The Guardian July 14, 1999


NATO members squabble over war profits

by William Pomeroy

After ruthlessly bombing the infrastructure, industries, city centres and 
residential areas of Yugoslavia into rubble, NATO member states have rushed 
into an unsightly wrangle over getting contracts for their companies to 
rebuild what they have destroyed.

The profits to be gained from the allegedly "humanitarian war" are huge. 
For reconstruction and development of Kosovo province the estimates run to 
nearly US$10 billion, this in a region largely rural in character.

In industrialised, urbanised Serbia, where about 250 factories alone were 
destroyed or damaged, the reconstruction cost is put by the European 
Commission of the European Union at a minimum of US$30 billion, while 
Yugoslav economists figure it at US$100 billion.

At the forefront of the corporations jostling to get into the rebuilding 
act are the big multinational construction companies that get fat on 
restoring the ruins created by imperialist wars and aggressions.

There are indications, indeed, that such interests began planning for the 
profitable aftermath of a Balkan war long before the attack was launched 
against Yugoslavia. Some cynical analysts in Europe have claimed that the 
whole operation was designed for the western construction business to make 
money.

The extent of the damage caused by the bombing was indicated only half-way 
through the 78 days of air raids by Professor of Economics at Belgrade 
University, Mladjan Dinkic.

Humanitarian catastrophe

"Politics aside, this is an economic and humanitarian catastrophe", said 
Professor Dinkic.

"While the Serbs will not die of hunger  agricultural production will 
continue even without fertilizers  our industrial base will be destroyed 
and the size of the economy cut in half."

Destruction in Yugoslavia, however, has been but part of the ravage of the 
bombing. The whole of the Balkans has been affected.

Two-thirds of Bulgarian exports had gone through Yugoslavia. Of Macedonian 
exports, 27 percent went to Yugoslavia while 35 percent had reached the 
rest of Europe via Serbia. Half of the exports of Romania went the same 
way.

All of this stopped as the Danube River trade route was blocked by 
destroyed bridges, highways and railways were blasted, and tunnels blown 
up.

Bulgaria reported losing over US$1.6 million a day of its trade, Romania 
US$500 million. Tourism everywhere from Croatia to Greece, a major source 
of revenue, was heavily hit, with mass cancellations by tourists fearful of 
the war zone.

Investors shied away as well, causing economic growth plans for 1999 in 
Bulgaria to be slashed in half.

The World Bank and International Monetary Fund (WB-IMF) issued a report 
dated April 29, Economic Consequences of the Kosovo Crisis, which 
stated that over five percent of gross domestic product would be wiped out 
for the Balkans this year, plunging their economies into recession and 
unemployment.

Along with reconstruction in Yugoslavia, for which Western companies are 
scrambling, huge WB-IMF loans are contemplated for these hard-hit 
countries, more profits for those financial interests.

A question to the fore is, who is going to pay for the reconstruction 
program? President Clinton made this plain on June 18, bluntly telling the 
European Union it must foot the bill for Kosovo. The US paid for the cost 
of bombing, he said, now Europe must pay for rebuilding what it destroyed.

A special European Commission-World Bank task force was set up in Brussels 
on May 14 (nearly three weeks before the bombing ended) to mobilise the 
finances for reconstruction and to award the contracts put out for bidding.

At least 80 percent of funding will be by low-interest loans, the rest 
being bilateral aid from EU members.

Britain's Department of Trade and Industry began setting up a task force of 
companies to go after contracts, reportedly "anxious not to be outdone by 
US and European rivals."

The British complain that they missed out on the Kuwait contracts after the 
Gulf War and don't intend to be beaten now. The biggest British 
construction firms and 56 consultancy firms were initially on the task 
force list, eagerly waiting in the wings since the bombing started.

A task force of German companies was in Brussels as quickly as the British, 
and the French were not far behind.

On June 15 a worried US Undersecretary for Trade, David Aaron, announced 
that the US is demanding a share of the Kosovo contracts. He said 100 US 
companies want participation and protested that in the past the European 
Commission had "tied" contracts to European companies.

Aaron said that the US had "earned the right to be full partner" in bidding 
because it did the bombing.

This spectacle of NATO companies elbowing each other to reap profits from 
the bloody ruins they have created is made uglier by the pronouncements of 
President Clinton and British Prime Minister Tony Blair that Serbia will 
get no reconstruction aid until Yugoslavia's President Slobodan Milosevic 
is overthrown. Only "humanitarian" aid would be allowed.

This continued US-British attack on Yugoslavia is not being backed by other 
NATO members.

France's President Chirac argued that a line cannot be drawn between 
humanitarian and reconstruction aid because electric power, water systems, 
transport and other services are humanitarian needs.

On June 23 the European Commission itself broke ranks with the hard-liners 
on aid and announced that it would channel aid to those areas of Serbia 
where there is anti-Milosevic sentiment, which had the sound of an excuse 
to start getting into the lucrative reconstruction field of Serbia.

Western companies will not be held back by a vengeful US and UK.

Furthermore the Yugoslav Tanjug news agency announced on June 21 that a 
group of Russian businessmen and architects had arrived in Belgrade to help 
rebuild its bridge over the Danube, estimated to cost US$50 million.

It has been the only instance in which the Yugoslav Government has been 
consulted on the rebuilding of its economy.

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People's Weekly World, paper of Communist Party, USA.

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