Experiences of an American woman who was married to a Serb.

Friday, August 24, 2007

Radio Sombor to be sold off to highest bidder on Sept 20th

Radio Sombor, one of the town's radio stations, is up for auction as part of Serbia's privatization movement as the government sells off many of its business assets. Serbia's official privatization Web site for government-owned company auctions and offerings nationwide is here (just click the link to the English language section.)

It's fascinating reading for the business-minded. You can see revenues, assets, costs, staff sizes, etc for an enormously wide range of operations, including farms with thousands of acres, shoe factories built to serve a nation, several vet clinics, and of course the media including newspapers, magazines, TV stations as well as Radio Sombor.

Most are officially losing money each year, mainly people here tell me, because they are overstaffed sometimes by 50-100% which is typical of state-run organizations everywhere in the world since the time of the Roman Empire.

However, staff here make very little money -- a top manager of a government organization may have take home pay of 500 Euros a month (plus the employer kicks in roughly 70% more to the state for pension, healthcare, etc.) That's incredibly low. So, although you might be able to "save money" by cutting extra staff after your obligatory first year when you legally are bound to keep everyone, in a few years staff costs will go right back up again as market forces cause employees to require more money.

Let's face it, the days of employing a 40-year old experienced worker in Serbia for 200-300 Euros take home pay are on their way out the door. So the profits a "privateer" can make by simply slashing staff down to 'normal' Western company size will be eaten away by Serb staff beginning to require normal Western wages.

This means anyone taking a company private should be buying into supporting the growth of the Serb economy as a whole, so they have a strong healthy country to do business in as wages increase. Otherwise future profits are doomed. Unfortunately that's not always what seems to be happening now. Stories abound of "privateers" buying state-run orgs, sucking all the possible fast profits out of them (slashing staff, selling off assets, neglecting to pay for staff pensions, etc) and then flipping them again to new buyers. Although the initial "privateers" are I think required by law to be Serb citizens, I don't think there's any law (or at least anything that's remotely enforced) requiring them to sell in turn to Serbs too.

So more and more of the former Yugoslavia's best assets -- including prime farm land and key media such as Radio Sombor -- are owned by outsiders who have no real allegiance to Serbs at all beyond making a profit. It's a dangerous thing, but I don't see how the government can stop it.

Anyway, kind of cool to think it's possible to buy a radio station in my new home town!

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