Bosnia Hit by Social Unrest

Author: Dragana Erjavec
Uploaded: Thursday, 23 January, 2003

According to an article in IWPR's Balkan Crisis Report no. 397, workers involved in a current wave of protest blame the flawed privatization process for their growing impoverishment.

Strikes and street protests are spreading across, Bosnia fuelled by discontent over plunging living standards. Bosnian workers blame much of their worsening plight on the country's clumsy privatization process, which has led to heavy job losses, and has been accompanied by huge wage backlogs and a mountain of company debt.

After a series of strikes in Tuzla and Bihac during the last two months, employees came out on the streets of Sarajevo at the end of December. Hundreds of workers from three companies, Alhos, Simes and Milkos, along with trade-union leaders, blocked the city centre complaining about the
erosion of social and health services. Union leaders warned that a general strike could be looming unless the situation dramatically improves.

The situation in the other half of Bosnia, Republika Srpska (RS), is not much better. Several thousand employees in health, education and police services gathered in the main square of Banja Luka on 26 December to sound a warning protest. The leader of the RS education union, Ranka Misic, said that the main goal of the protest was to ‘remind the outgoing government what it owes, and the new one what awaits it'. The unions called for back pay and salary increases. Government budgets, overburdened by social benefit payments and drained by corruption, smuggling and tax evasion, have no money to meet these demands. ‘You can't shoot from an empty gun,' said the RS president Dragan Cavic.

The privatization of state companies began in 1998 at the behest of the then High Representative Carlos Westendorp. Citizens were given certificates enabling them to invest in small- and medium-sized companies. However, as many were unschooled in financial matters, they sold their
certificates cheaply to criminals, war-profiteers and private businessmen. At the same time, managers of these companies - appointed by nationalist parties during the Bosnian war - artificially forced down their value to discourage potential investors and allow them and their families and friends to buy controlling stakes. In many cases, these new owners asset stripped the companies and closed them down, throwing large numbers of people out of work.

The second wave of privatization is focusing on bigger, strategic companies and conglomerates, which, it was hoped, would attract foreign investment. But the initial optimism was largely dashed by doubts over ownership and the backlog of debts built up over the years. Large Bosnian concerns lost major parts of their market during and after the war and were unable to sustain large numbers of employees. But deep-rooted socialist principles made managers reluctant to make employees redundant. By keeping staff on the books, the companies accumulated wage debts, which now nobody can pay. Added to this was the large backlog of health and pension benefits.

The authorities have repeatedly denied responsibility for these debts and stress that they could not afford to pay them anyway. Economy minister for Sarajevo canton, Edib Prasovic told IWPR that administrations across the country have ‘neither funds nor legal grounds' for such payments.

The head of the Association of Independent Unions of Bosnia-Herzegovina, Edhem Biber, said in an interview with IWPR that privatization was flawed and that it was high time that the new authorities compensated ordinary workers who lost out in the process. The trouble is that three months after the last general election, the local governments that bear responsibility for doing so have not been formed.

Economic analysts believe the situation in the country will get even worse before it gets better. The recent adoption at state level of a law on bankruptcy, which is supposed to facilitate privatization and the closing of local companies, is expected to throw tens of thousands of employees out of work in a country with an unemployment rate of 40 per cent.

One way out of the crisis, according to Biber, would be the creation of a proper social programme with arbitration tribunals to deal with employees' complaints. Kevin Sullivan, a spokesman for the Office of the High Representative (OHR) has pointed out that Bosnia-Herzegovina still does not even have proper labour legislation - which was supposed to be enacted in 1999 - and without this workers could not hope to have their rights properly protected.

One leading Bosnian economic journalist, Ibrahim Polimac, has said that the time in which ‘social peace' could be bought by Western donations has passed, and that he is not sure whether Bosnian leaders ‘know how, are able, or want' to offer a real solution to the problem.

Dragana Erjavec is a freelance journalist based in Sarajevo. This report appeared in IWPR'S Balkan Crisis Report, No. 397, 13 January 2003

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