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What is pulling Serbia away from the path of development? - Serbia Business

What is pulling Serbia away from the path of development?

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„We should brace ourselves and wait for better political circumstances.“ The West will soon collapse. The European Union and NATO are already falling apart. other forces in the world are slowly becoming stronger and they are the future…“

You have probably heard variations on these sentences and advice on Serbia’s future foreign policy more than once, from a wide variety of public figures. Also, you could very definitely hear them in the 1990s, as well as in the 2000s or 2010s, but even today in the 2020s. Although in itself the use of this same assumption over four different decades indicates that little is actually being reduced in practice as time passes, it often overlooks an important detail and is based on a false axiom that stems from political paranoia.

The axiom on which this foreign policy strategy is based is that Western interests are, as a rule, against the interests of Serbia, and that a strong West (at least in our region) implies a more difficult articulation of Serbian interests. Due to the disproportion of power between Serbia and the West, Serbian foreign policy should therefore be based on waiting for such a West to implode and then open up opportunities for Serbian interests. If it is excluded that it is basically a matter of political paranoia in relation to Western interests, and the definition of Serbia’s foreign policy through the more or less reformed Milosevic foreign policy, it has one practical fatal flaw. That fatal shortcoming is the assumption of time as an inexhaustible resource, especially in a country with a very bad demographic picture like Serbia.

Even if the aforementioned view of Western and Serbian interests is taken as well-founded, demography represents the biggest obstacle for this strategy to be a realistic solution to the problem. In addition to negative consequences for foreign policy, it can also have other negative effects.

Serbia’s demographic problem

Birth rates are declining in various important regions of the world and this is no longer news that surprises anyone. China has officially recorded a population decline since last year, most Eastern European countries and Italy are largely in the zone of negative natural growth, as well as Russia and Ukraine as two currently warring parties, while the number of children born per woman is at a record low in South Korea, Taiwan or Japan . Declining birth rates are also noted in Arab countries, as well as immigrant communities in Western countries, as well as the “most immigrant” country of all, the United States of America.

However, even in these globally negative population trends, Serbia is listed as one of the oldest countries in the world and, in that sense, less promising. It is not a recent problem, but it is more visible today and has major consequences for society and the economy. Namely, in order for a given community to maintain its current population, the fertility rate (number of children born per woman) needs to be 2.1. Today, as few as so many economically developed countries have this result, they make up for their recent population deficits with constant immigration as a form of mechanical influx.

Serbia last had a fertility rate of 2.1 back in the 1960s, since then it has been gradually declining, with a sharp decline from 1991 until today. Constantly low birth rates at the beginning of the 1990s turned into a negative natural increase, which over time turned into an annual decline of several tens of thousands of inhabitants (from 30,000 to 40,000). For this reason, Serbia without the territory of Kosovo recorded its highest number of inhabitants in 1990 with 7.79 million inhabitants, which in 2010 was already at 7.29 million, but according to last year’s census it fell to 6.69 million people, the result closest to the population of Serbia in 1967. The difference between the identical population of Serbia in 1967 and that of 2022 is the size of the female fertile population (at the age when childbearing is possible), which today is only 1.48 million, and in 1967 it was as much as 1.87 million.

Such demographic statistics arouse general pessimism, because mathematically speaking, without greater immigration, Serbia may encounter major problems in basic functioning. Decades of population decline has resulted in large labor force shortages, as well as a huge tax burden on currently employed residents. The increased share of pensioners implies a longer working life for current workers, as well as higher taxes aimed at maintaining the pension and health system, which is a trend recorded by almost all European countries. Older societies are also less prone to risks, reforms and modernization, but rather value stability, predictability and peace (which in the case of our region is not so negative).

Nevertheless, apart from all the mentioned problems, the decades-long bad demographic picture has fatal consequences for the rational foundation of the foreign policy strategy from the beginning of the text.

Demography and foreign policy of Serbia

A society that lost a little more than a million inhabitants in three decades, and even 50% of that number in the last ten years alone, is not a society that can play on the trump card of time. Time works in favor of societies with high birth rates and no tendency for existing residents to emigrate, and today Serbia does not belong to such societies, but neither does Albania or the ethnic body of Kosovo Albanians.

Societies that have an expected tendency to decline in population should have as their main goal an increase in labor productivity and wealth per capita, which would make societies functional even with a smaller number of people. Such societies do not have the luxury of wasting time, by the consumption of which their population continues to fall, to wait for the downfall of the West, which has not happened in the previous 33 years.

35 years ago, Serbia bordered only the other federal republics of the SFRY or the states of the Warsaw Pact, and Moscow had its soldiers in Prague and East Berlin. Today, Serbia borders EU and NATO member states on all sides, which, expanding to Finland, will be about a hundred kilometers from St. Petersburg. In addition to all that, with this same block of Western countries, Serbia performs over 2/3 of its economic activity, which directly depends on the future growth of the productivity of the domestic labor force, as the only hope that Serbia, with a reduced population, will remain an elementary functional state.

Due to the aforementioned trends, Serbia’s strategy cannot be to spend precious time that it does not have in order to hypothetically obtain territories that it cannot manage. Serbia’s central priority should be to reduce its relative economic backwardness to the West in the shortest possible time, which is only possible in cooperation with the West. Serbia would have to alleviate the demographic deficit as much as possible through birth incentives, as well as mechanically compensate for the existing and future population deficit through a successful immigration and naturalization program.

In translation, everything opposite to what can be dominantly heard in domestic public opinion as a solution, and which has been valid as a rational position for over 30 years. The world has become more multipolar in the past 35 years, but for Serbia it is more unipolar than 35 years ago. With current trends, there is a greater chance that Serbia will experience a demographic implosion, rather than a political implosion in the West, which the past 35 years have shown in practice. In order for this not to actually happen, it is necessary that the majority of generally valid assumptions in the domestic public opinion are more often reexamined, and less repeated over the decades, even though they have not passed the basic test of time in 30 years or so.


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