Described by one observer as “an election that never was”, the failure of the Serbian presidential elections to produce a result offers a damning commentary on the record of the Western-supported coalition that has governed since the ousting of President Slobodan Milosevic.

After the lack of a clear winner in the first poll, the elections were forced into a second round run-off between the two leading candidates. This round, held on October 13, also failed to produce a result. A turnout of just 45.46 percent of the electorate (2,979,254 voters) means that the process will have to be repeated and increases the likelihood of early parliamentary elections. Under Serbian law a 50 percent turnout was required for the election to be valid.

The result is embarrassing for both of the candidates. Current Yugoslav President Vojislav Kostunica of the Democratic Party of Serbia (DSS) won 66.86 percent of the vote, while the economist Miroljub Labus, deputy prime minister in the ruling Democratic Opposition of Serbia (DOS) coalition, polled just 30.92 percent. Labus is supported by Prime Minister Zoran Djindjic. Both candidates are supporters of the privatisation and economic reform process. They had emerged as frontrunners from the first round, when 11 candidates stood. Kostunica polled 31.2 percent, Labus 27.7 percent, from a turnout of 55.7 percent. Turnout was expected to be lower for the second round even before nationalist parties started issuing threats of boycotting the process.

What emerges most clearly from the low turnout is the growing disillusionment with the course taken by the government in the two years since the ousting of Milosevic. Unemployment is running at around 50 percent, with something like one-third of all economic transactions taking place on the black market. The average monthly salary is in the region of 160 euros.

The quick fix trumpeted by advocates of opening the economy up to Western intervention has failed to materialise. The impact of the transition process is now being felt, ten years after the countries of eastern Europe first underwent International Monetary Fund shock therapy. For all the rhetoric about economic liberalisation and opportunity, a country like Yugoslavia is of interest to Western investors only if wages and conditions are kept as low as possible. Some economists are explicitly speaking of Yugoslavia becoming “the new Poland” when the latter supposedly moves up the economic scale through integration into the European Union.

Ognen Pribicevic, an analyst from the Centre for South Eastern European Studies in Belgrade, stated, “Disillusionment here is much greater than in other central and east European countries because voters honestly believed when Milosevic fell that living conditions would improve overnight. They did not.”

A recent survey by the Institute of Researching Public Opinion found that 65 percent of its interviewees thought little had changed. A nurse, Zivanka Jovanic, was quoted as saying disappointment at the country’s leaders had left her “nauseated” at the prospect of voting in future elections. The level of support for political parties in Serbia is reflected in the fact that Kostunica and Labus’ votes together in the first round were lower than Kostunica’s vote two years ago. Turnout is down on elections under Milosevic.

Djindjic blithely claimed after the first round that the low turnout represented contentment with the government, but any suggestion of a silent endorsement of the DOS’s economic record was shattered on October 12.

There has been no public debate on the programme of economic liberalisation and privatisation, which is having such a devastating effect on the lives of ordinary workers. The candidates differ only as to the pace that such measures can be implemented. Hence Yugoslav Foreign Minister Goran Svilanovic’s assertion: “The sum of both [pro-reform] groups is still well over 50 percent, meaning that the country is still on a good course.”

During the election campaign Minister of Economy and Privatisation Aleksandr Vlahovic issued a stern warning against voicing any criticism of economic reforms. He said, “We don’t want privatisation to be the ground for scoring cheap political points,” as adverse comments during an election campaign “directly contribute to increasing investment risk and affect the success of projects we want to realise.”

Labus is head of the influential G17 group of economists selected and trained by the West. Apart from Labus, who went to Cornell University after his graduation from the Belgrade School of Law, the group also includes Mladjan Dinkic, governor of the National Bank of Yugoslavia, and the finance minister Bozidar Djelic. Djelic was at Harvard Business School and played a key role in the privatisation process in Russia and Poland. The G17’s economic programme was effectively the DOS’s election platform in the run-up to the overthrow of Milosevic.

It is the G17 that has driven the pace of reform for the Djindjic government over the last two years. Kostunica remarked that Labus was standing because Djindjic did not dare stand himself. Divisions had developed between Labus and Kostunica over participation in The Hague war crimes tribunal, but Kostunica remains equally committed to Labus’ negotiations with the IMF and economic links with the US.

Labus’ and Djindjic’s solution to the crisis of the Yugoslav economy is to speed up the development of foreign investment and political ties with the West. They insist on accelerating economic reforms as a means of access into the European Union. Barely a fortnight ago Djindjic told a session of the World Economic Forum in Salzburg. “It is essential that the EU leave a free fast lane ... I believe we can become an EU member by 2010.”

Labus was clearly the preferred candidate for the West. When Djindjic attended the World Economic Forum a senior EU official is said to have told him, “If you are not the government any more, then we don’t want to continue providing this kind of assistance and we will open new negotiations and set new deadlines to see the reactions of that other government.”

Nationalist demagogy

Kostunica presented himself as the saviour of the nation, a dedicated nationalist who is opposed to selling Yugoslavia to the West. To some extent he was able to pick up in the second round votes that went which had gone to more extreme nationalists such as Vojislav Seselj in the first round. (Seselj, leader of the Serbian Radical Party (SRS) chose not to broadcast an election platform in their slot on Radio Belgrade. Instead they played patriotic songs from the SRS songbook: the songs praised Seselj, and vowed to recapture Serbian territory, including the Dinara mountains between Croatia and Bosnia.) But Kostunica was unable to win more widespread support from hard-line nationalists, despite his rhetoric.

Kostunica’s resort to the most shameless nationalist demagogy is only a method of hiding the full import of the economic programme has championed. He has denounced members of Djindjic’s government recruited from abroad, and has whipped up Serb chauvinist sentiment by calling the Bosnian Serb statelet Republika Srpska only “temporarily separated” from the Serbian homeland. To allay doubts about his commitment to the programme of Western intervention, however, he denounced nationalist calls for a boycott of the second round as “anti-European”.

Kostunica has come up with populist ideas to sugar the pill of privatisation such as handing out shares to employees. Throughout the election he was more aware of the possibility of popular opposition to the process of reform. In this his position is similar to Darko Marinkovic of the Nezavisnost Trade Union Federation, who said the task was “to teach people, to instruct people, to educate people in new point of view, in a new way of life.” Marinkovic’s concept of re-education is illuminating. He sees his role as advising redundant workers how to invest their redundancy money. “How to invest money in different small jobs, how to open small businesses. How to work in a productive, effective way,” he said. He expressed the concern that if redundancy money were simply spent on necessities, there would be a social explosion waiting to happen when that money ran out.

In a recent interview with Balkantimes.com, Kostunica repeated his commitment to the reform programme: “reform is possible only in a decriminalised state. It is only such a state that can attract foreign investment ... My party’s programme calls for economic liberalism coupled with social solidarity, which is absolutely necessary in these difficult times of transition.”

Such invocations of the rule of law are to protect the rights foreign investors to exploit the workforce, but are understood differently by the mass of the population, as pollster Srdjan Bogosavljevic discovered during the election. “[W]e were trying to understand what rule of law means for the average Serb and, in fact, they are thinking about protection from unemployment. That is, for them, rule of law.”

The relatively high vote (22.5 percent) in the first round for the nationalist SRS is significant. Milosevic had called on his supporters to vote for its candidate Seselj rather than for his own Socialist Party of Serbia (SPS), whereupon the SPS’s ruling body chose to distance themselves from Milosevic and support the candidacy of actor Velimir Bata Zivojinovic instead. Zivojinovic, best known for portraying partisans in war films such as Walter Defends Sarajevo, polled just 3.2 percent of the vote with his embarrassing campaign statement, “In the last two years the DOS has managed to destroy the state more than we did in a decade.”

This served to wipe out the SPS, as well as giving Seselj (a man described by one of his aides as “the only man capable of protecting Ratko Mladic and Radovan Karadzic”) a boost at the polls. When he was eliminated from the contest, Seselj called on the SRS to boycott the second round, thus creating a constitutional crisis and forcing an early parliamentary election. The nationalists are seeking to exploit the level of disdain for the DOS coalition and channel it into support for their own right-wing programme.

Djindjic too was accused of attempting to whip up nationalist sentiment. He was accused in the first round of pushing one of his allies, General Nebojsa Pavkovic, into standing in order to divert nationalist and militarist votes. Pavkovic polled just two percent.

Kostunica and the DSS are seeking to avoid a re-run of the elections that is scheduled for the end of the year. They allege that there are 600,000 “ghost voters” on the electoral roll and that this was the reason for last Sunday’s election result not achieving the 50 percent threshold. The DSS has already lodged a complaint with the Select Electoral Commission and mooted the possibility of simply declaring itself the winner, in the style of George W. Bush. The party’s deputy president Zoran Sami said, “For us, the elections were successfully completed and there will be no new elections... If the US took two months to determine who is its president, so can Serbia.”

The Centre for Free Elections and Democracy (CeSID), fearful that the electoral debacle could hamper the government’s economic reform programme, has launched a petition to change the electoral law. The Organisation for Security and Cooperation in Europe (OSCE) had already expressed anxieties that legislative “shortcomings”—i.e., the 50 percent turnout requirement—could “lead to a series of repeat elections without outcome.” Cristina Gallach, spokeswoman for the European Union’s foreign policy chief Javier Solana, said the EU would ask Serbia’s politicians to find “imaginative ways” of avoiding a repeat of the election fiasco.

Both Kostunica and Labus have supported calls for a change in the electoral law. Both are aware that this will be a requirement in order to satisfy Western financiers. Labus said, “It will jeopardise our image if we don't have a president of the state. That’s something no country is proud of.”

It was only two years ago that the Western media hailed the downfall of Milosevic and the assumption of power by the DOS as a victory for democracy. Today the same political forces that made up this alliance are seeking to change the electoral law so that they can govern without a popular mandate and with tacit Western backing.