Abstract
IN THE 1970S A NEW INTEGRATED flat-product iron and steel enterprise, Metallurgical Kombinat Smederevo (MKS), began to take shape on the flat-lands south-east of the town of Smederevo in Serbia. Conceived on an ambitious scale, the new steelworks, together with older facilities in the town, grew to employ (at its 1987 peak) 11 153 workers. However, it ran huge financial deficits as soon as it started producing, its productivity was abysmal, and its expansion plans saddled the Republic of Serbia (as guarantor) with unmanageable foreign debts. This study enquires why MKS, 'the sick man of the Danube', under-performed. It also explains why, despite its inefficiency, MKS became a leading export enterprise in the 1980s, and examines the implications of this. How did Yugoslavia, and in particular Serbia, bear so great a burden, and why was MKS ring-fenced from painful rationalisation? Some causes of its difficulties lay outside the control of the enterprise, and led to deep irrationality in resource allocation, but others could ultimately be traced to deep-rooted mismanagement within it. In taking this single enterprise for study I aimed to explore the sources of decay which slowly undermined the economic system of socialist Yugoslavia. My research on Yugoslav enterprise history convinced me that macroeconomic performance was fundamentally conditioned by enterprise difficulties and strategies, and that only by studying how enterprises worked in practice (rather than in theory) can we make sense of what happened to the economy as a whole. The experience of MKS parallels that of Yugoslavia's industrial economy: it started small and inefficient, but it expanded rapidly and productivity gradually improved. From the later 1960s plans became ever more ambitious, but the price paid for
Published Version
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call