Understanding the link between socioeconomic and environmental challenges in BiH

The case of Zenica is a dramatic illustration of the consequences of the inability and unwillingness to respond to environmental concerns on the part of authorities, both domestic and international.

Reading time: 11 minutes
Socioeconomic impact environmental challenges

Last month, the Heinrich Böll Foundation in BiH published an insightful article by Samir Lemeš on air pollution in Zenica and the fight conducted by Eko Forum to try and improve air quality in the city. The case of Zenica is a dramatic illustration of the consequences of the inability and unwillingness to respond to environmental concerns on the part of authorities, both domestic and international. As Lemeš explains, environmental activism has been present in Zenica for a long time – Eko Forum was created 13 years ago. My own research interviews in Zenica, conducted as part of a project on socioeconomic violence and justice during and after the Bosnian War, also show that pollution was a concern already during socialist times. At the same time, environmental concerns in Zenica – as in other Bosnian cities – appear alongside concerns related to unemployment and basic social and economic rights.

In this short article, I will discuss the role of privatisation and international policies during the transition and how it may have facilitated such problematic socioeconomic and environmental outcomes. While taking Zenica as a starting point, the arguments presented in this article bear relevance for other post-industrial cities in Bosnia and Herzegovina, still struggling with unemployment and a social crisis alongside high level of air pollution. The article touches on three issues specifically: first, the lack of support for the manufacturing sector during the privatisation process; second, the false choice between saving jobs and protecting the environment; third, the lack of accountability in economic decision-making established through the transition to market economy.

Privatisation was a crucial part of internationally-sponsored economic reforms in BiH (as in other post-socialist and post-communist states). At first, a voucher privatisation model was implemented, which gave citizens access to vouchers with which to buy shares in privatised firms, or to enable them to own formerly socialised flats. Once it became clear that the voucher system was resulting, for many firms, in asset-stripping to the advantage of few well-connected individuals, international institutions thus decided that large firms could not be successfully privatised through this model, and that foreign investors would have to be sought.

It is in this context that we should place ArcelorMittal’s acquisition of the steel mill in Zenica (and of the iron ore mines in Omarska, near Prijedor, as well). ArcelorMittal’s investment was, at the time it was made, the largest FDI in BiH since the war. Should it succeed, it was thought, it would have boosted confidence and helped attract more foreign investors in BiH. Partly because of this, the EBRD contributed to financing energy efficiency investments and working capital at ArcelorMittal Zenica in 2005, to support the restarting of integrated steel production at the plant that was suspended during the war. But the support granted to ArcelorMittal was quite unique: out of 191 projects financed by the EBRD in Bosnia and Herzegovina to date, only 5 are in the manufacturing sector (two of these are linked to the Zenica steel plant). Most commonly, the manufacturing sector in BiH was not granted this kind of financial help. Institutions like the EBRD, for example, invested more heavily in supporting the liberalisation of the banking sector in BiH, and in microcredit initiatives that were meant to foster the creation of small enterprises. Ultimately, this led to the deindustrialisation of the economy in many areas, with the loss of firms that had been key employers during socialist times. Beyond the case of Zenica, we can think of the SODASO conglomerate in Tuzla, the paper mill in Prijedor or the many other industrial areas where a large majority of jobs were also lost in the privatisation process. This also resulted in growing levels of unemployment and low levels of economic activity, indicating that many people were neither working nor looking for employment.

One might think that the loss or restructuring of industrial conglomerates might have had at least the beneficial if unintended effect of reducing pollution around the country to acceptable levels. Sadly, that is not the case. Bosnian cities – similarly to cities in other Balkan countries – are still among the most polluted in Europe and often top global air pollution rankings. While it is true that some of this air pollution is be due to home heating systems rather than industrial outputs, it is still the case that international policies on privatisation, throughout the post-war period, have not provided sufficient support for the modernisation of Bosnian industries, including making environmental safeguards a key part of their strategy. In fact, the general approach taken by international organisations in their privatisation policies – despite the destructive impact of the war on Bosnia and Herzegovina’s industrial infrastructure – was that factories should be sold before any restructuring and upgrades are carried out. In addition to being one factor identified as facilitating asset-stripping and unsuccessful privatisation (leading to many firms never reopening), this ultimately made it more unlikely that privatised firms would complete renovations enabling a reduction in polluting emissions once they restarted production. As noted by Lemeš, SO2 and dust concentrations in Zenica reached 80% of socialist-era levels when production restarted, despite the industrial output being only one third compared to the past.  

A second unhelpful consequence of post-war policies that have contributed to depressing employment levels in BiH has been the distortion of demands around environmental issues. When demands for environmental justice – such as the ones put forward by the citizens of Zenica and Eko Forum – are raised, these are often framed in direct opposition to the need to protect jobs by protecting the economic interests of investors. This presents a false choice between saving jobs and protecting the environment. During my research interviews in Zenica, citizens demanded the right to work that for many of them had disappeared with the war and the privatisation of the steel plant and consequent reduction in personnel. Many hoped that more factories would restart production or open in Zenica to compensate for the loss of steel plant jobs. At the same time, people had clear demands in relation to the right to health and right to a clean environment. Air and soil pollution were often mentioned as pressing concerns. Citizens demanded that the relevant authorities turn their attention to these problems. These claims for a reduction in pollution alongside demands for more jobs are often presented as conflicting, but framing this as binary choice between work and the environment is in fact highly misleading. First of all, the interviewees themselves did not understand this as a binary choice, as they were well aware of the need to find solutions for both problems rather than prioritise one at the expense of the other. Second, such binary framing overlooks the extent to which the right to work and environmental and health rights are tightly interwoven. Historically, workers never mobilised just to get more work or better pay, but also for the safety of workplaces and the surrounding community. Moreover, as other scholars have noted, it is not possible to fully enjoy the right to work in the absence of access to health and a clean environment.

This does not mean that people in Zenica and elsewhere haven’t been presented with choices between elements of these rights, or the prioritisation of one over the other, but that this has more to do with power relations between different actors involved than with an inherent contradiction between these rights. It is due to such power imbalances – between citizens in post-industrial towns, corporations, and local, national and international authorities – that the question of the right to work and the right to a clean environment is often presented as a trade-off. But this false choice between protecting the environment and protecting jobs is actually better reframed as a problem of accountability: research interviews clearly highlighted that what citizens of Zenica were calling for was to have relevant authorities – local as well as federal – and economic actors (such as ArcelorMittal) respond to them for their management of the environment and the steel mill. This leads me to the third and final argument of this article.

 A third problem that links together the mismanagement of the economy and industrial sector in particular on the one hand, and environmental issues in BiH on the other, is the lack of accountability in economic decision-making. Commentators and scholars often highlight the problematic nature of BiH’s constitutional system established at Dayton, which incentivises ethno-nationalist political forces while disincentivising political mobilisation around civic ideas or values, and puts barriers to the participation of specific groups of people depending on their ethnic affiliation (including for those who do not declare themselves to belong to one of the three ‘constituent peoples’) and place of residence within BiH. These are well known issues.

However, it is far less common to discuss the loss of accountability and participation in economic decision-making that came with the transition from socialism to a market economy. This is relevant for this discussion because democratisation in the management of the economy and the environment are ultimately two sides of the same coin: a lack of accountability and participation in economic-decision making is bound to make environmental justice claims more difficult to achieve. It makes it harder for workers and citizens to advance holistic demands about different aspects of their livelihoods – such as health, labour rights and environmental issues – that are so clearly interconnected in their everyday life. During socialist times, there were established avenues for the participation of workers in decision-making that concerned their workplaces. While the functioning of workers’ councils and self-management in Bosnia and the former Yugoslavia more broadly clearly had importantly limitations that have been highlighted by researchers, the end of that system did not turn into an opportunity for improvements in public participation and an increase in accountability in economic decision-making towards the citizens of BiH. Rather, the transition to market economy dispensed quite quickly and summarily of socialist legacies, and for workers and citizens this meant that their rights to participation in economic decision-making were effectively relinquished together with the loss of socially-owned property.

Both of these sets of constraints – institutional/constitutional and economic – have affected social mobilisation around environmental issues. Environmental issues worried citizens in various BiH cities since socialist times, but in the immediate post-war years – and in the drafting of privatisation and economic strategies – they were not a central concern. Some of these issues were raised during popular mobilisations, both in the 2014 mass protests as well as in more localised mobilisations that took place both before (as in Zenica regarding air pollution) and after, for instance in relation the construction of hydropower plants on Bosnia’s rivers. However, only recently they have started receiving more sustained attention, especially on the part of the international community. As late as 2015, at a consultation with citizens on the ‘Compact for Growth and Jobs’ organised by the EU in East Sarajevo, international officials were mostly dodging questions from the audience concerning environmental concerns around industrial sites. If such a meeting was held today, officials would likely display more awareness and engagement with such topics. However, much progress remains to be made.  

Ultimately, we can see how, in post-war BiH, the new institutional system cast citizen participation in politics as voting in elections, which tend to result in maintaining the status quo; while economic reforms removed the old mechanisms of workers’ participation in economic decision-making without replacing them with better functioning ones. It is therefore not surprising that when it comes to environmental issues – which cut across politics and economics, private and public sectors, international and local distinctions – progress has been so slow.

Questions of unemployment and economic hardship on the one hand, and pollution and health on the other, are deeply interconnected – in BiH as in other countries. In this article, I have shown how economic reforms, the misframing of claims around jobs and the environment as competing ones, and the loss of avenues through which citizens could participate in economic decision-making have contributed to current problems in BiH. While a combination of short-sighted post-war reforms, inaction and lack of accountability have stymied progress so far, this should not stop us from trying to bring about change right now.