Sanctions against Yugoslavia

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During the Yugoslav Wars of the 1990s and early 2000s, several rounds of international sanctions were imposed against the Federal Republic of Yugoslavia, which from 1992 consisted only of the Yugoslav republics of Serbia and Montenegro. In the first round of sanctions, which were implemented in response to the Bosnian War, and lasted between April 1992 and October 1995, Yugoslavia was placed under a United Nations (UN) embargo. The embargo was lifted following the signing of the Dayton Agreement, which ended the conflict.[1] During and after the Kosovo War of 1998–1999, Yugoslavia was again sanctioned by the UN, European Union (EU) and United States.[1] Following the overthrow of Yugoslav President Slobodan Milošević in October 2000, the sanctions against Yugoslavia started to be withdrawn, and most were lifted by 19 January 2001.[2]

The sanctions had a major impact on the Yugoslav economy and Yugoslav society, with Serbia the hardest hit, its GDP dropping from $24 billion in 1990 to below $10 billion in 1993,[3] and $8.66 billion in 2000.[4] They also had a devastating impact on Yugoslav industry.[5] Poverty was at its highest in 1993, with 39 percent of the population lived on less than $2 per day. Poverty levels rose again when international sanctions were re-implemented in 1998.[2] An estimated 300,000 people emigrated from Serbia in the 1990s, 20 percent of whom had a higher education.[6][7]

History[edit]

On November 8, 1991, the European Economic Community implemented the first economic sanctions against Yugoslavia.[2] The sanctions forbid EEC members from importing textiles from Yugoslavia and suspended an aggregate total of $1.9 billion in EEC aid packages which had been promised to Yugoslavia before twelve cease-fires failed to take hold in the Croatian war zone.[8]

On May 30, 1992, the United Nations Security Council passed UN SCR 757 in a 13-0 vote, which banned all international trade, scientific and technical cooperation, sports and cultural exchanges, air travel, and travel of government officials from the Federal Republic of Yugoslavia.[5][9] In the following day, President George H. W. Bush of the United States ordered the Department of Treasury to seize all US-based assets of the Yugoslav government, worth approximately $200 million at the time.[10] French President François Mitterrand initially delayed the passing of Resolution 757 when he proposed that the sports ban be removed, but instead opted to keep the sports ban in exchange for written clarification that Serbian combatants were not solely responsible for the Yugoslav Wars.[10] In spite of Mitterrand's amendment, Resolution 757 solely targeted the Federal Republic of Yugoslavia, not any of the breakaway states.[10]

On November 16, 1992, the UNSC passed Resolution 787, posing a widespread ban of shipments to and from Yugoslavia.[5] This Resolution was followed by a series of naval blockades, beginning with Operation Maritime Guard and later involving Operation Sharp Guard.

The UNSC passed over a hundred resolutions over the course of armed conflict in the former Yugoslavia, and some targeted Serbian entities outside of the Federal Republic of Yugoslavia. Resolutions 820 and 942 specifically prohibited import-export exchanges and froze assets of Republika Srpska, at the time an unrecognized Serbian state established from the war in Bosnia and Herzegovina.[5] With the conclusion of the Bosnian War, UN sanctions against Yugoslavia were dissolved after the Bosnian elections on 14 September 1996.[11] In spite of the UN sanctions being removed, the United States maintained an "outer wall" of sanctions, preventing Yugoslavia from becoming a member of international institutions.[11]

A second series of international sanctions were implemented against Yugoslavia in 1998 when violence in Kosovo intensified. On March 31, 1998, the UNSC passed Resolution 1160, placing an arms embargo on Yugoslavia.[1] These measures were followed by the European Union banning JAT Yugoslav Airlines from flying to EU member states and freezing Yugoslav government assets in EU member states.[1] On March 24, 1999, NATO began bombing Yugoslavia, during which the United States and European Union enacted further trade and financial aid bans, including a ban on exporting oil to Yugoslavia.[1] The European Union ended its sanctions on Yugoslavia on October 9, 2000, allowing EU members to share commercial flights and trade oil with Yugoslavia.[12]

Hyperinflation of the Yugoslav dinar under sanctions[edit]

Shown above is a 500 billion Yugoslav dinar banknote printed in 1993. The first hyperinflation of the Yugoslav dinar lasted from 1992 to 1994.

Starting from 1992, the Yugoslav dinar experienced a hyperinflation episode which lasted for a total of 25 months.[9] In 1993, the dinar recorded a monthly inflation rate of 313 million percent.[9] The hyperinflation reached a crescendo when the dinar's monthly inflation reached a staggering 5.578 quintrillion percent.[9]

During the peak of the hyperinflation January 1994, the Yugoslav government recruited Dragoslav Avramović, a former World Bank economist, as an economic adviser. On January 24, 1994, Avramović put in force a new Yugoslav dinar with a value ratio of 1:1 to that of the Deutsche mark.[13] For several months afterwards, the dinar recorded virtually no inflation, and shortages of various necessities were noticeably reduced.[14] As a result of the success of the new dinar, Avramović was named governor of the National Bank of Yugoslavia on March 2, 1994.[15] Avramović told The New York Times that he thought his fiscal program could be sustained in spite of the sanctions, saying the following:

The currency is steady, we have achieved agricultural independence and industrial production is up 40 percent since the end of last year. We hope sanctions will be lifted, because all they do is create enemies. But our program is sustainable whatever happens.[14]

Economists disagreed whether hyperinflation could be avoided with the international sanctions.[14] Ljubomir Madjar, an economist, was quoted in the same NYT article as saying the following:

Hard-currency reserves are not sufficient, production cannot achieve sustained expansion under an embargo, and so the budget deficit must grow by the end of the year, leading to new hyperinflation."[14]

Avramović was voted out of the position in 1996 by the National Assembly of Yugoslavia.[16] International sanctions were re-instated in 1998 due to the Kosovo War, and by 1999, the Yugoslav dinar had inflated to 30 times the value of a single deutsche mark.[16]

Effects on the people of Yugoslavia[edit]

In 1989, the average income of inhabitants in Yugoslavia was approximately $3,000 per year.[17] In October 1992, less than a year after the first sanctions were implemented, economist Miroljub Labus estimated that the average income at the time had fallen to approximately $1,500 per year.[17] In September 1992, when gasoline was still available at some gas stations, a gallon sold for the equivalent of 15 US dollars.[18] As a result of the oil and gas restrictions imposed by the sanctions, owners of private vehicles in Yugoslavia were allotted a ration 3.5 gallons of gasoline per month by October 1992.[19] By November 1992, the state had begun selling public gas stations to individuals in hopes of circumventing the sanctions on fuel.[20] The gas stations were sold to individuals with large amounts of money and street authority; paramilitary leader Željko "Arkan" Ražnatović acquired several gas stations from the state at this time.[20] As a result of the sanctions, many people stopped driving their cars. The public bus operator in Belgrade, GSP, no longer earned revenue since its fleet reduced due to lack of funding, which lead to overcrowding on buses after which tickets could no longer be collected from passengers.[21] As a result, the safety GSP buses was gradually neglected, to the point in the late 1990s (after which sanctions had been re-introduced after the Kosovo insurgency started) where a passenger sitting over the one of the wheels on the bus fell through the rusted floor and was instantly killed.[22]

A CIA assessment on the sanctions filed in 1993 noted that "Serbs have become accustomed to periodical shortages, long lines in stores, cold homes in the winter and restrictions on electricity".[23] Medicinal supplies in hospitals experienced shortages in antibiotics, vaccines, and anti-cancer drugs.[19] In October 1993, the office of the United Nations High Commissioner for Refugees in Belgrade estimated that approximately 3 million people living in Serbia and Montenegro were living at or below the poverty line.[24] By late 1993, hospitals lacked basic antibiotics and functioning equipment such as X-ray devices.[24] At this point gasoline stations had stopped providing fuel.[24] In October 1993, in an attempt to conserve energy, the Yugoslav government began cutting off the heat and electricity throughout residential apartments.[21] In November 1994, 87 patients died in Belgrade's Institute of Mental Health, which had no heat, food, or medicine.[21] Patients in the hospital were reportedly walking around naked with little supervision.[21] In May 1994, The New York Times reported that suicide rates had increased by 22% since sanctions were first implemented against Yugoslavia.[14]

In the Yugoslav Republic of Montenegro, the largest aluminium smelter in the region, KAP, stopped working after the implementation of sanctions.[25] In 1993, the president of the Republic of Montenegro within Yugoslavia, Momir Bulatović, said that the sanctions were causing massive food shortages in Montenegro.[25]

Underground economy[edit]

The implementation of sanctions corresponded with the emergence of an underground economy. Although there was no legal import of cigarettes during the sanctions, a market of low-quality and fake cigarettes, alcohol, and various street drugs took in its place.[26][27]

Although the sanctions included restrictions on gasoline, smugglers tried to profit by purchasing gas from across the Yugoslav border.[28] Although some smugglers made large profits, the business was very risky, since they made their purchases in hard cash.[28] In some cases they were an ideal target for various mafia groups, which could profit from killing smugglers and taking their cash intended to import gas into Yugoslavia. A former smuggler who was active in Montenegro during the sanctions, Zoran Ilinčić, told Vijesti that at least 10 smugglers were killed on the borders of Hungary, Romania, and Bulgaria by late 1992.[28]

As the existing banks experienced widespread closing, several pyramid schemes took place. Fraudulent banks, such as Jugoskandik and the infamous Darfiment Bank were set up by opportunistic criminals to lure people with extraordinary interest rates.[29] Many people who fell for the pyramid banks were left homeless.[29]

Popular culture[edit]

Portrayal in Serbian films

References[edit]

  1. ^ a b c d e Agence France Presse 2000.
  2. ^ a b c Jovanovic & Sukovic 2001.
  3. ^ Becker 2005.
  4. ^ IMF 2014.
  5. ^ a b c d The Mandala Projects 2012.
  6. ^ "Serbia seeks to fill the '90s brain-drainage gap". EMG.rs. 5 September 2008. Archived from the original on May 29, 2012.
  7. ^ "Survey S&M 1/2003". Yugoslav Survey. Archived from the original on 2013-01-11. Retrieved 2016-06-18.
  8. ^ William D. Montalbano (November 9, 1991). "Yugoslavia Hit by Trade Sanctions". Retrieved February 10, 2019.
  9. ^ a b c d Ivana Bajić-Hajduković (2014). "Remembering the "Embargo Cake:" The Legacy of Hyperinflation and the UN Sanctions in Serbia" (PDF). Retrieved June 26, 2017.
  10. ^ a b c Paul Lewis (May 31, 1992). "U.N. VOTES 13-0 FOR EMBARGO ON TRADE WITH YUGOSLAVIA; AIR TRAVEL AND OIL CURBED". The New York Times. Retrieved February 10, 2019.
  11. ^ a b Milica Delević. "ECONOMIC SANCTIONS AS A FOREIGN POLICY TOOL: THE CASE OF YUGOSLAVIA". International Journal of Peace Studies. Retrieved May 2, 2019.
  12. ^ "EU lifts economic sanctions against Serbia". The Guardian. October 9, 2000. Retrieved February 10, 2019.
  13. ^ Dimitrije Boarov (March 1, 2001). "Odlazak Deda Avrama". Vreme (in Serbian). Retrieved June 26, 2017.
  14. ^ a b c d e Roger Cohen (May 29, 1994). "Embargo Leaves Serbia Thriving". The New York Times. Retrieved June 26, 2017.
  15. ^ "Deda Avram nas je spasao pre tačno 20 godina". Blic (in Serbian). January 24, 2014. Retrieved June 26, 2017.
  16. ^ a b Zoran Glavonjić (January 24, 2014). "Deda Avram: Sećanje na spasioca dinara" (in Serbian). Radio Free Europe. Retrieved June 26, 2017.
  17. ^ a b Paul Lewis (October 29, 1992). "Yugoslavs Face Hard Winter as the Blockade Bites". The New York Times. Retrieved June 26, 2017.
  18. ^ Thom Shanker (September 13, 1992). "Embargo Strangling Yugoslavia". Chicago Tribune. Retrieved June 26, 2017.
  19. ^ a b Stephen Kinzer (August 31, 1992). "SANCTIONS DRIVING YUGOSLAV ECONOMY INTO DEEP DECLINE". The New York Times. Retrieved June 26, 2017.
  20. ^ a b Louise Branson (November 6, 1992). "Young Gangs Rule Belgrade Streets". The Christian Science Monitor. Retrieved November 26, 2017.
  21. ^ a b c d Thayer Watkins, Ph.D. "The Worst Episode of Hyperinflation in History: Yugoslavia 1993-94". Retrieved June 26, 2017.
  22. ^ Živković, Marko. Serbian Dreambook. Indiana University Press, 2011, p. 23.
  23. ^ V. Mijatović (September 30, 2013). "CIA o Srbiji 1993: Sankcije ne pogađaju dovoljno". Večernje novosti (in Serbian). Retrieved June 26, 2017.
  24. ^ a b c David B. Ottoway (October 20, 1993). "SANCTIONS CRIPPLE SERBIA, BUT NOT ITS MONEY PRESSES". The Washington Post. Retrieved June 26, 2017.
  25. ^ a b Miloš Rudović (27 March 2016). "Đukanovićeva strategija za pripajanje Srpske". Vijesti (in Serbian). Archived from the original (via Wayback Machine) on 12 January 2018.
  26. ^ Daniel Bukumirović (June 19, 2015). "Tinejdžeri u Srbiji pod sankcijama devedesetih". Vice News (in Serbian). Retrieved June 26, 2017.
  27. ^ Pavluško Imširović (August 10, 2009). "Poreklo organizovanog kriminala na Balkanu" (in Serbian). Retrieved June 26, 2017.
  28. ^ a b c Milorad Milošević (9 June 2012). "Šverc goriva 90-ih: Desetak ljudi misteriozno nestalo". Vijesti (in Serbian). Archived from the original (via Wayback Machine) on 31 January 2015.
  29. ^ a b Ranko Pivljanin (February 5, 2017). "GODINE KOJE BISMO DA ZABORAVIMO Srđan Veljović fotografijama dokumentovao devedesete u Srbiji". Blic (in Serbian). Retrieved June 26, 2017.

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