Assessing the risks of a Balkan meltdown

By bne IntelliNews February 14, 2014

Harriet Salem in Belgrade -

On the weekend of February 8 in Bosnia-Herzegovina, plumes of black smoke billowed across Sarajevo's skyline as anti-government protesters took to the streets in their thousands, setting administrative buildings and police cars ablaze. The anger on the faces of hooded youths hurling rocks was palpable. Women with tear-soaked faces begged riot police to abandon their helmets and join the protesters' side.

The scenes, in a country lying on the periphery of EU, were shocking but apparently predictable; in November, metadata released by the Economist Intelligence Unit (EIU) listed the Balkans and Southern Europe, alongside the Middle East and North Africa, as amongst the regions most likely to see social unrest in 2014. Bosnia raised the biggest red flag with a rating of "very high risk", whilst EU newbie Croatia received a "high risk" rating. Serbia, which opened its EU accession talks on January 21, was ranked "medium risk".

Bosnians certainly have much to feel enraged about. Since the Balkan wars ravaged the country in the 1990s, this divided state - split into two ethnically defined entities of the Bosnian Serbian Republic (Republika Sprksa) and the largely Muslim and Croat Bosnian Federation as part of the peace deal - has struggled to find a way forward. Unemployment in Bosnia is variously estimated at between 25% and 45%, with the proportion of young jobless generally regarded as being over 50%. The average monthly net wage is just 828KM (€423), according to the most recent official figures, with the minimum wage less than half that.

The country's financial woes alone, however, do not entirely explain the outbursts. "Economic distress is almost a necessary condition for serious social or political instability, but it is not a sufficient one... Trouble is [often] accompanied by other elements of vulnerability," Laza Kekic, regional director for Europe at the EIU, tells bne. Such factors include: wide income-inequality, poor government, low levels of social provision, ethnic tensions and a history of unrest. But, of particular importance in sparking unrest in recent times, says Kekic, is "an erosion of trust in governments and institutions: a crisis of democracy".

Certainly all the above variables, particularly the latter, are present in Bosnia, where a political system divided along ethnic lines is exploited by an elite who use every available opportunity to line their pockets though nefarious means. They are also, however, to varying degrees, characteristic of all the countries in the region. "The Balkans score poorly on most factors associated with the risk of social unrest," Kekic says.

Where next?

But let's not jump the proverbial gun; using metadata to foretell protests, and other social phenomenon, is still in its exploratory phase. Analyses of 2007 predictions by the EIU show a 66-70% accuracy rate - not bad, but certainly not foolproof either.

According to critics, the formulations used for the calculations are insufficiently nuanced to make sense of local political peculiarities and history. "I would be rather hesitant to agree with EIU's [very high risk] estimates on Croatia, where the macroeconomic situation is improving," says Luka Oreskovic, a researcher in Southeast Europe at Harvard. "In my opinion, which comes from my background as a political economy researcher, elections and change tend to be the biggest trigger of unrest."

In comparison to many of its neighbours, Croatia, which last July celebrated its entry into the EU, has enjoyed a prolonged period of relative political stability. The Western Balkan country has not had a premature trip to the polls or an unexpected break of a coalition government for over a decade.

But under, as well as overestimations of social unrest may also be in play. "The government in Slovenia [rated "medium risk"] is unlikely to outlast the fall," reckons Oreskovic. And as the 2012-13 Maribor protests have shown, the "populace has a tendency to bring its general discontent to the streets," Oreskovicsays, adding that this suggests "there is more risk for social unrest here than in Croatia."

Serbia (rated "medium risk") may also be in for a rougher ride than the EIU data anticipates. In January the country's government announced early elections, scheduled for March 16. The last trip to the polls was only 18 months ago, and while the snap vote is ostensibly aimed at securing a popular mandate to implement a much-needed programme of tough economic reform, in practice it also reflects the growing power struggles in Serbia's fragile governing coalition; particularly Deputy PM Aleksandar Vucic's desire to oust PM Ivica Dacic and his Socialist Party from power.

With election campaigns already well underway, Serbian politicians will certainly be looking anxiously over their shoulders for any signs of spillover from next-door. "Belgrade is clearly concerned about these developments and would certainly be far happier if all this was not happening," says James Ker-Lindsay, a senior research fellow focusing on Southeast Europe at the London School of Economics.

Whilst the incumbent Serbian administration has reduced its meddling in Bosnia's affairs of late, they "could well be sucked into the situation politically if events get out of hand, or if the Bosnian Serb leadership does something that then has to be managed," adds Ker-Lindsay. "And if this were to happen it would create an unwelcome new complication just at the time when Serbia is trying to press ahead with EU accession."

Plenums not plumes

Yet there is a glimmer of good news amidst the gloom. In Bosnia, workers' plenums have quickly replaced the smoke plumes. The abandonment of violent protest in favour of voicing long-hushed political demands in assembly halls may not seem so revolutionary, but it is a crucial development for the region. Civil society in all the former Yugoslav countries was badly fractured as a result of decades under socialism and the brutal wars of the 1990s, and has been slow to recover. "People are afraid of each other [in Bosnia]," says Jasmin Mujanovic, a Balkans research at York University. "So even though nearly everyone has agreed for a long time that the political establishment as a whole is hopelessly corrupt and profits from stove-piping conflict, when it comes time to actually organize a response to this it has previously been timid."

In this context, if 2014 does deliver social unrest, in certain situations it may not be all bad. A reawakened political conscious would certainly be positive indication of a revitalised and maturing civil society finally remerging, after nearly two decades of silence, to provide a much-needed check on power.

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