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. Last Updated: 07/27/2016

A Sad New Year for Belgrade

BELGRADE -- The residents of Belgrade faced the New Year beset by 1 million percent inflation and unmitigated misery as their city, hit by strikes and power cuts, virtually ground to a halt.


A strike on Friday by coal miners in the Kolubara basin, which feeds the big Obrenovac power plants near Belgrade, resulted in drastic electricity cuts in the city of 2 million people, with some suburbs without power for 17 hours out of 24.


The miners were later reported by the Yugoslav news agency Tanjug to have returned to work, but it was not immediately clear whether power would be fully restored


Meanwhile, a strike by railroad workers halted trains in Serbia, except international services which suffered major delays.


Ten wage strikes, including stoppages by health workers and gravediggers, are currently being staged in Serbia where hyperinflation has eroded the real value of the average monthly wage to $10.


About 10,000 people, mostly pensioners, jammed into central Belgrade's Republic Square to queue for food handouts by a charity organization.


The pensioners are hardest hit by Yugoslavia's hyperinflation, which reached 1 million percent in December.


Most shops were closed, bracing for another weekend explosion of prices when, as a rule, the value of the dinar against foreign currency declines by several thousand percent.


On the foreign currency black market -- the only currency market that counts in Yugoslavia -- $1 fetched 7,500 billion dinars on Friday, up from 3,000 billion on Thursday and from 1,100 billion on Wednesday.


Some experts estimate that, within a month, the inflation rate will surpass the worst in recorded history -- that of Germany's Weimar Republic in 1923 and Hungary's in June 1946 when, according to Encyclopaedia Britannica, the inflation rate reached "several million million million."


The economy of the rump Yugoslav federation, now comprising only Serbia and Montenegro, has collapsed following the disintegration of former Yugoslavia's single market in 1991 and stiff U.N. sanctions against Belgrade for its role in the Bosnian war.


Economists estimate that damage so far to the economy exceeds $20 billion. Yugoslavia, which boasted per capita production running at $3,000 in 1990, has been reduced to 1960s levels, said federal Foreign Ministry adviser Stanimir Jovanovic.


"By the end of this year the annual per capita income ranged between $200 and $250, which is below the poverty line by Western standards," he said.


The federal government, faced by political crisis and threats of spreading strikes, is reported to be preparing a New Year anti-inflation program.


So far its piecemeal attempts to cope with hyperinflation have proved futile. The latest effort was made on Wednesday when the National Bank chopped nine zeroes off the dinar, less than three months after six zeroes were knocked off.


Economic analysts said there was a rift between experts over whether to apply a crash austerity program to curb spending or a gentle one that the people, mostly reduced to poverty, could more easily bear.