TRANSITION OF BALKAN ECONOMY

Shortly before that before that, Serbian former President Boris Tadic has said that some businessmen do not want to see him again as Serbia's president.

Statements of this kind have led to discussions on the extent of the influence on politics of those who acquired great wealth in the Balkans under dubious conditions in the 1990s.

One of the phenomena experienced in the Balkans in the transition from the centrally planned economy to the market economy was the emergence, out of the blue, of some people with huge capitals. Certain figures hardly known in the past have managed to suddenly turn into affluent businessmen in the new economic order.

The first wealthy group was from among the communist elite who constituted the administrative echelons of the former regime. Some of the public enterprises and considerable pieces of real estate came overnight under the ownership of former communists. The wars which later took place caused certain politicians and their relatives to acquire wealth by way of criminal activities.

The embargo imposed on the Federal Republic of Yugoslavia by the UN and the EU in the 1990s constituted a huge encouragement for illicit trade to flourish and enlarged the network of politically protected cross border smuggling.

The hyperinflation periods in the Balkans have also resulted in some people raking in huge amounts of money owing to political support. Those people were allowed to get loans from public banks without being indexed to the foreign currency exchange rate and made their payments in terms of heavily devalued national currencies, thus heaping more money on their wealth. For example, the supporters of Slobodan Milosevic in Serbia and of Franjo Tudjman in Croatia were rewarded in this way or similar methods.

The uncontrolled privatizations in the region have sometimes been likened to legal thefts. Privatization has first and foremost become a tool for money laundering. On the other hand, some public enterprises have been sold to certain people under very convenient conditions. Buying the old public enterprises was tantamount to owning the lands in the best locations of cities for cheap.

Actually, as the real purpose of the sales was not to render the enterprises operational again but get unearned income, some of the old public enterprises were destroyed leading certain cities and towns previously considered an industry hub to completely lose their economic vitality.

What is believed is that those who have gotten off to a good financial start under dubious conditions by amassing sizeable sums of money are still working today hand in glove with politicians and even shaping their countries' politicies. Politicians are known to finance their election campaigns with the support of businessmen.

When that is the case, what happens is that many of the arrangements pertaining to the economy are made in such a way as to favor the interests of those businessmen. The basic purpose of the businessmen in the region is to preserve their high profits owing to the protection provided by legal arrangements. A statement in this regard in the nature of a confession has come from Boris Tadic after losing his seat as president.

He said that some businessmen rallied great support from the state and boosted their wealth under conditions completely free of competition. The countries where the rule of law prevails put the capital acquired in murky conditions and its links to politics under scrutiny and that is what should have been done in the Balkan countries.

However, the governments in the Balkans prefer to keep silent about these issues. In point of fact, even the serious media organs in the region refrain from delving into those issues.

That is why being close to the government in the Balkans continues to be much more important than having business skills and connections in the business circles. One of the major stipulations that the EU has come up with as part of the criteria for them to join the Union has been the fight against corruption and organized crime. It is only in Croatia that the government has done more seriously the job of swooping on those who have become wealthy via dubious channels and the politicians supporting them. In this context, Croatia's former Prime Minister Ivo Sanader is also on trial.

The other regional countries, including Bulgaria and Romania, both EU countries, continue getting low grades from Brussels regarding their fight against corruption and organized crime. That is a concrete sign of the symbiosis of capital, politics and media retaining its undeniable power.