Hot topics August 2019: Bosnia fails to form state government; Serbia tops FDI list; Kosovo sets elections for October; Sarajevo film festival picks the winners; Pepsi and KMV become 100% owners of Knjaz MilosAdriatic Journal 2 September 2019
Bosnia fails again to form state government
Bosnia’s tripartite presidency again attempted and failed to break the country’s political deadlock and form a new state-level government, 10 months after the election. Extraordinary session of the Bosnian presidency intended to finally form a new state-level government, known as the Council of Ministers, was cancelled last month as the country’s political crisis continued to deepen. There was only one item on the session’s agenda – Milorad Dodik’s proposal to appoint Zoran Tegeltija as the new chairman of the Council of Ministers. This was the second time Dodik tried to push the appointment of Tegletija as chairman of the Council of Ministers. However, it was clear from the outset that Croat and Bosniak members of the presidency, Željko Komšić and Sefik Dzaferović, would vote against the proposal. Both conditioned supporting Tegeltija’s candidacy with the submission of Bosnia’s Annual National Programme to NATO – a precondition for the activation of BiH’s NATO Membership Action Plan. However, Bosnian Serb leaders are strongly against joining the alliance. According to an agreement signed on August 8 between the leaders of the three parties that won most votes in last year’s elections, the deadline to resolve the dispute is September 5.
"I would not want Bosnia to enter into this kind of crisis, to strike at three good things that are working in the country. It is our duty to try to calm the situation. With those kind of threats, we will all lose. Although I want to believe that an agreement will be reached, I’m afraid the other scenario is more likely", Komšić said after the last failed session.
Dodik threatened to pull out of agreements that allowed the formation of ethnically-mixed armed forces, the state court and the national police agency, if the deadline is not met. “It is our right to withdraw from an agreement we previously signed. Don’t think we have no consensus on this,” Dodik said at a press conference. Both Dzaferović and Komšić urged Dodik to refrain from making threats.
Kosovo’s election set for October
President Hashim Thaci announced last month that early parliamentary elections will be held in Kosovo on October 6. Kosovo’s Central Election Commission (CEC) has set a 10-day campaign for the snap elections, following the resignation of the prime minister Ramush Haradinaj. The official campaign will begin on September 25 and will last until 4 October. However, political parties have already begun campaigning and working to form pre-election coalitions.
Bosnian-Dutch film wins top award at Sarajevo Film Festival
A Bosnian-Dutch film about a Bosnian girl living in Holland and returning to Bosnia to visit her sick father she has never met was chosen as the best movie at the Sarajevo Film Festival (SFF) that this year marked its 25th anniversary. Take Me Somewhere Nice by Bosnian director Ena Sendijarević won EUR 16,000 Heart of Sarajevo award by the jury chaired by Swedish film-maker Ruben Ostlund. The film was chosen from nine features competing at the festival. Overall, 53 other films competed in four different sections. Georgian actor Levan Galbakhiani was named the best actor for his role in And Then We Danced, while Bulgarian actress Irini Jambonas won best actress for her role in film Rounds. Sequel to “Shadows over the Balkans” won the biggest number of votes by the audience.
PepsiCo and KMV complete the purchase of Serbia’s Knjaz Miloš
In August, Mid Europa Partners, the leading private equity investor in Central and Eastern Europe, completed the sale of its shares in Knjaz Miloš to a joint venture between Karlovarské Minerální Vody (KMV) and PepsiCo, Inc., who became 100% owners of the sparkling water producer. The purchase was formalised in the Czech Republic embassy in Belgrade by signing the ownership contract agreed upon five months ago. PepsiCo, Inc. is American multinational food, snack, and beverage corporation, while KMV is the largest producer of mineral and spring water in the Czech Republic. The acquisition approved by the Commission includes Knjaz Miloš production that covers capacities in Serbia as well as the company’s brands Knjaz Miloš, Aqua Viva, Guarana, ReMix and Gusto. The cost has not been made public. Knjaz Miloš, based in Arandjelovac, has over 200 years of history and is one of the largest producers of mineral water, non-alcohol and energy drinks in the country. Mid Europe Partners investment fund from London became its owner in 2015. Miloš Stojisavljević, Knjaz Miloš CEO, said the company finally acquired a strategic partner with the European and world experience in the business. According to him, the company with 800 employees, expects a net turnover of EUR 70m this year.
Emigration of Croats triggered salary increases in the country
Mass-scale emigration of Croats abroad has triggered off two significant processes on Croatia’s labour market: wage increases and the opening of the market to older workers, according to the Večernji List daily. The beginning of the increase in monthly salaries coincided with the end of the recession and the start of the economic recovery in 2014, Zvonimir Savić , analyst at the Croatian Chamber of Commerce (HGK) said in comment to the publication. The average monthly salary is around HRK 6,500 (EUR 878), with the average monthly salary in Zagreb being HRK 7,500. According to the publication, in 2016 the gross monthly salary in Croatia stood at EUR 1,030 in 2016, increasing by 10.6% in 2018 to EUR 1,139. Broken down by sectors, healthcare registered the biggest pay increase by approximately 5%. Savić pointed out, however, that a rise in salaries in Croatia in recent years was lower than in some other countries in transition. Slovenia, Estonia and the Czech Republic have average gross salaries higher than those in Croatia and they top the list of the 16 countries analysed by the publication. In Slovenia, the gross salaries rose by 6.2% from EUR 1,585 in 2016 to EUR 1,682 in 2018.
Serbia’s opposition expected to boycott spring elections
Lats month, Serbia’s opposition parties met to discuss a possible boycott of the next year’s general election. N1 reports that none of the opposition parties that took part in last month’s meeting said they would run in the elections under the current conditions. Dragan Djilas, the leader of the Party of Freedom and Justice (SSP), said after the meeting that some parties had already opted for the boycott, some are still considering it, while some said they would wait until the elections were called. “However, none of the parties are ready to take part in elections under current conditions,” Djilas said. He added that “there will be pressure on people to vote, but we’re aware that no one can make us jump into an empty pool and swim.” Zoran Živković, the former prime minister and leader of the Nova Stranka said his party is yet to decide, adding that it first has to be clear what would be gained by boycotting elections. He cited the elections in Albania that were boycotted by the opposition but that nobody challenged their legitimacy despite a low turnout. Konstantin Samofalov, a Social-Democrat, insisted that the boycott should be unanimous if it was to have an impact. Many, however, agree that the boycott is the only way to change the regime. Srdjan Marković, one of #1 in 5 million anti-government protest organisers, said they would call on all opposition parties to boycott the elections.
One in five Croats have never used Internet
As many as 21% of Croatia’s population has never used the Internet, compared to 11% in the whole of the European Union, reported Croatia’s daily Jutarnji List, quoting the findings of the European Commission’s Digital Economy and Society Index (DESI). The index tracks the evolution of EU member states in digital competitiveness. It shows that there are large disparities across EU member-states regarding the use of internet services. For example, in Croatia every fifth citizen has never used the Internet compared to the 2% of Danish population. In Croatia, 62% of its citizens aged over 65 have never been online, writes Jutarnji List.
Koper port among best connected in the world
The Koper port ranked 80th on this year’s list of 900 best connected container ports in the world. The rankings are published by the United Nations Conference on Trade and Development (Unctad). The port has been listed the highest among all Adriatic Sea container ports since the first such rankings in 2006. The first place went to the Shanghai port, while the port of Antwerp was the best in Europe. The Unctad ranks ports according to their liner shipping connectivity index which takes into account the number and frequency rate of their connections with other ports as well as average and maximum vessel sizes. The four north-Adriatic ports transshipped a total of 1.12m container units in 2009, while in 2018 that figure rose to 2.47m. According to the Unctad’s list, the port of Koper is on par with northern-Adriatic ports in terms of its connections, but the Slovenian port surpasses its neighbours when it comes to the number of container units each vessel transships on average. The Koper port has a 40% share of all container transport in north Adriatic Sea and is the biggest terminal in the region. The port expects to reach a million container units transshipped this year.
Serbia tops FDI list
Serbia ranked first on the Financial Times FDI index and attracted EUR 2bn in foreign direct investments (FDI) in the first half of this year, according to the country’s finance minister Siniša Mali. He added that this figure is expected to rise to EUR 4bn by the end of the year.
In the annual study by fDi Intelligence – a Financial Times data division – Serbia scored 11.92 in the index, closely followed by Montenegro with 11.49 and Cambodia with 10,82. The previous year, Serbia was the runner-up behind Mozambique. The study looks into Greenfield investments in 2018 relative to the size of each economy, the FT said. Serbia’s president Aleksandar Vučić welcomed the report, saying it meant that every global or European company would now check what conditions for investing in Serbia were. Bosnia and Herzegovina ranked 15th while North Macedonia was 18th.
Montenegro Airlines registers loss of EUR 90m
Montenegro’s national air carrier Montenegro Airlines (MA) had an accumulated loss of EUR 89.8m at the end of last year, drastically higher than the company’s assets, making its capital negative – minus EUR 51.5m. This was shown by the auditor’s report for the last year, prepared by the auditing company “MV Konsalt” from Podgorica, Vijesti reports. The audit revealed that last year’s MA loss was EUR 1.97m and contingent liabilities EUR 22.5 million. It has also been estimated that the state-owned company cannot finance the loss and liabilities from regular operations, Tanjug reports. “The firm’s ability to continue doing business depends, first and foremost, on the ability to restructure its liabilities and establish a satisfactory level of liquidity,” the report said, adding that a lack of working capital could cause reduced business volumes and increase insolvency risk. “Opportunities for improving the MA’s financial position are limited and depend almost entirely on the support of the Government and its restructuring plans,” the report added. The stabilisation of the carrier’s business has been announced for years, but has not moved further from the declarative one, according to Vijesti. According to the latest list of the largest tax debtors published by the Tax Administration of Montenegro, the national air carrier is in first place.