The Balkans – many small wrong decisions, part 1

Many small wrong decisions make for a bad Balkan soup

Back in the early 1990’s I studied Russian and East European history and politics under Kristian Gerner at Lund University. A map in one of his books branded the Balkans as “Third World Europe”. Then I might have thought Gerner judgmental, now I know he was dead right. What is wrong with the Balkans? Why this chronic under-performance and inability to build strong states and economies? These are questions that have puzzled non-Balkan people for generations. For the Balkan people however, it is painfully obvious. Generations have lived their lives complaining about the negative consequences of too much nepotism and corruption. Yet, in line with a high degree of fatalism, for which the Balkan mentality is famous, all segments of society show little or no signs of knowing how to break with old, Ottoman ways of life.

Corruption as a way of life

In fact, living in the Balkans you get the feeling that people have come to regard blatant corruption as a way of life. A local politician who does not set out to fill his/her own pockets when in office is regarded as odd among his countrymen. Why? Because, deep inside, most people would do the same. It is one of those small personal decisions we are asked to make in our professional lives. The answer helps explain why the Balkans is Third World Europe, and it will remain so until a larger proportion of its citizens starts to making the “right” decision. In Bulgaria they will tell you that if you want to know a person’s true character, give him/her power! As with everything else in the Balkans, history offers some clarity (or more confusion). In Ottoman times an incoming public official would pay a set sum to the Sultan for the right to collect taxes in a region. Well installed in his new position, the public official’s only mission was to extract as much financial resources out of the local population, to cover his initial investment (payment to Sultan) before somebody else offered the Sultan a higher sum. Today, Balkan politicians far too often see it as their divine right to misuse power for their own gain.  So the approach to public service as not changed much during the last 600 years in the Balkans.

Beyond the politics

But let’s leave the obvious abuse of power by Balkan’s current political leaders aside for a moment. We hear about their flaws and incompetence every day. It’s never-ending fodder for the media. Let’s instead look a little deeper into the Balkan mentality, move beyond socio-economic analysis and look at the individual’s choices.  It’s the choices and decisions we make in our daily lives that in the end makes up society and makes the difference between societies around the World. The Balkan way of life is simply a collection of not so well thought through choices and decisions, i.e. bad decisions, which may benefit the individual at the moment but be detrimental to society and the economy, both now and in the future. It is these every day bad decisions that makes it impossible for the Balkans to ever catch up with the quality of life produced in Northern Europe. Let me give you some anecdotal examples. In the Balkans employees are, in the large majority of cases, hired based on “who” they know, not “what” they know. This automatically takes education and strive for new knowledge and technology out of the equation. This is not a good start if you want to move from a small scale farming to information technology driven economy. One striking negative consequence of this approach to human resource recruitment is low productivity in the private sector and no productivity in the public sector. While the Monday version of a newspaper in Germany is very thin, since nobody has time to read it before dashing off to work, in the Balkans the Monday edition is thick, as reading newspapers at work appears to be a constitutional right for public servants. Why should I bother to work if I am in this position because of “who” I know? The “who” will always protect me!

Monopoly before Competition!

The private sector in the Balkans suffer under an over-regulated and over-staffed state bureaucracy. The under-stimulated public administration spend all their creativity and free time on causing trouble for the entrepreneurs, problems which they themselves then turn around and offer to solve, for a penny or two. But who really cares about the “privatniks” anyway. They are only their to pay their taxes, most politicians would answer. Can you imagine a politician in Washington or Stockholm displaying such disrespect for those that generate the income of the state and citizens? Of course not, but in the Balkans, in this horrible mix of Ottomanism, Communism and Maffiaism, competition among equals is not well received by the men in power. Why do people in the Balkans prefer monopolies to competition? Another choice and another wrong decision. Competition is hard work, while monopolism is hoping that you “know” the right people who can misuse the system, not pay customs duty, bribe the tax man, to your immediate advantage. Of course, we all know (or most of us, I hope) that what they are doing is only stealing from themselves and their children (the future). Without a proper tax base, there can be no development-for-all, only for the few (what is the definition of a Banana republic?) no matter if we are relying on EU membership or international donor organisations for support.

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About Jakob Modéer

22 years of corporate and international investor experience as well as private sector development project management, consultancy in private sector policy and business advisory services, and direct consultancy to companies in South East Europe (and now a blogger on socio-economic issues)
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