23 December 2014

Bosnian_social_protests_Tuzla

The Government Building of Tuzla Canton burning, 7 February 2014.
Photo: Wikimedia Commons/Juniki San 

Recent years have seen many small and peaceful protests. The violent protest in Bosnia which made international headlines earlier this year in February was an exception, not the rule.

The impression that Bosnian society is passive and Bosnians are indifferent to what is happening around them is wrong. Take a look at the list below. It is only some information on protests ESI has collected for the last three weeks – 1 to 21 December 2014. It offers an interesting insight into politics in Bosnia at the end of this year, and at the end of a lost decade.

It is noteworthy that protestors direct their energy at the levels of government that matter most to them: these are the cantons (in the Federation), Republika Srpska and Brcko District. This is an important signal to all those, including the European Commission, who work with Bosnian authorities on recommendations for reforms. It simply makes no sense not to closely involve the levels of government that are at the centre of citizens’ expectations and frustrations.  The same is true for the international financial institutions such as the World Bank, studying challenges to Bosnian development. The future of Bosnian reforms will be decided in Tuzla, Zenica and Bihac as much as in Sarajevo.

Hot December? Reports in Bosnian media on threats, protests and strikes
1 to 21 December 2014

Protesters target

Number

Cantons

20

Republika Srpska

11

Private companies

8

Municipalities

6

Judiciary

5

Not specified

3

Federation

3

State level

2

Brcko District

2

Total number

60

Will protests change policy, though? If protests are directed at things which politicians cannot actually change – or at the very system of representative democracy – then they condemn themselves to impotence. Only parliamentary majorities can change laws. Only elected leaders can change policy.

On theme that runs through the news is lack of financial resources. Note that on 3 December 2014, Brcko, mayor of Brcko District announced that Brcko is faced with financial difficulties due to the collapse of Bobar bank. Brcko deposited around 10 million euros in Bobar bank. There is similar news from across the country. On 7 December 2014, Trebinje, mayor of Trebinje announced that the city could go bankrupt because it had around 2.5 million euros of its budget deposited in collapsed Bobar bank.

The key question that will determine whether protests change anything is what people expect from them and call for. If it is only some interest groups – former workers of socialist companies or war veterans – demanding redistribution of public spending to their benefit few politicians will be able to satisfy them. However, if protests can be harnessed to support specific changes, less waste, and more transparency then they could become the wind filling sails of reform.

Reasons for protests and strikes – Media to 21 December 2014

Reason

Primary reason

Secondary reason

Pending salaries

22

3

Unpaid benefits

13

16

War related topics

6

Cutting salaries

received from budget

3

Bad privatization

3

6

Policy improvement

3

Environment

2

Unemployment

2

Slow judiciary

1

Bad working conditions

1

7

Flooding related

1

Other reasons

3

Here is a selection of available reports in Bosnian media for the period from 1 to 21 December 2014 on threats of possible and actual protests. The list is not exhausted.

1 December 2014, Tuzla, group of workers of several big companies in Tuzla gathered and blocked traffic in front of the building where the first session of new cantonal assembly was held.

2 December 2014, Zenica, organization Eko forum announced it would organize protests because of increasing air pollution in Zenica and little or no effort on side of municipality and canton to prevent pollution or punish polluters.

3 December 2014, Tuzla, workers of several companies gathered in front of the prosecutor’s office and the court to remind about criminal privatization of their factories and pending cases against alleged perpetuators.

4 December 2014, Banja Luka, a group of small owners of Fruktona factory protested in front of the factory and demanded from the entity government to stop factory’s bankruptcy.

5 December 2014, Istocno Sarajevo, around 100 workers in the Istocno Sarajevo general hospital protested because their salaries were late, because benefits were not paid for several months and because of the working conditions.

5 December 2014, Bihac, around 200 workers of BIRA factory of cooling equipment who were fired recently protested in front of the factory and demanded from the owners to register them at the unemployed office in order to be able to make use of health insurance.

5 December 2014, Visegrad, organization of war veterans of Republika Srpska organized protests because of arrests of 15 war veterans from Visegrad on account of war crimes.

6 December 2014, Srbac, 11 workers in a local cultural center of Srbac warned that they would go into general strike because of poor working conditions, pending salaries and social and health benefits.

7 December 2014, Gorazde, former cantonal minister, who resigned in June 2011 following the disagreement with then cantonal prime minister, announced that she was preparing a public exhibition of 47 job rejections in the local, cantonal, entity and state administration she received since her resignation.

8 December 2014, Istocno Sarajevo, around 100 workers in the Istocno Sarajevo general hospital protested because their salaries were late, because benefits were not paid for several months and because of the working conditions.

8 December 2014, Zenica, representatives of students who receive scholarships as children of war veterans met with the cantonal prime minister to demand payment of three pending benefits.

8 December 2014, Sarajevo, workers of a company in charge for management of the sporting arenas built during the 1984 Winter Olympics continued their protests because of pending salaries and announced cuts of 33 jobs.

9 December 2014, Ilijas, teachers in local schools go into 30 minutes long strike because of unpaid transportation costs.

9 December 2014, Tuzla, representatives of the Union of those receiving their salaries from cantonal budget announced mass protests if the government doesn’t retract its decision to cut all budget dependent salaries for 10%.

9 December 2014, Banja Luka, representative of union of medical doctors threatened with general strike if demands of those working in Istocno Sarajevo general hospital are not met.

9 December 2014, Sokolac, workers of company Nova Romanija announced they would start a legal procedure against government of Republika Srpska because of pending 10 salaries from 2014.

9 December 2014, Sarajevo, representatives of farmers from entire Bosnia demand a meeting with the presidency to explain them all the problems they have.

9 December 2014, Bileca, workers in textile factory Nikola Tesla protested because of two pending salaries.

9 December 2014, Sarajevo and Geneva, around 50 out of 15.000 citizens of Bosnia who worked before the war in Croatia and were left without benefits (pension) started their trip to Geneva where they protested in front of the UN building on occasion of the human rights day (10 December).

10 December 2014, Sarajevo, members of families of missing persons from the 1992 to 1995 war in Bosnia protested in the city centre and demanded that all governments do more on finding their missing ones.

10 December, Banja Luka, three of TRZ Bratunac company protested in front of the entity industry ministry because they rejected to sign a contract with management of their company on arrangement for payment of pending salaries.

10 December 2014, Tuzla, a small group of former and current workers of state owned shoe factory Aida protested in front of the factory. They demanded from cantonal government to provide them with unemployed one-time support in amount of 200 euros, to provide funding for missing contributions to the pension fund and help repay 10 million euros of debt that the factory has.

10 December 2014, Sarajevo, survivors of concentration camps from the 1992 to 1995 war in Bosnia gathered in the city center to warn about their bad legal and economic situation.

10 December 2014, Zenica, students of the University of Zenica announced that they would start to protest if three pending cantonal scholarships for children of war veterans were not paid.

10 December 2014, Tuzla, around 300 workers of nine companies announced that they will protests if cantonal government doesn’t provide them with agreed one time help in amount of 200 euros.

11 December 2014, Zenica and Bihac, according to the statements of directors of general hospitals in Zenica and Bihac, two hospitals are close to being closed. The hospital in Zenica had to restrict its work to urgent surgeries and was forced to cut down parts of its heating system. Bihac general hospital could close down because it has a debt of 3.5 million euros and cantonal health fund rejected to vouch for further loans for this hospital.

11 December, Banja Luka, three of TRZ Bratunac protested in front of the entity industry ministry because they rejected to sign a contract with management of their company on arrangement for payment of pending salaries.

11 December 2014, Zenica, miners in pit Stranjani rejected to come out of the pit after their shift was over and put forward demands towards a company run by the Federation regarding unpaid benefits and working conditions. Following the meeting with the management protests ended.

11 December 2014, Tuzla, decision of cantonal government to put out of force decision on reducing all salaries for 10% as of January 2015 prevented mass protests of those receiving salaries from budget.

11 December 2014, Tuzla, association of “Mothers of Srebrenica” protested in front of the state investigative agency SIPA regional office in Tuzla because one of its employees took part in Srebrenica atrocities in July 1995.

11 December 2014, Istocno Sarajevo, around 100 workers in the Istocno Sarajevo general hospital protested because their salaries were late, because benefits were not paid for several months and because of the working conditions.

12 December 2014, Teslic, management and workers of a private textile factory Neno threatened with protests because company’s bank account has been blocked due to collapse of Bobar bank.

12 December 2014, Brcko, families of missing Serbs from the 1992 to 1995 Bosnian war protested in front of the Brcko District prosecutor’s office because of pending missing person’s cases.

12 December 2014, Siroki Brijeg, around 100 former and current workers of private meat factory Lijanovici protested in front of the factory and claimed that they haven’t received salaries for 16 months and that the owners did not make contribution for workers pensions for 12 years.

13 December 2014, Banja Luka, three workers of TRZ Bratunac protested in front of the entity industry ministry because they rejected to sign a contract with management of their company on arrangement for payment of pending salaries. The minister talked with them and they stopped their protests.

15 December 2014, Zenica, a group o 50 young mothers with their babies protested in front of the cantonal government because they haven’t received child support for four months.

15 December 2014, Tuzla, around 100 former and current workers of state owned shoe factory Aida protested in front of the factory and blocked the city’s main road. Workers of Aida demanded from cantonal government to provide them with unemployed one-time support in amount of 200 euros, to provide funding for missing contributions to the pension fund and help repay 10 million euros of debt that the factory has.

15 December 2014, Sarajevo, union of railway workers of the Federation publicly demanded from the Federation government to solve the problem of health insurance for workers of the Federation Railways who live in Mostar and Sarajevo canton and those who live in Brcko District and Repubika Srpska.

15 December 2014, Bihac, around 200 workers of BIRA factory of cooling equipment who were recently fired protested in front of the factory and demanded from the owners to register them at the unemployed office in order to be able to make use of health insurance.

15 December 2014, Istocno Sarajevo, around 100 workers in the Istocno Sarajevo general hospital protested because their salaries were late, because benefits were not paid for several months and because of the working conditions.

15 December 2014, Siroki Brijeg, around 100 former and current workers of private meat factory Lijanovici protested in front of the factory and claimed that they haven’t received salaries for 16 months and that the owners did not make contribution for workers pensions for 12 years.

16 December 2014, Bihac, general hospital warns that it could close due to unpaid contribution by the cantonal health fund in amount of 3.5 million euros.

16 December 2014, Siroki Brijeg, around 100 former and current workers of private meat factory Lijanovici announced that they would sleep in front of the factory and the house of its owner Jerko Lijanovic (who is from 2011 deputy prime minister and minister of agriculture in the government of the federation). The protestors claim that they haven’t received salaries for 16 months and that the owners did not make contribution for workers pensions for 12 years.

16 December 2014, Tuzla, around 100 former and current workers of state owned shoe factory Aida ended their protests without success. Workers of Aida demanded from cantonal government to provide them with a one-time support in amount of 200 euros, to provide funding for missing contributions to the pension fund and help repay 10 million euros of debt that the factory has.

16 December 2014, Sarajevo, around 20 workers of privatized Feroelektro trading company gathered in front of the Federation government building demanding support for workers who haven’t received 29 salaries and their social benefits were not paid (health insurance and pension contribution) and demanded to speed up the process at the cantonal court regarding the alleged wrongdoing during the privatization process which could lead to annulation of privatization contract and return of the company to the state.

16 December 2014, Sarajevo, around 4.000 unemployed persons in canton Sarajevo warned on possibility that they will go to the streets if the cantonal government implements decision to delete from the list all unemployed who earned more than 104 euros per month.

16 December 2014, Zenica, following a meeting with the cantonal prime minister some 50 young mothers ended their protests which started because they haven’t received child support for four months. The prime minister explained that the government is experiencing problems with the filling of budget but he hopes that the money from IMF would solve this.

16 December 2014, Sarajevo, union of teachers in canton Sarajevo held a 30 minutes protest because their November salary was late and because their transport costs haven’t been paid for 9 months.

17 December 2014, Bihac, thousand members of the cantonal union of persons receiving salaries from cantonal budget protested because the cantonal government did not fulfill the agreement about paying pending payments.

17 December 2014, Srbac, 11 workers in a local cultural center of Srbac started their general strike because of poor working conditions, pending salaries and pending social and health benefits.

17 December 2014, Sarajevo, workers in Sarajevotekstil textile company protest because their salaries and benefits have not been paid due to company’s blocked bank account.

17 December 2014, Lokanje, residents of a small village of Lokanje in eastern Bosnia (Republika Srpska) demonstrated against arrests of their fellow citizens who were indicted for war crimes.

18 December 2014, Sarajevo, workers in Sarajevotekstil textile company protest because their salaries and benefits have not been paid due to company’s blocked bank account.

18 December 2014, Sarajevo, coalition of civic organizations gathered in front of the state parliament to deliver 78 demands/policy recommendations for the period from 2014 to 2018 regarding EU integration process, human and minority rights.

18 December 2014, Brcko, Milenko Gojkovic, victim of May flooding started a hunger strike because authorities rejected to provide financial assistance for rebuilding of his home.

19 December 2014, Derventa, workers in factory Unis demonstrated in front of their factory demanding payment of pending salaries from December 2013 and restart of production.

19 December 2014, Banja Luka, union of textile workers sends a protest letter to the council of ministers at the state level demanding adoption of measures that would protect their production.

21 December 2014, Zenica, 300 citizens protest because of the air pollution in the city. Protestors demand lowering of pollution and prosecution of air polluter.

Filed under: Bosnia — christian @ 6:04 pm
2 December 2014

Debating Doing Business – A view from the ground 

“Straight out, the only reason why I ultimately decided to invest in Georgia is because the country undertook many of the reforms suggested by Doing Business.” (Hans Gutbrod)

A few weeks ago we wrote about the 2015 World Bank Doing Business survey:  Pumpkins, outliers and the Doing Business illusion (4 November 2014).  We looked in particular at countries we know well, Georgia and Macedonia, and at their astonishing rise through these rankings:

“In January 2013, one of Germany’s leading papers, FAZ, wrote a long article about our analysis on Georgia. And we set out to take a closer look at Macedonia. We focused on these two amazing results: how it was possible for Georgia to have a better business climate than Germany – not only for one year, but in consecutive reports, year after year – and how Macedonia managed to beat Switzerland.”

We also examined how the aggregate position in these rankings is generated. And we concluded: 

“Overselling Doing Business can do harm, if it suggests that the key problems facing a country like Macedonia are easy to identify and to address without any real understanding of local comparative advantages or disadvantages, of existing businesses and industrial legacies. Doing Business authors argued that their research “defies the often used saying, ‘one size doesn’t fit all.'” This implies that it is straightforward both to diagnose the illness and to prescribe the right medicine. It remains true today, as it was in 2004, that Georgia and Macedonia have much more to learn from Germany and Switzerland (or Poland and Slovakia, countries in “Danubia”) than vice versa.

We started by noting that rankings are both useful and inescapable. This means that their authors have a responsibility to present the findings in such reports in a sober way. Here the Doing Business report still has some way to go.”

This is an important debate, all the more because rankings are inescapable. So we invited some experts we highly respect, who understand the region we discuss and the way the World Bank works, to comment on our findings, in order to launch a wider debate on the future of rankings in general and on Doing Business in particular.  

The series starts with Hans Gutbrod, who has worked as a regional director for the Caucasus Research Resource Centers (CRRC), covering Armenia, Azerbaijan and Georgia. With CRRC, Hans has occasionally worked for World Bank projects, among 30+ other donors. He was not involved with Doing Business, and is not working on World Bank projects at this point. Next to working in policy research and on transparency issues, he co-founded an agriculture company in Western Georgia in 2009. Hans holds a Ph.D. in International Relations from the London School of Economics.

If you are interested to contribute to this debate, please write to me on g.knaus@esiweb.org

 

Doing Business: The Path out of Kleptocracy – a response by Hans Gutbrod

The recent publication of the Doing Business report by the World Bank brought a new round of debate on the value of these rankings. As in recent years, critics have pointed out a number of methodological concerns, as has the European Stability Initiative. From my point of view, these criticisms are mostly misplaced. I think that I bring a perspective that can add to the debate: for more than six years, I ran a research organization doing many dozens of projects across the Caucasus and beyond. This research often grappled with how to quantify economic, political and social change. Together with colleagues, I have also set up rating systems that have received some degree of attention. Moreover, for more than five years I have been active in business in Georgia, setting up, with two Georgian colleagues, one of the first larger-scale export-oriented agriculture ventures. In other words, I have an understanding of social science methodology — and I have actually been doing business.

Straight out, the only reason why I ultimately decided to invest in Georgia is because the country undertook many of the reforms suggested by Doing Business. It’s easy to set up a company, the tax structure is clear, we have been fully compliant, and in an environment of significant political and geopolitical risks, we do not have to worry about cumbersome or predatory regulation. The flexibility of the labor code matters, too. It is so desperately difficult to make things work in these environments that — unless you have huge amounts of money, which I do not — you should be able to hire people quickly, without adding long-term cost burdens. We want our workers to commit, so we pay them a good salary. Our salaries are very significantly above minimum wage, for work that can be done in combination with other jobs. I am not saying that all businessmen take this approach. Yet the idea that little labor legislation automatically implies exploitation does not make sense, from my perspective. You get good work by paying a fair wage.

Small tweaks matter, too. Georgia allows its notaries to do transactions via Skype. If, prior to this reform, you have ever chased around Ottawa in a Canadian winter to get a permission to apply for water rights notarized (notary), apostilled (Department for Foreign Affairs and International Trade), verified (local Georgian Embassy), and then shipped (DHL, at the cost of an expensive dinner for two) you will learn to value the kinds of reforms that Georgia undertook. Doing Business indeed highlighted that Georgia went on the right track.

Are the Doing Business indicators sufficient? No, of course not. But they are necessary. Let me unpack that argument: under the very government that undertook a number of excellent reforms, we were worried about heavy-handed tax police and about unchecked rogue elements in the Ministry of Internal Affairs. These excesses were not fully reflected by the Doing Business rankings. It is seen as a weakness of Doing Business that it does not fully account for such realities. At the same time, is this a fair criticism? Doing Business sells itself as focusing on the kind of business regulation that serves as an instrument for obstructing (and usually fleecing) entrepreneurs. Doing Business fulfills on that promise. Yet of course this angle only captures one aspect of the total business environment. It is, however, a critical angle, without which only the very rich, or the very well-connected, can get things done.

Doing Business has another desirable feature, one that is also the subject of criticism that ultimately is shortsighted. Doing Business creates many winners, in that it marks progress according to different categories. In that way, Georgia can do better than Germany, and Azerbaijan, otherwise not exactly a role model of reform, can also make progress. That is, of course, a sacrifice of rigor, but conversely an excellent application of research (or parental experience): if you want change, creating winners is an attractive strategy.

From what I have seen over the years, Doing Business is one of the best tools that the World Bank has come up with. It is extraordinarily powerful, in pointing in a direction that helps the world move away from kleptocracy. Not everyone in the World Bank is happy about this success, as departments that have not invented Doing Business want more attention for the concerns that they are seeking to advance. From their perspective, the methodological shortfalls of Doing Business are particularly glaring. And these concerns are relevant: it is likely that some (small) improvements to Doing Business are possible. Yet in this discussion, let’s keep the big picture in mind.

Doing Business helps to advance an important cause. If people have an even better system, it would be great to hear about it and to have spelled out how it works. But let’s understand all that Doing Business does before getting stuck on what finally are marginal quibbles. Actually doing business is not just about academic rigor, it is about creating opportunity and jobs in tough environments where those typically are in short supply.

Follow Hans on Twitter at @HansGutbrod

 

Further reading:

Filed under: Doing Business,Georgia — Gerald @ 11:08 am
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