by Michel Chossudovsky
* In Yugoslavia, the IMF has become the steadfast financial bureaucracy of the Western military alliance, working hand in glove with NATO and the US State Department. *
The International Monetary Fund (IMF) is known to bully developing countries, imposing strong doses of "deadly economic medicine" while saddling governments with spiraling external debts. In complicity with Washington, the IMF often meddles in cabinet appointments in debtor countries. In Korea in the turmoil of the 1997 Asian crisis, the Finance Minister --sacked for allegedly "hindering negotiations" with the IMF-- was replaced by a former IMF official.1 In Turkey, also in the wake of an IMF-style financial meltdown (March 2001), the Minister of Economy was substituted by a Vice-President of the World Bank. 2
But what has occurred in Yugoslavia sets a new record in the abusive practices of the Washington-based international financial bureaucracy: the arrest of a head of State of a debtor nation --demanded by its main creditors-- has become "a pre-condition" for the holding of loan negotiations.
While the 31st of March 2001 was Washington's deadline date for the arrest of President Slobodan Milosevic by the DOS government, another ultimatum was set for transferring the former head of State to the jurisdiction of the NATO-sponsored Hague Tribunal (ICTY). In the words of Secretary of State Colin Powell:
"the US administration's support for an international donors' conference where Yugoslavia is hoping for up to $1 billion to help rebuild would depend on continued progress in full cooperation with the [Hague] tribunal."3
A State Department spokesman further clarified "that the United States has the power to stop the conference from going ahead in the early summer if Washington is not satisfied."4 Meanwhile, the Hague Tribunal has threatened to take the matter before the UN Security Council, if President Milosevic is not rapidly transferred to its jurisdiction. 5
WITHHOLDING FINANCIAL "AID"
Very timely... At the height of the Yugoslav presidential elections (September 2000), "enabling legislation" was rushed through the US House of Representatives. Washington had forewarned Kostunica --pursuant to an Act of Congress (HR 1064)-- that unless his government fully complied to US diktats, financial "aid" would be withheld. The IMF and the World Bank had also been duly notified by their largest shareholder, namely the US government, that:
"the US Secretary of the Treasury [would] withhold from payment of the United States share of any increase in the paid-in capital of [the IMF and World Bank] an amount equal to the amount of the loan or other assistance [to Yugoslavia].6
Meanwhile, Washington had demanded the setting up of an office of the Hague Tribunal (ICTY) in Belgrade as well as modifications to the legal statutes of Yugoslavia. The latter --to be rubber-stamped by the Parliament-- would place the ICTY Tribunal above the jurisdiction of Yugoslavia's national legal system. It would also allow the ICTY to order on NATO's behest, the arrest of thousands of people on trumped up charges.
RELEASING KLA TERRORISTS
US officials had also intimated that the prompt release of KLA "freedom fighters" serving jail terms in Serbia was to be regarded as an "additional pre-condition" for the granting of financial assistance:
"State Department officials later told UPI that among other steps the United States was looking for, were Yugoslav President Vojislav Kostunica to begin returning Albanians captured during the 1999 Kosovo conflict to Kosovo and for an acceptance of the war crimes tribunal's jurisdiction inside Serbia where numerous indicted suspects still enjoy immunity."7
An "Amnesty Law" was rushed through the Yugoslav parliament barely a month before Washington's March 31st deadline.8 While the victims of the war are persecuted and indicted as war criminals, the Kostunica regime --on Washington's instructions-- has released Kosovo Liberation Army (KLA) criminals (linked to the drug mafias) who committed atrocities in Kosovo.
Meanwhile, these criminals have rejoined the ranks of the KLA, now involved in a new wave of terrorist assaults in southern Serbia and in neighboring Macedonia. The evidence amply confirms that these terrorist attacks are supported and financed by Washington.9
Without further scrutiny, the Western media touts the holding of a donors' conference as "a necessary step" towards "economic normalization" and the "reintegration" of Yugoslavia into the "family of nations". Public opinion is led to believe that the "donors" will "help" Yugoslavia rebuild. The term "donor" is a misnomer. In fact the donors' conference is a meeting of bankers and creditors mainly from the countries which bombed Yugoslavia. Their intent is to not only to collect money from Yugoslavia, but also to gain full control and ownership of the Yugoslav economy.
Meanwhile, national laws have been revised to facilitate sweeping privatization. Serbia's large industrial complexes and public utilities are to be restructured and auctioned off to foreign capital. In other words, rather than "helping Yugoslavia", the donor conference --organized in close consultation with Washington and NATO headquarters in Brussels-- would set the stage for the transformation of Yugoslavia into a colony of the Western military alliance.
Yugoslavia's external debt is in excess of $14 billion of which $5 billion are owed to the Paris Club (i.e. largely to the governments of NATO countries) and $3 billion to the London Club. The latter is a syndicate of private banks, which in the case of Yugoslavia includes some 400 creditor institutions. The largest part of Yugoslavia's commercial debt, however, is held by some 16 (mainly) American and European banks which are members of an "International Coordinating Committee" (ICC) headed by America's Citigroup and Germany's giant WestDeutsche Landesbank. Other big players in the ICC include J. P. Morgan-Chase and Merrill Lynch.
The ICC --which operates discretely behind the scenes-- ultimately call the shots regarding debt negotiations, privatization and macro-economic therapy. In turn, the IMF bureaucracy acting on behalf of both the commercial and official creditors has called for "a restructuring of FRY's external debt on appropriate terms" underscoring the fact that fresh money can only be approved "following the regularization of arrears." 10 What this means is that Belgrade would be obliged to recognize these debts in full as a condition for the negotiation of fresh loans as well as settle pending succession issues regarding the division of the external debt of the FRY with the "successor republics."
While token "reconstruction" loans are envisaged, vast amounts of money and resources will be taken out of Yugoslavia. In fact, most of the promised "reconstruction" money is totally fictitious.
A $208 million 'bridge loan" granted by Switzerland and Norway (January 2001 was used to reimburse the IMF. In turn, the IMF had granted $151 million to Belgrade in the form of a so-called "post-conflict assistance" loan. But this "aid" was tagged to reimburse Switzerland and Norway, which had coughed up the money to settle IMF arrears in the first place:
"The [IMF] Board approved a loan [of] ...US$151 million under the IMF's policy on emergency post-conflict assistance in support of a program to stabilize the FRY's economy and help rebuild administrative capacities. Of this amount, the [Belgrade] authorities will draw... US$130 million to repay the bridge loans they received [from Switzerland and Norway] to eliminate arrears with the IMF."11
The illusion is conveyed that "money is coming in" and that "the IMF is helping Yugoslavia." In fact, what remains after the IMF "has reimbursed itself" is a meager influx of 21 million dollars. And broadly the same fictitious money arrangement has been put in place by the World Bank, which has ordered that $1.7 billion in arrears "be cleared" before the granting of fresh loans.
In this regard, Belgrade will be granted a so-called "loan of consolidation" from the World Bank to reimburse the $1,7 billion debt it owes to the World Bank. Little or no money will actually enter the country. In the words of Central Bank governor Mladan Dinkic:
"[this] will pave the way for Yugoslavia's return to the World Bank. `In the first three years, we will receive the so-called AIDA status, which the World Bank gives to the poorest countries... [this] is the most favorable arrangement possible, with a longer grace-period and minimum interest, which will allow our economy to pay off the [$1.7 billion] debt and create conditions for receiving new loans".12
More generally, the "reconstruction" money will line the pockets of international creditors and multinational corporations (with trinkets for DOS cronies) while putting the entire Yugoslav economy on the auction block. Assets will be sold at rock-bottom prices under IMF-World Bank supervision. The meager proceeds of forced privatization --in which only foreign "investors" will be allowed to bid-- will then be used to pay back the creditors, who happen to be the same people who are buying up Yugoslavia's assets.
And who will appraise the "book value" of Yugoslavia's industrial assets and supervise the auction of State property? The large European and US merchant banks and accounting firms, which also happen to be acting on behalf of their corporate clients involved in bidding.