In this second part, we will share about businesses here and how foreign actors have helped and/or hindered their growth. Continuing Rowson’s fourth approach to social change, this post explores the opportunities and challenges behind the side-to-side approach, which emphasises economic networking between businesses, the EU and China (horizontal influence), as compared to top-down or bottom-up approaches.
We met Prof Zoran Đukanović, an Architecture Professor from the University of Belgrade. During his sharing about Serbia, he highlighted that Serbia is overly dependent on foreign companies for urban development. This is favourable for EU, China and Russia, but not necessarily for locals as these projects may not represent their needs. What results is a mismatch of interests between foreign companies and the populace, further aggravated by the government’s failure to recognise and reject these proposals, reallocating the citizen’s money elsewhere.
This is clearly evidenced by “Belgrade on the Water”, which saw local resources drained to EU, Chinese and Russian companies for a project doomed to fail since the planning stage. In an interview, Prof Zoran mentioned:
“These foreign companies unfortunately have a very great influence… and they care about their interest more than they do about the people. Sometimes, it is unhealthy.”
The onslaught of urban development projects in the name of foreign aid is also present in Bosnia, but to a lesser degree. This was illustrated when the Finance Minister talked about how UN and China are only interested in making money, and that he had to reject projects that Bosnia does not need.
On 29 May, we visited AS Group Holdings, Bosnia’s largest private holding company in the food and textile industry. Compared to state, populace and NGOs, businesses tend to be the most agile and practical respondents to any sort of external influence, with profit and market access at stake.
However, the company expressed their struggle to cope with the constant shifts and changes in EU regulations. The image above shows flour made in AS Group’s Klas Factory due for export, with the notable absence of EU states, for which permission has not been granted for..
With that said, the presence of a large export market in the West motivates the Group to attain the necessary certifications to meet EU’s criteria. The brand mineral water-brand “OAZA” had won multiple global awards and was even on “The White House” menu during George W. Bush’s presidency.
This “Bosnian wonder and pride” illustrates how businesses have the capacity and ability to adhere to international standards. In reality, firms may not be as ‘backward’, with products welcomed in many developed countries. The sheer number of certifications necessitated by EU might instead be the issue, and firms here have nimbly circumvent these challenges by exporting elsewhere, in search of an alternative market. A mismatch between the EU’s understanding of the region and its actual capacities may have been the real problem. With the EU blaming the lack of political will to enforce standards on the region, the question thus arises if the bloc is too nit-picky in integrating the region.
On our visit to the University of Zagreb, we experienced a sharing by Prof Hrvoje Džapo about career prospects there. He feels that the region should emphasise local start-ups and local-led businesses. Rather than being dependent on foreign businesses, the students at Zagreb have effectively tapped on the regional economic networks created with Croatia’s integration into the EU, an example being Croatia-leading the Board of European Students of Technology (BEST).
Similarly in the case of ARUP, despite it being an international consultancy firm for city design and development based in London, their team at Belgrade is made up entirely of Serbians. Mr Aleksandar Bajovic, Belgrade’s Office Leader, expressed his team’s dedication and pride in leading urban development projects for their homeland. This starkly contrasts with Prof Zoran’s pessimism about foreign companies’ mismatched interests with the region.
In the long run, ARUP and the university’s success illustrates how local-led firms with global expertise, strong reputation, deep technical understanding, and knowledge of local needs can benefit off foreign investment and development funding within the region, overcoming the aforementioned problems of mismatch of interests and dependency.
To conclude, external actors strongly determine the rules of the game for businesses intending to thrive and prosper. The side-to-side approach, although fraught with challenges, has so far been most effective in effecting social change. This is because the approach benefits from companies’ nimbleness towards EU trade embargoes (and tapping on rich regional networks). It also benefits from businesses being self-financed (state-independent), since governments have proven problematic in top-down and bottom-up approaches. Since a side-to-side approach has facilitated economic development, could this by extension then also be the region’s answer to reconciliation? We can only wait to find out.
References
Sarajevo Times. (2015, 23 February). New Water for Mineral Water "Oaza" in Berkeley Springs. Sarajevo Times. Retrieved from http://www.sarajevotimes.com/new-award-mineral-water-oaza-berkeley-springs/
Written by Tan Li Qi and Donovan Liew