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How Serbia became a neocolonial economy

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We should not forget that profit is international and that there is always an end user somewhere in the world, while social costs, from investment in education, health or culture to the development of infrastructure – are always national, he said during the promotion of the monograph “Serbia – from sanctions to neocolonial economy ” its co-author, economist Božo Drašković, describing the functioning mechanism of neocolonialism.

“The authors Đorđe Đukić and Božo Drašković, relying on original documentation and studies of characteristic cases, such as the collapse of Dragoslav Avramović’s program or the privatization of banks, analyze the causes that systematically led the economy of Serbia to a neo-colonial position, during the continuous process of changes in the economic system, with the application partially different models, different environments and different actors”, assessed the reviewers of the book, economists Bojan Dimitrijević and Branko Vasiljević.

Economist Đorđe Đukić, also co-author of a monograph published by Novi Sad’s “Prometheus”, pointed out the importance of the transition of the domestic banking sector to foreign ownership for bringing Serbia to a position that can be described as – neo-colonial.

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Thus, among other things, his argumentation against the sale of Komercijalna banka, which he addressed to the Governor of the National Bank of Serbia and the President of Serbia in December 2019, as well as his initiative to change the constitutional position of the central bank, so that monetary power would not be concentrated in the central bank, became part of the book by the hands of the governor. 

Both of his appeals were ignored, which, as stated in the book, speaks of the attitude of the political elites towards the timely initiatives and proposals of the author.

“Until today, Serbia has not built powerful and efficient institutions, so belief in the power of individual miracle workers is a constant of the social milieu, and the political elites are most responsible for that, because weak institutions that are easy to control through incompetent and easily replaceable personnel that they appoint to their forehead”, said Đukić at the promotion of the monograph, which covers the period from 1991 to 2021.

Božo Drašković also emphasized the importance of the ownership structure in domestic banks for the operation of the neo-colonialist mechanism.

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“When you look at the balance sheets of banks from 2005 to the first half of 2022, 84 percent of banking assets belong to foreigners. The profit on share capital is over 42 percent, and for the year 2021, the net interest income of the banking sector was close to 900 million euros and about 400 million more from additional banking services. It is a de facto outflow of money from the country,” said Drašković.

His position is that since 2000, key economic sectors have been left to foreigners, and that this is bad for economic development.

“When it comes to the exploitation of natural resources, we will also be left with the negative consequences of pollution, and the profit will go abroad, because that’s how the neo-colonial mechanism works – it extracts the profit, and leaves the costs and development problems in the country,” said Drašković.

Part of the book is the author’s text by sociologist Slobodan Cvejić, who dealt with the issue of the constitution of entrepreneurship in Serbia.

The general context refers to large entrepreneurs, who were mostly ‘formed’ through ‘dirty privatizations’ in the nineties and who, driven by their own interest, at one point turned their backs on Slobodan Milošević, and it seemed that they would support a system that brings about the opening of the economy and market match”, said Cvejić.

After two decades, as he pointed out, it turned out that they were only looking for a new political framework in which to restore their position, this time not through privatization but through public procurement and the exploitation of natural resources.

“In this whole context, a layer of new small and medium-sized entrepreneurs slowly formed, and today it is a solid number of small and medium-sized enterprises that are sustainable and have been doing positive business for years, which indicates that a domestic capitalist class is also forming in our country, which could will be a healthy core for future development”, Cvejić assessed.

He believes that the key today is how many young people want to become entrepreneurs.

“It seems that the trend is positive, but everything will depend on what the policy will be in the field of economy, and how much the politicians will protect those who already have a privileged position,” concluded Cvejić.

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