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Opinion
September 29, 2017 www.intellinews.com I Page 21
destination for Romanians to relocate) to other university towns.
Elsewhere in Southeast Europe, the government of Serbia — a prospective EU member and the largest economy in the Western Balkans — has been seeking to take on the mantle of Europe’s low-cost factory by offering tax breaks and subsi- dies to export-oriented investors, but this policy has become increasingly controversial.
Back in 2008, Serbia scored a coup when Fiat agreed to take over the old Kragujevac car fac- tory. However, production at the plant was recently shut down by a strike over pay and working condi- tions, which only ended when Prime Minister Ana Brnabic stepped in amid fears the Italian giant could quit Serbia altogether. While this was avert- ed, the three-week strike at Serbia’s top exporter is likely to hit the country’s export figures for this quarter.
The Fiat Chrysler Automobiles strike coincided with a separate strike by workers at another Serbian factory, owned by Slovenian domestic appliance maker Gorenje, which has located some of its production in Serbia as costs are considerably cheaper.
The two strikes threw the spotlight onto grow- ing opposition to efforts by the government to take advantage of Serbia’s low costs to bring in foreign investors. While the government hopes
to tackle chronic unemployment, which is set to worsen when IMF-required public sector reforms are launched, opponents say foreign investors are benefitting by exploiting Serbian workers.
This was one of the mixed bag of grievances voiced during the protests that followed Alek- sandar Vucic’s election as president in April, where some protesters carried banners stating “We won't be a cheap labour force”. Outrage has also been sparked recently by allegations about working conditions at a plant operated by Korean Yura Corporation, a long-term investor in Serbia that produces electrical components for the auto
industry, where workers reportedly were made to wear adult diapers during their shifts to avoid wasting time with toilet breaks.
Efforts to attract FDI in neighbouring Macedonia have also come under scrutiny as the new Social Democrat-led government declassified informa- tion on ad hoc subsidies paid by its predecessor to foreign investors. Subsidies and tax breaks extended in the 10 years the conservative VMRO- DPMNE was in power amounted to €225mn — or €11,000 per job created.
The current tightening of the CEE region’s labour markets may not continue to accelerate indefi- nitely. There are already signs that the wave of migration that started when they joined the EU
is slowing, and could even be reversed in future.
This is backed up by a study from real estate firm Colliers International which lists new “pull” fac- tors for CEE migrants as tighter labour markets push wages up and negatives such as corruption and political instability lessen, while at the same time governments try to entice migrants back.
“We believe that the emigration wave has peaked and that workers will start to return eastwards to CEE-6,” says the Colliers study, which looks at the Visegrad Four countries plus Bulgaria and Roma- nia. This will contribute to “filling the skills gaps that these workers created by seeking work in
the West,” it adds. “This market dynamic, termed the ‘labour force boomerang', is likely to translate into increased investment interest, provided that worker productivity can keep pace with Europe,” forecasts Colliers’ EMEA director of client ser- vices, Peter Leyburn.
And as citizens of the CEE countries have moved westwards, workers from Ukraine in particular and other countries to the south and east have ar- rived to take up jobs in the countries they left be- hind. All the Visegrad countries have seen strong inflows of Ukrainians, with Czechia, Hungary
and Slovakia all experiencing net immigration in 2015, the OECD’s latest International Migration