Humanitarian Risk Analysis No. 8: Federal Republic of Yugoslavia

OCHA Belgrade
OCHA Belgrade issues a monthly "Humanitarian Risk Analysis", which provides an overall and impartial evaluation of the impact of the economic crisis, sanctions and the NATO intervention on the vulnerable sectors of the population in the Federal Republic of Yugoslavia (FRY).

1. INTRODUCTION

This issue of the Humanitarian Risk Analysis (HRA) addresses the following subjects:

• A consideration of humanitarian vulnerability from the regional perspective: HRAs so far analyzed the vulnerability of the populations in FRY at the "macro" level, using the indicators covering the country as a whole or the republics. This section seeks to point at regional differences in the vulnerability in Serbia (excluding Kosovo). They are shown in the map format, which indicate regional distributions of risks, measured from three different dimensions.
• An overview of socio-economic trends in FRY: Each HRA tracks, on a monthly basis, economic trends which impact the most vulnerable. This issue, as the first HRA in the new year, includes a special section to summarize changes in economic indicators for the year 1999. This is followed by a review, as usual, of the monthly trends, including the updated table on the OCHA shopping basket.

2. HUMANITARIAN VULNERABILITY FROM REGIONAL PERSPECTIVE

The past HRAs provided analyses on the declining living standards and the vulnerability of the at-risk groups, based on the national (and in some case republican) level data and indicators. This issue attempts to look at humanitarian risks on the municipality level, aiming to show regional differences in the scale of vulnerability. This is done based on the following three distinct criteria, all shown in the map format:

Map 1 - Average monthly salary in municipalities in Serbia

This map summarizes the average monthly salary in each municipality of Serbia (excluding Kosovo), as an indication of distributions of "vulnerable municipalities." For this purpose, Serbia is broken down into the following categories of municipalities: 1) the average municipality salary of 230 - 800 Dinars (below 50% of the national average) [50% of the average salary as one of the eligibility criteria for WFP’s food assistance to pensioners in 1999]; 2) 800 - 1,280 Dinars (50-80 % of the national average) [Considerations are being given to applying 80% of the average salary as a criterion for vulnerable pensioners]; 3) 1,280 - 1,700 Dinars (80-100% of the national average); and 4) 1,700 Dinars and above.

In reflecting on regional differences in vulnerability, regional characteristics should also be kept in mind. In general, residents in the municipalities in the agricultural regions (e.g., North Serbia and Vojvodina) are most likely attached, in one way or another, to private agricultural land, and, therefore, have alternative access to food. On the other hand, residents in the regions where prevailing industries are textile, leather, chemical or metal (e.g., West, Central and Southern Serbia) are more vulnerable, as those industries traditionally pay lower salaries and have been affected more seriously by the sanctions and the bombings in 1999.

Average salary is generally used as one of the important criteria for presenting the reality of the hardship. However, caution should be used against drawing conclusions solely on the basis of the average salary, as it excludes the unemployed as well as certain categories of employers (such as the army, the police, and small enterprises). It also does not account for the vast scale of the grey economy.

Map 2 - Concentrations of social cases in Serbia receiving WFP food assistance

This map [Prepared based on the information provided by WFP.] seeks to chart the regional distributions of vulnerable social cases, measured in terms of the actual recipients of food assistance. For this purpose, it shows the locations of 312,432 social cases in Serbia (excluding Kosovo) that are beneficiaries of food assistance by the World Food Programme, one of the major humanitarian actors assisting social cases in FRY. Most of these beneficiaries are vulnerable pensioners and other destitute persons - i.e., the categories of vulnerable people who are most likely not included in the official data on the average salary. Vulnerability is considered to be particularly high among social cases in urban areas living on fixed or no income [See "WFP/UNHCR Joint Food Assessment," July 1999.], which may explain the relatively high concentration of beneficiaries in urban areas.

Map 3 - Concentration percentage of Refugees & IDPs to the Population in Serbia

This map shows the regional concentration of refugees and internally displaced persons (IDPs), measured in terms of their percentage of the total population of a municipality. Vulnerable refugees and IDPs add an additional burden to the local economy and social systems. Therefore, municipalities with high concentrations of refugees and IDPs may be considered vulnerable, as their local support systems are likely to be over-stretched. They are located mainly in East Vojvodina (with high concentration of Croatian refugees) and in Central Serbia (with many IDPs from Kosovo).

3. OVERVIEW OF ECONOMIC TRENDS

3.1 Overall Trends in Year 1999

HRA 7 discussed the overall trend of the general economic decline in FRY over the past decade, particularly its sharp deterioration in 1999. The table below summarizes the overall 1999 figures for major economic indicators, shown both as the official figure and as estimates by independent experts.

Table: 1999 Economic Trends (% change between the average figures in 1998 and 1999)

• Caclulated as a % change between the average DEM/Dinar exchange rates in 1998 and 1999 (see HRA 7 for further explanations).
  
  Since its publication began in August 1999, HRAs tracked changes in the cost of living, measured in prices of a basket of essential consumer goods ("OCHA Shopping Basket"). The table below summarizes changes in its value over the past five-month period and shows a drop in the purchasing power of the average salary by 43% and 14% in the grey and state markets, respectively.

3.2 Monthly Economic Trends

Inflation: In December 1999, the officially measured inflation in FRY was +0.8 % (-0.7% in Serbia and +20% in Montenegro). This is the result of continued price control by the Serbian Government as well as the stable exchange rate (1DEM = 20 Dinars). Despite the low overall inflation, prices of agricultural products increased by 15 –20%, mostly due to the seasonal factor, resulting in an increase in the overall cost of living.

In January 2000, similar trends continued, though official data are not released yet. The strict price control over the past few months has taken its toll on the availability of milk and bread. The Serbian Government refused an appeal by producers for price increases. As a result, producers are opting to restrict the production of state price controlled types of milk (short life, 2.8% fat milk) and bread (regular 600 gr. loaf of bread), and, instead, offering different varieties that can be sold outside of the price control (e.g., higher-fat or long life milk and different-sized bread).

Average salary: The average salary in Serbia increased to 1,687 Dinars (84DEM/43USD) in December 1999, representing an increase of 7 % from the previous month. This increase, however, does not compare with the price increase of the basic shopping basket which recorded 7.7% and 10 % increases in the state controlled and grey markets, respectively (see the table below).