Balkans Beachhead

'Global Loan Sharks' Will Make A Killing On Kosovo Reconstruction

Nevertheless, whatever power the EU attempts to exert in the rebuilding of Kosovo may be offset by the involvement of two institutions that, ironically, played roles in Yugoslavia's breakup: the IMF and the World Bank.

Regarded by many in the developing world as global loan sharks, the World Bank and the IMF are happy to advance money so long as recipient countries submit to "structural adjustment," a euphemism for cramming neoliberal Western-style capitalism down a nation's throat. Under Tito, IMF money was rarely distributed equitably among Yugoslavia's six republics and two provinces, and rather than pool income the enclaves that made the most kept it. Already hurt by the world economic crisis of the 1970s, arguably the last thing Yugoslavia needed was more IMF austerity demands; by the early '80s, unemployment had skyrocketed, and by 1990 inflation had soared while wages had fallen.

Though the IMF and the World Bank weren't the most prominent players in Yugoslavia's breakup, "their adjustment policies certainly created tensions and contributed to pitting population groups against one another," says Hellinger. "There's anticipation that any program initiated in the wake of hostilities that's managed by the World Bank or IMF will mean more adjustment, which is cause for concern because it means liberalization of trade, which wipes out small and medium-sized producers; liberalization of foreign investment laws, which lets multinational corporations buy up smaller firms; and labor market reform, which is another way of saying 'undermining unions.' "

According to Hellinger, while the EU doles out contracts to construction firms and merchants, the World Bank and IMF can be expected to take advantage of Kosovo's international protectorate status to make it a Balkans beachhead for neoliberal expansion, and it's here that U.S. corporate hegemony is apt to assert itself. "Someone has to manage on privatization and rewrite foreign investment laws, and there's likely to be a fight between the big U.S. finance houses, like Goldman Sachs and Merrill, for handling those privatizations," he says. "This is their opportunity to impose the same economic agenda they've imposed everywhere else around the world."

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