Global Economics

The Balkans' Journey of Transformation


More than just moving from communism to democracy, Western Balkan countries are beginning to embrace new values and responsibilities

Western Balkan countries are only just embarking on a journey to transformation, a process that must affect all walks of life, not least some stubborn old attitudes.

The process of transition from communism to democracy in southeastern Europe has reached the point at which the countries of the region are embarking on a much longer journey: the transformation process. While the transition so far has included dismantling of communist political structures and getting rid of one-party authoritarian rule, transformation is going to be much more complex. It involves state-building and good governance based on the rule of law, human rights, and civil liberties; a free-market economy; pluralistic democracy; and above all, socio-cultural changes and acceptance of new values and responsibilities across the board.

The lesson the international community and democratic governments are still to learn is that the holistic approach to reconstruction and development is the only way to guarantee stability and peace in the region. The holistic approach simply means realizing that civil liberties, safety and security, an independent judiciary, and good governance go hand in hand with market economies and private and entrepreneurial initiative, eventually creating conditions for a good society. Efforts and measures aimed at improving these policy areas should not be given priority over one another. Wherever the international community or local authorities have tried a sector-driven approach in transitional countries, it failed or slowed down the process of transformation. All these areas have to be addressed and confronted simultaneously from day one, in particular when dealing with communities struggling with post-war reconstruction as well.

TRANSFORMATION CHALLENGES

Karl Deutsch wrote in 1971 that the main task of law is to make life more predictable. And Deutsch was not a lawyer. I interpret this laconic statement as one of the crucial signposts for countries that are struggling with their own transformations. Namely, legal regulation, in general, aims at facilitating the functioning of social relations and at stimulating their development in a definite direction. In any society people need a clear perspective in order to function and show their abilities and creativity. In times of major political changes and socio-economic transformation this is even more true. In other words, legal reform is just one of many elements in the holistic approach to transforming Balkan countries into stable democracies with trustworthy and credible institutions.

At the same time, there is a stubborn socio-cultural background, based upon the legacy of the previous way of life and work culture, which is still very much reflected in the social and business mentality in the region. Evoking the "good old times" has become a convenient defense mechanism for people who still dwell on the predictability of the way of life in the second half of the last century, when they could safely follow the same social patterns for generations. That nostalgia has lost its ideological label (communism or socialism) but still serves as a reference in evaluating current democratic processes and economic transformations. More importantly, it has become a collective paralysis for some communities. They refuse to trust the transition process and have no courage to face reality and take the initiative however small it might be.

The system which produced this type of "stable stagnation" and encouraged mediocrity was encapsulated in a few popular jokes. People used to say in defiance: "We pretend to work and the state pretends to pay us," or "You cannot pay me as little as I can work." There is a long way ahead of us, and many invisible bridges will have to be built in order to transcend that legacy and transform that mentality into a mode of individual responsibility, competition, and entrepreneurship.

Promoting the concept of good governance and good society should be a crucial agenda item for the Balkan countries. The international community's help and support have been enormous and in many cases progress was made. Nevertheless, there is a risk that new or reformed government institutions (public authorities, tax agencies, state ministries in Bosnia and Herzegovina, reformed police, human-rights ombudsmen, etc.) might remain empty shells if not empowered by appropriate capacity that includes an army of skilled civil servants, public accountability mechanisms, and a system of checks and balances.

It is a notorious fact that the countries of the Western Balkans are part of Europe, and their strategies of transformation are focused on having a place in an integrated Europe. Yet, the process of embracing European standards in the Western Balkans is often reduced to the spheres of politics and the economy in their narrow sense. Few people realize that European standards, as a set of democratic and civic values, are equally crucial for the functioning of education system, health and social care, utility services, environmental protection, etc. In other words, the transformation of the region should involve all walks of life, including civil society.

The civil-society community is essential in promoting cultural change and providing a favorable atmosphere for addressing environmental issues, corruption, and inadequate public services. When developed, it can be very effective in cultivating public opinion and raising the awareness of good work practices and accountability of public-service providers, as in the recent case of corruption in a hospital in Croatia, or a few cases of bribery involving Bosnian judges.

PUBLIC DIALOGUE NEEDED

Another problem, quite common for countries of the Western Balkans, is the lack of public dialogue in politics. Politicians do communicate among themselves but, as a rule, they do it via individual press conferences and interviews in the media. They almost never share a panel and engage in an informed and constructive dialogue aimed at helping the general public understand current issues and future options. Failure to initiate and maintain public debate on key issues has resulted in the lack of clear vision for many societies in the region, consequently stifling their ability to set meaningful strategies for reform and sustainable progress.

Nor has the international community been good at learning lessons. For too many years foreign experts were parachuted into the Balkans without enough serious prep-work on the background of political processes and socio-economic complexities. Most of them never found a way to communicate effectively with their local interlocutors. As a result, foreign experts tend to surround themselves with arrogance and bureaucratic walls. The risk of the international community alienating itself from the country it came to support in its transition process has been all too real and in some cases mutual hostility was the result.

There is something seriously wrong with the international community's institutions on the ground. The main problem seems to be lack of continuity and long-term planning. It is understandable that the flow of officials and experts is very intensive, but often newly appointed officials seem insufficiently briefed by their predecessors and want to do things from scratch and in "my own way." This sends a confusing message to national officials, to say the least, who in turn try to build personal relationships with their international colleagues, instead of cultivating a businesslike institutional cooperation.

The international community - including governments, international organizations, non-governmental organizations, development and aid projects, etc. - is facing the challenge of transforming itself in accordance with the requirements of different countries' transformation processes. The international community now needs to switch from lecturing and dictating to a mode of engaging with local communities and sharing with domestic authorities the risks involved with reforms and projects initiated on that road. This may facilitate the "ownership transition" and make the withdrawal of the international community less painful. Given the level of dependency syndrome created in Bosnia and Kosovo so far, it is high time that such a change in attitude take place.

BOSNIA'S DOUBLE TRANSITION

Countries in transition are often thrown together as a package of states defined by a number of common features. This may be so if the analysis is restricted to recent economic and political indicators. But if socio-cultural and historical charateristics are taken into account as well, then the opening sentence of Anna Karenina may apply to Bosnia: "All happy families are alike, but an unhappy family is unhappy after its own fashion."

What makes Bosnia different and unhappy? The country has a unique burden of traveling along two parallel roads in order to reach the end of its transition and achieve stability and functionality; it is transition, times two! One is the task of overcoming the gap between one-party authoritarian rule and parliamentary democracy and the open market. This road is very slow and bumpy, and exhausting enough even for countries that did not experience war or serious ethnic conflict. The other path, that of postwar reconstruction, is extremely demanding economically, but also painful and emotionally charged and will torment Bosnian society for generations to come.

Emerging from the war after the Dayton Agreement of late 1995, Bosnia presented many challenges for an international community ill-prepared to deal with this double-act of transition requirements. Much precious time, effort, and resources was wasted in the years after Dayton in trying to achieve a political settlement. The totally dysfunctional tripartite presidency and the futile rotating chairmanship of the Council of Ministers were the main focus of the international community's efforts, while crucial areas of the reconstruction process were neglected, including reviving the economy and creating jobs, reforming the judiciary and public administration, and establishing the rule of law.

This brings us back to the point: the holistic approach. In the case of Bosnia it would have meant, back in 1996, setting a clear time frame for the international administration's involvement, consistent reconstruction and development projects supported by a united international community, plus a workable political settlement. Instead, the international community rushed towards organizing the first "free and fair" elections less than a year after the war. The election project stalled the process of reforms for at least a couple of years because this very democratic measure, backed by no rule of law to speak of, simply allowed criminals to legitimize themselves by being elected to office all over the country. What this lead to in September 1996 was not the launching of a democratic future for Bosnia, but allowing criminals and war profiteers to highjack the institutions of the state.

More than 10 years later, Bosnia and Herzegovina is still struggling to make itself a more effective, functional state, and to shape its identity. It has progressed dramatically in terms of economic and social viability. But it is still paralyzed in many sectors by corruption and incompetence. It has built a state-level institutional structure to a degree never anticipated by the Dayton Agreement. But it is still a hostage to the lack of political will to release the grip of the two sub-state entities and the prerogatives they still enjoy in some crucial areas, like the judiciary and law enforcement. Its efforts to form an identity are still hampered by the divided loyalties of Bosnian Serbs and Croats, and by Bosniaks' stubborn demands to bring back an idealized "civic Bosnia" that existed until the end of the 1980s.

But there may be a way out of this impasse in an overarching European identity of Bosnia and Herzegovina that would embrace all peoples and individuals alike, without interfering with their respective ethnic or group interests. In order to be able to consider this prospect the country needs a broader framework to enable people to see the future beyond the Sarajevo-Belgrade-Zagreb triangle that has been squeezing them for the last 15 years. Europe indeed stands today as a beacon for all and everyone in Bosnia and Herzegovina, regardless of age, ethnic or religious background, political affiliation or profession.

It appears that while international expertise on state-building is well established, there is still uncertainty on how to transfer know-how on building strong institutions to developing countries. They can tap into accumulated knowledge on how to transfer resources across international borders and administer weak states, but well-functioning public institutions require a diversified approach that takes into account certain habits and traditions of governance, as well as the political and legal heritage of each society.

Whereas the Western prescription in the 1980s and 1990s had generally been to "roll back" the state, the experience of countries in transition shows that a strong state is essential to the success of the liberal-democratic project in the developing world, as Francis Fukuyama notes in his State Building: Governance and World Order in the 21st Century. In spite of the liberalization process and impressive growth of the nongovernmental sector in the past 15 or 16 years in Central and southeast Europe, in the final analysis only the state can deliver security and a range of public services from health care to education and be held responsible for the collapse of law and order.


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