Serbs Protest Against IMF Mandated Austerity

April 30, 2009

Workers protesting in Belgrade, Getty

Workers protesting in Belgrade, Getty

Around 10,000 Serbians protested yesterday in Belgrade against the budget being agreed inside the country’s parliament that same day. The government, which has been begging the IMF for emergency funding, managed to pass the budget, which will seek to make massive cuts to Serbia’s public sector. In return, the IMF will disburse a 3 billion Euro loan to the nation, which is seeing its economy shrivel due to the deepening global economic crisis.

What that means for ordinary Serbians is an entrenchment of misery. The IMF is demanding that Serbia keep its “fiscal gap” (basically budget deficits consolidated across all levels of government) to just 3 percent of GDP. That in turn means that huge cutbacks are needed.

A public sector wage freeze is planned, in addition to wholesale lay offs. 8,000 public sector workers are slated to lose their jobs in the near future, while local governments will see their payments from the centre slashed. The state health fund will see its budget reduced while, despite the cutbacks, taxes will be increased across the board. Income tax, petrol duties and mobile phone bills will be stepped up. Instead of keeping some profits in their hometowns, public companies (of which many still remain in Serbia) will have to pass all of their profits to the centre.

It’s a brutal austerity plan, which is being forced upon Serbia, mafioso style, by the International Monetary Fund. At a time when Serbia needs to be running a deficit to stimulate demand, and public services will be strained due to deepening poverty, it is being compelled to maintain a tight leash on spending. Nothing has changed in the way that the world is run, despite the verbiage coming out of the G20 summit in London earlier this month.

The cutbacks have obviously not been met with total passivity, although the trade union movement in Serbia is hopelessly divided. The protest on Wednesday, while heartening, could have been far larger, were it not for the unwillingness of major union figures to back it.

According to Balkan Insight, “President of the Association of Free and Independent Unions Ranka Savic told the FoNet Agency that her organisation sent written support, but would not take part in the protest, because it is not clear what its goal is” while “Zoran Stojiljkovic, another union leader, told B92 that he thought there is no reason for protesting, saying the government has created space for dialogue.”

There seems to be very little “space for dialogue” actually. The IMF has given the government one month to put its house in order so that it can qualify for a loan. The process has been a rush job forced upon Serbia by the Fund, making the reticence of the union hierarchy a mystery.

On a local level, however, there has been fierce resistance. Textile workers in a state-run plant in Novi Pazar have been on strike, demanding the honouring of benefits packages after being made redundant. One of the leaders, Zoran Bulatovic, has garnered some minor global media attention by hacking off one of his fingers in protest, and threatening to repeatthe gesture until the demands of workers are met.

That’s how desperate workers are at Novi Pazar, which has seen its workforce plummet from 4,000 to 100 in recent years. And Bulatovic’s commitment sent the government scurrying to defuse the situation. Serbia’s Labour Minister, Rasim Ljajic urged the protesters not to “radicalize” their cause, to which the workers refused, although they did agree to open dialogue.

As B92 reported, “Bulatović for his part stated that the workers will not back down from their demands, but that they will not radicalize their protests “at least until the meeting.”

At Wednesday’s protest, speakers were strident. Union leader Dragan Zarubica urged the government to “downsize itself” while Ljubisav Orbovic said that the budget would “create a small number of profiteers and huge number of losers.”

Others were less bombastic though. Metal worker Ljubisa Nikolic, who attended the protest, told Javno.hr that “For months, I haven’t been able to afford a decent meal for my children, and the government is imposing more belt-tightening.”

His anger, and that of millions of Serbs is clear, but the opposition to government and IMF plans is weak, albeit growing.

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