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50 Years of Progress Erased by 7 Months of Civil War in Yugoslavia : Balkans: Lawlessness and poverty loom. Experts reckon the region will have lost half of its gross domestic product by the end of 1992.

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TIMES STAFF WRITER

In a symbolic farewell to an age of prosperity scuttled by civil war, black marketeers line up by the hundreds along Vojvoda Stepe Embankment to flag down hard-currency customers by waving thick wads of dinars.

The jobless money traders, victims of the Yugoslav conflict that has destroyed half a century of development, are standard-bearers in the Balkans’ collective march backward to poverty, lawlessness and crude barter.

Seven months of conflict has produced a tragic leveling of living standards in the remnants of Yugoslavia, a phenomenon that four decades of communism sought but never achieved. Croatian resort managers and Bosnian factory workers and Albanian peasants in Kosovo now live equally--from hand to mouth.

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“I have a wife and three children to support on a pension of 5,000 dinars a month,” bemoaned Muslim money trader Jemalia Abid, citing a figure worth about $35 in early February. “I worked for 32 years, and now I can’t even afford to buy bread.”

Western economists estimate that Yugoslavia lost 25% of its gross domestic product last year, and they predict that, even if the war were miraculously ended, at least another quarter will disappear in 1992.

Artillery battles have smashed centuries-old palaces in Adriatic resorts, ruining for years any hope of revived tourism. The fertile fields of eastern Croatia, which could not be harvested last fall, are matted with a decomposing tangle of corn stalks that will prevent planting this spring. At least two-thirds of the federation’s factories have cut production or had to shut down, prompting massive layoffs or reduced wages.

The Yugoslav peoples, once considered the most prosperous in Eastern Europe, have been uniformly beggared by the Serb-Croat war. Inflation is running at an annual rate of 12,500% in Serbia, Croatia and the southern republics. Basics like milk and cooking oil are hard to find at any price. Gasoline has been unobtainable by civilians in Bosnia-Herzegovina since summer, and is ever harder to come by even in Belgrade, the Serbian and federal capital.

“Each month of war represents about five years of economic decline, which means this region could quickly find itself confronted with 19th-Century living conditions,” said a Western economics attache in Belgrade. “Even if the war were to end tomorrow, there is no way to arrest a rapidly collapsing economy.”

Serbia, though physically unscathed by the fighting, has been spending as much as 90% of its resources on the federal army. Still desperate for cash to fuel the fighting machine, the Belgrade leadership has begun selling off army assets. Retired officers living in army-owned housing must choose between buying their high-priced quarters or moving out.

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There are few reliable statistics with which to gauge the war’s impact on the Serbian economy. But massive army mobilizations have drained tens of thousands of workers from republic industries. Severed transport and communications lines have prevented deliveries of manufacturing components and finished products, and power supplies have been repeatedly interrupted this winter because of fuel and electricity shortages.

Production at facilities like the giant Zastava auto works in Kragujevac has been halted at times for lack of components manufactured in other republics, and a huge inventory of unsold cars has built up because few distributors have the money to purchase them.

Food supplies have been relatively stable in Serbia, although prices have soared beyond many families’ means. Discontent over inflation recently prompted the Belgrade government to freeze prices for milk, meat, cooking oil and sugar, promising imminent shortages of those goods, as suppliers will not be able to cover costs with the state-set prices.

Serbian-occupied territory in Croatia has been dependent on Belgrade for months. The capital can finance food and some fuel deliveries to those areas only by printing new dinars, spinning inflation ever further out of control.

The economic toll is most evident in the Croatian war zones. Relentless shelling last summer and fall reduced Baroque town centers and spacious brick houses to rubble, and looters have cleaned out every coat, shoe and video player from the shattered stores that once rivaled those in West European suburbs.

Many of the 700,000 refugees forced from their homes in the war zones are Croats who have crowded in with relatives in cities such as Zagreb and Rijeka, imposing a burden on nearly every household. Inflation is as high as in Serbia, and shortages are more prevalent.

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Croatia’s Adriatic resorts are still under the republic’s control. But air and infantry attacks have flattened hotels, defaced ancient monuments and torched some of the most beautiful forests and shrubbery along the coast. Croatian Information Minister Branko Salaj has estimated material damage to the republic at nearly $20 billion.

The bite is especially painful in Bosnia-Herzegovina, the multiethnic republic literally caught in the middle. A Serbian blockade of Adriatic ports has choked off all trade goods imported by ship, and rival roadblocks and boycotts imposed by the combatants prevent most trucks and trains from delivering food, fuel and vital manufacturing parts.

Tens of thousands of federal soldiers are stationed in Bosnia-Herzegovina, concentrated along the border with Croatia. They are ostensibly there to deter ethnic conflicts, but many fear that Belgrade and Zagreb want to economically isolate the republic so they can divide the territory between them.

The federal newspaper Borba reported recently that the average monthly salary was about 11,600 dinars in Serbia and only 7,600 dinars in Bosnia-Herzegovina, roughly $77 and $51 respectively. With prices now similar to those in Western countries--a quart of milk costs about 75 cents and meat is upward of $2 a pound--families can rarely afford more than bread.

“We have had to give up just about everything except eating, and we don’t eat so well,” said Bahta Turkovic, a 27-year-old clerk selling rice and beans at a Sarajevo grocery. “We used to go out some nights. I could buy new clothes every so often. But now we pay our regular bills each month and then there is nothing left.”

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