completely “colonized” puppets, nor socialist “holdouts” or beacons of anti-imperialism. The bureaucratic-mafia “national” bourgeoisie in all cases had its own class interests, which at times coincided with those of imperialism and at times did not – but at all times did not coincide with the interests of former Yugoslav workers.

In fact, part of the relative slowness of privatization and FDI entry into Serbia was due to years of war: investors don’t like buying into a war zone, or regions of massive instability. Nevertheless, when considering this, Yugoslavia does not look that different: according to estimates of the Economist Intelligence Unit, by 2000, FDI in Yugoslavia accounted for almost 17 percent of Yugoslav GDP, compared with the average for all other “transition” countries of only 19.8 percent, ie the average including those handful (Hungary, Poland, Czech Republic) that had far more FDI than anyone else (Kekic, Laza, “Foreign direct investment and the east European transition”, paper presented at conference The European Future of FR Yugoslavia, Belgrade, November 2001). In fact, in 1993, FDI accounted for a mere 0.1 percent of Slovenian GDP (Lawrence Godtfredsen, ‘Enterpreneurship in Slovenia: Assessing the Impact of Public Policy’, Communist Economies and Economic Transformation, Vol. 8, No. 3, 1996). The amount of FDI going into Yugoslavia was only 0.97% of the total amount invested in all transition economies (Kekic), so that might sound low, until we take into account that only a total of 2 percent of FDI was going to anywhere in the Balkans (Catherine Samary (‘Foreign Investment and Capitalist Enterprise’, International Viewpoint, March 2002), meaning Yugoslavia was getting nearly half.

But what a pity it would be if we let facts get in the way of a good story about Serbia being a ‘socialist holdout’, so popular with many others besides Clarke.

In fact Clarke even asserts that “Socially owned enterprises, the form of worker self-management pioneered under Tito, still predominated.”

Clarke seems unaware that in 1990 Milosevic changed the Serbian constitution and that managers, previously elected by workers in state enterprises (ie, “worker self-management”), were from then imposed on the ‘social’ enterprises by the government, as long demanded by the IMF and World Bank who till then Milosevic had been working closely with. Even before this, the IMF-backed ‘Milosevic Commission’ had in 1988 greatly increased the power of managers vis-a-vis workers’ committees, along with driving through a myriad of other IMF-demanded economic ‘reforms’.

We further read that “Yugoslavia had publicly owned petroleum, mining, car and tobacco industries.” But so did most East European and Balkan countries, and for that matter, many third world capitalist countries. As noted, privatisation and foreign investment were very slow throughout most of the East. Indeed, when Clarke writes “petroleum” he is perhaps unaware that in 1997 the manager of Beopetrol, the second largest state petrol company, was privatized, and this privatizing “manager” was Zoran Todorovic, richest man in Serbia, also owner of various mega-private companies, close friend of Milosevic’s wife Mira Markovic, and head of her fake party, the “Yugoslav Left”, which grouped the country’s biggest plutocrats but got less than one percent of the vote (and a guaranteed seat in government). And when Clarke mentions “mining”, he is apparently unaware, as he later shows, of the Milosevic regime’s drive the privatize Kosova’s Trepca mining and metallurgy complex, and deals with Greek and French investors – but more on Trepca later.
We further learn from Clarke that in Milosevic’s socialist Yugoslavia, “75% of industry was state or socially owned.” In fact, in the murky state of quasi-state, quasi-private economy that dominated Serbia in the 1990s under Milosevic, as Croatia under Tudjman, Albania under Berisha, Russia under Yeltsin etc, it was very difficult for anyone to know what the real percentage of industry was state-owned, private-owned, legally mixed, illegally mixed, criminally privatised or whatever, especially when managers of state firms were also chief share-holders in those same firms when they became “joint-stock” firms as most did in 1992, and these same managers and chief shareholders were also legally allowed to own other purely private businesses, even in the same area of work, well you don’t have to be a genius to know what would happen in a highly corrupt environment, to the surpluses of “state” firms.
Moreover, wherever Clarke got that statistic from and whatever it means, how different is it from the complaint by the CIA’s Radio Free Europe/Radio Liberty that in Tudjman’s Croatia, “efforts on the part of old interest groups to maintain their pre-existing privileges have contributed to preserving economic-administrative structures virtually intact” (RFE/RL News Briefs, August 11 1994), at a time when Croatia had only privatised about one fifth of social capital (Globus, November 11, 1994), or from the World Bank’s assertion in 1996 that in Tudjman’s Croatia, “The largest enterprises, accounting for some two-thirds of social assets and employment, remain in state hands, and their privatisation has virtually stalled” (World Bank, ‘Trends in Developing Economies’, 1996, p139)?

What can be said, however, is that the widely quoted figure that 60 percent of Serbian GDP was “state” or “social” firms was nonsense even from a legal point of view: this figure includes 28.2 percent which was “mixed”, ie part-state, part-private, “joint-stock” companies. Thus 33 percent, not 60 percent, of GDP was “state” or “social”. The difference between the latter two, by the way, was not that workers any longer managed “social” firms after 1990, as I noted above, but rather, that these now non-worker managed firms were more independent of the state than “state” firms. That is, that the dictatorial managers, who usually also owned private companies, were appointed by the state but less controlled by it than ‘state’ firms, and hence their surpluses were less available to cover overall societal needs outside the enterprise. That is, “managers” were in an even better position to rip them off. And what was the division between “state” and “social” firms? 1.75 percent of Serbian GDP “state” firms, 31.4 percent “social” firms (Data of the Federal Statistical Office, “Drustveni proizvod i narodni dohodak 1998,” Statisticki Bilten no. 2259, Belgrade).

Nevertheless, Clarke believes the Milosevic regime was in some ways an impediment to deeper privatization or at least foreign investment in the region. His key point is that 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” (and he should add managers), which he believed left little for foreign capital, and this is contrasted with the post-Milosevic government’s legislation allowing 70 percent of enterprises to be sold to strategic foreign investors.

The problem, however, is that the 60 percent “workers’ and managers’ shares” rule in the Milosevic law did NOT apply to the 75 leading strategic companies that were opened to privatization in 1997. The 1997 law put forward three methods of privatization: the one noted by Clarke with up to 60 percent of shares initially going to workers; the 75 ‘strategic’ firms to be privatised according to a special government program; and some 514 enterprises whose activities were of “public interest,” to be privatised “with the approval of the founder” (ie the government). No “workers shares” to interfere for all these crucial large companies in the last two groups.

The 75 strategic firms to be privatised included Telecom, the Beocin cement works, oil companies, the State Electric Company, Trepca, Ferronikl, the Pancevo petro-chemical complex etc. When Greek and Italian investors bought 49 percent of Telecom, 60 percent did not go to “workers’ shares” unless Clarke is a mathematician of some brilliance. In negotiations with French companies over Beocin, in negotiations with the Italian ENI over buying the State Electric Company, there was no impediment of workers shares. There were no workers shares in Trepca.

Rather, the fiction of micro-shares was for less important companies – those that foreign capital would have less interest in and the state would have difficulty privatizing at all unless it offered maximum conditions for workers to “buy shares” in their enterprises. There is nothing inherently progressive, let alone socialist, about “workers shares.” If workers allegedly “own” companies called “social”, then what step forward is entailed by making the enterprises their “share” property? The answer is quite simple to anyone who knows anything about privatizations in dozens of countries that have handed out tiny “shares” to workers or the population as a whole – once these are private shares, they will eventually be sold and bought up by the managerial plutocracy (except in the most debt-ridden firms – the workers are entitled to “own” these rather than the state, so they can sink with their firm). So all we can say is that in the non-strategic companies, there was a plan to ensure the bureaucrat-mafia kleptocracy, ie the “national” bourgeoisie, a dominant position.

Finally, a very large percentage of ‘workers’ shares’ was also the rule in both Croatian and Slovenian privatization in the 1990s, again making there nothing exceptional about Serbia (since there was virtually no privatization at all in Bosnia, the question barely exists). Like the Serbian case, they were fraudulent.

In Slovenia, the Privatisation Law of late 1992 “provided for the sale of 40 percent of the enterprise … and specifically gives employees the first option to buy shares at a 50 percent discount. An additional 20 percent of shares are distributed free to employees by means of vouchers.” That is, employees get the first option on 60 percent of shares, as in Milosevic’s Serbia. “The results have so far been that the vast majority of privatized firms are internal buyouts enabling employees, managers and former employees to obtain majority holdings of shares on very favourable terms … In over 80 percent of the companies approved for privatization, internal owners will have a 60 percent shareholding, and in 85 percent of the companies a 50 percent shareholding” (Godtfredsen, p. 41).

In Croatia, “according to the 1991 legislation employees were granted considerable discounts when buying the shares in ‘their enterprises’ and the possibility of payment in installments over a long period of time (20 years) … the discount was granted for the purchase of up to 50 percent of the estimated value of the total social capital of the company” (Drago Cengic, ‘Privatisation and Management Buy-Out: The Example of Croatia’, Communist Economic and Economic Transformation, Vol. 8, No. 4, 1996). The most popular model was that “the workforce bought some 45 percent of the shares (on credit) and the management 6 percent (also on credit) … Croatian critics have argued that this privatization frequently amounts to little else but a new guise for self-management … revenues has been much less than it could have been, since a number of valuable companies were given to their workers even though foreign investors signaled their desire to buy them at relatively high prices” (Bruno Schonfelder, ‘Croatia Between Reform and Post-Communist Populism’, Communist Economic and Economic Transformation, Vol. 5, No. 4, 1993).

However, while the fraud of “workers shares” in Serbia was not getting in the way of privatization, another thing was: the 1998 Kosovar Albanian intifada against the brutal, decades-long, Serbian occupation and apartheid. The renewal of war was putting off investors. In addition, the underground Kosova parliament denounced this privatization drive and warned any foreign firms buying in that they would be treated as “neo-colonialists” and threatened it would “demand reparations” (Parliament of the Republic of Kosova, Pronouncement, January 7, 1998). When the Kosova Liberation Army (KLA) appeared, US Balkans envoy Robert Gelbard labeled it a “terrorist organization”. The Serbian elite reacted to the uprising, initially involving only small numbers of guerillas, by burning villages and driving out the population. This led to the mushrooming of the KLA into a mass country-wide guerilla army overwhelming backed by Kosova’s impoverished, terrorized and now dispossessed peasantry.

To stabilise the situation for imperialist investment, and to prevent the destabilization of the southern Balkans and NATO’s “southern flank,” 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 brutal “humanitarian” bombing of Serbia, timed to present NATO’s 50th birthday in April 1999 with the application of a new doctrine to justify its post-Cold War existence.

Regarding this war, Clarke claims curiously that “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.”

It is certainly true that NATO only hit 14 Serbian tanks in 11 weeks of bombing. This was because, as NATO leaders continually pointed out long before the war and right throughout it, they did not want their bombing to aid the KLA on the ground. On the contrary, they wanted to get into Kosova to disarm the KLA, which they did far more successfully than Milosevic’s blundering tactics could (Slobo achieved the opposite). So NATO assiduously avoided hitting Serbian tanks, the major advantage Serbian occupation forces had over the 90 percent of the population who did not want them there. In fact they hit no tank at all in the first two weeks of war, and most of those 14 in the last fortnight of war when they became desperate for Milosevic’s capitulation.

Therefore, they had to hit something else. Clarke suggests they hit state industry to strike at “socialism.” Yet in the first two weeks they hit little of this – they concentrated on out of the way military barracks, arms depots and intelligence facilities. Zastava, for example, was hit 17 days into the war. The aim was to get Milosevic to capitulate to the Rambouillet Accord, which would not only have left Kosova as part of Serbia, but would have allowed Serbian army and even dreaded Interior Ministry police to remain there (and did not allow for an independence referendum). When Milosevic, under the influence of his openly fascist coalition partners, the Serbian Radical Party (SRS), decided to use the cover of NATO’s aggression to carry out the long-time SRS program of doing ‘Al Nakbah’ on the Albanians, trying to empty Kosova, threatening regional stability in a massive way, then NATO massively stepped up the bombing to avoid a humiliating political defeat. Still not wanting to help the KLA by bombing tanks, they targeted Serbian industry and infrastructure to impose maximum harm on the economy to induce capitulation.

Whether they were all “state” and none “private” is another matter, and without some evidence it seems unlikely that NATO’s targeting was that good. For example, they bombed the ICN-Galenika pharmaceutical plant, privately owned by Milan Panic since Milosevic sold it to him in 1991, the biggest pharmaceutical plant in the Balkans; it is true that Milosevic had punitively seized Galenika in early 1999 as punishment for Panic’s political opposition (much as Putin recently treated Yukos when Khodorkovsky went into opposition), but presumably Panic aimed to get his property back, so I don’t know that NATO was doing any favours to him by bombing his plant. NATO bombed the Pancevo petro-chemical complex, which Milosevic had announced was ready to be placed on the London capital market shortly before the war began. But the real problem is this: if the implication is that NATO countries desperately wanted to get their private capitalist hands on all these rustbelt “state” industries but were allegedly prevented from doing so by the wonderful “socialist” fairyland, then why would they destroy them first?

Clarke notes that “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.”

It would seem NATO wanted to destroy these enterprises that western investors were allegedly so eager to buy. But let’s agree that the post-Milosevic government is, like the Milosevic government, a privatizing capitalist government. And just as the Social Democrats that replaced Tudjman’s right-populist corrupt Mafiosi regime were more neo-liberal than Tudjman, so likewise the government that replaced Milosevic’s right-populist corrupt Mafiosi regime was more neo-liberal than Milosevic. Just as, for example, the post-junta “democratic” regime in Brazil was more neo-liberal than than the junta etc. But what have the new regulations achieved? In 10 years of Milosevic, 2000 companies were privatized, despite years of war, sanctions and instability; in the first 3 years of the new government, 1000 were privatized, in conditions of peace. Yes the rate is a little faster, but just a little. But more important: what does this have to do with the current privatization in Kosova?

To Clarke it seems obvious: “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. 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".”

UNMIK has been given the responsibility to administer “state” and “social” property in Kosova until the final status is worked out (and thus it is decided whether this property belongs to the Serbian state or a new Kosova state or both). Therefore, let’s agree that they do not have the right to sell it.

However, Clarke fails to note that Milosevic had put the whole of Kosova up for privatization in 1997, including the biggest firms like Trepca, Feronikl, the Electric Company etc. And that it was the underground Kosova parliament that denounced this privatization drive and warned anyone buying in that it would treat them as “neo-colonialists.”

The assertion that UNMIK’s version of privatisation is ripping off “the workers, managers and citizens of the former Yugoslavia” who are the “moral owners” of these firms is strange. I didn’t know managers were supposed to be “owners”, even if they were in reality under Milosevic. But the “workers and citizens” of Serbia morally own state and social property in Serbia, which Milosevic was trying to privatise; state and social property in Kosova is “morally owned” by the workers and citizens of Kosova. They are the ones being ripped off.

But that ripping off did not begin with UNMIK. Among the many measures when Milosevic ripped up Tito’s constitution and suppressed Kosovar autonomy in 1989-90, was the mass sacking of virtually the entire ethnically Albanian Kosovar workforce from all state and social companies. Thus Milosevic had already performed the biggest prize to future buyers: 90 percent of the workers had been sacked, separated from the industries. Which brings us to a rather obvious point: What does the issue of the percentage of “workers shares” in various Serbian privatization laws have to do with privatization in Kosova, where the overwhelming bulk of the workers involved no longer had jobs, let alone any chance of buying shares?

Following NATO’s victory, Kosova was handed over to a UN administration, which denies the Kosovar people an independent state, leaving the economy paralysed, with 60 percent unemployment. Lack of a state means state and social enterprises sit idle, with no state capital to get them running, and possibility of gaining international credit. This makes it difficult to resist pressures by investors to buy into the economy on terms more favourable to themselves than Kosova workers. In its latest move, for example, as Clarke rightly points out, UNMIK is to allow the sale of 99-year land-leases with the privatized firms. Yet why has so little been achieved in 5 years of imperialist control?

In fact, the charade of “liberating” the Kosovars initially meant that the greatest service Milosevic had performed for future investors was reversed: there was little the UN authorities could do to prevent Albanian workers from attempting to return to their former places of employment after June 1999.

In fact, one of the contradictions of early UNMIK policy was that it had acceded to Albanian pressure to work on the basis of the Titoist pre-1989 constitution, under which workers were the collective owners of the enterprises, rather than Milosevic’s anti-worker 1990 constitution. Tito’s constitution had been in place when Kosova still had autonomy; naturally Albanian workers and their political leaders now demanded the return of this constitution, even if only in order to reject the one imposed after autonomy had been suppressed. Workers’ committees began taking control of these enterprises – not as private “share” owners, but as ‘self-managed’ owners, electing and sacking their managers.

For example, the ‘The Lessons Learned And Analysis Unit’ (a Project Of The EU Pillar Of UNMIK and The European Stability Initiative), complained that “the UN erred in paying lip service to ‘applicable law’ from the 1980s … this law was a key component of Yugoslav self-management socialism, a form of corporate governance elaborated over decades by Tito’s ideologists and the apparatchiks who succeeded him, and then abandoned as unworkable in 1990 (by Milosevic). One of the paradoxical effects of UNMIK’s commitment to the 1989 statute book was to restore self-management socialism in all its glory” (‘The Ottoman Dilemma: Power And Property Relations Under The United Nations Mission In Kosovo’, 8 August 2002).

The EU/ESI complained that this was making privatization difficult: “The evidence can already be seen in the results of commercialisation (UNMIK’s policy of trying to lease SOEs). All twelve successful concession agreements were concluded with companies where no workers’ council election had been held. Conversely, wherever an elected workers’ council was in place, negotiations to lease the company were protracted and ultimately unsuccessful, with the workers predictably reluctant to relinquish control over the company to an external investor.”

Thus Clarke should be thanking the Kosovar Albanian workers committees, mostly led by the Kosova Democratic Party (made up of ex-KLA leaders) for blocking privatisation.

One confusing issue, however, is that sometimes when these workers took over the state firms, which had been run for 10 years by Serbian management, this itself was thought of as a form of “privatization.” So UNMIK had to bring this kind of “privatization” to a halt in early 2003 before preparing for the real one. It is important to understand this background when reading that Kosovar trade unions were recently said to be campaigning against UNMIK’s slowing down of “privatization” before the latest round. The EU/ESI report continues:

“In early 2000, in an attempt to win approval from the UN for privatisation, DTI (the UN Department of Trade and Industry) briefly argued that SOEs in some sense already ‘belonged’ to the workers, and were therefore not state property at all. This argument was later shelved. However, Yugoslav self-management always produced a strong subjective sense of ownership on the part of workers … on the eve of a long-awaited privatisation process, the reconstitution of workers’ collectives has created the expectation that workers are to become the new captains of industry in Kosovo. These expectations must eventually be shattered. When that happens, UNMIK may find itself in serious conflict with the very structures it has worked to restore.”

What have been the spectacular results of 5 years of total imperialist control (and of course the change of privatization law in Serbia Clarke thinks is relevant)? Clarke answers himself: “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.”

Just a factual correction, it was 19 enterprises, not 10. They sold for 16 million pounds. So let’s see: after 5 years of imperialist control, 19 enterprises are privatized, worth 16 million pounds, including “printing houses, a shopping mall, an agrobusiness and a soft-drinks factory.” Such heights of the economy NATO made war in order to seize!! Boardrooms in New York and London were sitting back there in 1999 fuming about how the Serbian “socialists” would not let them get their hands on … a shopping mall. This kind of economism has nothing to do with reasons why imperialists launch wars, which are over bigger issues, such as the stability of the whole region for imperialist investment, geo-strategic considerations, the credibility of NATO, enforcing US control of NATO in competition with the EU via “security” domination, and so on, not to grab every brewery or brick-making workshop. In fact, Clarke does not even tell us if the sales were to foreign or local capitalists.

More significant will be the November bidding for the Ferronikeli nickel mining and metal-processing complex, as Clarke rightly points out. But let’s remember Milosevic put it up for sale in 1997 – without “workers shares”, as it was one of the 75 “strategic” firms, even leaving aside the fact that the bulk of workers, being the wrong ethnicity for the racist regime, had been driven out anyway.

But the most contentious issue is the massive Trepca mining and metallurgy complex, valued at $US 5 billion, 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.

Clarke explains that “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.”

To first clear up a couple of minor points. What was seized was not the mines or the whole complex, but one part of it, the smelter in Zvecan, but this is the biggest smelter in the Balkans, the key to actually using the stuff in all those mines.

Secondly, this did not occur “shortly after the war, but in September 2000, just before the Serbian elections. The theatrical excesses were aimed at delivering a blow against Milosevic in the elections, to enable the opposition to claim “Milosevic lost Trepca,” as the pro-imperialist International Crisis Group had 6 months earlier advocated.

But what is useful for propaganda should not be confused by left analysts as fact. Neither the outgoing Milosevic regime nor its successor made the kind of fuss one would expect if Trepca was really “lost”. NATO’s creation of a Serb mini-state in the region was obviously not intended to take Trepca away from Serbian control. On the contrary, the obvious aim was to keep it out of Albanian control.

What Trepca needs to really take off again is massive investment in technology and reconstruction. A joint US-French-Swedish consortium is currently administering Trepca to invest in its rehabilitation. Serbia does not scream because it knows this is in its interests, and it also knows that these companies have not become the new “owners” and simply expropriated the old ones. The fact that the NATO troops there are French, that the main local Serbian bank is half French-owned, that a French company has a stake in Trepca and that another French company is part of the consortium administering Trepca, I think allows us to put two and two together.

Serbia’s argument for avoiding UNMIK privatisation of Trepca is that Trepca is not a social firm, and thus not among the firms UNMIK administers, but a Serbian private firm, which also has some foreign interests involved. UNMIK has accepted the Serbian argument, claiming “the difference between Trepca and some other socially- and state- owned enterprises is that Trepca's private ownership is not in dispute” (‘The Challenge of Trepca: Taking a Realistic Approach’, UNMIK/FR/0061/01, 17 August 2001).

What has the issue of “workers’ shares” to do with it? When the Milosevic regime began trying to sell it, workers were given no shares. Obviously the 17,000 Albanian workers sacked from Trepca in 1989-90 were offered none, but even the tiny remaining Serb workforce were given none. Trepca was made a “joint-stock” company in 1992. Initially, shares were given to a number of state or social firms, which were themselves transformed into joint-stock companies. So for example, one part-owner of Trepca was Jugobanka Mitrovica, which itself is half owned by French capitalist Pierre Rozan, owner of French multi-national Societe Commercial des Metaux et Minerais (SCMM) and the Belgrade firm Meding International. And this example starts to give us an idea of the nature of what some gullible leftists call the “state” or “social” sectors in Serbia. But we can continue on this note.

Aside from the criss-cross of ownership allowing in private owners, the manager himself, Novak Bjelic (appointed by Milosevic in 1996, not ‘elected’ by any imaginary ‘self-management’ body), was also the owner of two private companies, INOS and FAGAR, to which he routinely transferred work and funds from Trepca, steadily bankrupting it to feed his private firms. FAGAR had been a state-owned construction materials firm to which Bjelic was appointed manager in 1991, who then privatised it in 1992. One of its largest share-holders was INOS, Bjelic’s other private concern. INOS had also been a ‘social’ firm, engaged in metals recycling, which had been privatised under Gavrilo Ivanovic, another top Trepca official, while Bjelic was head of its management board. In 1996, the Trepca management committee awarded Bjelic the right to dispose of investment and procurement funds of up to $5 million at a time without reference to the committee – so much for any management, let alone ‘workers’ self-management’. Bjelic was also given a seat in government by Milosevic (a good thorough description of the entire Trepca system is in Michael Palairet, ‘Trepca 1965-2000’, Lessons Learned and Analysis Unit/European Stability Initiative).

Being concurrently a government minister, the head of a ‘state’ or semi-state firm, and the owner of private firms, was a normal part of the political economy of Milosevic’s Serbia. This needs to be kept in mind when considering the above issues of the weight of state, mixed and private sectors in that state (as in many others).

The real problem is that the western occupiers can finally begin privatization and even pass legislation for 99-year land leases because they are occupiers. To get rid of the occupation regime, Clarke should be advocating the right of the Kosovar people to independence, as is the express desire of the overwhelming majority, blocked only by the NATO-UN occupation. The main excuse for the continuing occupation is the need to protect the Serb minority from Albanian vengeance – the imperialist “standards before status” dogma states that Kosova must meet the most stringent standards ever asked of any country, regarding minority rights and returns and a hoist of other ‘democratic’ standards, before the final status of Kosova can even be discussed. Even if such standards are reached, there is no guarantee of independence. The danger to the minorities is real enough, but the presence of UN troops to protect them need not go together with occupation of the whole country and denial of independence. It is precisely the denial of independence that is maintaining the rage of the Kosovar Albanians, and the total insistence of the Serbian regime, and its appointed spokespeople among Kosovar Serbs, that Kosova must not be granted independence under any circumstances, makes this minority continue to be a target.

This vicious circle can only be broken if the Serbian regime gives up its claims, and the Kosova Serb minority and Albanian majority enter into partnership in pushing for an independent multi-ethnic state. Only an independent state of Kosova could inherit these state and social firms and decide what to do with them, whether or not to privatize, in which ways to gain capital for their upstart and how much, rather than these decisions being made by an occupation regime.