Issue No. 307 - February 7, 2003
1. Serbia/Montenegro: DISAPPEARANCE OF YUGOSLAVIA
by Slobodan Rackovic
2. Russia: HUGE SWINDLE WITH REAL ESTATE
by Valeh Rzaev
3. Romania: DRACULA BUSINESS
by Angela Magherusan
February 4, 2002 will be known as the date when the Yugoslav parliament got rid of its existing state, and proclaimed a new one in its place, Serbia and Montenegro, but one with unclear character, however, since no one can say with certainty whether it is a union, a confederation, or federation.
Some Belgrade citizens chose their own way of celebration by filling garbage cans with Yugoslav flags. After 84 years of existence, Yugoslavia was relegated to the junkyard of history! One beggar who was collecting the flags said he would use them for dresses and shirts for his sons and daughters. "Still, this is not a nice gesture. Tito would have turned in his grave had he seen this," he murmured through his teeth to TV reporters.
Yugoslavia was founded after World War I in December 1918 under its first name, the Kingdom of Serbs, Croats and Slovenians. Historians usually speak about three Yugoslavias: the kingdom, which lasted until World War II, communist Yugoslavia which was founded during World War II and lasted until 1991, and third, a rump Yugoslavia, generally identified with Milosevic's regime and containing only Serbia and Montenegro following the bloody break-up and wars.
During the Tito era, when it contained all six republics—Serbia, Croatia, Slovenia, Bosnia and Herzegovina, Macedonia, and Montenegro—Yugoslavia was considered the most successful communist state in the world. However future historians merit the previous state’s worth, what is clear is that the new Serbia-Montenegrin community has hardly had a glorious inauguration.
Four of the five main signatories of the Belgrade Agreement announced on March 14, 2002 were not present at the building of the former Yugoslav parliament, neither former Yugoslav president Vojislav Kostunica, nor Montenegrin president Filip Vujanovic, nor former president and current Montenegrin prime minister Milo Djukanovic, nor deputy premier of the Yugoslav government, Miroljub Labus. The only signatory to the agreement present was Serbian Prime Minister Zoran Djindjic, who said resignedly, "Who knows why this is good? Earlier states, the first, second, and third Yugoslavias had grandiose beginnings, but miserable endings. Maybe now it will be different."
However, he can hardly believe in what he said, since all projections and analyses predict that the community between Serbia and Montenegro will hardly survive even the minimal three-year term set by its creators, that is before Montenegro and Serbia both have the right to hold referendums to find out the citizens' views about continuing a community some have labeled a "Frankenstein state." No similar can be found in the history of international law.
"Neither black nor white," some jokingly say about new community because it has some elements of a union, a confederation, as well as a federation altogether. International law experts have struggled about a formal designation, but none succeeded in completely defining it.
The new community will have all of its state institutions formed within 30 days, including a joint two-house parliament. The majority of MPs will be from the larger member, Serbia, but without the possibility of majority rule. In fact, the new country has no property of its own, since it remains in the hands of member states.
This new community does not have a standard constitution, but some alternative called a Constitutional Charter, which took ten months of coordination before the two sides adopted it. Nor does it have its own flag, shield, hymn, or passport. It does not even have its own budget but will function for a long time on the basis of a temporary law for financing Serbia and Montenegro. The larger and richer Serbia will invest 95 percent of the total finances necessary for the functioning of the union, while smaller Montenegro will contribute only 5 percent, or 50 million Euros. The population of the new community is also divided along a 95:5 percentage, and Serbian territory is 16 times as large as Montenegro. Most analysts think that such disproportion between two member states is an insurmountable problem. While it was not felt so much in Tito's more diffused six-member communist Yugoslavia, it was in the two-member Federal Republic of Yugoslavia created by force under former dictator Slobodan Milosevic on April 27, 1992. The FRY collapsed, it is believed, exactly because of this enormous disproportion.
The new community will not have a government in the usual sense, but a Council of Ministers with five departments: a ministry of defense, a ministry for foreign affairs, a ministry for internal trade, a ministry for economic ties abroad, and a ministry for protection of human and minority rights. The president of the Council of Ministers will also be president of the new state—it is already known to be Svetozar Markovic, vice president of the ruling Democratic Socialist Party from Montenegro. Montenegro will hold the position for the next two years, upon which it will rotate to Serbia. The president of the joint parliament will probably be Dragoljub Micunovic, who was president of the Council of Citizens in the Yugoslav parliament. There will not be federal elections for a joint parliament in the first two years. State members will select their MPs on their own according to their rules.
Member states will have their full sovereignty, but will be represented by only one seat in the U.N. as well as all political and financial international institutions that Yugoslavia is a member of. It is believed that the new community will very soon become a member of the Council of Europe, if the issue of cooperation between Serbia and the Hague Tribunal does not intrude. The new community of two states will not have a capitol in a classic sense. Belgrade will be the center of a joint parliament, Podgorica will have the Supreme Court.
Military forces will not have their own property and will be governed by each member state on its own territory. The Supreme Command will be a Supreme Council of Defense, which is comprised of the president of the union state and the presidents of the member states. In the first two years, Montenegro will have the advantage in this body. However, the military will be under strict civilian control so that the parliament will ultimately have higher authority over the Supreme Council of Defense. Montenegrins have already decided to cut down the obligatory military service to six months and that recruits will not leave Montenegrin territory. They also will wear civilian clothes and go home in the afternoons for meals and to sleep.
There is a hard job ahead regarding the division of embassies and consulates in the world. The head of diplomacy for the new community during its first two years will be Goran Svilanovic, who was also the last Yugoslav foreign minister.
On an economic level, member states will have full sovereignty. Monetary, custom, and bank politics will be completely separated, and the same can be said for foreign trade and macro-economic policy. Montenegro has established the Euro as its currency, while Serbia still clings to an unstable dinar that is formally convertible but only in Serbia and not outside it. The National Bank of Yugoslavia will be transformed into the National Bank of Serbia, while Montenegro has its Central Bank. There will be no joint banking institutions. Customs are also separate and opposed. Montenegro’s are very low, only up to 3 percent, while Serbia’s are enormously high—13 percent, with up to 25 percent for some products, like textile!
All cultural, art, and sport institutions with the "Yugoslav" prefix will be disbanded. Some will be proclaimed Serbian instead, some will be shut down.
Due to the disbanding of so-called federal institutions, a whole army of political, economic, cultural, and sports figures will have to return to Montenegro from Belgrade. The sport system will have to be completely transformed according to the new circumstances, and Yugoslav league competitions will merge, where possible, into regional ones (for example, the Adriatic League in basketball).
It is clear that Montenegro and Serbia will not get along in the new community and there are already fights regarding who gained or lost more. It is almost certain that the community between Serbia and Montenegro will not survive past its obligatory three-year term. It is evident even from various remarks of Serbian and Montenegrin officials—Serbs predict a long life for the new community while Montenegrins speak about a referendum on independence taking place immediately following three years. A referendum was advanced by Montenegro’s most influential politicians, especially Milo Djukanovic, but separatist tones are more and more present also in the Serbian public. There are already separatist parties in Serbia and former vice prime minister of the Yugoslav government, Miroljub Labus, and governor of the now former National Bank of Yugoslavia, Mladan Dinkic, both expressed in an interview to Frankfurter Algemeine Zeiting their large displeasure with the Constitutional Charter and announced that they would ask Brussels to allow Serbia’s independent entrance into the EU and World Bank! In Montenegro, some parties have already printed a Montenegrin passport three years ahead of the deadline.
Most Montenegrins feel that the three years of living in the new union is an obligation imposed by the EU and are already preparing for a referendum on independence. "The EU promised us that they would acknowledge the results of a referendum come three years, which means that the international affirmation of our future independent state is already guaranteed," said Montenegrin president Filip Vujanovic.
Although Javier Solana and
all world politicians are congratulating Serbian and Montenegrin officials
for the new union and promising extensive economic aid as well as entrance
of the new community into various European and world institutions, it is
more than obvious that the international community has committed another
inexcusable mistake in preventing last year's Montenegrin referendum and
encouraging formation of such a parody union. As the saying goes, "What
is born ugly, passage of time will not make any more beautiful."
• • •
They say that the first swindle
happened in ancient Egypt in the reign of Osiris, when life on this planet
had just begun. Osiris had an envious brother, Seth, who longed to sit
on the throne. At a feast, Seth showed the guests a beautifully carved
chest and announced that whoever fit into it would receive the chest—and
more—as a gift. All the guests tried to get in, but only Osiris fit. Seth
snapped the lid shut on him and ordered the chest taken away and thrown
into the Nile. Cheats operate in all areas of human endeavor. Some simply
beg, dressed in someone else's uniform from the Afghan or Chechen wars.
Some resell stolen cars; others make themselves out to be psychics and
healers and try to get rich off of strangers' misfortunes. Then there are
counterfeiters. In addition to these, there are slick and well-heeled conmen
who operate on the real estate market.
Swindlers have a deep knowledge of psychology. If they are brazen in their assault on a stranger's pocketbook, their victim will run straight to the police. If they are cunning, promising heaven and earth as they wrap their victim around their finger, the victim will be ashamed of his or her gullibility and keep the matter secret. Also in the criminals' favor is the fact that completely honest people frequently avoid turning to the authorities because they do not trust them, and for good reason. It is hard to imagine that thousands of people can be defrauded without some involvement by some authorities on the behalf of the criminals.
A lawyer in my acquaintance told me a story that typifies Moscow life. “I am selling a seven-room apartment on Kutuzovsky Prospect for $250,000," an owner told Mikhail. Mikhail knew that the owner did not live there and so he decided he would act in an instant. Mikhail and his lawyer began preparing for the deal. "I'll buy the apartment. I like it. Let me have a copy of the documents so my lawyer can check them," the impeccably dressed Mikhail said as he walked through the luxurious unoccupied apartment. The delighted owner gave him the copies and waited patiently for the deal to be completed.
Mikhail then quickly wrote up a sales agreement with all the necessary formalities. He forged the signatures and a notary's stamp and then, armed with a smile and several thousand dollars, registered the transaction with the Municipal Housing Committee. At that moment, Mikhail became the “official” owner of the luxurious apartment. Mikhail just as quickly found a rich, naive buyer for the apartment through the newspaper. They agreed over the phone to meet to see it.
Late that night, Mikhail changed the lock on the door so he could enter. The next morning, the new buyer liked it very much—especially since it was listing for $50,000 less than the market rate. Mikhail had already engaged the services of a real estate firm called LIK, whose agents were none too professional. He promised the LIK agents a hefty commission if they would process the paperwork for this deal without too much scrutiny. Mikhail received $200,000 and gave the purchaser the key to "his" apartment.
The new homeowner immediately began remodeling. Then one day, the real owner of the apartment came along, having given up on Mikhail and accompanied by another prospective buyer. A scandal ensued. A court quickly nullified the false sale. The LIK real estate agency closed a month later. Mikhail was never found and the swindled homebuyer was left to cope with his loss.
Until very recently deception
by Russian realtors was a standard practice, accepted at all levels of
the industry. While that has changed, these agencies’ clients are still
Statistics found on the web site aferizm.ru give an immediate impression of the Moscow real estate market. The Moscow Criminal Investigation Office closed almost 10,000 real estate agencies between 1993 and 2001. There are fewer than 100 agencies that have remained in business since perestroika. According to the Russian Lawyers’ Guild, there were about a million registered property transfers of various types in Russia in 2000. That was almost twice the number registered in the previous year. In 2000, the courts examined 11,093 privatizations of living quarters, 143,446 other types of housing disputes, and 5,383 disputes involving land ownership. Citizens are turning to the courts with ownership cases in ever greater numbers: 2,074 cases in 1999 and 4,552 in 2000. There are comparable figures from the arbitration courts. In 1999 and 2000, those courts heard 645 cases concerning state registration of real estate ownership and sales, 11,940 cases to overturn property transfers and 4,805 cases to recover illegally seized property.
A year ago, Gyorgy bought an apartment honestly through a major real estate agency. He made expensive improvements to the apartment and, six months later, received a court summons. It seems that the seller of the apartment suffers from mental illness and wanted the apartment back. The court ruled in favor of the seller, ordering the seller to return the money from the sale. Georgy vacated the seller's apartment, his only place to live. Of course, he was not able to get even 1 percent of the money he invested back. He was left without the apartment and without any money, despite his lawyer's best efforts.
In another case, a swindler
sold his apartment, faking his wife's death to have her removed from the
records. Four days after he received his money, his wife was "resurrected"
and sued to have the sale cancelled. Although real estate fraud is most
common in the Moscow Region, it is not unknown in the provinces. Journalists
in Ivanov Region have repeatedly called attention to the Princess Olga
Real Estate agency, whose clients lost both money and their homes. Even
though there are suits against this agency, the prosecutor admits that
the cases "are not making a dent" and that there is no good news for the
agency's defrauded clients. Journalists and former clients of the agency
have even taken the matter to the regional legislature. They received no
satisfaction there either.
The rapid expansion of trade relations and consistently high profitability of commercial real estate operations, especially in the Moscow Region, has led to special tactics being used by store and shopping center owners, who rent their space at prices that are high even by international standards. At first, when most trade was conducted at wholesale bazaars, owners of shopping centers attracted renters by offering discounts during the off season and so on. But now that many of the open-air markets have been closed, shopping center owners have devised a new approach, reminiscent of debt servitude. The renter pays a deposit equivalent to one to six months' rent that will not be returned if the lessee breaks the lease. In addition, rent is paid a month in advance.
This forces small and midsize
businesses to charge double the usual prices for goods to avoid going out
of business within months. This is deceptive in that the nonrefundable
deposit is never mentioned in any advertising or over the telephone if
a potential renter calls.
Payment of Fees for Nonexistent Services
There is another, even more widespread, trick to separate the businessman from his money, especially if the businessman is from the provinces.
For five months, I studied the most popular Moscow advertising publication, Iz ruk v ruki (Changing Hands), and came to the conclusion that there are about 60 companies illicitly making between $30,000 and $50,000 right under the noses of Moscow' multitudinous and vicious police force. Their ads take up about 80 percent of the real estate section and can be distinguished by their low rents for housing and store rentals. Besides offering low rents, these companies, calling themselves information agencies, attract their victims by not taking a commission or by pretending to be the owner of the property and not a middleman.
If you call about one of these ads, a pleasant female voice courteously informs you that a 40-square-meter store near a major metro station is available and renting for $800 a month. You should come to the office immediately to take advantage of this unheard-of luck. At the office, they tell you that you must speak to the owner of the store and give you his number to call. Often this is the number of a cell phone. You call and a self-assured masculine voice tells you that the store is available and does indeed cost $800. You want to see it? Go right ahead. You just have to sign a contract with the information agency and pay the small fee of $100 (which is better than the $800 a real estate agency would charge). Then you can go see the store. When you get there, however, you find the store occupied by the people who have occupied it for the last five years and have no intention of moving.
You return to the office
intending to make a fuss. But you are politely told that there must be
some minor misunderstanding, nothing terrible. Call tomorrow or next week
and they'll show you a different inexpensive store. Of course, call as
often as you like, run all over Moscow,
and you still will not find a store. You finally come back to the same office, demand to see the director, and get your money back. That's when you find out that the contract you signed with the information agency obligated them, at a price of $100, to give you information on stores for rent. They provide no guarantee, are not responsible for the reliability of their information and do not give refunds. If a store is already occupied, it is not their fault.
After several more tries to get your money back, you understand that you've been had. If you try to make a scene, mean guards with shaven heads or a patrol of aggressive cops appear out of the blue to calm you down and make you forget where that office even is. It'll change locations soon any way. Many people think that the swindles will continue until they reinstitute debtors' prison, as they had before the Revolution.
It is obvious that the level
of deception in the real estate market is the result of the corruption
of society. So who knows what to expect next?
• • •
The myth of Dracula has made a lot of money for a lot of people in the last decades. Books and movies have gotten more and more people interested in the strange story of Count Dracula. Even today, the myth attracts generation after generation, although the new versions of the story tend to put it constantly farther from the historical truth.
No matter what this truth may be, the fact remains that Dracula sells thousands and thousands of pictures, books, and souvenirs throughout the world. It is most natural therefore for this image to attract many economical interests, including in the country where the myth was born, first, in the fifteenth century: Romania.
Who was in fact the figure
that we see today as Dracula?
His real name was Vlad Tepes, ruler of Tara Romaneasca, one of Romania’s three historical provinces. He became famous for his very cruel policies.
Confronted with the external
danger of the Ottoman Empire, and having to rule in a country where disorder
was the ordinary state of things, he imposed law and independence by force,
and making any “guilty” Romanian or foreigner die a horrible death — to
be penetrated by a stake and left to hang as an example for others who
may have thought of making the same mistake. From this practice he got
his second name, “The Staker." His other name, Dracula, resembles the word
"devil," or drac, in Romanian. This name became well-known, both inside
and outside the country. But this is not how Vlad Tepes earned his image
as a vampire. That is a totally different and even humorous story, and
is connected not to his bloody methods of punishment but rather to his
economic policies. In order to protect the economy, Vlad Tepes introduced
some restrictive rules for imports, which had a negative impact on German
merchants trading in Tara Romaneasca who had previously benefited from
certain privileges granted by previous rulers. Their way of revenge was
a book written by Brahm Stocker, who described Vlad Tepes as the cruel
vampire we see today. But so far, no one could tell if the truth inspired
the legend or the other way around.
What is important about the Dracula myth is the revival of his image today, especially in the grey world that Romanians are living in. From the cruel, untouchable and insensitive character seen back in the fifteenth century, Vlad Tepes has now turned into a figure of justice, righteousness, and patriotism among many Romanians who would like to see him again for real. This is why many people, confronted with poverty and corruption, often ask rhetorically, “Where are you, Tepes?”
So, this was the man Vlad Tepes, and the legendary Count Dracula. After all, history does not count any more. Tourists are interested in seeing his wings, his teeth, his castle. And they are willing to pay a lot of money for it. So, why not show them what they want to see, and best of all, make a great business out of it?
That's what the Romanian authorities asked themselves recently, after they saw everyone but Romania taking advantage of the myth. So, they quickly decided to change the situation by starting a campaign to make Dracula a sort of Romanian trade mark. The solution they found is called The Dracula Park. Thought to be a huge entertainment place, it is an adapted version of similar famous places existing all over the world, such as DisneyLand. The costs of the project are estimated at US $31.5 million and the scheduled opening is the end of 2004. Where would the park be placed, though? The question led to a long and still strong public debate. At first, the location of the park was set in the medieval city of Sighisoara, in Transylvania, a place where Vlad Tepes lived but which has a significant environmental inconvenience: the location of the park would have meant destroying an ancient forest, which environmentalists immediately protested against.
So, the plan changed recently. The consulting firm Pricewaterhouse Coopers brought economic and financial evidence arguing in favor of constructing the park in Bucharest, the capital, since it has a bigger capacity for tourists and a better infrastructure. Besides, the Monastery of Snagov, where Vlad Tepes was buried in 1476, is in Bucharest. The idea of Constanta, on the Black Sea, was hardly considered. But many voices now argue that the most natural place for the park would be the region of Brasov, where we find the Dracula Castle and where tourists could also be very close to the mountains and well-known ski areas in Poiana Brasov or Sinaia.
There's no doubt that the
debate has more serious reasons than its historical relevance. The park
will bring investors, money, and development, and these are sufficient
motives for everyone in Romania to fight for having the park placed in
their regions. Who will win? The international press is also closely watching
this so we will soon know.