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Europe

Migrant workers prop up Balkan economies from abroad

In times of economic crisis, poor nations depend more than ever on money transfers from migrant workers in the West. In the Balkans, summer brings a new wave of cash.

Workers in an airplane hangar building

Matic's airplane assembly plant is based in Kraljevo, Serbia

A sport aircraft painted in the Serb national colors - white, blue and red - speeds over the bumpy grass runway, climbs into the air and performs a short set of air acrobatics, before coming in for a smooth landing.

Out steps Milorad Matic. The 37-year-old not only owns the plane, but also the firm Aero-East-Europe, an airplane manufacturer he founded three years ago in the city of Kraljevo, Serbia.

Twenty years ago, Matic left his country in hopes of making a living in the West. He worked on construction sites in northern Italy, and later founded his own construction company in Germany. He also fulfilled a childhood dream and took flying lessons. With money earned in Italy and Germany, and know-how from Italy and the Czech Republic, he then returned to Serbia. Today, he employs 25 mechanics and engineers.

A patriotic duty

Airplane parts stand in a hangar

The government encourages investment in Serbia

If you live abroad, Matic says, you feel much more patriotic.

"If you are here, you don't miss your country. But if you're not, you feel drawn back to it, and you feel this patriotic pain," he said.

The businessman says he invested in Serbia out of love for his native country. He supported his family and friends long before that, when he still lived in the West - as many Serbs who work in Italy, Germany, Austria or Switzerland do, Matic says.

"They send money. Without these transfers, many families could not even survive. Or you bring money in. Or you try to build up something," he said.

Newly constructed buildings have sprung up across the Balkans, houses for the entire extended family, built with the money migrants regularly send home.

Important social net

"We believe that most of the money goes to the poorest families," said Marco Mantovaneli, head of the World Bank's Bosnian bureau in Sarajevo.

Marco Mantovaneli in front of the World Bank logo

Mantovaneli says migrant workers create a social security net

"By supporting the family members who stayed behind, migrant workers take on the important role of a social security net," he said. International experts estimate that in Bosnia and Herzegovina, such bank transfers account for more than 15 percent of the gross domestic product - more than $2.5 billion (1.93 billion euros) last year alone.

Vendors selling their goods at Sarajevo's central market profit, too. Nerima sells flowers here, and is lucky that her cousins emigrated to the United States years ago. Several times a year, they send her a few hundred US dollars.

Nerima says they can't send more; they have to pay off a loan. "I hope they can send more when they are better off so that we can survive," she said. "Selling flowers, sometimes we don't even make enough to buy dinner."

Fewer money transfers due to the financial crisis

A man at a neraby vegetable stand is also dissatisfied. His brothers and sisters in Germany have become more tightfisted because of the economic crisis. "They say they are doing worse than we are because they don't have work," he said. "Sometimes they help a little bit, and send 10 euros or so. "

Last year, the World Bank warned that the poor could be hardest hit by the global financial crisis and its effects; the economic and social structures of many nations could break down without the money transfers from migrant workers.

Last year, these transfers did in fact drop by about 20 percent. In Bosnia, transfers dropped by about half a billion dollars from 2008. Serbia, though, was not hit quite as hard. Since 2004, the World Bank estimates that migrant workers have pumped about $30 billion into that country.

Send us money, but don't come home

Market stalls filled with local produce

Selling vegetables and flowers is not profitable enough

Returnees who invest in their country often encounter corruption and mismanagement. Firms often go broke because of local problems, says airplane constructor Matic.

"You invest everything you've saved, and it's your downfall," he said, adding that corruption and mismanagement have cost him one million euros.

The migrants tread a fine line between what their heart and what common sense dictates. In the Balkans, their financial support is urgently needed. Which means that the migrants themselves are expected to stay in the West so they can continue to pay.

Matic, too, has mixed feelings. He returned home, but has experienced a hard landing in his beloved native country. He only sells his planes on the international market.

"It was a mistake to come back," he said. "My heart tells me it was right because this is where my family is. Businesswise, it was a mistake - I'd have led a better life in a different country."

Author: Filip Slavkovic/db
Editor: Martin Kuebler

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