Eagle Hills construction board showcasing area of "Belgrade Waterfront" project between river Sava and main station in Belgrade, 2.10.2017. Robert B. Fishman/Press Association. All rights reserved.Ravaged by NATO bombings,
hyper-inflation, and sanctions in the recent past, Serbia’s economy is
rhetorically poised to be revitalised by the Belgrade Waterfront Project,
funded by UAE’s Eagle Hills development company. ‘The Project’, however, will
have wideranging repercussions on the fabric of the Serbian economy beyond the
nominal increase it will bring to the country’s GDP.
The appointment of Aleksandar
Vučić as Prime Minister in 2014 affirmed the political intention of transitioning
towards the EU and consequently a wholly neoliberal economy. As noted by
professors at the University of Kragujevac in 2017, the EU transition process
includes a definitive emphasis on attracting foreign investments in purchasing
domestic companies and privatising state markets. The Financial Times has
praised the Project’s capacity to improve the privatisation of state-owned land
in Serbia, which had previously been “sluggish”.
Investment to transform the Sava
riverside in Belgrade into a luxurious complex, complete with apartments,
restaurants, and malls will cost $3 billion paid for by Eagle Hills who will
retain 68% ownership. A foreign property investor has commended the investment,
claiming that “we’ve seen more liquidity in Serbia over the past six months
than in the past six years”. This has been echoed by the lead municipal
planning official who claims the investment will “put construction back on its
feet” in a project the city has been awaiting “for 50 years”.
Vučić, who has now swapped
position from Prime Minister to President, is at the forefront of the Project.
He has generated tremendous political capital from the UAE investment and will
use all the considerable power he wields to keep the investment on track.
But there have been four main
political controversies around the project so far. Firstly, under Serbian law,
riverbanks come explicitly within municipal ownership. Without explicit consent
from the City of Belgrade, the investment contract is trying to transfer the
rights of the Sava riverside to a private foreign developer.
Secondly, when the government
autonomously decided to sell the land to Eagle Hills, they did not adhere to a
standard bidding procedure. The Abu Dhabi based group was simply chosen through
an opaque process, raising suspicion as to the incentive deployed to subvert
the investment modus operandi.
Thirdly, an organisation
investigating the official contract between Eagle Hills and the Government
discovered a clause stipulating that the Government would adopt laws to
facilitate the realisation of the project and block any bills that would impede
its development. This has widely been regarded as no less than full political
capitulation to the imperatives of the project.
Finally, in May 2016 a group of
masked men blocked off a contentious street near the riverside, tied up a
number of residents and subsequently bulldozed several buildings to the ground.
When residents called the police to intervene not a single member of the force
responded, claiming that they had orders from “higher up.”
The annual report of Serbia’s Ombudsman
confirms this and implicates the Ministry of the Interior in the event. These
controversies resulted in ongoing and increasing popular protests in Belgrade,
by thousands of people.
Belgrade’s municipal elections are due to take place on Sunday 4 March. Those who have been adversely affected by the Project and its controversies will be given a renewed platform to voice their discontent with the political status quo. However, opposing the Waterfront Project is not an issue in isolation for Belgrade’s citizens. It is merely a symptom of a dysfunctional, highly corrupted government that fails to put the safety and prosperity of its people first. Deep concern lies in the possibility that these negligeant governing tendencies will set a precarious precedent for the city in the future.
Conscious that sentiment in the city is growing ever hostile, the ruling party, who also controls the municipal assembly, has deployed its usual arrangement of election meddling tricks to smooth over the process. The party has explicitly avoided attending any televised political debates in the run-up to the election. It has ensured that even though the election has nothing to do with the President, Vučić’s name will be visible on the ballot sheet, which is particularly relevant for elderly voters who are the party’s most supportive voting demographic. It has also continued to create ‘ghost voters’ – people who are not eligible voters in the election (migrants, non-Belgrade residents or even deceased voters) but who will be entered into the system on Sunday to subsequently boost the Party’s vote where necessary. These along with numerous other tactics imply that challenging the Government will be no easy feat.
Yet, Belgrade does have some hope. Provided that the people in the capital continue to voice their dissent to what has happened to their city, there is reason to believe there will be a high electoral turnout. This would favour the opposition. Additionally, people in the capital are most likely to use the internet as their primary news source and therefore are less susceptible to the influences of the Party’s censored media. Whilst there would be no clear way to identify what the outcome of the election would be, not least because of the plurality of contesting parties, the election will be defined by what happens to President Vučić’s party. If the Waterfront project and its controversies prove scandalous enough to oust the Party from Belgrade’s municipal government, Belgrade may be able to restore some level of integrity back to its government and institutions. Moreover, election history in Serbia has shown that losing Belgrade’s city assembly foreshadows an analogous trend at the national level for any incumbent.
Eagle Hills’ interest in
Belgrade’s riverside exemplifies the tendency for the surplus accumulation of
capital in one economy to result in investment in foreign markets. This would make
it inevitable for Serbia, once opened to attract foreign investment, to be used
as a means for the reabsorption of capital into the world market. Accordingly,
the Belgrade Waterfront is not likely be the last of such projects in the
country, which has since developed a “one-stop shop” for investment permits
granted within 35 days. As such investments become normalised, so too will the
Government’s role in this. Contrary to popular rhetoric, the state plays a
fundamental role in the transition to neoliberal economics. The subversion of
democratic procedures for the Project should be understood as part of the
transformation of the Government’s mandate towards single-minded identification
with the needs of the market.
Furthermore, the Project calls
into question the Serbian Government’s levels of accountability. Whilst
conceptions of market liberty insist that a government’s sovereignty should be
limited to its facilitation of economic activity, this neoliberal
interpretation also suggests that the Serbian Government should not be held accountable
for the consequences the Project may have on the people. This is fundamentally
flawed. Adopting a Keynesian perspective, investments of this magnitude require
state planning because the effects go beyond the metrics of profitability. Yet,
the Project is exclusively led by Eagle Hills, accountable only to the
return on the investment to its stakeholders, not the overall effect on
macroeconomic relations and people's livelihoods in Serbia.
Belgrade is most likely to face
intensified stratification as a direct result of this project. The luxury complex
is only too evidently not catering for a population whose median monthly salary
is less than £400. This means that the development will be for a separate part
of society that will effectively become its own gated community, specifically
one that would possess enough sway to maintain the economic and political
By allowing state control to be
limited by market and investment imperatives, the rhetorical freedom that is
provided by the state on the grounds of economic activity is narrowly constrained
to negative freedom. In essence, regardless of the impending stratification,
the Government will claim moral justification for its decisions by arguing that
this investment augments the individual freedom of economic choice for all. There
is little indication that the EU will remonstrate with Serbia regarding the real
repercussions likely on the standard of living. Again this will be considered a
necessary consequence for the sake of development.
Who then, while the Serbian GDP
grows, the company’s stakeholders flourish, the Government proves itself worthy
of EU membership at any cost, and the rich in Belgrade are provided with a new
playground – who will be concerned and responsible for those outside this
limelight of investment?