How to survive an economic collapse: Wartime Yugoslavia.

In revisiting, the past one can learn many lessons from history. In an extreme situation, the best and worst of humankind will flourish. This is an interview with a survivor of one of the wars in Yugoslavia. The interview focuses on the financial hardships that the people suffered.

How did you experience the war in your city?

In 2001, the weather is getting warmer and warmer in our city. The temperature is 34 – 35 Celsius; everything seems like a usual fine day in the city until you get to the police and army checkpoints. The conflict between the government forces and the Albanian gunmen had been raging for a couple of months.

The situation is getting worse every single day. For a start martial law has been declared, meaning every single person without official permission from the authorities finding itself on the street after 23:00 is violating the martial law and will be punished.

The battle between the opposing forces is being done a couple of kilometres from the city centre… gunshots, artillery shelling, constantly bombardment from the air force including helicopters. 

What were the first significant events that made people aware that life was no longer normal?

As retaliation to the bombardment and shelling made by the army units, the resistance closed the water supply leaving more than 160 000 people without water, and that means not just drinking but even for hygienically needs.  There was chaos for the residents of the entire city and its surroundings.

The medical service in our city, its Surgery Department, Obstetric and Gynaecological Department, Laboratory, and the Centre for Dialysis had to be closed, meaning no health care could be provided in the city.   

This was somehow resolved by solidarity shown from compatriots from other cities who organized and accepted all the ill persons from the city and provided medical health care to the one who needed it urgently.

How did the situation develop after the water supply was closed off?

It was hard … no water for drinking, no water to have a proper shower or any other hygienic needs. Diseases started to appear… epidemics of typhoid, dysentery and other infectious diseases started to spread.

Every day people would get to local checkpoints where mobile platforms filled with water were set up so at least local people can fill two bottles with drinking water. Imagine what kind of horror this was for the people… even though you are thirsty you should wait for the next day since the mobile platform at the evening is gone away to refill itself and you cannot find water anywhere. 

What kind of business existed during wartime?

  • Loan Sharking
  • Smuggling
  • Selling clean Water
  • Medical Services

On the other side, there were persons making a profit from this situation in the city. Smuggling became an economy branch in the city and smugglers became some of the most powerful persons as well. They could have smuggled whatever you needed and for them, and they could jump over any obstacle to get you what you needed. The smugglers had a network of carriers who risked their lives crossing enemy lines with goods.

One kilogram of coffee would cost 20 Euros while 1 kg of flour would go even higher. The price for water for abnormally insanely high… 20 Euros for 1 litre of water. There where medical professionals who had no option but to charge people for their services and medicine. There was not enough medicine to go around and all medicine especially antibiotics where very expensive. The doctors had to buy it from the smugglers. The medics had to survive to and they charged people so they could buy food for their own family.

Income was also affected, due to the hard situation many workers didn’t receive a salary and with the prices kept going up since the smugglers controlled the market lots of persons got into financial problems.

There was a network of loan sharks connected to the smugglers who made loans to people. People who did not have the money to buy food and water. When smugglers could not sell their goods they connected their client to the loan shark. The loan shark would give the money, but since these poor people could not pay their loans back they had to work for the loan sharks … and the smugglers. The interest rates were so high, that it was impossible for those who borrowed the money to ever escape their debts.

They work they made the debtors do was on the front lines, digging foxholes, trenches or any other kind of physical labour. Carrying goods for the smugglers on the front lines was very dangerous.

Further thoughts 

It is impossible to imagine what these people went through, many of them lived a life similar to the those we experience today in the modern west. They had good jobs, happy families and kids who every day went to school. In this situation, financial independence was not a luxury but a necessity. Being financially prepared by holding foreign currency and having assets invested around the world, would have increased the chances of surviving. Such assets would make it easier to rebuild one’s life when the war was over.

We thank the interviewee for the interview and we respect his right to remain anonymous. In addition, the person wanted to specify neither the time period of these events nor the location.

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Author: Jim Reynolds
Jim Reynolds. Is passionate about finance, passive income and cryptocurrencies. He writes about his passions on He has worked in the tech and financial industry for a few decades. He holds a masters in business admin and a bachelors in IT. All his writings are not investment advice.

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