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Monday, February 17, 2003

Book Reviews

From the Balkans to Southeastern Europe

Balkan Reconstruction edited by Thanos Veremis and Daniel Daianu. London, Frank Cass, 2001, 224 pages, $26.50.

Prior to 1989, the Balkan peninsula — now often referred to as southeastern Europe (SEE) — received only scant scholarly attention. The end of the Cold War and the ensuing bloody demise of Yugoslavia changed that situation, generating a plethora of works dealing with various aspects of the Yugoslav drama and the concomitant political and economic transition unfolding in the countries of the area. The majority of these volumes dealt with the causes and effects of the dismemberment of the Yugoslav body politic, the security issues it generated in the region and beyond, and the processes of transition from communism to democracy and market economies. When the guns fell silent, however, scholarly attention waned. As a result, there is surprisingly little evaluation and assessment of the process and state of transition, as well as of the economic, political, social, and other issues associated with it. This new book edited by Thanos Veremis and Daniel Daianu is a systematic and welcome effort to fill this important gap.

The volume sets out to evaluate and assess the state and impact of reconstruction in the Balkans since 1989, focusing on such pivotal issues as economic assistance, social capacity to utilize aid, regional cooperation, poverty, and factors impeding transition. The book is divided into two parts. The first takes a regional approach and concentrates on issues affecting the area, while the second focuses on the record and specifics of each country, minus relatively prosperous Slovenia and the two countries that never joined the Eastern bloc, Greece and Turkey.

Part I opens with an essay on the European- and, to a lesser extent, American-inspired stability pact. As Vladimir Gligorov sees it, the pact is an outgrowth of a previous and largely failed initiative and aims “to contribute to long-term stability in the region” (p. 13). Its major focus is economic stability, to lead the Balkan countries to “develop open market economies that are integrated within the EU [European Union] and the world economy and managed on the basis of sound economic principles” (p. 13). Gligorov argues that the pact fails to outline clearly the instruments for achieving stability and suffers from an “asymmetry between means and needs” (p. 17).

While Gligovov laments the absence of adequate means and well-articulated implementation methods, Laza Kekic criticizes the conditions that donors attach to aid. Foreign aid, especially when it is tied to conditions, “strips countries of residual sovereignty, further debilitates weak states and creates de facto new protectorates.” Under the circumstances, “rather than help, aid can create symptoms of dependency, which can even undermine the recipient’s institutions, irrespective of the best intentions of both donors and recipients” (p. 22). Kekic believes that rather than proposing “grandiose schemes,” the EU and other donors should pursue an “arms-length assistance doctrine,” which should be “based on assuring free trade, assistance for infrastructure development and minimum political interference” (p. 38). In other words, what the region’s people need is not free fish, but to be taught to fish.

No amount of foreign aid, or meticulously drawn-up stability packages, can improve the situation in the peninsula without a marked change in the quality and capacity of the public sector. Marta Muco argues that “good governance,” which includes “ensuring the rule of law and improving the efficiency and accountability of the public sector,” has a long way to go (p. 41). The low capacity of the state in the region is “demonstrated by the level of corruption and tax evasion,” and the inability to manage social conflict (p. 43). It is also responsible for “low levels of…absorbency” of funds provided by the EU and other donors (p. 51). While the low state of financial capacity and pervasive corruption are connected to historical, geographic, and cultural factors, a large share of the blame rests on the political leadership. Muco’s assessment is blunt: “corrupt political leadership generates corruption” (p.47).

If Balkan fortunes are to experience improvement, regional cooperation is an absolute necessity. Using available data, Milica Uvalic traces and analyzes the state of that cooperation. Before 1989, trade among states in southeastern Europe was negligible. But in the last decade or so, there have been fundamental changes in the overall situation, including “radical reforms of the foreign trade system and substantial trade liberalization.” The EU has emerged as the region’s leading trade partner. The peninsula saw “changes in regional economic groupings, the position of individual SEE countries and their trade partners” (p. 58). In addition, smuggling, drug trafficking, and other illegal activities experienced a dramatic increase. A number of integration-oriented initiatives, such as the Black Sea Economic Cooperation pact and the Southeast European Cooperative Initiative, were undertaken in the 1990s. Despite these changes, Uvalic argues, the region “is even less economically integrated [today] than a decade ago.” The author blames this on continuing hostilities in the former Yugoslavia, the exclusion of what was rump Yugoslavia from these initiatives, and lack of a clear and comprehensive strategy on the part of the EU. Yet, in Uvalic’s mind, regional cooperation in the Balkans has never been more necessary: “regional problems require regional solutions” (p. 72). Such cooperation should be comprehensive and “must include all areas (economic, political, cultural) and all countries. Without it no permanent regional solution is possible” (p. 66). Uvalic asserts: “closer regional cooperation must be promoted primarily in the interest of the SEE countries themselves, but also in the interest of all Europe” (p. 71).

Weak state capacity, problems associated with outside aid, and weak regional cooperation are negatively affecting people’s lives, resulting in substantial increases in the levels of poverty and inequality. Despite difficulties obtaining hard data, Ivo Bicanic reports that there is ample evidence to document that “with transition and its implied structural and institutional changes, inequality increased dramatically and poverty spread visibly.” The author points out that these disturbing developments contrast with the pre-1990 situation, in which “the levels of poverty and inequality inherited from socialism were lower than in developed economies and much lower than in economies with similar levels of development” (p. 77). Bicanic blames this on price liberalization, shifts in priorities in public spending, and “erosion of entitlements.” The biggest culprit, however, is privatization, which “invariably results in unequal distribution of wealth and introduces non-labour incomes, also unequally distributed” (p. 77). Even more alarming is the fact that southeastern Europe has done worse than its northern-tier counterparts and is “still undergoing a social process, transition, which will further increase poverty and inequality levels” (p. 86). Bicanic is concerned that unless the situation improves, we are likely to see “rising instability and political tensions, which in turn will create an unfavorable investment climate and, consequently, low growth, which diminishes the expectations of the poorest and thus leads to further instability” (p. 85).

Despite differences among them, and compared to their central European counterparts, the transition trajectory in Balkan countries from command to market economies has been rather difficult. Daianu uses accession to the EU as the standard by which to assess transition in the countries of southeastern Europe. By this standard, only Slovenia managed to be included in the recent EU expansion. One of the most glaring signs of transition failure is “the blossoming of organized crime and corruption” and the inability or unwillingness of the state to deal with them (p. 94). The author asserts that while central Europe “embarked on sustainable growth in the 1990s, the Balkans continue to be mired in stagnation and even negative growth rates” (p. 97). A number of factors explain this poor record of economic performance and dependency, including lack of political will and “historic and geographic circumstances.” Cultural and other ties to the West enabled central European countries to restructure their economies, but, due to “historic and geographic circumstances,” southeastern European countries were denied this connectedness and, as a result, “were less capable in reorienting their trade towards the EU” (p. 98). As such, “the ideological and political divide that existed in pre-1989 Europe is being replaced by new divides, essentially economic.” And Daianu warns: “unless leaders take astute decisions, Europe’s unification, in the sense of ‘economic inclusion’ of most post-communist countries, will remain a distant goal” (p.107).

The final and very brief chapter in the first part of the volume deals with the West’s view of economic reconstruction in the Balkans. Franz-Luther Altmann concurs with Daianu and other contributors that the economic disparity between the region and the rest of Europe has increased substantially. Yet he notes that the West’s inadequate appreciation of Balkan historical and other disadvantages “might lead to opinions suggesting that the region is so plagued by ancient hatreds, all the rest of the world can do is isolate and leave it to its own devices” (pp. 114-115). Altmann feels that while this is a minority view, attitudes could change for the worse unless the region’s “politicians and citizens do not realize that strong skepticism also exists in the EU countries about enlargement towards Southeastern Europe” (p. 116). Left to its own devices, the region will, according to Altmann, sink into further violence, economic despair, and political instability that could threaten European and even international security.

Part II is devoted to the specifics of the transition trajectory, as well as the record and problems facing each country in the area. While differences should not be minimized, and some strides have been made, one cannot fail to detect increasing levels of poverty, crime, corruption, and general neglect. Market economies have yet to take hold, democracy and the rule of law are weak, and social cohesion is strained to the breaking-point. Countries remain dependent on outside assistance, and crony capitalism and drug and human trafficking cannot be controlled by the bloated but weak post-1989 Balkan states. Every contributor to this volume sees the need for deep restructuring and reform, but doubts the political will and wherewithal to carry it out. Even in countries in which some steps have been taken, such as Croatia and Bulgaria, the road to prosperity is long and difficult.

Balkan Reconstruction is an informative and readable volume that enhances our understanding of this complex, neglected, strategic, but often misunderstood region of the world. Most of the contributors are from or intimately familiar with southeastern Europe; consequently, they have amassed a considerable amount of data and, in general, use them deftly to advance and substantiate their arguments and points of view. Despite its usefulness, however, the book is not without shortcomings. As is the case with most compendiums, the essays are of uneven quality and depth. They are also short in sociological data and analysis. It would have been helpful to learn, for example, among which social strata, or social and ethnic groups, poverty is more pronounced, and why? While information on the Balkans is hard to obtain and not always reliable, there is nevertheless enough available to serve as a basis for analysis. Several contributors mention Western reluctance to come to the region’s aid, but they fail to identify and amplify the reasons that explain this otherwise correct observation. The article on the West’s view of economic reconstruction in southeastern Europe is scant and lacks analytical depth. Finally, the volume neglects issues relating to national security and their impact on the process of transition. The same is true with what is referred to in contemporary literature as societal security, i.e., the capacity of society to maintain its own social or ethnic identity and cohesion in the face of globalization.

These and perhaps a few more shortcomings notwithstanding, however, the editors and contributors deserve praise for putting forth an interesting and much-needed volume. Scholars and practitioners will find this compendium beneficial, and a useful addition to their collection.

Constantine P. Danopoulos teaches political science at San Jose State University.
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