The trees of Tirana

When I look out my window in Tirana, Albania, I look East towards the hills of park Dajtit, I can see seven trees. Seven, that’s it! It’s like the local population is allergic to greenery, every square meter has been turned into a apartment block, spontaneous parking lot or an area used for some kind of economic activity. Today when the temperature is reaching far above 35, some more shadow would be nice. No such luck. Except for on Rruga Ismali Qemali where the grand maple trees create a tunnel of coolness, the trees of Tirana have been sacrificed on the alter of economic growth (read: greed) and we pay the price every day in sweat. No trees mean no coolness in the summer heat, no trees mean that dust rules the streets, blowing dirt into eyes and cloths. For certain, rules and regulations forbid the cutting down of trees, even in Albania, but like all other laws they are being ignored more or less deliberate by people. Why? How about this for a theory. After 50 years of suppression by the state, modern rules and regulations are seen as tools by the state to continue to suppress the free will of the people. Rules and regulations are not accepted as guidelines to be followed in order for society to function properly, for the good of the majority, and as a result people spend all their time breaking the rules – cutting queues, driving against red, not declaring income, not using cash machines to record a sale, looking for a short cut to richness, throwing litter everywhere (even inside the elevator, why?) Rules are for others, rules are for the stupid!
Until the day when the majority of the people realize that the rules and regulations are there for their benefit and protection (to live longer and well as a life ambition, what a thought?), the rules/regulations will never be obeyed, and as a consequence chaos, dirt and heat will continue to rule Tirana. Poor trees, poor people.

When there is no Respect…

If you stand around a traffic intersection in Tirana, Albania, 5 minutes is all you need to put the finger on the country’s key problem. There is simply no respect. No respect for formal rules. No respect for other people.

In Tirana, a red light means “slow-down” to the driver while it means “cross-if-you-dare” to the pedestrians. Young children learn from their parents and grandparents the art of jay-walking, passing a four-lane street without being killed, rather than waiting 35 seconds for a green light.

For a large SUV, the same red light means “speed up”. The fact that some pedestrians may be half way across the street means nothing to the driver of the 2 tonne monster machine. He does not respect them anyway. If by chance a policeman makes the effort to stop the road killer, the driver is most likely to give him a verbal beating. The policeman will join the driver in the dog-fight, shouting back and waving hysterically with a green and red ping pong racket. After a short exchange of offensive language, the jeep rushes off. He does not respect the policy force anyway. As the driver of a big car, he is above the law. The message to younger generations is clear – you want to be respected, make sure your dad buys you a big, f-kn car!

From this anecdotal evidence, a serious question arise. If you do not respect basic and universally applied traffic rules, can you respect the more sophisticated rules of democracy, or even legislation? Probably not. In societies where there is no respect for authority, rules or altruistic values, some people will always feel that their “bigness” puts them above the law, and ahead of the rest of the population. This is the law of the jungle, not the foundation of civilized behavior, and our collective behavior is our political culture, upon which political institutions are built and maintained…see it all starts at the local road crossing!

An Academic take on Kosovo 2011

An academic take on Kosovo 2011
In the conclusion to his speech at Riinvest 15 year anniversary in 2010, the American Ambassador Dell sent a warning to the citizens of Kosovo, with special emphasis on the political élite, remarking that the “(c)hoices and decisions made today will determine whether the Kosovo of 2020 looks pretty much like it does today, the poorest country in Europe, with huge unemployment and an uncertain future, especially for its young people, struggling to survive as a viable, independent state.”
While the citizens of Kosovo now enjoy basic needs, essential household commodities and relatively peaceful existence, much remains to be done to further enhance the quality of life and seize opportunities. In one way, the young state of Kosovo could be described as “inefficient but restrictive.” The state has taken on an interventionist role, not un-common in post-war societies, “which involves the state in planning and organizing production and development”. In Kosovo, the state clings on to a dominant role in the economy, i.e. mining, energy generation and telecommunication sectors as well as in Society.
Such a restrictive state prevents people “from following their own best interests via the market”. At the moment, the public sector in Kosovo employs 100.000 people, one third of total employment. Ambassador Dell is the first to admit that this figure is unsustainable and a “clear sign that the Government has assumed a dangerously large position in the economy”.
Corruption is now chronic in public administration, as a result of crony recruitment habits, low salaries and low motivation among civil servants. The public sphere in Kosovo is under tremendous pressure from “clubs of the powerful” pursuing their own interests. For Mackintosh such collective “manipulation of the public environment constitutes public action, whether this is through legislation, lobbying, self-organization or rigging the market.” However, whichever form the public action takes, it does not adequately correspond to the current public interest, leaving the citizens of Kosovo disillusioned with their new state, the economy in dire straits and the civil society without enough social capital to become a viable generator of change.

Democracy
The political landscape in Kosovo is neither authoritarian, as in Yugoslav times, nor does it fulfill Dahl’s definition of liberal democracy. Rather, it can be described as a partial democracy, where “elections are held, but organized to ensure that only certain candidates can be elected.” International observers to Kosovo General Elections in December 2010 reported that “cheating was so blatant that no attempt had been made to cover it up…(I)n one district with 940 registered voters, another 300 had apparently “voted”.
The EU’s 2009 Progress Report on Kosovo makes for additional critical reading, highlighting an economy suffering from very high unemployment rates, limited export earnings, and an overwhelming dependence on remittances from the Diaspora. In fact, “the level of economic activity does not allow the young and growing labour force to be absorbed. For many, emigrating and working abroad remains the only viable option to support their families in Kosovo. Labour is indeed Kosovo’s biggest (non-recorded) export item…”
According to the World Bank’s “Doing Business Index” 2009, which measures business regulations, Kosovo is actually slipping in the ranking, from 156th to 164th place, losing ground in 9 out of 10 dimensions. In line with the private interest theorists, excessive regulation, licensing and permits for economic activities lead to “rent seeking”, opening the door for corrupt practices, as “regulators and their clients develop patterns of mutual accommodation which run against the public interest.”
Unlike in Argentina 20 years ago, where the disillusionment with the state was caused by economic policy failures, inflation and high unemployment, in Kosovo the disillusionment is caused by the state’s inability to serve the public interest and fight corruption and improve the living standards of the population. Difficult times in Argentina saw the surfacing of social movements, like the Global Exchange Network, fulfilling the population’s needs where the state and private sector were failing. There is no such trend within civil society in Kosovo today, due to low levels of social capital and a traditional reliance on either family or state (Yugoslav experience) to serve their private needs.
That said, Kosovo is a post-conflict country, and as such it has to tackle social and economic trauma at the same time as constructing a new state from scratch. In the words of Ambassador Dell, “(f)or the past ten years, you and your international partners have concentrated on establishing Kosovo’s nascent institutions of state. This was the right choice…Kosovo today has a liberal governing structure that can support an open economy…there is a modern legal framework in place…This monumental effort is now largely completed…” With the World Bank’s definition of ‘good governance’ in mind – “the means in which power is exercised in the management of a country’s economic and social resources for development”, it is however difficult to come to the same optimistic conclusion about the situation in Kosovo, and the development efforts of the past ten years. On the opposite, the Kosovo state institutions are under-performing on all four areas of governance – Public sector administration, accountability, legal framework for development as well as information and transparency. Furthermore, there is a common view held among citizens in Kosovo “that bureaucrats exploit their monopoly of information and services: in order to expand their budgets, powers and perks”. The new Government, in place since March 2011, was even expanded with a new Ministry for Economic Development, which will require additional funds from the Ministry of Finance. A growing Government and public sector in Kosovo feed nicely into the views held by the private interest theorists that governments “can go wrong” and “that the state tends to grow into a monster”, as in the ‘Leviathan’ state.

Protectorate Kosovo
During the first ten years following the end of the conflict, Kosovo has experienced an enormous influx of international development agents, pursuing an intentional development path. The state of Kosovo and its international supporters have made deliberate efforts to achieve progress and improvements in the political, social, economic life of Kosovo citizens. Through a ‘trusteeship’ relationship, international donor agencies are ‘entrusted’ by the Kosovo state to support and ensure the ‘development’ of Kosovo. However, none of the features required by states to successfully implement intentional development, according to Johnson, White and Wade, are currently in place in Kosovo.
There is no leadership in place, which is “ruthlessly committed to national economic development (and not to partial interests or its own enrichment)”. Neither has a developmental élite emerged, nor a strong bureaucracy. Rather, the bureaucracy in Kosovo remains weak, over-populated and closely linked to the political parties in power. Finally, there is no “availability of possibilities for strategic intervention to govern the market”. The main reason for that is that there is not much of a market to govern, in order to achieve public policy objectives, such as job creation. In fact, the only feature in place in Kosovo in support of a “developmental state” is a weak civil society.
To what extent progress has been achieved is questionable, but certainly Kosovo has not yet reached a level of sustainable immanent development, despite billions of euros in financial support and technical assistance by international development agencies. In fact, there are few or no signs of development occurring in Kosovo as a result of a “spontaneous and unconscious (‘natural”?) process of development from within.” In order for this to occur, there need to be a vibrant private sector and a civil society free of political interference. Neither exists in Kosovo today. Rather, an intrusive bureaucracy, a weak judiciary and un-fair competition from crony and grey market capitalists are suffocating the dynamic development aspects of entrepreneurship.
The same can be said for civil society and media that are still trying to create space for themselves beside a state with monopolistic tendencies. “(T)he news media can play a vital ‘adversarial” function in putting the government under constant pressure to be responsive and sympathetic to the plight of the common people”. There is an obvious parallel here between Sen’s arguments about famine and non-democratic governments, and the relationship between the government and a failing economy in Kosovo. As long as economic policy failures “are relatively costless for the government, with no threat to its survival or credibility, effective actions…do not have the urgency to make them inescapable imperatives for the government.”
In Kosovo today, the roles of the state in development cannot be separated from the development agencies’ roles. This is a result of 11 years of immense international involvement in every aspect of the public sphere in Kosovo. In a jungle of development agencies, and without a National Development Plan to coordinate their efforts, and international disagreement on the unilateral declaration of independence by Kosovo authorities, it is understandable that conditionality did not end up high on the development agenda. However, this limited conditionality may also have contributed to the lack of improvements in economic policies and generally slow economic development in Kosovo.
Another apparent reason for poor performance by the Kosovo state is an all-embracing lack of ownership for policy, and for the implementation of policy reform programmes in particular. Too often, calls for change are generated by the development agencies, rather than the Kosovo government, private sector or civil society. Without the support of “local champions and domestic leadership” changes and reform programmes are not sustainable. Poverty reduction requires the “institutionalization of altruism”, which in turn requires “another kind of agency. Not an organization, which promotes what it views as development…but agency in the general social sense. Individuals and groups must have expectations and make demands in order for the structures to be challenged”.
By increasing “participation” of private enterprises and civil society in development, a process of empowering them will occur. In turn, this may lead to a “power over” situation, where the power of the state in the intervention process is decreased to the benefit of other stakeholders. In one way, the state and the international agencies have until now pursued a policy of “unaimed opulence”, lacking in “participatory growth” and unable to spread the fruits of economic injections across the population in Kosovo.
The future for Kosovo
While the people of Kosovo are far from starving, contributions of international development agents today make up one third of GDP and remittance from Kosovo Diaspora makes up another 30%. Should any of these two channels of funding dry up, the economic collapse of Kosovo is a distinct possibility, which in turn would throw an even large proportion of the population into relative poverty. Of more concern is Ambassador Dell’s faintly disguised criticism of the habits of the current political elite in Kosovo, their resistance to change and basic instinct to hold onto power, at any cost. Robert Chambers puts the finger on the core issue applicable to the political elite of Kosovo, when he proclaims that the biggest challenge of the 21st Century is to “find better ways to enable those who are powerful to gain more satisfaction from exercising less power”. In other words, instead of filling their own pockets, the political leadership in more autocratic societies must enhance a process where political power is divided between different institutions (checks and balances), and rotate regularly between various actors (democratic elections), where wealth is distributed more evenly within their societies and perhaps even transfer power to a new ‘post-independence struggle’ generation of political leaders.
The public upheaval and toppling of old, static and un-democratic regimes in the Arab world in the winter of 2011, only confirms the difficulty in maintaining a regime for the benefit of the few, in countries with a large unemployed youth population. At this point in time, Kosovo urgently needs to identify and support individuals equipped with a new kind of individualist motivation, “a drive for achievement, which will not only aim at personal gain but also convert this gain into productive investment, which may eventually benefit society generally.”
To change course, and avoid social, economic and political failure, Kosovo must make radical changes in its approach to development and public action. A better functioning democratic political system and free press will no doubt contribute to correcting failures, but public activism against corruption and for economic development is also required. “Ultimately, the effectiveness of public action depends not only on legislation, but also on the force and vigour of democratic practice”. Social, economic and political improvements will only occur if the state, civil society and private sector collaborate.
In order for development to be successful in reaching its goals, the Government and public administration must ”enjoy the trust and co-operation of the whole of society”, and not be “isolated and out of touch”. Using the terminology of Alan Thomas, Kosovo and its supportive international development agents must move from “intentional” to “immanent” development, by “empowering” the country’s young population and unleash the power of private entrepreneurship to reach levels of real “progress” in living standards and economic growth.
State action “can be particularly crucial in regenerating lost incomes”, as in post-conflict Kosovo, but these actions must not stifle ‘trade, commerce, scientific research, the news media, political parties, and other instruments of economic, social and political actions.” Again, using the arguments of Sen, high unemployment and relative poverty in Kosovo, can best be tackled through economic expansion, which also “reduces the need for entitlement protection”. The same way “the major feature of the problems of Sub-Saharan Africa is not the particular lack of growth of food outputs as such, but the general lack of economic growth altogether”, Kosovo lacks neither resources nor potential outputs, but suffers from low levels of competitiveness and economic growth. There is a need for more “diversified production structure”, reduced over-dependence on old state monopolies and development of new sources of income and growth in Kosovo.
In Kosovo today, the private interest view of the state has a case. “Although the pursuit of private interests allocated resources efficiently in competitive markets, this generally does not occur when governments use monopolistic powers of government to their own advantage. Politicians, bureaucrats and many private interests gain from a growing government and greater government expenditure”. There is a situation of ‘government failure’ in Kosovo, with a rapidly expanding public sector that is not in tune with public interest. Along the lines of the neo-liberal theorists, the state of Kosovo has become too large relative to the private sector. To stop the descend towards a Leviathan state, there is an urgent need in Kosovo to shrink the state. However, like in Third World countries, there are few state activities to be cut and few services to be contracted out in Kosovo. The focus should rather be, as Ambassador Dell highlights, on selling off state owned monopolies, and reduce the inflated public administration. However, these measures will only go part of the way in aligning public actions with the public interest in Kosovo.
In order to adequately address the high unemployment rates and relative poverty, there is a pressing need to promote and support the private sector in Kosovo to become the core source of employment, as it is in other more developed countries. As a further step, “foreign investment can come, but only if business conditions improve and Kosovo’s reputation as a solid, law-abiding nation is strengthened”, in the words of Ambassador Dell. Having initially chosen “development alongside capitalism”, as the preferred view of development, the state of Kosovo and development agencies, will now probably have to re-focus and assume a more “neoliberal approach”, as a means of kick-starting the economy, and a “people-centered approach” in order to increase civil society’s participation in “public actions on development”.

Conclusion
In a development perspective, the state and economy of Kosovo are terribly under-performing. The modeling of the post-conflict Kosovo state has been based on the idea of the public interest state. A political elite, with its civil servants, supported by international development agencies “define the public interest”, and “use the economic powers of the state”, and the development agencies, to serve the public interest. To this end, the public sector remained a substantial force in the economy. However, it has become increasingly obvious that the state has not been successful, neither in identifying the ‘public interest’, nor servicing it.
As in many other post-war countries, the predominant development theory in Kosovo assigned an array of roles to the infant state, and the same time was overly optimistic about “the state’s benevolence and competence”. Taken to the extreme, the sustainability of Kosovo, as a state, now depends on its ability to deepen “participation and partnership”, both internationally with other states, multinational corporations and development agencies, but more importantly on its capacity to strengthen the level of ownership among stakeholders in the state, private sector, civil society and minority groups for public actions, policy and programmes aimed at serving the public interest.

Donor dependency and the making of a quasi state and economy

The other day I was staying overnight at hotel Afa in Prishtina, Kosovo. In the morning I enjoyed an elaborate breakfast in the hotel’s new wing. There was everything from corn flakes to ham and eggs on offer, freshly baked bread and cappuccino. There must have been at least 50 persons in the breakfast room that morning. At the table next to me two Italians were discussing their “work plan”, the Germans were focusing in on their “target groups” and the Swedes were set to ‘empower” a group of local women agricultural producers. What was striking was the complete lack of businessmen, there was no business talk, no talk of cost-cutting, price reduction and quality improvements. In Prishtina, that very morning, there was probably another 200 consultants staying at other hotels, getting ready to go to work in support of the Government, ministries, agencies and public administration. Add to them another 300 who are on long-term contracts and rent apartments, and you have a formidable force of human resource capacity, enough to keep the new state of Kosovo running. No wonder the locals feel limited ownership and responsibility for their own affairs. Why should they, the foreigners are there doing their job! For 10 years now! The other day, the EU announced they will spend another 65 million euro in assistance to Kosovo. Is this a positive sign or a confirmation that without external financing and human resource the Kosovo state will not be able to service its citizens? There was a time when the Government of Estonia asked the UNDP to leave the country because its presence in Tallinn was placing Estonia, a country in rapid transition and with big ambitions for Foreign Direct Investment, in the same category as countries in Sub-Saharan Africa. Before Kosovo goes the way of many Banana-Republics before them, eroding their own competitiveness by relying too heavily on remittances and donor support, its is time for Kosovo to make full use of its only real asset, its young population. But this will require massive investment in education, driven by the needs of economic sectors with export potential. At the moment, why should a Kosovo youth take the risk and costs of starting up a company, when s/he can go work as a driver on a donor project making €500 per month? Or why work at all if relatives abroad are sending money regularly, enough to drink coffee all day and pay my mobile phone bill? Well, the problem is that one day the donors will grow tired of carrying Kosovo forward (hopefully in that direction) and the Diaspora will send back less money as they get increasingly integrated in the new home countries. With falling income and lack of human resource, an economy that cannot pay for its imports, the state and public administration in Kosovo will find it increasingly difficult to function. What to do? Simple. Kick out most of the international consultants. Let the Kosovo authorities take the wheel of their own destiny, let them make the mistakes themselves and learn from them, rather than blaming the foreigners. Stop putting the carriage before the horse, and start building a viable economy in Kosovo. Stop spoiling the young generation and equip them with skills to fulfill job obligations in companies that are active on the world market, not in the aquarium market of Kosovo, at salary levels which are comparable to other countries in the region. That done, we can start to think about foreign direct investment. At today’s salary levels, who would set up shop in Kosovo? Time for a re-think among all Western donor countries.

Durres, Albania

A visit to the port of Durres, on the Albanian coast, should be a regular visit for students in urban planning and tourism development. Most of what can go wrong in the dash for quick cash has done so in Durres. Urban planning rules and directives for hotel constructions have been ignored in order to maximize the economic return of every single square meter. The result is an unattractive diversity of huge apartment blocks and hotels, built 2 meters from each other with little or no green areas. Add to this the universal presence of uncollected garbage, free flowing sewage water which finds its way through the hotel areas and into the sea where the majority of the tourists go swimming. In the centre of town, a new front line of properties are emerging out of the sea, through massive land fills. One can only imagine the reaction of those hotel and apartment owners, who some years back invested (and most certainly paid off public officials) in front line property to wake up one morning and see a new row of blocks being built right in front of their noses. Their only salvation will be that in 5 years time the same faith awaits the current front liners (until the construction boom reaches the shores of Italy…)

Corruption – Destroyer of values

Why politicians love infrastructure development
The roads in Bulgaria are in a notoriously bad state, to the extent that the casual visitor may be forgiven to think he is in rural Africa, rather than in a EU members state. The depth and sheer number of the potholes are extraordinary. The creation of new holes seriously out paces the state’s feeble attempts to fill in the holes. Why is it so difficult to construct proper roads in Bulgaria? Is the terrain particular difficult, is there a lack of know how? No. The simple answer is corruption. This is how it works or rather how it does not work out in the end, neither for the drivers nor the taxpayers.
Step 1. Central or local government decide on a piece of road to be built.
Step 2. A public tender procedure is announced, in accordance with national procurement laws and directives of the EU. Road construction companies prepare technical offers and, yes, bribe enough public administrators and/or local politicians to win the tender.
Step 3. The winning company starts construction. As a standard the layer of macadam should be, say 50 cm and the asphalt layer minimum 15 cm. However, to quickly recover the “success fee” (fancy word for ‘bribe’) and to make a whooping profit, the construction company reduces the macadam layer to 20 cm and the asphalt to 5 cm.
Step 4. In a ‘normal’ country, a construction company would not get away with such simple tricks, easy profit on the account of road safety. The local municipality or state organ financing the construction would hire an independent agent to evaluate the work of the construction company, measures would be taken and the truth would come out. However, in the Balkans this is common practice. Because the construction company has already paid off the politicians to win the tender, the same politicians will respond by looking the other way.
Step 5. The poorly constructed road starts to break into pieces already on its maiden voyage, effectively creating a new market for ad hoc road repair. This explains why so many Bulgarian roads look like a grey quilt, and why road construction is such a popular business and why the state loves to invest in infrastructure.
Lessons learned: To cheat pays off in the Balkans.
Negative consequences: A higher than EU average number of horrific accidences with loss of human lives and the rapid destruction of automobiles are the two most obvious negative consequences of having roads that look like Swiss cheese. Beyond that, the flow of easy cash through public institutions suddenly makes holding public office or working in public administration attractive. Unfortunately, it attracts the wrong people, persons who encourage and feed-off corruption and bribery. “You pay me, I will serve you” for services which by law is free of charge for citizens! Now, because so many public servants owe their job, not to their own skills and experience, but to a ‘patron’, the focus of these servants are to serve the wishes of the patron, and not the general public or their immediate supervisor. This means that most of the time at work is spent doing jobs for the patron, identifying new opportunities and playing video games on the laptop. There is little or no time to complete the services required by the job description in serving the public. As a consequence, public administration in the Balkans is notoriously ineffective and rude. A non-functioning public administration has direct negative impact on the overall competitiveness of the private sector, as enterprise owners have to spend endless of hours standing in queues or finding ‘personal’ solutions with every single public office.

The right not to pay taxes
All Balkan countries suffer from inadequate health care, education, social services as well as poor infrastructure and transportation. The obligation to care for the well-being of all its citizens, the status of its assets and resources, clearly fall with the state. Yet, the state is incapable of generating sufficient financial resources, quality human resource and proper management to even offer basic, but quality services to its inhabitants. To do so, the state needs money. Enter taxation. Let’s look at taxation in the Balkans, where avoiding tax is a national past-time, and for many regarded as a constitutional right. Not to care about the obvious connection between taxation and better functioning society can only be described as a reflection of a high degree of ignorance and/or pure egoism. There is a political and business elite in most Balkan countries, who are in power for one purpose only, to fill their own pockets.
The large majority of the self-proclaimed businessmen in the Balkans are not really businessmen by any Harvard Business School definition of the word. Yes, they have registered enterprises pursuing some economic activity, but that does not mean that they are neither competitive nor economically viable. Still, they do not go bankrupt, some even grow and generate enormous wealth in relatively poor countries. How is this possible? Have the Balkan businessmen discovered flaws in the theories of Adam Smith. Of course not. Their simple business plan is to cheat the state. Cheating the state has long, proud traditions in the Balkans. To cheat the Ottoman rulers was a sign of emerging nationalism, to cheat the communist rulers was a survival mechanism. Even the communists themselves were cheating the state (re-selling cheap oil from the USSR to the West, smuggling of other assets, etc.). The post 1990 generation of con artists, all dressed up in muscles, tight black t-shirts, suits and driving cars right out of the latest Frankfurt car show, have institutionalized tax evasion and late payment, and through aggressive use of the local media created an image as successful ‘biznizmen’. They are not. Their bread and butter is old style racketeering, muscling in on public tenders, not paying VAT, not paying their suppliers, not paying Custom duties and tariffs, privatizing state assets at a price far below market value, grabbing state property for no money at all, etc, etc. Of course, all of the above could not happen if the police, prosecutors, courts, media and politicians were doing their job, which is to protect the state. But the truth is that in most Balkan countries nobody defends the state. Even public officials, hired to protect the state, act like visitors, grabbing what they can as they run for the door. If there were one or two cases of bad behavior, nipped in the butt right away by the authorities, like a kid caught with the fingers in the cookie jar, and punished by his parents, it would have been ok and the other kids would have learned something from the ordeal. But, in the Balkans, the kids are in the jars, all the time, and the parents too. The biznizmen play closely with corrupt public servants, bribe their way out of legal cases and keep the politicians off their backs by financing their political parties.
When this self-destructive system, in which corrupt and criminal behavior is tolerated, even applauded, become the norm a society will find it extremely difficult to grow economically and the quality of life for the majority of the people will remain rock bottom. This is the Balkans, because this is how the Balkans has been for a very, very long time. People in the Balkans may not like it, but they are so used to it, they adapt to survive and they become a quite contributor to the norm.

Why go to school?
Education is the key to economic growth and social progress. This appears to be a universally recognized truth. In Asia, parents will work double jobs to afford sending the kid(s) to a good school, modern Turkey is famous for its attention to quality schooling and in Scandinavia the governments are not holding anything back in financing life long learning initiatives. This is not the case in the Balkans. Public schools are under-financed, poorly staffed, run-down and stuck with old teaching styles. Public universities are not much better, suffering from under-financing, poor management and corruption. It is a well-known fact that university diplomas can be bought. Care to become a MD anyone? €10.000 will do the job, fancy diploma and all. Enter privately owned education facilities. Let’s be honest, most of them are diploma print shops, mainly targeting the newly rich, most of whom do not believe in education, since their own wealth is a result of contacts rather than brains. And as a spoiled brat with newly rich parents, why should I bother to study when mom and dad will fix me up with a job (read, ‘place to go’) upon graduation? In such a climate, it is not difficult to understand that access to quality human resource is a core weakness among Balkan companies. This matters if your are running a hotel catering to the needs of German tourists, or manufacturing furniture to the quality standards of a French buyer, but less so if your main business activity is cheating the state through corrupt practices.

The human casualty of corruption
Corruption makes a fool out of good people and good behavior. If bending the rules is norm in a society, whoever is standing up for what is right and civilized behavior, such as paying taxes, working hard, not throwing litter on the street, not parking your car on the sidewalk, adhering to traffic rules, will inevitably be made a fool of. By not punishing bad behavior among the few, the majority of people will soon adopt the same bad behaviors and the fabrics of a well-functioning state and democracy will start to decay, to the point when people will not care about anything but themselves. To reverse this negative trend will require, first of all, that the judicial system work also against the rich and influential. To start putting corrupt politicians and businessmen behind bars would go a long way in saving the Balkans. So far, no Balkan country has been successful in dealing with corrupt officials between 1990 and 2010. So why should not every Balkan boy and girl dream of public office? But, realistically, where to start, and when to stop in prosecuting misuse of state assets? If, for example, a former Ministry of Economy who is taken to justice for corrupt practices during privatization (now there you have some candidates in the Balkans where almost all privatization schemes were complete failures) and if he is sentenced to 20 years in jail, is bound to open his mouth and bring down with him another 30 corrupt officials and businessmen. If, in turn, these 30 persons are given their day in Court, and a stiff sentence, they will for sure spill the beans on another 30 corrupt individuals. The multiplier effect is be well on the way. Can the legal system cope with this onslaught of high level political cases? Can society and democracy cope with the pressure for revenge and justice, when finally after so many years of silence, the truth is let loose? Alexander Solzhenitsyn, the Russian dissident writer, ones said that a people who finally deals heads on with its history will loose an eye, while those who don’t will go completely blind. At this moment in time, there is a universal darkness in the Balkans, and there appears to be no urgency to turn on the light. For this you will need an enlightened despot (Turkey’s Aturk) to force corrective measure on society or an extremely strong grass root movement forcing change from below. Neither is anywhere to be seen in the Balkans today. Ten years ago, Madeleine Albright, former US secretary of state, described the situation in the Balkans: “Many people have yet to free themselves from the prejudices and hatreds of the past. The economy is plagued by underdevelopment and the ravenous parasite of corruption. And quite a few, especially the young, are pessimistic and eager to leave”. Little has changed for the better since then. However, there may be small glimmer of hope from unexpected places. Bulgaria’s new Minister of Interior, Tsvetan Tsvetanov, a FBI trained supporter of a hard-line approach against organized crime, has aired the necessity of special courts to take on corruption and organized crime cases, as the normal judicial system (corrupt in itself) is incapable and/or unwilling to sentence and punish blatant criminals. According to Tsvetanov there was little accountability among current judges. “It’s a problem because there is no official mechanism for cleaning up the judiciary and because so many judges are entangled in Corruption”. Clearly, as a EU member state, Bulgaria could expect support from Brussels in coordinating the establishment of a special Court against organized crime in the country, rather than just stamping such a move as a first step towards a police state. With rampant corruption demolishing any effort to build a law-abiding society, Bulgarians themselves are for the establishment of such a Court. This is a perfect opportunity for the EU to make a difference in the fight against organized crime, and statuate an example on how effectively deal with corruption and organized crime, once and for all.

Why corruption is Balkan’s curse
Corruption is the constant search for easy solutions that benefit myself in the short run. If everybody thinks the same way, well, then you get the Balkans. With such a predominant mentality, you cannot build a democratic state, strong economy or free society. There is simply no platform for any of it.

Who let the Dogs ‘in’ – Bulgaria and EU membership

The way in

For ten years leading up to formal EU membership in 2007, Bulgaria sent well-educated, female foreign ministers to negotiate with Brussels. Their mission was to improve Bulgaria’s negative image abroad, to replace the old stereotype of Bulgaria as a haven for money-washing, organized crime and chronic corruption, into something new, civilized and Western bound. Clearly the tactics worked. But others came to Bulgaria’s aid as well. The bureaucrats in the Delegation of the European Commission in Sofia were probably the most prominent promoter of Bulgarian EU membership, painting a rosy picture of a country in rapid transition in its official reports. To get Bulgaria in the EU as quickly as possible would benefit their careers, for sure. A third force pushing for Bulgaria was the US. Bulgaria, notably unknown to most Americans before the bombing of Serbia in 1999, suddenly turned into a firm ally as NATO fighter jets were permitted to fly over Bulgarian airspace on route to targets in Kosovo and Serbia. For sure, keeping the Russian bear out of Europe also played a role, as Bulgaria was rushed into NATO as well.

However, despite all the good looks and good words, in reality, Bulgaria in 2007 was far away from coping with the Copenhagen criteria for EU membership. The Bulgarians knew it, that’s why the EU membership came as such a surprise to most Bulgarian citizens and companies. According to the Copenhagen criteria, to join the EU, a new member State must meet three specific criteria: political (democratic institutions, rule of law, human rights and protection of minorities), economic (functioning market economy and capacity to cope with free market forces), acceptance of the Community Acquis (ability to cope with obligations of membership). How the EU came to the conclusion in 2007 that the rule of law is upheld in Bulgaria remains a mystery. By any measure, and again any Bulgarian taxi driver will confirm this fact, the legal system in Bulgaria is not up to par. To the contrary, it is an under-performing institution, which protects the bad, and leaves the good out in the cold. In summary, 150 business related assassinations in 20 years remain unsolved, famous businessmen whose only claim to fame is their capacity to avoid taxes and steal state assets remain at large and so does generations of politicians, policemen, custom officials, public administrators, prosecutors and others on low state salaries who own properties for which they would have to work 300 years to actually afford. All of the above must have been obvious to Brussels, yet made no impression on the EU as it gave Bulgaria the green light to enter the Club.

Most Bulgarians expected euro notes to fall from the trees as a result of EU membership. The politicians did little to restrain expectations. Instead, what followed was a range of disasters and disappointments – inflation, closure of production units not adhering to tough EU directives and standards, increased brain drain especially among the young and well-educated, outbursts of blatant corruption in the use of EU funds and a horrific realization that the country was incapable of managing the opportunities and responsibilities of EU membership. Why? Well, in good Balkan fashion political change means change in public administration. The winner fills the public sector with his own people. Any capacity built up is effectively lost as the old staff walks out the door. There is no continuity in skills or procedures, everything starts over from scratch, including new desperate attempts by the EU to strengthen administrative capacity.

No way out

There is no historical presence of a member state being asked to leave the EU due to under-performance. There is no clear legal framework for a member to choose to leave the EU. If your are in the Club, you are in forever. This does not send the right signal to the layer of irresponsible politicians that the Balkans has the unfortunate, but very consistent habit of electing to power, over and over again. The EU’s stick is hence non-existence, while the financial carrot has limited influence. In Bulgaria’s case, when the EU decided to “punish” it for misuse of EU funds, the Government turned to the national reserve to keep its abuse of power machine ticking, at least until the next election. Who got hurt? Neither the political elite nor the businessmen dictating policy and new legislation, of course, but the average citizen who saw the quality of health care, education, roads take a nose dive.

Dare to change

So, will the EU learn anything from the Bulgaria case in its current negotiating with countries in Western Balkan? Will it change its approach to taking in new member states? Probably not. This is both unfortunate and irresponsible. A new model for absorbing new member states, which at the time of entrance are far below the EU average on the Copenhagen criteria, is desperately needed. If the EU is to become a global economic and political power, it has to invent new membership rules, which promote the well-performing member states, while at the same time demanding improved performance by the other members of the Club.

To build and enforce positive and sustainable changes in the politics, economy and society of new members states, it is simply not enough that these countries perform well during 10 years leading up to EU membership. Bulgaria did this and has since fallen back into old habits of chronism, corruption and crime. The recent debt crisis in Greece shows that also older members of the EU continue to misbehave like children hoping that they will get away with it, every time.

EU is a club of very diverse nation states. It includes states with clear Banana Republic tendencies (not functioning judicial system, heavy political involvement in the economy and businessmen in politics, incompetent and over-staffed public administration, etc) glued together with some of the most competitive economies, with highest living standards anywhere in the World. EU member states are like pupils, divided into groups depending on performance, and in classic egalitarian manner the teacher is giving all his/her attention to the under-performing students, ignoring the plea of the better students. And then we wonder why we are not the most competitive economy in the world yet.

A new approach is necessary to break the bad habits of Ottoman rule and communist mismanagement among the potential new member states from South East Europe. Rather than granting full membership to new member states, a trial period of 25 years (at least one generation) with limited voting rights and no presidency should be applied, during which the country will still receive a comprehensive package of technical assistance to build up the capacity to fulfill the Copenhagen criteria in a sustainable manner. Some will argue that this is unfair, and that the countries of Western Balkan will be a B-team within EU. Well, yes, but let’s be honest, they are 20-50 years behind the best performers in the EU anyway (and some of the older member states surely belongs to this category as well) However, upward mobility is the goal and by showing consist improvement on the Copenhagen criteria for 25 years a new member state will earn promotion to the A-team. In simple school terms, the current accession process is like cramming for an exam, taking the test successfully, and forgetting everything you learned the next day…and going back to doing things they way you and your buddies know best! Nobody benefits from this approach.