bosnia report
New Series No:32-34 December - July 2003
Selling arms to Saddam
by Dejan Anastasijevic

It suddenly emerged in November 2002 that a number of Serbian and Bosnian Serb enterprises were doing business with Saddam Hussein - selling him military equipment, including explosives and rocket fuel. The whole affair started with the discovery of the arms-selling activity of the firm Orao in Bijeljina, part of Bosnia that is run by Republika Srpska. The firms involved on both the RS and Serbian sides were nominally private, but were in fact run by members of the two governments. The fulcrum of the whole operation was the firm Jugoimport, which in the former Yugoslavia was entrusted with the arms trade. This time the deliveries were part of a secret deal worth over $100 million agreed between Slobodan Milošević and Saddam Hussein signed in 1999, but which continued into late 2002.

A Lucrative Business

When the scandal broke out the Serbian government set up a special investigating commission, with nil results. The Jugoimport manager Jovan Čeković, however, was retired and the firm's office in Baghdad closed down. The US State Department, after an initial protest, decided to drop the whole thing. The reason for this is that Serbia had handed over the books which told in detail the contribution Serbia had made to Saddam's defences.1 They included information from the 1980s, when Yugoslav army and state-run firms under the cover of Jugoimport sold goods and services to Iraq worth at its height $1.7 billion. According to a former Yugoslav ambassador who served in the region, 'Saddam was buying everything he could think of: military bases, shelters, airports, de-salinization plants, electric power distributors and dams. Our firms have built, among other things, the port of Umm Qasr and the Baath party headquarters in Baghdad.'

Valuable Information

The plans for this infrastructure, including the thickness of the walls and quality of cement, were handed over to the USA, which found them useful in the preparation and conduct of the war. Serbia was promised, in return, to be included in the business of reconstruction of Iraq. A government-led consortium has already been set up involving at this stage twenty-five firms, but it is expected that their number will grow. There are rumours that the US firm Bechtel, which will distribute many of the concessions, has earmarked tens or even hundreds of millions of dollars for Serbia. Serbia has apparently also been rewarded by US military aid, above all in communications. The US government has also lifted the trade embargo imposed on Serbia in 1992.

Serbia's Reward

The outcome is that Serbia was able to contribute to the US invasion of Iraq without evoking a rebuke from France and Germany, unlike the countries of the 'New Europe' (including Croatia) whose far more marginal support moved Chirac to deliver them a sharp warning. No wonder that the Serbian government is right now very pleased with itself. The long-standing friendship and trade between Belgrade and Saddam's Iraq survived both Tito and Milošević and continued to flourish during the years of Koštunica's presidency. Belgrade, however, has managed to both drop an old friend at a point when he clearly was finished and win another, far more powerful one, instead. Clever Serbia. But where has all that money gone?

Translated from a longer text published in Vreme (Belgrade), 22 May 2003


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