G17 and the West's plans for Yugoslavia

Recently there has been a lot of interest in the economists in
the Yugoslav group G-17. They wrote the Program adopted by the
so-called "democratic" opposition and its Presidential candidate,
Vojislav Kostunica.

by Michel Chossudovsky & Jared Israel

The G-17 likes to give the impression it is independent and
Yugoslav-oriented. In fact it is funded mainly through the
Washington-based "Center for International Private Enterprise"
(CIPE).

CIPE describes itself as "an affiliate of the US Chamber of
Commerce". But in fact it is "a core institute" of the National
Endowment for Democracy.

The National Endowment for Democracy has nothing to do, as far as
we can discern, with Democracy. Rather, the Endowment was created
in 1983 to solve a problem of Empire.

People knew that the CIA bribed intellectuals and leaders and set
up phony front groups to carry out US policy:

"When these covert activities surfaced (as they inevitably did),
the fallout was devastating." ("Washington Post", Sept 22, 1991)

So Congress created the National Endowment for Democracy. Allen
Weinstein, who planned the Endowment, said:

"A lot of what we do today was done covertly 25 years ago by the
CIA." ("Washington Post", Sept 21, 1991)

So the National Endowment (a sort of spin-off from the CIA)
controls and pays for the Center for International Private
Enterprise which in turn funds the G-17. In addition, the leading
G-17 economists hold important positions in the World Bank and
International Monetary Fund, and have for many years.

If the "democratic" opposition got into power, the G-17
economists would be in charge of the Yugoslav economy. This is
not a matter of speculation. The "democratic" opposition program
calls for working with the International Monetary Fund and the
Fund does not work on a casual basis.

It invariably insists that its men (who conveniently happen to be
the G-17 economists) run the show. That is not open for
negotiation.

Let us take a look at three of the leading G-17 economists. Their
record is most disturbing.

Effects of IMF/WB economic ``medicine''

The G-17 program contains the same economic measures they forced
on Russia, the Ukraine, Bulgaria and Peru, among many others.

The results: social and economic devastation. But because of the
long-term US/German attack on Yugoslavia, the results in the
Yugoslav case would be much worse.

G-17 economists are fond of phrases like "free markets" and
"privatisation", but their International Monetary Fund "reforms"
wreck countries.

First, they force governments to do away with any social
protections -- subsidised food or rent, free transportation, free
medical care.

Out the window.

Second, they use economic manipulation and new laws to force
businesses -- public and private -- into bankruptcy.

Then these businesses are taken over by a small clique of
thieves, international banks, rich speculators and foreign
companies. They purchase the businesses at rock bottom prices.
This is called "Privatisation through Liquidation."

A case in point is Yugoslavia, 1989.

The elder statesman of the G-17 is Professor Veselin Vukotic.
Presently he is one of the brains behind Montenegrin
secessionism. But in 1989 he was Minister of Privatisation under
Yugoslav Premier Ante Markovic.

Yugoslavs have bitter memories of 1989-1990. But do they "put a
human face" on the nightmare? Perhaps people think the economic
disaster that befell Yugoslavia that year was the natural result
of "market mechanisms" or the fault of "incompetent government."

It wasn't. There was somebody pulling the strings. That somebody
was Veselin Vukotic.

In 1989-90, Professor Vukotic worked out of governmental offices
in Belgrade alongside an army of Western lawyers and consultants
to impose the Financial Operations Act. It was a World Bank plan.

Under this law, companies were selected for bankruptcy or
liquidation. They were forced to meet impossible conditions. In
this way, Vukotic orchestrated the breakup of 50 per cent of
Yugoslav industry. 50%!

World Bank data confirms that under his direction more than 1100
industrial firms were wiped out from January 1989 to September
1990 And that was only the beginning.

Over 614,000 industrial workers were laid off out of 2.7 million.

The areas hardest hit were: Serbia, including Kosovo, and Bosnia-
Herzegovina and Macedonia.

Real wages did a nose-dive. Social programs collapsed.
Unemployment shot up.

And now this same Vukotic, a key man in G-17, wants to return to
power.

When the IMF gets its jaws on a country it forces the government
to work under people like Vukotic. So Vukotic could finish the
job he started in 1989 and which ironically was discontinued when
economic sanctions were imposed in 1992.

(Bulgaria would probably be better off today if it had been hit
with sanctions instead of with the International Monetary Fund!)

Practising on Montenegro

While hoping to get his hands on all of Yugoslavia once again, Mr
Vukotic is practicing on the co-operative regime in Montenegro.

Montenegrin boss Milo Djukanovic, his former student, has
appointed Vukotic Deputy Chief of the Privatisation Commission
which is auctioning off state property in Montenegro.

Recently we discovered a US Commerce Department advertisement on
the internet.

The title is: "Montenegro: Seeks Privatization Fund Managers."

The advertisement explains that these Managers are needed in
Montenegro, where US officials are "providing technical support"
for so-called privatisation.

The managers would control "funds" that would take over ownership
of what is now public property.

The Managers could "restructure" these privatised companies --
lay off the workers and sell the most valuable components. The
Commerce Department promises that this "should be quite
profitable".

Note how brazenly the US Commerce Department celebrates the
transformation of Montenegrin property into foreign profits.

Vukotic is helping in other areas as well. For example, last June
NATO marched into Kosovo, and the UCK along with them. Wherever
they went, they drove loyal Yugoslav citizens from their homes,
stole or destroyed their property and threatened them with death.
By June 26, the expulsions were at a peak.

Vukotic could no longer remain silent. According to the
Associated Press, on June 26 Vukotic demanded that Kosovo have
its own currency, separate from the dinar!

One of the most prominent G-17 people is Dr Dusan Vujovic, a
senior economist at the World Bank. He acts as a link between G-
17 and Washington.

He has been very active overseeing "reforms" in so-called
"transition countries".

Shock treatment for Ukraine

In August 2000, Vujovic was in charge of negotiating one of the
World Bank's most deadly economic packages, imposed on the
Ukraine, already devastated by previous International Monetary
Fund measures.

What happened to the Ukraine?

The Ukraine disaster started in the fall of 1994 in Madrid,
Spain. Prime Minister Vitali Masol signed an agreement with the
International Monetary Fund.

In exchange for accepting "economic shock treatment" Ukraine got
a $360 million loan, a very small amount as these things are
calculated.

Reforms were launched in mid-October, 1994. The IMF ordered the
Ukrainian authorities to abandon State controls over the exchange
rate.

This led to the collapse of the currency. The price of bread
increased overnight -- 300 per cent. Electricity shot up -- 600
per cent. Public transportation -- 900 per cent.

"Dollarised" prices were forced on a population with earnings
below $10 a month. Credit was frozen. With super high electricity
prices and no credit, public and private industry was destroyed.

The international speculators moved in like sharks in a frenzy.

Then in November 1994, World Bank negotiators were sent in to
"advise" the government on overhauling Ukraine's agriculture. The
grain market was deregulated.

This opened Ukraine up to the dumping of US grain surpluses.

Ukraine went from being a grain exporter to begging for Food Aid
from the European Union and the US.

Thanks to the International Monetary Fund, Ukraine is a starving
political protectorate of the US and Germany. And remember,
Ukraine never did anything to offend the US, unlike Yugoslavia.

The Rape of Bulgaria

G-17 member Dr Zeliko Bogetic has a senior position at the
International Monetary Fund. Bogetic has been doctor in many
economic cures. The patient always dies.

In 1994-96, he played a key role in forcing a structural
adjustment program (SAP) on Bulgaria. All social defences --
price controls, subsidised food, housing and medical care, were
stripped away.

The program led to mass poverty. By 1997, old age pensions
(according to World Bank sources) had collapsed to $2 a month.

The World Bank admits that 90 per cent of Bulgarians now live
below the extreme poverty level but, they say, much economic
progress is being made.

Apparently perfection will be achieved when there are no
Bulgarians left alive.

Yugoslavia next?

What would Mr Bogetic do if he and his G-17 colleagues came to
power under a "democratic" opposition government?

Bogetic was dispatched by the International Monetary Fund to
Podgorica, Montenegro, to advise the pro-secessionist government
of President Milo Djukanovic.

Bogetic was to set up a currency board modelled on that of Bosnia
under the Dayton Accord.

Bogetic's advice was to stop using the Dinar, the Yugoslav
currency. He said that under no circumstances should Montenegro
establish a Central Bank.

Now remember, the Djukanovic Government in Montenegro says it
wants "independence" from Yugoslavia -- but a Central Bank is a
requirement for real independence.

No, said Bogetic, that is the "worst possible solution". Meaning:
independence in the colonial sense.

Bogetic would be the likely candidate for Yugoslav Central Bank
Governor if the "democratic" opposition were to win.

What would he do?

The same thing he's been doing in Montenegro -- establish a
colonial style currency board linked to the Deutschmark. Then
monetary policy would be controlled by the country's creditors.

This would be an excellent state of affairs for the creditors,
but very bad for the common people.

It would make it impossible to finance economic reconstruction
through the mobilisation of Yugoslavia's own domestic resources.
The country would be in a straightjacket.

What would International Monetary Fund-Type Reforms mean for
Yugoslavia?

If the "democratic opposition" came to power they would enforce
International Monetary Fund economic medicine. That's what they
say in their Program.

But would this be the same medicine that the Fund (including some
of the people who lead the G-17) have prescribed for Russia,
Bulgaria and Ukraine?

Co-operative countries

Russia, Bulgaria and Ukraine co-operated fully with Washington.
As nations, they never resisted being turned into colonies. Was
the West merciful?

Consider Russia. During the first year that the reforms were
applied, 1992, wages collapsed by 86 per cent. And in many of the
countries of the Balkans and Eastern Europe, economic activity
has been cut in half, even if it was low before.

And these are co-operative countries. As everyone knows, the US
is very annoyed with Yugoslavia. Yugoslavia has not been a good
slave. It has not kissed the hand of the bombers.

History shows that if the Monetary Fund gets hold of a country
that has been rebellious the treatment is vicious. And we are not
talking about major rebels, like Yugoslavia. We are talking about
very moderate rebels, like Peru.

In Peru, the government of President Alan Garcia (1985-1990)
refused to do some of what the International Monetary Fund
ordered it to do.

In 1985, it decided to pay international debts at a reduced rate.
It instituted an economic program that would help (instead of
destroying) the economy.

The country was immediately put on a black list by the
International Monetary Fund. This disrupted Peru's foreign trade.

Enter Professor Alberto Fujimori. It was the 1990 elections. With
help from Washington, Peru was having economic problems, so many
people wanted a change. Fujimori was an unknown. People felt he
was "honest" and "promising". He led a tiny party that had never
held power. He seemed to be squeaky clean.

With Washington's help, he was the top runner-up in the 1990
elections.

The electorate chose him over the other candidates "because we
did not know who he was" and "we thought he was honest" and
"maybe if we put in someone Washington likes they will go easy on
us." They did not understand. Washington has no mercy.

Fujimori of course caved in to the International Monetary Fund's
demands.

What followed was the most deadly economic "reform" in Latin
American history. From one day to the next, the price of fuel
increased by 31 times (2,968 per cent) and the price of bread
increased more than 12 times (1,150 per cent).

People could no longer afford to boil water. A cholera epidemic
broke out.

The social consequences were devastating.

An agricultural worker in August 1990 was paid US$7.50 a month.
That was enough to buy two hamburgers and a drink at McDonalds.
Consumer prices in Lima were higher than New York.

Real earnings dropped by 60 per cent. By mid-1991 the standard of
living had declined by 85 per cent.

And this was the just beginning of ten years of deadly reforms
under Fujimori.

And remember, Peru didn't really do anything. Just resisted a few
International Monetary Fund Measures. But Yugoslavia? Yugoslavia
has been driving the German Establishment (and now the Americans)
crazy for 100 years or more.

Washington and Berlin would like nothing more than to make
Yugoslavia an example of total enslavement, to show people what
would happen to them if they were to resist.

Haven't the US and Germany made this perfectly clear in Kosovo? A
gangster-fascist regime has been installed. And Western leaders
are fully aware of the horror they have wrought in Kosovo.

UN Secretary General Kofi Annan received a special report about
this. The report was discussed by the British newspaper, the
"Observer":

"Murder, torture and extortion: these are the extraordinary
charges made against the UN's own Kosovo Protection Corps in a
confidential United Nations report written for Secretary-General
Kofi Annan.

"The KPC stands accused in the document, drawn up on 29 February,
of `criminal activities -- killings, ill-treatment/torture,
illegal policing, abuse of authority, intimidation, breaches of
political neutrality and hate-speech'." (quoted in "How Will You
Plead at your Trial, Mr. Annan?" at
http://emperors-clothes.com/news/howwill.htm )

What would Washington do if its G-17 employees got hold of
Yugoslavia? They would institute the most extreme economic
"reforms" to devastate the country.

Prices would go sky high; farmers would lose their land;
businesses would be bought up and closed down.

In Hungary they privatised the only light bulb factory and shut
it down so that now everybody has to buy bulbs from the US
company, General Electric.

In Yugoslavia they would take away the lamps. People would be
reduced to starvation.

This kind of suffering produces ethnic tension. Washington would
whip this up by sending in their UCK (KLA) fascist terrorists.
Why does Washington keep the UCK in power in Kosovo? Because they
want to use them again. For what? They are incapable of fighting
a real army. But they are capable of terrorising civilians.

A Washington-controlled government would bring in NATO troops to
"help keep order". The troops would never leave. The hunt for
imaginary war criminals would go on, a thousand times worse than
it is in the Bosnian Serb Republic.

Croatians, Bosnian Muslims and ethnic Albanians who fled to
Serbia to escape fascist persecution would be put on the list of
phony war criminals.

All loyal Yugoslavs would have to pay for their (imaginary)
crimes so that "healing can begin."

Every effort would be made to humiliate the people, to break
their spirit, and to eliminate potential leaders of resistance.

Do you know what the United States did a few years ago to
Vietnam? When the Vietnam War ended, the US Government ordered an
embargo which did Vietnam a lot of harm, economically. A few
years ago, Washington agreed to lift the embargo.

In exchange, Vietnam had to agree to pay the debts of the former
South Vietnamese Government, a puppet government controlled by
Washington.

Most of its debt came from borrowing money (from the US) to buy
weapons (from the US) to kill its own people. And now Vietnam is
being forced to pay this "debt" to Washington, after Washington
had invaded Vietnam and was driven  out, leaving two million
Vietnamese dead.

The "democratic" opposition says that if they can just get into
power everything will be normal. Washington would treat the
Yugoslavs right. Sure they would. Just the way they treated the
American Indians.

Michel Chossudovsky is Professor of Economics, University
of Ottawa, author "Globalization of Poverty" Third World Network,
Penang, Zed Books, London, 1997 and Jared Israel, editor,
www.tenc.net (Emperor's Clothes).

Via Global Reflexion -- Amsterdam -- The Netherlands