Back to Archive Hope on the Balkans   Kosov@ Crisis 2000
Back to Kosov@ Crisis
Who are the Serbian rich men?

The Serbian society is divided into two segments: about 200.000 are rich and the rest are poor

by Vladimir Milovanovic

The experts assert that there is a stratum of very rich people in this country. It comprises about 200 families which look after the entire capital of the country. By the way, it is about those people whose income is not registered at all. It all accords with the results of a long and careful examination of class division by Dr. Mirosinka Dinkic, an associate of the Institute of Economics in Belgrade. The conclusion is that the number of poor people in this country is increasing every day, and they are becoming poorer and poorer, while the circle of the wealthy is getting narrower, and its members are becoming wealthier and wealthier. Her colleague, Dr. Danilo Sukovic, director of the Institute of Social Sciences, possesses similar data concerning the social map of Serbia. His research reveals that, in the last decade, the Serbian population became divided into two segments: there are about 200.000 rich people and millions of poor and socially deprived people. At the bottom, there are several hundreds of people which eat in communal dining halls and live of miserable and irregular social support, while the top is occupied by a small number of people which buy yachts and fight over travel arrangements for exotic parts of the world.


When the incomes of the rich, which are registered by the official statistics, are taken into consideration, there are no real wealthy people in this country. Traditionally the highest salaries are given to those employed in the housing activities, electro-economy and oil industry. Therefore, Dr. Dinkic points that it is not surprising that the ministers are struggling to obtain the leading posts in such companies. In November last year, which is the last officially known information, the employed in these sectors received approximately 4,666 dinars or 245 German marks - which means that they could hardly pay their electricity bills. The lowest salaries, in that month as well as usually, were given to those employed in the textile industry, approximately 548 dinars or 28 German marks - which means that they could not even dream of a mere survival. If we have in mind that those with the highest incomes make only one fourth of the overall number of the employed, it seems that we are supposed to see people dying of starvation in the streets. 'The secret lies in the gray economy, where additional incomes are raised, plus the help from various relatives abroad, house renting, extra jobs in the private sector', says Dr. Dinkic. The gray sector is also a status from which come those people who buy magnificent villas in Dedinje and posh cars. More precisely, an expert would say that it is about brown economy, which assumes that one participant in the business is fully legal, and the other is totally black. All that changes the local social picture, which informs us that the population of Serbia can be divided into following groups: 20% of poor people, one fifth of extremely poor, 2-3 % of very rich people, and a multi-million population of relatively poor. According to Sukovic, one fifth of the population, which are the poor, enjoy about 7% of our national income, while one third of the population which can be considered as rich, plus 2% of those ultra-rich, practically 'eat' 40% of anything that our country produces. 'The real rich men, of which there are maximally 200.000, possess 20% of the national income', says Sukovic. So, if we have in mind that our social product is worthy of about 10 billion US dollars, two million of the poorest had possession of 738 million dollars, while the group of 200.000 richest people possessed two billion dollars.


Following the phenomenon of social stratification from year to year, Dr. Dinkic came to a conclusion that the rate of poverty and the number of extremely poor decreased, but they are increasing again. In 1992, the rate of poverty was 23%, and in 1997 it fell down to 17,3%. Already in 1998, it grew up to 21%, and our interviewee supposes that (there are still no precise statistical data) that in 1999 the rate of poverty was between 25 and 26%. 'With socio-political measures the state manages to keep the number of extremely poor people at a level of one per cent of the population. That is, however, done by degrading those from higher levels, so that now we are all gathering around the so-called line of poverty. According to the information that Dr. Dinkic has been collecting for years, more than one half of the entire population of Serbia live on the line of poverty, and a slightly smaller portion of the local population live below that line, after which follows desperation. Contrary to them, there are official information, according to which about 20% of all residents in this country are rich, but as Dr. Dinkic holds it, there are no more than 2% of rich people, if not less. As the last series of statistical data available for one year (1998), the poorest people in that year had annual incomes which hardly went above 6,000 dinars, while the wealthy enjoyed 28 times higher incomes than them. In normal countries, the relation 1:10 is tolerated. But, if we have to console ourselves, the matters in Serbia are different from those in Colombia and Guatemala, where one fifth of the privileged spend two thirds of the complete national income. We are, however, far from the Western countries, even Slovenia, where the poorest social layer has possession of 11-12% of the national income, whereas the richest possess 31%. That classifies Slovenia among Sweden and Denmark. In western Europe and in some east European countries which finished their transition, such as the former Yugoslav republic of Slovenia, the so-called ?? coefficient (it represents the relation between the highest and the lowest income) is somewhere around 0,25. In our country, it was extremely high in 1993 - 0,55, while in 1999 it fell down to 0,35. Sukovic explains this fall in the following way: 'Our society has become so poor and underprivileged that it cannot even create social distinctions.' 'To be honest, the fact that a layer of extremely affluent people has been created in our country, which is characteristic of countries in the first phase of the accumulation of capital, does not have to be catastrophic. It would be logical if they invested their capital in something, which indirectly employs new manpower. Our misfortune is that the ultra-rich layer of people remove their funds and keep them very safe.'


The story about social stratification, as Dr. Dinkic points out, takes us back to the gray and brown economy, which became a commonplace practice for everyone, of both the poorest and the richest. 'The difference is only in the fact that the lowest layers of the population sell cigarettes in the streets, whereas those on top of the social structure manage to import tugboats and tugboats of cigarettes as well as cisterns and cisterns of petrol'. That is the most profitable business in the sector of brown economy, since the mentioned actions require hush-up before customs officers, financial police, tax services... The gray economy, the conversationalists of VREME maintain, is one of the columns of this regime, and by means of that column, the authorities managed to corrupt the widest layers of the population. The regime simply enabled an army of people to be officially employed in decayed and bankrupted state and social firms, it pays them minimal salaries, and does not prevent them form indulging in the black trade. 'Those people do not even think about being compelled to work fifteen or more hours per day, they are happy to be able to survive.' 'And they are getting social support too.' More than a million of officially employed people of Yugoslavia are indulging in the gray economy, as the Institute of Economics finds out. The greatest number of such people are employed in social firms. 'That is why the state is against any reforms as well as privatisation, because it is the people from the very top who are collecting the toll of the gray economy. They are usually bosses of some stately-run or social companies, which are dealing with tobacco, oil, cement and similar products', concludes Dr. Dinkic. The research of the eminent London's 'Economist Intelligence Unit' says that Serbia is definitively the poorest country in the entire Europe, and so far, the light at the end of the tunnel is invisible.

Source: Vreme news

Back to Archive | Back to Kosov@ Crisis