by Dejan ANASTASIJEVIC
As Vreme has learned from domestic and Western diplomatic sources, before the Iraq war Serbia and Montenegro provided the Americans with a large volume of information about strategic Iraqi objects, such as military and naval bases, airports and underground bunkers. In return, domestic companies were promised privileged treatment in tenders for participation in reconstruction and rebuilding of the infrastructure in Iraq, under the supervision of the American corporation Bechtel. The office of Jugoimport, which would take the lead position in representing domestic companies, opened earlier this month, after it had been closed for more than six months due to the scandal with the Orao company.
PUBLIC SCANDAL: As a reminder, in November last year a scandal emerged after it was revealed that several companies from Serbia and Bosnia were selling military equipment, explosives and rocket fuel to Saddam Hussein. Several privately owned firms, under the auspices of powerful men from the state apparatus, were involved in the affair. All of the activity went through Jugoimport, formerly known as the Federal Office for Trading of Special Purpose Goods, the chief state agency for import and export of military equipment and arms. At that point it was discovered that the shipments were part of the secret deal signed by Slobodan Milosevic and Saddam Hussein in 1999. The affair was doubly unpleasant: not only was such an activity in breach of numerous UN Security Council resolutions, but it also threatened to ruin already tense relations with the United States.
A speedy investigation was promised, but nobody was called to account. Key members of the government, including the current prime minister of Serbia, were members of the board of directors of Jugoimport but swore they had no idea what had happened. An investigation by a special state committee and the Serbian police did not result in a single indictment, and no money earned from the export was confiscated. The only results were the closing of the Jugoimport office in Baghdad and the long-awaited retirement of director Jovan Cekovic. It seemed it would stay that way, especially because the U.S. administration distanced itself from the whole affair. After an initial condemnation of the illegal export and the demand to establish responsibility, the State Department abruptly went silent and limited itself to remarks that the Belgrade authorities had "taken steps to avoid repetition of similar events."
SECRET AFFAIRS: However, much happened behind the scenes. The Foreign Ministry saw an opportunity to solve a long-lasting problem. For a long time, the ministry has been trying to persuade Jugoimport and other firms that conducted business in Iraq to provide it with plans that could be of importance to the Americans and to the UN weapons inspectors. The ministry regularly received the response that the desired plans and information had been destroyed, or that the plans fell within the category of military or business secrets. The Orao scandal and the replacement of the head of Jugoimport broke this resistance. The cooperation improved further once these companies realized that they could benefit from providing the documentation. A prominent ministry official told Vreme that "all of a sudden, it turned out nothing had been destroyed." The same source said that the first "gift" consisted of a book, 120 pages long, with details on contacts with Saddam from 1999 to 2002. "It wasn't a big deal," he said, explaining that Milosevic and Saddam had agreed to military cooperation worth more than $100 million, but that only a small portion of that was realized. Americans were fascinated with the precise and detailed report. "We understood that to be proof of the honest intentions of Belgrade," said one Western diplomat who had the access to the book. "Serbia was Saddam's favorite corner shop during the '90s." Furthermore, much of Saddam's defense capability could be analyzed from his "wish list" in the document.
But there was a much more important stake. During the 1980s, Yugoslav engineering and military companies, under the auspices of Jugoimport, were rushing to Iraq. At one point, the volume of trade reached $1.7 billion. One former Yugoslav ambassador in the region told Vreme that it was the golden era of Baghdad-Belgrade cooperation. "Saddam was buying everything, whole military bases, bomb shelters, airports, desalinization plants, electric power plants, and dams," says the ambassador. "Among other, our companies built the Umm Qasr port and the headquarters of the Baath party in Baghdad."
SALE PRICE: Construction plans of plants, with details such as the thickness of walls and type of concrete used, were very precious at the final stage of preparations for the war. "It really was of use to us, before and during the war in Iraq," says the Western diplomat. Finally, it was America's turn to return the favor. The solution was found in reconstruction of destroyed buildings in occupied Iraq. Around $1.8 million was the preliminary sum of money earmarked for this purpose, but the greatest individual contractor is Bechtel, an American concern, with $680 million. Bechtel's tender for subcontractors is now open.
Although the decisions should be made based on the best offer, politics will likely also be an important factor. Companies from Germany and France, whose governments attempted to impede the American war machine, were publicly notified not to bother applying. In addition, Colin Powell, U.S. secretary of state, has said that it was time for those countries to "feel the consequences" for the policy of their governments. So much for the principles of the free market.
On the other hand, Americans have suggested that companies from here should certainly bid. That's why the consortium has already been created, under the auspices of the Trade Chamber and the watchful eye of Stevan Nikcevic, a former employee of the state security and the new head of Jugoimport. 25 companies from Serbia were included in the consortium, but it is expected that this number will increase significantly. No one can or wants to say how much of Bechtel's money will end up in Belgrade, but speculations are that it would be tens or hundreds of millions of dollars. Apart from that, the U.S. government rewarded cooperation by providing direct military assistance, most of all in the area of communications and electronic equipment. That was the point of the recently published order of President George W. Bush to lift the ban on the export of the U.S. military technology to Serbia and Montenegro.
The end is not near. The helpful attitude toward Americans, along with sympathy after the assassination of Prime Minister Zoran Djindjic and the suddenly improved cooperation with the Hague tribunal, brought about the unprecedented warming in the relations between Belgrade and Washington. "Our policy toward Serbia and Montenegro has changed," says one American diplomat. "From now on, there will be less stick and more carrot."
ONE HAND WASHES THE OTHER: That's how Serbia and Montenegro joined the small number of European countries that helped in the American invasion of Iraq without ruining relations with France and Germany. On the other hand, some of our neighbors were very loud in their verbal support for the United States but did not earn anything significant, except slaps from Berlin and Paris. Our Foreign Ministry is not trying to conceal its satisfaction. "We finally played smart," they says.
And they did play smart. Friendship and business ties between Belgrade and Baghdad lasted for decades and outlived Josip Broz Tito, the rule of Slobodan Milosevic, even the first two years of Vojislav Kostunica and the DOS [Democratic Opposition of Serbia]. Maybe it is not nice to sell out an old friend, but we have found a new one that may be of more use. Saddam was already finished by that time. If he's still alive, the treason of Belgrade is probably not at the top of his list of problems. By the way, he wasn't exactly a trustworthy buddy either: He never intended to pay the $1.2 billion he owed us, and it is most likely that this sum will be written off.