yugoslavias implosion

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of Milošević, his cronies, and the Secret Service and their efforts to
redistribute the country’s wealth were major factors in the Balkan
wars. (The scale of the corruption can be gauged from the fact that
at the time of the break-up of Yugoslavia, the state foreign exchange
reserves amounted to nearly $10 billion. By the end of 1997, these
reserves, kept at the central bank in Belgrade, had dwindled to $300
million. Most of the money ended up in Yugoslav banks in Cyprus as
part of a global money laundering scheme.) 499
The legacy of war profiteering continues to hinder postwar
reconstruction in the region. 500 The new financial elite that came to
power after Milošević, including some of Milošević’s close friends,
has persistently obstructed a fundamental transformation of the Serbian
economy. Its opposition to institutional changes and legislation
sustains a lucrative “grey economy.” The wars gave an enormous
boost to illegal practices such as trafficking in narcotics, humans,
arms, untaxed goods (cigarettes and alcohol), and migrant labor.
And the businessmen who grew rich in illegal trading during the
1990s continue to wield great power. In the 2000s, crime has shifted
from the domain of war to the domain of politics—and is the number-one
problem of postwar reconstruction.
499 Part of the money remained in Cyprus to finance Belgrade companies, various
businesses connected with Milošević, and secret financial and intelligence operations .
The rest was apparently successfully laundered and transferred to lawful accounts
in banks in western Europe, the Middle East, and eastern Asia . Borka Vučić, one of
Yugoslavia’s foremost bankers and expert in large financial transactions, was the
mastermind managing Milošević’s illegal banking empire in Cyprus . Born in 1927,
she became a top Yugoslav financial expert in the 1960s and was Milošević’s personal
banker . Milošević vs Yugoslavia, (Expert Report by Morten Torkildsen) ed . Sonja Biserko,
Helsinki Committee for Human Rights in Serbia, Belgrade 2003, p . 214 – 260 .
500 See, for instance, a special issue of Problems of Post-Communism on
transnational crime and conflict in the Balkans, especially Peter Andreas,
“Criminalized Legacies of War: The Clandestine Political Economy of the Western
Balkans,” Problems of Post-Communism 51, no .3 (May-June 2004): 39 .