Boom, bust and blight: the story of a Bosnian factory

If you want to understand anything about Bosnia & Herzegovina’s industrial decline, just take a look at the Glinica Birač factory near the north-eastern town of Zvornik.

Built in 1976, the aluminium and zeolite megacomplex was the single largest producing-exporting company in the entire former Yugoslavia, producing a record net profit of US$100 million in 1989.

Today, however, it provides a stark example of failed privatisation and murky foreign investements, saved from bankruptcy by politicians who considered the factory as ‘too big to fail’ but who have done little to make it work.

The winners in this scenario are the tycoons and politicians who enjoy all of the privileges that come with deregulation and cronyism. Meanwhile the workers, who eke out a living in one of the poorest countries in Europe, are the undisputed losers.

According to national statistics, the average monthly income in Bosnia is around 800 convertible marks (approximately US$560).

However, civil society groups such as the consumers’ association, say this figure fails to reflect the true situation, pointing out the massive disparity in incomes.

Many public sector employees, for example, earn in excess of 5000 KM (US$3500) a month while the vast majority of citizens take home between 200 to 600 KM (US$140-420) a month.

Add to these low wages an official unemployment figure of well over 40 per cent and you can see why mass protests erupted across the country last month.

 

Workers: from ‘kings’ to paupers

During the rule of Marshal Josef Tito, Bosnian (then Yugoslav) workers enjoyed working conditions that rivalled, even exceeded, those in Western Europe.

As one former Glinica worker stated: “Before the war, the worker was king. There were plenty of workers, which meant less working hours and more free time. But, we still saw the results of our labour. It was a much happier time.”

In addition to more favourable working conditions, workers also enjoyed numerous benefits. For example, many of the workers at Glinica lived with their families in afforable, company apartments situated near the factory.

But things couldn’t be more different these days. Simply put, today there are far more unemployed people than there are jobs, so those ‘lucky’ enough to be in employment put up with terrible working conditions because they know there’s an army of unemployed people behind them.

The majority of workers in Bosnia & Herzegovina work in the informal economy where their rights are routinely violated, while permanent work is a pipe dream for most.

In addition, there is no social safety net in the country and employers often take advantage of the country’’s desperate economic condition to avoid their tax obligations, usually in collusion with the authorities.

“The former Lithuanian owners [who in 2001 bought a majority share of, what as until then a state-owned company – ed.] did not pay into the social welfare and pension fund, many workers were not even registered,” stated a long-time worker at the Glinica Birač factory, who spoke to Equal Times on the condition of anonymity

“The government was aware of this, but turned the other way until the Lithuanians went bankrupt and fled the country in early 2013. Months later, the government moved in and divided the ownership among the politicians.”

The worker said conditions have improved under the new government-appointed executive board, but that insecurity still remains.

The factory currently employs around 1000 workers. In 1991, a year before the Bosnian War broke out, that number was 2600.

 

Disunity

The deep divisions that exist in Bosnian society along ethno-national/religious lines are a legacy of the brutal civil war from 1992 to 1995, and present a number of challenges for the workers’ movement.

The country is effectively divided into the two entities: the Federation of Bosnia & Herzogovina, populated mainly by Bosniaks and Croats, and Republika Srpska, which is mostly Serb.

Discrimination, especially in employment, is rife across the country.

The split makes is extremely difficult, if not impossible, to form a functioning administration, a coherent nationwide plan for economic and social development, or to safeguard the rights of the citizens.

The excessive and overly complicated bureaucratic system helps create a culture in which authorities do not feel beholden to the citizens.

It also allows corruption to take place at virtually all levels of government.

Nerzuk Ćurak, a professor in political science at the University of Sarajevo and a renowned political analyst, has spoken in favour of a “socially just, highly decentralised state which functions according to the subsidiarity principle, but which functions on a cheap and rational basis. Those who believe BiH needs five layers of government to project an ethnic balance deserve only contempt.” 

Even the trade unions in Bosnia & Herzegovina reflect these divisions which hinders their ability to work effectively together.

The two Bosnian trade union centres – the Federation’s Savez samostalnih sindikata BiH (Confederation of Independent Trade Unions of Bosnia and Herzegovina, or SSSBiH) and the Savez sindikata Republike Srpske (SSRS) – are both constitutient members of the KSBiH, the Confederation of Trade Unions of Bosnia and Herzegovina.

Enisa Salimović, office coordinator for the International Trade Union Confederation (ITUC)/Pan European Regional Council’s South-East Europe office in Sarajevo, has described the level of cooperation between the two unions as “solid, sometimes very good, yet most of the union activity takes place along the entity-level due to the fact that the working legislature is passed in the entities.”

 

Labour laws

Even though the potential strength of the labour movement is weakened by unfavourable socio-economic conditions and a lack of solidarity among workers, the blockage of a new labour law in Republika Srpska by the trade unions has proved to both the authorities and the workers that they are capable of standing up when their rights are grossly violated.

The proposed law had the strong support of the entity government and the Unija udruženja poslodavaca RS (the official employers’ association).

As the approval of the union was necessary to see the passing of the legislation, strong pressure was exerted on them to vote in favour of the new law.

But according to the SSRS President Ranka Mišić, the proposed law would have turned workers into “21st century slaves”.

In a recent interview with Radio Free Europe, she said: “[The worker’s] fate in all segments is decided exclusively by the employer. There are no collective discussions – and even more importantly, all of the material dispensations secured by the unions under the general collective agreement disappear.”

The unions were successful in defending the workers’ interests in this case, but securing the legislation is one thing – implementation is quite another, and many point out that certain provisions in the current labour law are not respected.

Local disputes between management and the workers receive relatively little media coverage and are usually quickly resolved, with the workers getting the short end of the stick.

According to Salimović, stronger unions is the only answer: “It is sometimes very bad when unions start to have internal quarrels – they lose time and public reputation. It’s important to return the trust in the unions, to rebuild their image in order to bring in new members and to appeal to younger workers.”

For many of those young workers, opportunity lies elsewhere. According to World Bank data, a massive 28.6 per cent of Bosnian’s who have received a post-secondary school education have migrated abroad.

The recent protests have quite effectively put the issues of workers’ rights and employment at the centre of political discourse in Bosnia. The workers and unions have forced the politicians to hear their demands.

But Bosnia has been in a perpetual state of depression for over two decades. The February protests may have raised hopes that significant, positive change is possible, but it will take time to reverse over 20 years of economic mismanagement, social degradation and corruption.