WITH DISCUSSION of economic aid to the Balkans now beginning ("West stalls on aid for Kosovo", 25 July), public debate should start to pay some attention to the West's so far appalling role in the economies of the ex-Yugoslavia. The imposition of "structural adjustment" policies by the IMF over the past 20 years has been a disaster which has directly fed ethnic conflict. Following a decade of IMF-dictated austerity, in 1989-90 the Yugoslav federal government, under Western instructions, privatised the self-managed enterprises, introduced a bankruptcy law easing takeover by creditors, ended industrial interventions, deregulated trade, froze wages, and sharply cut state expenditure except on loan repayments. The result was a 50 per cent decline in GDP in three years, the sacking of half the industrial workforce, rocketing unemployment and poverty. The same policies have been imposed on the new nations. What more fertile ground for ethnic conflict?
Western governments' agenda for the dismembered Yugoslavia remains the same: to continue privatisation, including to Western companies, and to get its loans repaid. Aid will be geared to these aims. This is a recipe for continuing poverty and ethnic conflict. The Western public should press for aid without strings and an end to the imposition of neo-liberal policies on the Balkans.
Newcastle upon Tyne