A Stability Pact for Serbia

BELGRADE: It is widely believed that if only Slobodan Milosevic were removed from power, Serbia would be set on a path of renewal. But reality here is more complex and more troubling. If Serbia is to avoid a humanitarian disaster this winter, all of its politicians must put ambition aside so that the country can begin to rebuild.

Even before the disaster of Kosovo, Serbia was an economic basket case. Key economic reforms that transformed much of postcommunist Europe -- macro-economic stabilization, freeing prices and foreign trade, privatization -- were scorned in order to sustain an authoritarian regime. Instead of integrating Serbia into the international community and stopping the rot in the country's living standards, the regime opted to cow its people into submission through high inflation, a brutal black market economy, and tolerance of massive corruption.

NATO's bombing was the coup de grace for an economy dying on its feet. So stark are conditions now that the very survival of the nation is at stake. Bomb damage has been estimated at $30 billion, triple this year's GDP. Industrial production will drop this year to one fifth of its value in 1989, while GDP per capita will be only $975, a third of its value ten years ago. One out of every two people in Serbia are unemployed. Without international help, and if our country "relies on our own resources" to rebuild, which is the stated policy of the regime, it will take between 40 and 80 years for Serbia to return to the economic level it enjoyed when President Milosevic first took power a decade ago.

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