Kosovo

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The quotes below are taken from the book: "The Globalisation of Poverty" by Michel Chossudovsky.
Regarding Rwanda:

 

"The brutality of the massacres shocked the world community, but what the international media failed to mention was that the civil war was preceded by the flare-up of a deep-seated economic crisis. It was the restructuring of the agricultural system which precipitated the population into abject poverty and destitution."

 

Regarding Yugoslavia (and noting this book was published in 1998):

 

"Western public opinion has been misled: the plight of former Yugoslavia is presented as the outcome of an 'aggressive nationalism'"

 

"...the economic and social causes of the civil war have been carefully concealed. The strategic interests of Germany and the US are not mentioned"

 

"Yet the break-up of the Yugoslav federation bears a direct relationship to the programme of macro-economic restructuring imposed on the Belgrade government by its external creditors."

 

"'The Prime Minister Milka Planic who was supposed to carry out the programme, had to promise the IMF an immediate increase of the discount rights and much more for the Reaganomics arsenal of measures...'"

 

"Washingtons intervention in this regard had been formalised in 1984 in a US National Security Decision Directive (NSDD 133) entitled 'United States policy towards Yugoslavia' labelled 'SECRET SENSITIVE'."

 

"...expand efforts to promote a 'quiet revolution' to overthrow Communist governments and parties while reintegrating the countries of Eastern Europe into a market-oriented economy."

 

"Washingtons strategic objective was to integrate the Balkans into the orbit of the 'free market' system."

 

"In fact, this programme was conducive to speeding up rather than alleviating the inflationary process:"

 

"The economic-reform measures reached their climax under the pro-US government of Mr. Ante Markovic. Prime Minister Markovic continued with the same old promises of a 'positive policy' of support to manufacturers, while in fact he initiated the deregulation of the system."

 

"Inflation had been engineered almost deliberately."

 

"...many of the required reforms (including a major revamping of the foreign investment legislation) had already been put in place by the Belgrade nomenclatura with the assistance of Western advisers."

 

"The budget cuts requiring the redirection of federal reserves towards debt servicing were conducive to the suspension of transfer payments by Belgrade to the governments of the republics and autonomous provinces thereby fuelling the process of political Balkanisation and secessionism."

 

"The Trade Union movement was united in this struggle: worker resistance crossed ethnic lines, as Serbs, Croats, Bosnians and Slovenians mobilised"

 

"The creditors were in control of monetary policy: the agreement signed with the IMF prevented the federal government from having access to credit from its own Central Bank"

 

"The freeze of all transfer payments to the republics had created a situation of 'de facto secession.'"

 

"This situation acted in a sense as a fait accompli, prior to the formal declaration of secession by Croatia and Slovenia in June 1991."

 

"The objective was to subject the Yugoslav economy to massive privatisation and the dismantling of the public sector."

 

"The Financial Operations Act of 1989 was to play a crucial role in engineering the collapse of Yugoslavias industrial sector"

 

"A related act entitled the Law on Compulsory Settlement, Bankruptcy and Liquidation was to safeguard 'the rights of the creditors'."

 

"As in Eastern Europe and the former Soviet Union, however, the valuation of assets was based on the recorded 'book-value' expressed in local currency. This book-value tended to be unduly low thereby securing the sale of socially-owned assets at rock-bottom prices."

 

"More than half the countrys banks were dismantled; the emphasis was on the formation of 'independent profit-oriented institutions'. By 1990, the entire three-tier banking system consisting of the National Bank of Yugoslavia, the national banks of the eight republics and autonomous provinces and the commercial banks had been dismantled under the guidance of the World Bank."

 

"This mechanism allowed creditors (including national and foreign banks) routinely to convert their loans into a controlling equity in the insolvent enterprise. Under the act, the government was not authorised to intervene. In case a settlement was not reached, bankruptcy procedures would be initiated in which case workers would not normally receive severance payments."

 

"In other words, in less than two years the trigger mechanism (under the Financial Operations Act) had led to the lay-off of more than 600 000 workers (out of a total industrial workforce of the order of 2.7 million). The largest concentrations of bankrupt firms and lay-offs were in Serbia, Bosnia-Herzegovina, Macedonia and Kosovo."

 

"When Mr. Markovic finally started his programmed privatisation, the republican oligarchies, who all had visions of a national renaissance of their own, instead of choosing between a genuine Yugoslav market and hyperinflation, opted for war which would disguise the real causes of the economic catastrophe."

 

"These imports were financed with borrowed money granted under the IMF package (i.e. the various 'quick disbursing loans' granted by the IMF, the World Bank and bilateral donors in support of economic reforms). While the import bonanza was fuelling the build-up of Yugoslavias external debt, the abrupt hikes in interest rates and input prices imposed on national enterprises had expedited the displacement and exclusion of domestic producers from their own national market."

 

"This process referred to as 'Reform by Dismemberment' consisted in breaking up an integrated system of public transportation or road haulage into a multitude of small individually-owned transport companies. The latter are referred to as 'the successor enterprises'."

 

"Germany not only favoured secession, it was also 'forcing the pace of international diplomacy' and pressuring its Western allies to grant recognition to Slovenia and Croatia."

 

"The former Yugoslavia has been carved up under the close scrutiny of its external creditors, its foreign debt has been carefully divided and allocated to the republics, each of which is now strangled in separate debt-rescheduling and structural adjustment agreements."

 

"Under the agreement signed in 1993 with the IMF, the Zagreb government was not permitted to mobilise its own productive resources through fiscal and monetary policy."

 

"A new national currency, the Kuna, was launched in October 1994. According to official figures, 95% of the socially-owned enterprises had been transformed into joint stock companies."

 

"Also in 1995 a few months before the completion of the Dayton Peace Accord, the IMF acting on behalf of the creditor banks and Western governments, proposed to redistribute the debt of former Yugoslavia roughly as follows: Serbia and Montenegro, 36%; Croatia, 28%; Slovenia, 16%; Bosnia-Herzegovina, 16% and Macedonia, 5%."

 

 "Mr. George Soros, the multi-billionaire business tycoon, acting as a private individual, had integrated the so-called International Support Group alongside the government of the Netherlands and the Bank of International Settlements. The money provided by the support group was not intended for the reconstruction of Macedonia. So-called 'bridge financing' was provided to enable the Skopje government to reimburse its debt arrears with the World Bank."

 

"These endeavours, however, would inevitably require further compressions in social programmes and payments of old-age pensions."

 

"The minister of finance Mr. Ljube Trpevski stated proudly in a press conference that 'the World Bank and the IMF place Macedonia among the most successful countries in regard to current transition reforms'."

 

"With the Bosnian peace settlement holding under NATO guns, the West unveiled in 1995 a 'reconstruction' programme which fully stripped Bosnia-Herzegovina of its economic and political sovereignty. This programme consisted largely in developing Bosnia-Herzegovina as a divided territory under NATO military occupation and Western administration.
 Resting on the November 1995 Dayton Accord, the US and the European Union had installed a full-fledged colonial administration in Bosnia."

 

"Some 1 700 policemen from fifteen countries, most of whom had never set foot on in the Balkans, were dispatched to Bosnia after a five-day training programme in Zagreb."

 

"Article VII stipulated that the first governor of the Central Bank of Bosnia and Hezegovina is to be appointed by the IMF and 'shall not be a citizen of Bosnia and Herzogovina or a neighbouring State...'."

 

"For the first six years (...) it may not extend credit by creating money, operating in this respect as a currency board (Article VII). Neither was the new 'sovereign' successor state allowed to have its own currency (issuing paper money only when there is full foreign exchange backing), nor permitted to mobilise its internal resources."

 

"One can not sidestep a fundamental question: is the Bosnian Constitution formally agreed between heads of state at Dayton really a constitution? A sombre and dangerous precedent had been set in the history of international relations: Western creditors had embedded their interests in a constitution hastily written on their behalf; executive positions within the Bosnian state system were held by non-citizens who were appointees of Western financial institutions. No constitutional assembly, no consultations with citizens organisations in Bosnia and Herzegovina, no 'constitutional amendments'..."

 

"Under the Dayton agreement, no taxes were paid by NATO personnel and several of the local costs of the military operation were met by the Bosnian government."

 

"In a familiar twist, 'fresh loans' were devised to pay back 'old debt'. The Central Bank of the Netherlands has generously provided 'bridge financing' of US$37 million. The money, however, was earmarked to allow Bosnia to pay back its arrears with the IMF, a condition without which the IMF will not lend it fresh money. But it is a cruel and absurd paradox: the sought-after loan from the IMFs newly created 'Emergency Window' for so-called 'post conflict countries' was not to be used for post-war reconstruction. Instead it was applied to reimburse the Central Bank of the Netherlands which had coughed up the money to settle IMF arrears in the first place. While debt was building up, no new financial resources are flowing into Bosnia to rebuild its war-torn economy."

 

"Documents in the hands of Croatia and the Bosnian Serbs indicated that deposits of coal and oil had been identified on the Eastern slope of the Dinarides Thrust..."

 

"Chicago-based Amoco (American Oil Company) was among several foreign firms that subsequently initiated exploratory surveys in Bosnia."

 

"Moreover, there are also substantial petroleum fields in the Serb-held part of Croatia just across the Sava river from the Tuzla region. The latter under the Dayton agreement was part of the US Military Division with headquarters in Tuzla.
 The territorial division under the Dayton agreement sanctions 'ethnic cleansing'. The deployment of nine heavily armed brigades of 70 000 troops (nearly as many as in the Vietnam war) was not intended to 'enforce the peace' but rather to administer the territorial partition of Bosnia-Herzegovina in accordance with Western economic interests."

 

"Macro-economic restructuring applied in Yugoslavia under the neoliberal policy agenda had unequivocally contributed to the destruction of an entire country. Yet since the onset of the war in 1991, the central role of macro-economic reform had been carefully overlooked and denied by the global media. The 'free market' had been presented as the solution, the basis for rebuilding a war-shattered economy. A detailed diary of the war and of the 'peace-making' process had been presented by the mainstream press. The social and political impact of economic restructuring in Yugoslavia had been carefully erased from our social consciousness and collective understanding of 'what actually happened'. Cultural, ethnic and religious divisions were highlighted, presented dogmatically as the sole cause of the crisis when in reality they were the consequence of a much deeper process of economic and political fracturing.
 This 'false consciousness' had invaded all spheres of critical debate and discussion. It not only masks the truth, it also prevents us from acknowledging precise historical occurrances. Ultimately it distorts the true sources of social conflict. The unity, solidarity and identity of the Southern Slavs have their foundation in history, yet this identity had been thwarted, manipulated and destroyed.
 The ruin of an economic system, including the take-over of productive assets, the extension of markets and the 'scramble for territory' in the Balkans constitute the real cause of the conflict.
 What is at stake in Yugoslavia are the lives of millions of people. Macro-economic reform destroys their livelihood and derogates their right to work, their food and shelter, their culture and national identity. Borders are redefined, the entire legal system is overhauled, the socially-owned enterprises are steered into bankruptcy, the financial and banking system is dismantled, social programmes and institutions are torn down. In retrospect, it is worth recalling Yugoslavias economic and social achievements in the post-war period (prior to 1980): the growth of GDP was on average 6.1 per annum over a twenty year period (1960-80), there was free medical care with one doctor per 550 population, the literacy rate was of the order of 91% and the life expectancy was 72 years.
 Yugoslavia is a 'mirror' of similar economic restructuring programmes applied not only in the developing world but also in recent years in the US, Canada and Western Europe. 'Strong economic medicine' is the answer; throughout the world, people are led to believe that there is no other solution: enterprises must be closed down, workers must be laid off and social programmes must be slashed. It is in the foregoing context that the economic crisis in Yugoslavia should be understood. Pushed to the extreme, the reforms are the cruel reflection of a destructive 'economic model' imposed under the neoliberal agenda on national societies throughout the world."

 

GLOBAL POVERTY IS AN INPUT ON THE SUPPLY SIDE.