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You are here: Home News European News Street-wise Serbs brush off global economic crisis

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12/04/2009Street-wise Serbs brush off global economic crisis

While the full impact of the worldwide crisis has begun to bear down on Eastern Europe, Serbia is hoping its experiences during the war-torn 1990s will help it muscle through these tough times.

Belgrade -- Despite warnings of a looming meltdown, people in Serbia are confident they can handle the global economic crisis with skills acquired during the sanctions and hyper-inflation of the war-torn 1990s.

The full impact of the worldwide crisis has begun to bear down on Eastern Europe, hit hard by a dramatic decline in fund flows that has the region's leaders warning of a new, protectionist "Iron Curtain."

But in Belgrade, trade is thriving once again at the sprawling Buvljak flea market, where the impact of the crisis has revived Serbs' memories of their struggle under the iron-fisted rule of late president Slobodan Milosevic.

"We will survive, as always. Some things will have to change, jobs will be lost, but it will never be as bad as it was during Milosevic's times," a stall operator, Momcilo Majstorovic, told potential customers.

Economic sanctions were imposed on rump Yugoslavia on and off throughout the 1990s, when it was a pariah state over the Milosevic regime's involvement in the wars of Bosnia, Croatia, Kosovo and Slovenia.

The UN-backed policy left supermarket shelves bare in both Serbia and Montenegro and spawned a huge underground market in which the smuggling of anything from cigarettes and petrol to nappies and toilet paper became the norm.

Most of the products brought in from neighbouring countries like Bulgaria, Greece, Hungary, Romania and Turkey ended up at Buvljak or other similar markets scattered across the former Yugoslavia.

Hyperinflation ensued, so bad that it reached proportions not seen since Germany in the aftermath of World War I and only repeated in present-day Zimbabwe.

"There is no crisis that could be worse than the one we had in 1993, when with my monthly salary as a clerk I could buy 10 eggs in the morning and only one in the evening," recalled Buvljak shopper Ruzica Despotovic.

While Belgrade now has a vast new chain of hypermarkets and such smuggling would now be hard to repeat, the experience of the 1990s stands Serbs in good stead for the current global economic crisis, observers say.

According to economists, almost 25 percent of Serbia's workforce operates in the grey economy, meaning they are not registered with state authorities and pay no taxes.

"Some 600,000 people work in the so-called grey zone. They have been doing so since the early 1990s. No wonder they believe the crisis from 1990s will not repeat," said Misa Brkic, economic editor of the influential Politika daily

"I've heard that in Croatia people are increasingly purchasing flour and oil due to fear from the crisis. Serbs don't feel that way, meaning it will not be so bad as it was in 1990s," Brkic told AFP.

Psychologist Jelena Vulic said it was normal for people to revive gloomy memories from the crises of the past when faced with similar problems, but warned there was too much optimism.

"Turning a blind eye to problems does not bring a solution," Vulic said.

"It's a good thing that we have this experience to learn from, but we must be prepared to act accordingly to new circumstances: the crisis has hit all countries in the world, this time, it is not only us, it is not because of our regime or its politics," she said.

Brkic also warned that the circumstances were completely different compared with the sanctions-hit Serbia of the 1990s, with falling remittances from migrant worker relatives in the West.

"One of the main reasons that made it easier for Serbs to survive 1990s was money sent by wealthy relatives from Europe, but now those relatives are in crisis too," Brkic said.

In addition, "the country could be hit by a wave of people who have lost their jobs abroad and are coming back home," he warned.

But prepared for crisis or not, thousands descended on Belgrade's tourism fair last month, pre-booking holidays for summer, even as snow was still melting on the streets of the city.

The Montesol travel agency said that it had already sold out 70 percent of its Aegean Sea tour packages for the first phase of the upcoming holiday season.

"Most of these arrangements have also been paid in advance, which is very useful both for clients and us," said one Montesol agent.

Such a spendthrift mentality was highlighted recently when all 3,000 cars offered to citizens by a new Serbian company owned by Italian automaker Fiat were sold out in advance.

"Those cars were not bought by wealthy Serbs, but those who are poor. They are ready to pay 6,000 euros at this time. Who needs a new car now? Who takes out a loan while fearing for their job?" asked Brkic.

Serbs "certainly believe that the crisis is not going to last for a long time. I think the authorities encouraged them to think so" by initially underestimating impact of the crisis, he said.

Aleksandra Niksic/AFP/Expatica


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