Playing With Fire in Europe’s Powder Keg

(Bloomberg) -- Sarajevo glove maker Kerim Svrakic survived the war that ripped Bosnia apart in the 1990s and then struggled through the peace. Looking back, he wishes he’d left his homeland.

Like many in a city synonymous with 20th century conflict, his concern is that Europe is sleepwalking toward another rupture in the Balkans. That doesn’t necessarily mean all-out fighting, but it could be enough to upend lives again by destabilizing the continent’s most volatile corner.

“I’m sorry I didn’t leave before the war,” says Svrakic, 68, standing in front of stacked-up yellowing boxes filled with faded merchandise. After experiencing the last one, “I feel nothing is safe,” he says.

Playing With Fire in Europe’s Powder Keg

Bosnia risks being collateral damage as world powers jostle for influence in a historical flashpoint. Balkan leaders emboldened by Russia, Turkey and Donald Trump’s revisions to U.S. foreign policy are seeking to unpick ethnic and territorial agreements that have underpinned an anxious peace for two decades. And in the background is a wave of nationalist posturing that’s swept through the former eastern bloc and weakened the European Union.

The latest unease stems from efforts by neighboring Serbia to mend ties with Kosovo, which declared independence in 2008. A deal is a prerequisite to stand any chance of joining the EU, something Bosnia is also aiming to do.

Serb President Aleksandar Vucic has floated the idea of a land swap as the EU tries to broker talks with Kosovar leader Hashim Thaci. Both held discussions on Friday in Brussels with EU foreign affairs chief Federica Mogherini, though refused to sit down together. The German government, for one, has said moving borders risks opening Pandora’s box.

Playing With Fire in Europe’s Powder Keg

But even the idea of redrawing borders and changing homelands for about 100,000 people had raised fears of a domino effect spilling into Bosnia, which is divided into two entities along mainly ethnic lines between Bosnian Serbs on one side and Muslims and Croats on the other.

Bosnian Serb leader Milorad Dodik wants to pull his Republika Srpska region out of Bosnia and Herzegovina and break the power-sharing agreement that’s kept the country together since the 1995 Dayton Peace Accords. Name-checking Russian President Vladimir Putin as his long-time friend, he has been ramping up talk of a split ahead of Bosnian elections on Oct. 7. He’s been repeating calls for independence for the Serb entity of 1.2 million, or about a third of Bosnia’s 3.5 million population.

Playing With Fire in Europe’s Powder Keg

“In the Balkans, you can’t have independence without a war,” Fadil Novalic, prime minister of the Bosnian federation between Muslims and Croats, says in his office near the city’s Miljacka river. “The threat of war is high if Dodik presses for this.”

While Novalic expects any agreement between Kosovo and Serbia to only “increase nervousness, but not lead to a secession or a war,” any arrangement will impact Bosnia, he says. “We’ve been at the intersection of world conflicts for the past 1,000 years.”

It was in Sarajevo in 1914 where a Bosnian Serb triggered the onslaught of World War I by assassinating Archduke Franz Ferdinand of the Austro-Hungarian empire. What became Yugoslavia was then partitioned in World War II between the Nazi-led Axis powers. Then held together again under dictator Josip Broz Tito, it imploded a decade after his death and the ensuing ethnic battles and genocide of the 1990s left more than 100,000 people dead in Bosnia alone.

That makes Bosnia a timely warning of the potential consequences of the blood-and-soil tribalism so familiar in this region. A crossroads of culture and religions, the city is a mix of church spires and minarets, bikini and burkini shops. Local Muslim women wear tank tops while visitors from the Middle East are dressed in niqab face covers.

Playing With Fire in Europe’s Powder Keg

Turkish President Recep Tayyip Erdogan visited Sarajevo during his election campaign in May, stirring emotions in the ethnically divided state. The capital’s newest mall and an adjacent hotel with 218 rooms built on the key central intersection known during the war as “Sniper Alley” cater to mainly Muslim visitors with their no-alcohol policy.

Elsewhere, packed cafes serving booze and shisha water pipes give it a feeling of a sleepy city at peace. Signs of shelling are visible only on some buildings. But that’s just a facade, says Aida Ahmagic, a 33-year-old therapist and yoga teacher who left for the U.S. in 2002 and was treated for post-traumatic stress before returning after seven years.

“On the surface, you don’t see anything,” she says. “But this is just a cover.”

The feeling of being left behind by the rest of Europe has been taking hold for years, a country in limbo as a forgotten failure after other former Yugoslav states joined the EU and NATO. That’s left Bosnians vulnerable just as the economy appears to be picking up.

Aid and investment from the EU, Turkey and the Middle East have helped boost growth and bring down unemployment, albeit only to about 18 percent. Remittances from Bosnians abroad account for as much as 8 percent of the economy, but central bank Governor Senad Softic talks of a positive outlook. The currency is pegged to the euro and the economy has been growing around 3 percent a year.

Yet it would take Bosnia 60 years to converge with the EU’s average level of income if growth remains as it is, says Emanuel Salinas, the head of the World Bank in Bosnia. And citizens are on the move to leave their country again, this time with complete families quitting their jobs to flee the uncertain security situation.

Playing With Fire in Europe’s Powder Keg

There’s a daily line of people waiting outside the German embassy seeking work permits to relocate. There are no official figures, but the current volumes of the brain drain are “high,” according to Salinas.

The administrative division, put in place by the Dayton accord, has turned into a major headache. Phone companies, statistics offices and banking supervision are split. Any changes to the system would have to be agreed upon by all three ethnic groups. Now the political bickering and threats of succession of Republika Srpska hang over the country.

Softic didn’t expect it to turn out this way when he thinks back to 1995.

“I was younger, full of enthusiasm and fully convinced that this country would have gone much further than I see it now,” Softic says at the central bank on Marshal Tito street. “We are wasting too much time for unproductive issues. The young don’t wish to live in uncertainty.”

For one, the international community’s highest representative in Bosnia urged to draw red lines now, before Republika Srpska moves ahead. Valentin Inzko, the Austrian official in charge, believes the Serb entity won’t break away, though says the increased rhetoric is making the “the atmosphere very poisonous.”

Playing With Fire in Europe’s Powder Keg

A key area of potential conflict is over Srebrenica, scene of the mass murder of at least 8,000 Muslim men and boys during the war. Any notion of the Republika Srpska town not being in Bosnian territory should be stopped, he says. The EU has a set of tools it could use now, including an asset freeze and a travel ban against Dodik.

“Bosniaks are very patient,” says Inzko, who has the power under the Dayton accords to intervene and even oust top officials. “But if Srebrenica would be in a foreign country this would be a case for war. The international community must avoid this.”

In the meantime, Sarajevans like glove seller Svrakic live in hope that Bosnia will keep on track—however slowly—toward prosperity, security and, ultimately, acceding to the EU.

The lambskin garments he sells at his store in the city center came to the family’s rescue during the war as he traded them for vital supplies of flour and sugar. He tried to rebuild the business, which his father started when he was a toddler. It now provides just enough to live on.

Holding no grudges, Svrakic says he’s thankful his sons have few memories of the war. For him, the nightmares include a day in 1993, when his cousin was killed in shelling along with the relative’s son. Their remains had to be scraped off their apartment building.

“The EU is our only possible option to live like the rest of people in Europe,” he says, offering his navy blue and pink gloves. “So far, the EU doesn’t show a huge interest in Bosnia.”

—With assistance by Samuel Dodge and Hayley Warren

©2018 Bloomberg L.P.