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A Scandinavia-like Balkans? Why Not?

The Western Balkan region is still much more often associated with times of turmoil than periods of progress and economic growth, but if the countries of the region were clearly oriented towards one another, it could ultimately lead to the kind of cooperation enjoyed by Scandinavian countries

If you were to enter into Google the words ‘Croatia, Serbia, Bosnia & Herzegovina and war’, this American creation and global tool for searching the internet would provide 1,040,000 hits in 0.46 seconds. However, if you repeat the search but replace the word ‘war’ with ‘progress’, Google is only able to offer 505,000 options in half a second.

Considering the constant instability across the territory of the former Yugoslavia, where various peoples, cultures and religions encounter each other and the interests of the great powers, the headline of this article might seem like the premise of a film from the fantasy genre. The political reality of the Western Balkans gives the unfortunate impression that all microphones and megaphones in the region are exclusively in the hands of nationalists, radicals, criminals and arms dealers. It seems as though there’s no place for optimists and rational folk who believe that nothing is impossible and that change doesn’t always mean change for the worse.

Nowhere in the West does the average Slovenian businessman feel so at home and desired as he does on the markets of the former Yugoslavia

But some of us are nonetheless like that. I have been dealing with journalism for almost 30 years and have spent most of my career as a journalist monitoring the economy and events in Balkan countries. If you’d told me or any of my colleagues in Slovenia in the mid-1990s that Croatian or Serbian companies would become important players as owners of significant Slovenian companies in many sectors of the economy in less than three decades, you would only have received pity-filled smiles. A destitute person who has no contact whatsoever with the economic and political reality of Slovenia and other less developed countries of the region would have been considered back then of being an impudent prognosticator. Our smile would probably closely resemble the kind of belittling smile evoked by the notion of the Balkan Peninsula one day becoming a region resembling Scandinavia.

The lands known today as the Western Balkans have always been viewed by Slovenia as its own backyard; as the epicentre of the country’s interests. The great importance of the markets of the former Yugoslavia to Slovenia became clear to even the worst sceptics after 1991, following Slovenia’s gaining of independence and in the subsequent period of the bloody wars in Croatia, Bosnia-Herzegovina and a Serbia that was blocked by sanctions. It was during that time that the Slovenian economy was compelled to suddenly shift, practically overnight, and reorient its production and trade flows towards Western markets. That was no mean feat, but the Slovenian economy, which is based on small and medium-sized family firms, nevertheless succeeded, and thus today the vast majority of its exports end up on Western markets, in the countries of the European Union.

And yet, nowhere in the West does the average Slovenian businessman feel so at home and desired as he does on the markets of the former common country. Despite having gone through a generational shift and the fact that the “Made in Slovenia” label means nothing more to younger consumers than the “Made in Turkey” one, older generations of consumers still remember Iskra, Gorenje, Elan, Fructal and other Slovenian brands as being synonymous with reliability and quality. In fairness, following the privatisation process and numerous business transformations that inevitably followed changes to the demands of the market and consumers, the aforementioned brands have very little to do with Slovenia, but the knowledge and skills of the numerous people who spent years building and developing the Slovenian economy have not disappeared. They are still there, working, forging careers, developing new products, defending their positions on old markets and conquering new ones. EU membership and the euro are important trump cards for Slovenia, which – with just two million inhabitants – is a relatively small market. Slovenia’s market is the entire EU, but also the Western Balkans. That was previously also the case and will continue to be in the future. That’s why it is in Slovenia’s vital national interests that the region remains stable and continues to develop, and that it is made as easy as possible to cross borders in the future, for goods not to spend inordinate periods stuck at borders, and for the recognition of professional qualifications and university degrees to be facilitated.

Small markets like Slovenia’s can’t handle shocks like the closing of borders, which is why Slovenian entrepreneurs so warmly welcomed Serbian President Aleksandar Vučić’s Open Balkan initiative

Given that the value of exports totals almost 90 per cent of Slovenia’s GDP, the country is very vulnerable to any heightened disruptions to cross-border trade, as occurred during the Covid-19 pandemic. It is extremely difficult for a small market like Slovenia’s to absorb such shocks simply by doing business on the domestic market. This is probably also one of the main reasons that numerous Slovenian entrepreneurs so warmly welcomed Serbian President Aleksandar Vučić’s initiative regarding the so-called Mini- Schengen zone, later dubbed the Open Balkan initiative. In one public appearance, Blaž Brodnjak, CEO of the NLB Group, representing Slovenia’s largest bank and the third largest in Serbia, illustrated the need for the Balkan markets to unify by noting that the combined total of the GDPs of all former Yugoslav republics barely exceeds – by just a few billion euros – the annual GDP of Hungary, which isn’t a large economy from the European perspective. “In Slovenia we produce everything that our market needs in two weeks. And what should we do for the rest of the year? I believe strongly in building regional markets and linking them based on the Scandinavian model. We don’t need any new Yugoslavia; we need the free movement of people and capital across that territory,” said Brodnjak during one public appearance in Serbia.

The world is changing too rapidly for Brodnjak and other dynamic businesspeople to spend eternity waiting for rigid state administrations to change to ease their operations. However, that doesn’t mean that there’s no room for success and progress in the region that we share. There is! And Scandinavia is closer to the Balkans than we would have dared to dream until recently.

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