Yugoslav austerity puts self-management to a severe test
Skopje, Yugoslavia — Milan Dzajkovski has been at the helm of Alumina Company of Skopje, in the Yugoslav republic of Macedonia, for 12 years. In that time, he has expanded the company from one ''basic organization,'' a production unit that treated raw aluminum, to eight different basic organizations that produce everything from irrigation pipes and greenhouses to door frames and curtain rods.
Under Yugoslavia's unique self-management system, he came up for re-election as general manager every few years, and the workers of Alumina Company always voted for him.
Now, the Yugoslav government is telling Mr. Dzajkovski and other company managers like him that they will have to work harder with less. Under Yugoslavia's new policy of economic austerity, companies have come under more and more pressure to increase their exports, particularly to hard-currency customers, to help pay off the country's huge external debt and reduce Yugoslavia's hard-currency trade deficit, now valued at $3 billion.
At the same time, they are being asked to cut their imports, and are facing stiffer terms for credit at local banks.
The new rulings, issued in October, have sent many company managers scrambling to fulfill their increased production targets.
Mr. Dzajkovski described some of the adjustments his company has had to make. ''In the past,'' he said, ''it was easier to sell in the country than to export. Everyone wanted to import cheaply.''
The new rulings require firms to justify their imports and to show that the value of the finished goods to be exported is at least double the cost of the imported component. The federal secretariat for foreign trade in the nation's capital, Belgrade, must approve each request to import. Written guarantees must be given that the finished products will be exported within a set time limit. Credit to buy raw-material supplies is sometimes difficult to come by, and local banks are not as willing now as they used to be to cover cost overruns.
''Now,'' Mr. Dzajkovski said, ''we are looking for import substitutes inside Yugoslavia. Our engineers are making combinations on how to get what we need from domestic suppliers. Once it's hard, you start thinking.'' He admitted that new, complicated credit-application procedures sometimes cause delays in supplies of raw materials.
Another problem Yugoslav firms have to cope with now is reduced energy allotments. As with imports, enterprises have priority over private consumers, but they are being asked to cut down all the same. Macedonia, one of Yugoslavia's less-developed southern republics, is one of the regions hit hardest by the country's energy shortage. Skopje has a timetable for frequent, rotating power cuts; like the rest of the country, it rations gas.
''The authorities looked at our 1982 (fuel) consumption and said, 'you will get 10 percent less in 1983,' '' Mr. Dzajkovski said. ''It's the same for everyone. But we can save more because we plan better.''
By changing the company's production strategy, he said, Alumina Company was able to save on some energy-intensive processing activities.
With all these preoccupations and added hardships, it is surprising to hear Mr. Dzajkovski report that the company's turnover in 1982 will be 41 percent higher than in 1981 and he is hoping to export 50 percent more on hard-currency markets in 1983 than in 1982.
''We worked for several years to position ourselves for export to the Middle East,'' he said. ''Now it's paying off.'' He cited a list of orders for major projects in Kuwait, Jordan, and Iraq.
Alumina Company is also increasing its exports to the Soviet Union. ''It's a good market; they need a lot,'' Mr. Dzajkovski said.
Alumina Company imports some of its raw materials from the USSR, settling its accounts through clearing arrangements that do not require using up valuable hard-currency reserves.
Mr. Dzajkovski said he expected Yugoslavia's 20 percent devaluation of the dinar in October to help boost exports. Since domestic prices have been frozen until at least mid-1983, he said he did not expect the added cost of inputs to be much of a factor.
Critics have charged that the system's inefficiencies have helped cause Yugoslavia's current deep indebtedness. A longtime member of Macedonia's League of Communists, Mr. Dzajkovski defended Yugoslavia's self-management system:
''Everyone on the outside says we run into troubles because of the self-management system. But that's not true. We believe in the system. All countries are saying that they're rescheduling their loans. We're the only ones who say we'll repay on time. Find anyone in Europe who is saying that.''