Thursday, June 01, 2006

Slovakia and Serbia

A tale of two Slavic states

From The Economist print edition

The Slovaks show how even laggards in the ex-communist world can leap ahead; Serbia has yet to get the message


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TEN years ago, there was not much to choose between Slovakia and Serbia. The former, though located in central Europe, felt like the Balkans. It was run, thuggishly and sleazily, by Vladimir Meciar. His fellow strongman, Slobodan Milosevic of Serbia, did far worse things in his neighbourhood, stirring up wars and displacing millions of people. But in domestic affairs, the two places had a similar feel. Their economies stagnated. Neither Slovakia nor Serbia seemed likely to join the European Union or NATO any time soon.

Since then, Slovakia has become a showpiece of post-communist change, with a shiny new bridge to complement the old townscape of spires and cobblestones in its now buzzing capital, Bratislava. A cross-party coalition removed Mr Meciar from power in 1998. It stabilised the economy, curbed Russian influence and groomed the country to join the EU and NATO. Re-elected in 2002, the prime minister, Mikulas Dzurinda, made Slovakia a reform star of central Europe, with a flat tax, labour deregulation and a solid pension system. Foreign investors, especially in the car industry, have flooded in.

Serbia, by contrast, is still languishing. Although Mr Milosevic left office in 2000, his country is still waiting to join the EU queue. The economy has stabilised but foreign investment is still puny. The recent vote for independence by Montenegro was another stage in the decay of Serbia's quasi-empire. In the short term at least, Serbian politics may move back, not forwards, under the shock.

What is more surprising, perhaps, is the short-term outlook in Slovakia: voters seem unlikely, in elections on June 17th, to give a third term to what outsiders see as the region's most successful government.

This highlights one of the biggest paradoxes of post-communist politics. Privatisation, stabilisation, liberalisation and flat taxes have stoked prosperity in every country that has adopted them. Slow and partial reforms do not work. Fast and deep ones do. Yet voters rarely see it like that.

Mr Dzurinda's troubles are a good example. One big source of weakness is his lack of a solid mandate. That is a typical problem: most post-communist reformers have gained office thanks to an electoral quirk, or because of a strong vote against the outgoing government. So it is no surprise that voters are miffed when they then find themselves being fed a diet of economic dislocation, greater inequality and cuts in public services, accompanied with claims that it is for their own good.

In Mr Dzurinda's case, his first term stemmed from public revulsion against the scandals and menacing behaviour of the Meciar regime. The first, broadly based coalition was sensible rather than radical. And Mr Dzurinda's own conservative party was far from being the most popular part of it. His re-election in 2002 was a fluke. Two minor parties of left and right failed to reach the threshold necessary to get into parliament. And his main rival, the populist ex-communists of “Smer” (Direction) did surprisingly badly. That allowed Mr Dzurinda to cobble together a new coalition, including other right-of-centre parties and a grouping representing the Hungarian minority. It too was unwieldy, but hung together enough for Mr Dzurinda, and his main ally, the brainy finance minister, Ivan Miklos, to get reform through.

Sadly, even successful reforms do not create much political support. Most of Mr Dzurinda's changes are now popular (only Smer is pledged, in theory at least, to cancel them). But post-communist voters have short memories and short fuses. They compare their lot not with the travails of the past, but with the secure and comfortable lives they see in old Europe.

The biggest reason for reformers losing popularity is that economics is only part of the story. The biggest failing among all the former captive nations has been in reform of state administration. Corrupt and incompetent officials, venal politicians, slow, expensive and untrustworthy courts, silly rules and a feeling of public powerlessness all combine to make voters feel fed up. On this front, Slovakia (like almost all ex-communist countries) has made little progress.

Still, Mr Dzurinda can be pleased. Reformers lose—but so does almost every incumbent. Mr Dzurinda is by some way the longest-serving post-communist prime minister, with nearly eight years in office. Most of his changes look irreversible. His party, or its allies, may yet return in a new governing coalition, albeit in a weaker position. Mr Miklos, with his plans for a knowledge economy, is a name to watch. But, as he admits, “it is normal that after eight years, people are tired.”

It would be nice to think that post-communist countries would foster strong party systems, with mass memberships that could connect policy, politicians and voters. But that model of politics is declining in western Europe, and shows little sign of taking root in the east.

Discouraged Serbs should take heart from how far Slovakia has travelled—not just in economics, but also in the sophistication of its democracy. Having been ranked as one of Europe's problems, Slovaks are now seen as problem-solvers, whose experience of authoritarian rule makes them well placed to work as lobbyists for democratic reform.

Take the May 21st poll in Montenegro; as an exercise in democracy, overseen by the EU, it worked well. Both Montenegro's political camps agreed on terms for the poll; this averted a boycott, chaos or worse. As it happens, a lot of the EU's work was done by Slovaks. Earlier this year Miroslav Lajcak, the political director of the Slovak foreign ministry, was named a special EU envoy to settle the conditions for Montenegro's ballot. Then a Slovak diplomat, Frantisek Lipka, was appointed by the EU as head of the Montenegrin referendum commission. The fact that both Slovak envoys could speak the local tongue was an advantage; it countered the impression of patronising Westerners lording it over unruly natives. Montenegrins liked this.

But in Serbia, the mood is sour. Vojislav Kostunica, the prime minister, reacted to the independence vote with disbelief. Serbian-Montenegrin divorce proceedings must now start to dissolve their loose federal state; a declaration of independence will almost certainly come soon.

Although Serbia's president, Boris Tadic, congratulated the Montenegrins on independence (and said he would be in charge of Serbia's armed forces), Mr Kostunica and the nationalists around him appeared barely capable to taking in what had happened. Indeed, the credibility of Mr Kostunica's government is in freefall. In March the prime minister promised to send Ratko Mladic, the former Bosnian Serb general, to The Hague war-crimes tribunal; he failed to deliver. So the EU stopped talks with Serbia on an agreement that could lead to eventual membership.

Over the next few months, Serbia faces further shocks, including the formal loss of Kosovo, which many Serbs still see as the cradle of their heritage—although over 90% of its population is ethnic Albanian and it is now run by the UN.

This autumn, Martti Ahtisaari, the Finnish chairman of talks on Kosovo's future, is likely to propose granting it independence. That will be horrify the Serbs: if losing Montenegro was a bitter pill, losing Kosovo will be a poison draught. Mr Kostunica may react by calling an election. What follows could be messy, with gains for the ultra-nationalist Radicals (the most popular party in Serbia with a 38% poll rating) on whom Mr Kostunica already relies.

Slovakia's velvet divorce from the Czech Republic (in 1993) showed how a smooth resolution of “national questions” can pave the way for progress on other fronts. Sadly, the reverse is also true—a contested national question may poison Serbia's body politic for years to come.

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