Privatization in Serbia

Letter From Belgrade

In articles dealing with the 2002 presidential election in Serbia, I have made passing references to Zoran Djindjic as “Serbia’s kleptocratic prime minister” and to his “corrupt establishment” that “controls the economy and the media more stringently than Milosevic had ever done.”  While such designations would be considered unremarkable by most of Serbia’s impoverished and disheartened people, they raised an eyebrow or two among some foreign Yugoslavia-watchers who still believe that Mr. Djindjic is a “pro-Western, reformist” politician whose program of privatization may prove pain-ful at first but will eventually lead Serbia to prosperity and a free-market system.

That is wishful thinking.  Mr. Djindjic, his privatization minister Aleksandar Vlahovic, and about a dozen members of their inner coterie are in the process of turning Serbia’s state industries into their own private assets by means that would be considered criminal in most Western countries.  Take the announcement by Mr. Vlahovic last October that the Zastava car factory in Kragujevac would be sold to an American buyer.  According to Reuters,

Zastava became well-known as producer of the cheap-and-cheerful Yugo hatchback in the 1980s but was crippled by international sanctions and bombed by NATO during the turmoil that engulfed the Balkans in the 1990s.  Vlahovic...

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