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 status quo.
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?