Chapter 82 Shock Yugoslavia

The Balkans had been the target of American intervention long before the Soviet Union was treated with economic "shock therapy" created by the United States.The importance of destroying Yugoslavia's economic model was the main reason for Washington's early attention to Yugoslavia.As the situation progressed into the mid-1990s, Yugoslavia's strategic position with respect to potential Central Asian oil resources became increasingly important to Washington.Throughout the second half of the 1990s, oil and the dollar played a decisive role in Washington's Balkan policy, though not in the simplest form that Western critics had suspected.

Just before the fall of the Berlin Wall, Washington was busy doing work on Yugoslavia that had already been done once by the IMF.Nationalist movements in the Balkans are being manipulated by external forces, and the map of Eurasia is being transformed into what it was before the First World War.At that time, Britain intervened in conjunction with other interest groups to dismantle the Ottoman Empire and prevent Germany from building the Baghdad railway. Now, the goal is to dismantle Yugoslavia into several independent smaller states and create a foothold for NATO and the United States at the crossroads of Western Europe and Central Asia.Oil and geopolitics are once again in the vanguard of Washington.

Ironically, with the disintegration of the Warsaw Pact in the early 1990s, the reason for NATO's continued existence seemed to disappear.What other threat exists to justify the retention of the Cold War alliance established in 1949 or the permanent US military presence in Western Europe, or even further expansion eastward?Many hope that once the Soviet threat disappears, NATO will also disintegrate.But even before the collapse of the Soviet regime, strategists in Washington had begun devising new missions for NATO. The newly proposed NATO mission is defined as "deployment outside the NATO area", meaning extending its tentacles beyond the borders of NATO member states.This new mission was later combined in 1994 with Washington's "Partners for Peace," a plan to gradually integrate the military forces of former Warsaw Pact members into the U.S.-led NATO.Republican Senator Richard Lugar described the dilemma facing the United States as it dominated NATO after the end of the Cold War in the following words: "NATO, either out of bounds or out of it." Quite simply, the Balkan Wars gave Washington a great opportunity to expand NATO. Good reason.This process will last for more than ten years.

For more than 40 years, Washington has quietly supported Yugoslavia and Tito's model of mixed socialism as a buffer against the Soviet Union.As the Soviet Union began to collapse, that buffer was of no use to Washington—especially one of economically successful nationalism, which might convince its Eastern European neighbors that anything but an IMF shock In addition to therapy, there may also be a compromise route.In the eyes of top Washington strategists, the Yugoslav model had to be dismantled for this reason alone.The fact that Yugoslavia is at the choke point to the potential oil-rich states of Central Asia only adds weight to the options.Yugoslavia must be brought in, if need be, forcibly dragged into the free market reforms of the IMF.NATO will ensure the deal goes through.

In 1988, as the doom of the Soviet Union became so evident, Washington had dispatched to Yugoslavia an advisory group from an eccentric, private nonprofit with the high-sounding name of the National Endowment for Democracy, or It is the NED as it is known in Washington circles.This "private" organization began to distribute dollars generously in all corners of Yugoslavia, financing the opposition, buying young journalists, funding the trade union opposition, opposition economists' organizations, and human rights NGOs. Ten years later, in 1998, a year before NATO began bombing Belgrade, NED Chairman Paul McCarthy boasted in Washington: "The NED is working with the Soros Foundation and certain European foundations to provide Sponsorship, one of the few Western organizations working with local NGOs and independent media throughout the country." During the Cold War, such interference in the internal affairs of foreign countries could be considered subversive by the CIA, But in Washington press, it's glorified as "fostering democracy."The result has been a catastrophe for the lives of Serbs, Kosovars, Bosnians, Croats and other peoples.

Exactly what the guarantees Yugoslavia received after 1990 are known only by a few insiders.Using the NED, the George Soros Foundation, and the IMF, Washington created economic chaos in Yugoslavia as a means of implementing geopolitical policy. In 1989, the IMF asked Prime Minister Ante Markovich to implement economic structural reforms.Whatever the reason, he did. Under IMF policies, Yugoslavia's GDP fell by 75% in 1990 and again by 15% in 1991, with industrial production falling by 21%.The International Monetary Fund called for the complete privatization of state-owned enterprises, resulting in the bankruptcy of more than 1,100 companies and an unemployment rate of more than 20% by 1990.Economic problems across the country have become a bomb ready to be detonated.Predictably, each region grapples with its neighbors for its own survival amidst escalating economic chaos.To keep things straight, the IMF kept wages unchanged from 1989 levels, but inflation rose sharply, causing real incomes to fall by 41 percent in the first six months of 1990.By 1991, inflation was over 140%.In this situation, the International Monetary Fund ordered that the Yugoslav dinar be made fully convertible and that interest rates float freely.The IMF explicitly limited the Yugoslav Central Bank's currency issuance, which undermined the central government's ability to finance social and other programs.These policy measures created a de facto fragmentation of the economy that predates the formal declaration of independence of Croatia and Slovenia in June 1991.

In November 1990, under pressure from the Bush administration, the US Congress passed the Foreign Operations Appropriations Act.Any Yugoslav member states that do not declare independence from Yugoslavia within six months of the bill's passage will lose all U.S. economic support under the new U.S. law.The act required that each Yugoslav republic hold separate elections, which would be overseen by the US State Department.The law also stipulated that all aid be provided directly to each Union republic and not to the central Yugoslav government in Belgrade.In short, what the Bush administration wants is the self-disintegration of the Yugoslavia.They deliberately lit the fuse that set off a new series of Balkan wars.

Through the use of organizations such as the Soros Foundation and the NED, Washington's financial assistance went to some ultra-nationalist or ex-fascist groups that could ensure the disintegration of Yugoslavia.In response to IMF shock therapy and Washington's destabilizing direct intervention, the Yugoslav president, Serbian nationalist Slobodan Milosevic, organized a new Communist Party in November 1990 dedicated to Prevent the disintegration of the Yugoslavia.The stage was set for a series of horrific regional race wars that lasted a decade and killed more than 200,000 people. In this small, strategically important Balkan country, economic issues have become a hot spot, and it is the Bush administration that has made it a hot spot. In 1992, Washington imposed a total economic embargo on Yugoslavia, freezing all trade activity in the latter, throwing the economy into chaos, and eventually leading to hyperinflation and 70% unemployment.The public in the Western world, and first of all the American public, was told by the media that this was caused by the corrupt Belgrade dictatorship.The US media rarely mentions the inflammatory actions in Washington or the policies of the IMF that lead to these events in the Balkans.See "Southern Europe and the Balkans" magazine, Volume 4, Issue 1, May 2002, p75-89, "The Confluence of Blood and Oil: Balkan Factors in Western Energy Security". The simplest justification for the 1999 Kosovo war was oil.In fact, Europe's goal is to establish strategic links with possible new energy (including oil) production areas, and Washington's goal is to control these resources. This is a slightly different matter.The problem is that, in order to control Europe's energy security, Washington exercises strategic control over the oil pipeline routes that may connect the Caspian Sea oil fields to Europe through the Balkans.See "Trans-Balkan Oil Pipeline Through No Man's Land" by Alexandra Tetica of Baya Luka, Serbia, February 27, 2001.

In 1995, the Dayton Accords ended the Bosnian War.The Clinton administration believed that Caspian oil was of great strategic importance, while the European Union hoped to ensure the safety of oil transported to Europe through oil pipelines in the Balkans. The end of the war was consistent with the above-mentioned views.For the opening of oil routes from the Caspian Sea to Europe, Washington clearly believes that ensuring peace in the region is necessary.But this "peace" is defined by Washington. After the Dayton Accords, Bosnia, a once multi-ethnic country, was transformed into a de facto Muslim state, a de facto client state under the control of the International Monetary Fund and NATO.The Clinton administration heavily funded the arming of the Bosnian Muslim army.The portrayal of the war in the international media greatly exaggerates the impression that the EU is incapable of resolving major wars within its territory without US intervention.In the process, Washington's case for NATO's eastward expansion has been significantly strengthened.Hungary, Poland and the Czech Republic are potential NATO partners that would have been unthinkable just five years ago.

Soon, the Clinton administration took the next step, dismantling any remnants of nationalism in the Balkans that might be out of step with Washington.American and British oil companies began to compete for the right to develop the Caspian Sea, which is considered to be the richest oil reserve, not far from Baku and the border with Kazakhstan in Central Asia.That's where geologists talk about the "new Kuwait or Saudi Arabia."The U.S. government estimates that there will be more than 200 billion barrels of oil there - if true, it would be the largest oil resource discovered in decades.Brzezinski, a well-paid Washington lobbyist who represents the interests of the Anglo-American oil giant BP, is betting on the Caspian oil-producing region.