[BRIEF NOTE] Vojvodina Notes
A new article at Balkan Insight, Neil MacDonald's "Serbia Luring ‘Brownfield’ Investors", caught my eye the other day. In the autonomous Serbian province of Vojvodina, "brownfield" investments in an idle and decayed industrial economy seem to be taking off.
Strong economic growth forecasts, continued flows of remittances from Serbs working abroad--often used to finance homebuilding--and Serbia’s gradual progress toward membership in the European Union all make Windisch optimistic about the domestic building materials market.
While Serbian economic officials talk frequently about attracting "greenfield" investors, many foreign investors have opted for a less dramatic entry into the southeast European market of 8 million.
"Brownfield" investment in existing factories, warehouses or other industrial assets is a faster, lower-cost way to seek earnings from the former Yugoslavia’s massive, if decayed, industrial capacity.
Weinerberger first set up a Serbian sales office at the end of 2006 and last month purchased 100 percent of IGM Backa Nova, the local private company behind the Mali Idjos brick factory. The price, though undisclosed, was right for a "mid-sized old plant" with "a reliable basis for development," Windisch says.
Far from crumbling or moth-balled, the Mali Idjos plant with 50 workers reported revenues of 2 million euros last year. Weinerberger intends to hire 100 more workers.
Nowhere is successful "brownfield" investment more prevalent in Serbia than in Vojvodina. Weinerberger’s investment is one of countless examples in the northern autonomous province, traditionally the country’s strongest industrial area.
Since October 2000, Vojvodina has regained fiscal autonomy from Belgrade. More recently, since May 2004 when the EU launched its waves of enlargement into post-communist Europe, Vojvodina has gained common borders with two EU countries, Hungary and Romania.
"Vojvodina is from our point of view a market with prospects of good development in the future," Windisch says.
Vojvodina has always been a region with experiences diverging from that of Serbia proper, these experiences rooted in a particularly complex local history as described in Brian J Pozun's 2000 "A New Sky Over Serbia".
For a long time, there has been an academic controversy over whether the Serbs or the Hungarians were the land's original inhabitants. In 1918, the region became part of the Kingdom of the Serbs, Croats and Slovenes, later Yugoslavia, but until then it had been part of the Hapsburgs' Austrian Empire.
Proud of their Hapsburg, Central European culture, the residents of Vojvodina distance themselves from the rest of Serbia, feeling closer cultural affinity to Croatia, Slovenia, Hungary and other former Hapsburg areas. One ethnologist found the Vojvodinian ideal to be fini ljudi, in other words, cultured and civilized. Vojvodinians put their fini ljudi concept in diametric opposition to their prejudice of the uncivilized "Balkan" types to the south.
Vojvodina became an autonomous province of Serbia under the terms of the 1974 constitution, together with Kosovo and Metohija. De jure, it was still part of the republic of Serbia, but de facto, it functioned as a full-fledged republic. Five nationalities were accorded the status of "titular nationality:" Serbs, Hungarians, Slovaks, Romanians and Rusyns.
This autonomy was eventually revoked under pressure from Milosevic in the late 1980s, and Vojvodina effectively subsumed Republic of Serbia. At the beginning of the Yugoslav wars, as outlined in a CSIS commentary from 1991, Vojvodina had prospered quite nicely: GDP per capita in the richest Yugoslav republic, Slovenia, was $US 12 618, Croatia ranked second at $7 179, Vojvodina came a close third to Croatia at $6 949, GDP per capita in Serbia proper was $4 870, and GDP per capita in Yugoslavia as a whole was $5 434.
This prosperity soon came to an end. As Vladimir Gligorov notes in his essay "Southeast Europe: A History of Divergence" (PDF format), the stresses of war and sanctions created a massive economic collapse in Vojvodina, with gross social product per capita slipping from 60% of Slovenia's at the beginning of the 1990s to a mere quarter at the decade's end. Multiethnic Vojvodina was fortunate to avoid the warfare that hit other Yugoslav territories, and many ethnic Serb refugees from the lost wars were resettled in Vojvodina, perhaps attracted by an average level of income perhaps a quarter higher than that of Serbia proper.
A Vojvodina that borders directly onto the European Union member-states of Romania and Hungary, and the prospective European Union member-state of Croatia, has obvious potential. Before 1991, Vojvodina was one of the wealthiest regions in that part of Europe. Assuming a stable political environment, quite a lot of catch-up growth could be possible. That, unfortunately, is a big assumption: Tomislav Nikolic might be in the lead in the next round of Serbia's presidential elections.
Strong economic growth forecasts, continued flows of remittances from Serbs working abroad--often used to finance homebuilding--and Serbia’s gradual progress toward membership in the European Union all make Windisch optimistic about the domestic building materials market.
While Serbian economic officials talk frequently about attracting "greenfield" investors, many foreign investors have opted for a less dramatic entry into the southeast European market of 8 million.
"Brownfield" investment in existing factories, warehouses or other industrial assets is a faster, lower-cost way to seek earnings from the former Yugoslavia’s massive, if decayed, industrial capacity.
Weinerberger first set up a Serbian sales office at the end of 2006 and last month purchased 100 percent of IGM Backa Nova, the local private company behind the Mali Idjos brick factory. The price, though undisclosed, was right for a "mid-sized old plant" with "a reliable basis for development," Windisch says.
Far from crumbling or moth-balled, the Mali Idjos plant with 50 workers reported revenues of 2 million euros last year. Weinerberger intends to hire 100 more workers.
Nowhere is successful "brownfield" investment more prevalent in Serbia than in Vojvodina. Weinerberger’s investment is one of countless examples in the northern autonomous province, traditionally the country’s strongest industrial area.
Since October 2000, Vojvodina has regained fiscal autonomy from Belgrade. More recently, since May 2004 when the EU launched its waves of enlargement into post-communist Europe, Vojvodina has gained common borders with two EU countries, Hungary and Romania.
"Vojvodina is from our point of view a market with prospects of good development in the future," Windisch says.
Vojvodina has always been a region with experiences diverging from that of Serbia proper, these experiences rooted in a particularly complex local history as described in Brian J Pozun's 2000 "A New Sky Over Serbia".
For a long time, there has been an academic controversy over whether the Serbs or the Hungarians were the land's original inhabitants. In 1918, the region became part of the Kingdom of the Serbs, Croats and Slovenes, later Yugoslavia, but until then it had been part of the Hapsburgs' Austrian Empire.
Proud of their Hapsburg, Central European culture, the residents of Vojvodina distance themselves from the rest of Serbia, feeling closer cultural affinity to Croatia, Slovenia, Hungary and other former Hapsburg areas. One ethnologist found the Vojvodinian ideal to be fini ljudi, in other words, cultured and civilized. Vojvodinians put their fini ljudi concept in diametric opposition to their prejudice of the uncivilized "Balkan" types to the south.
Vojvodina became an autonomous province of Serbia under the terms of the 1974 constitution, together with Kosovo and Metohija. De jure, it was still part of the republic of Serbia, but de facto, it functioned as a full-fledged republic. Five nationalities were accorded the status of "titular nationality:" Serbs, Hungarians, Slovaks, Romanians and Rusyns.
This autonomy was eventually revoked under pressure from Milosevic in the late 1980s, and Vojvodina effectively subsumed Republic of Serbia. At the beginning of the Yugoslav wars, as outlined in a CSIS commentary from 1991, Vojvodina had prospered quite nicely: GDP per capita in the richest Yugoslav republic, Slovenia, was $US 12 618, Croatia ranked second at $7 179, Vojvodina came a close third to Croatia at $6 949, GDP per capita in Serbia proper was $4 870, and GDP per capita in Yugoslavia as a whole was $5 434.
This prosperity soon came to an end. As Vladimir Gligorov notes in his essay "Southeast Europe: A History of Divergence" (PDF format), the stresses of war and sanctions created a massive economic collapse in Vojvodina, with gross social product per capita slipping from 60% of Slovenia's at the beginning of the 1990s to a mere quarter at the decade's end. Multiethnic Vojvodina was fortunate to avoid the warfare that hit other Yugoslav territories, and many ethnic Serb refugees from the lost wars were resettled in Vojvodina, perhaps attracted by an average level of income perhaps a quarter higher than that of Serbia proper.
A Vojvodina that borders directly onto the European Union member-states of Romania and Hungary, and the prospective European Union member-state of Croatia, has obvious potential. Before 1991, Vojvodina was one of the wealthiest regions in that part of Europe. Assuming a stable political environment, quite a lot of catch-up growth could be possible. That, unfortunately, is a big assumption: Tomislav Nikolic might be in the lead in the next round of Serbia's presidential elections.