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From: The Socialist issue 294, 4 April 2003: The Bloody Price Of War

Search site for keywords: Bosnia - Iraq - War - Aid - Privatisation - Yugoslavia

After the horror and destruction: Rebuilding Iraq In Uncle Sam's Image?

ALREADY, WHILE a bitter and bloody war is still taking its grim toll in Iraq, the world's big powers are discussing what will happen when the war is over. A recent visit to Sarajevo, Bosnia, by a CWI member reveals what post-war reconstruction by the Western powers has really meant in practice in this war-torn country.

Learning the lessons of Bosnia

THERE IS hardly a building in Sarajevo undamaged in some way by the war. At best the walls are pock-marked with bullet holes. More often than not, blocks of flats are scarred by hollow husks of buildings where once a flat was before it was destroyed by shells.

Every so often a building has been completely destroyed. In the office I was working in was a map of the minefields round Sarajevo - from this map, dated 2002 it was clear that only a small minority of the minefields had been cleared.

The military presence of different international bodies was clearly visible - whether the helicopters of S-FOR at the airport or the soldiers going about the streets on their business.

If the city's infrastructure was damaged, the psychology of the population is even more scarred. People remember the feelings of betrayal they felt when they were advised by international diplomats to take certain actions and were then left defenceless.

There's a feeling of deep frustration at the political structures imposed on the country in an attempt by Western powers to balance the interests of the different nationalities. It is almost as if the calendar in Bosnia-Herzegovina differs from that of the rest of the world - people always refer to times as "before the war" or "after Dayton".

The Dayton Accords which were presented to the world as a peace settlement were in fact accompanied by a huge programme of "economic aid" aimed not at rebuilding industry in the country but in changing its very nature.

Huge amounts of donor aid have been pumped into the economy - a recent estimate says that up to 30% of the country's GDP consists of such aid. Large amounts have been drained off by corrupt officials and criminal gangs. Corruption now is far higher than at any time before the war.

Aid that does not simply disappear is used by Western powers as a political tool to force through privatisation. The construction industry is a prime example.

Privatisation programme

IN THE years before the war, when there was still state ownership of industry there were about ten construction companies operating in Sarajevo, some employing several thousand employees. Dayton however was accompanied by a programme of forced privatisation.

A scheme was used where every resident was given a voucher to buy a share of industry. These shares were then sold to companies, which used them to buy shares in the newly privatised companies.

In that way ownership was changed with no new investment. That in itself was bad enough but Bosnia's economy, ravaged by war, had no money left to provide for the rebuilding of homes and flats.

One building site, started before the war and consisting of 80 flats with no windows or utilities, was occupied by refugees as late as the year 2000. New buildings financed by foreign aid were banks and hotels for staff working for foreign aid institutions.

The former state building companies were consciously refused contracts to work on what rebuilding there was. Typically workers were left without wages, and in at least one of the organisations are still owed over a year's wages. Assets are being sold off to finance redundancies - from having several thousand workers, these companies are left with several hundred on the books.

Taking the place of these former state companies, over 500 small construction companies have sprung up. Usually employing less than ten people they can even pay higher wages than the former giants but for the simple reason that the new employers do not pay taxes and insurance for the staff.

More often than not, workers at these small companies are still formally employed by one of the giants, who pay their tax and insurance for them. Although many of these companies have earned a reputation as cowboys, they still have the advantage in competing for work as freed from "overheads" they can undercut the larger companies' prices.

Many of the smaller companies have direct connections to the bureaucrats and politicians who, at the behest of the Western powers, have divided up control of the country between themselves.

No talk here of a level playing field - Western donors openly encourage and assist the so-called small and medium companies, which they see as the basis of a new, private-sector dominated economy. And one of the most active Western donors is none other than Clare Short's Department for International Development!

Clearly, the same fate awaits "liberated" Iraq. Already USAid, the US government's foreign aid vehicle has announced its policy based on a rushed programme of privatisation.

After years of UN sanctions which have left millions of Iraqis in dire poverty and the devastation of war, the masses will see their jobs destroyed and living standards further devastated all for the sake of free enterprise.


Still Poor and Gangster-ridden

BOSNIA-HERZEGOVINA emerged, stillborn, out of the civil wars and chaos of the break-up of the former Yugoslavia.

Members of Yugoslavia's Stalinist ruling caste - who included Slobodan Milosevic in Serbia, Franjo Tudjman in Croatia and Alija Izetbegovic in Bosnia - tried to cling to power by carving out territory and promoting an oppressive nationalism.

The collapse of Yugoslavia in 1990 was encouraged by Western leaders, especially Margaret Thatcher and Germany's Helmut Kohl, who were keen to restore capitalism to the region.

Despite Bosnia's multi-ethnic make-up and a cosmopolitan capital, Sarajevo, without a mass socialist alternative to challenge the ex-Stalinist nationalists and pro-capitalist elements, the working class was divided. This led to the country's break-up after 'independence' in 1991, followed immediately by a bloody war with millions of refugees and genocidal 'ethnic cleansing'.

The arming of Muslim and Croat nationalist armies by the US eventually tipped the military balance against the Serb forces and in December 1995 Milosevic signed the US-brokered Dayton Agreement.

Dayton was meant to secure a prosperous, peaceful multi-ethnic state. In reality Bosnia remains a cantonised, impoverished entity, run by corrupt nationalists and dependent upon Western cash and 12,000 armed "peacekeepers" of Nato's Stabilisation Force (S-FOR).


WAR IN Bosnia caused production to collapse by 80% from 1990 to 1995. National output (GDP) remains below the 1990 level. Unemployment is at 40%. International reconstruction aid often ends up in the coffers of the gangster nationalist political parties that are considered the chief obstacles to peace.







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