Bye-Bye, Balkans: A Region in Critical Demographic Decline

Young people are leaving. Fertility rates have collapsed. Societies are aging. And though hundreds of thousands of refugees and migrants have tramped through much of the region, few want to stay. Borders, ethnic spats, EU accession, NATO membership and unfinished business from the wars of the 1990s — these are the stories that fill the news from the Balkans. But serious analysis of the region’s demographic decline, depopulation and the hollowing out of the labor force is harder to find. Possibly this is because governments have neither credible answers nor the resources available to change things. If demography is destiny, the Balkan future is bleak — but it is not unique. From Greece to Poland, almost all Eastern, Central and Southeast European countries are wrestling with the same problems. On current projections, by 2050, Bulgaria will have 38.6 percent fewer people than it did in 1990. Serbia will have 23.8 percent fewer, Croatia 22.4 percent and Romania 30.1 percent. Moldova has already lost 33.9 percent of its population. Bosnia and Herzegovina has a fertility rate of 1.26, one of the lowest in the world. Kosovo, with a median age of 29, is the youngest country in the region but does not escape demographic decline either. The figures and percentages may vary but the trends are the same almost everywhere, albeit with some countries further advanced than others. Serbia’s median age is 43, older than the EU average of 42.6. However you look at it, the demographic future of the Balkans and this half of Europe, afflicted by emigration and chronic low birth rates, is dramatic.

Different from the past

Historically, all countries of the region, and in fact most of Europe, had periods of intense emigration. In the case of the former Yugoslavia, hundreds of thousands went abroad from the 1960s as Gastarbeiter, not necessarily meaning to stay away but many of whom did, perhaps because they had children abroad or the wars or both. Before that, Jews left — or were killed in the Holocaust — and ethnic Germans were expelled or killed. In the generation before that, Muslims, Albanians and Turks from Bosnia and other parts of former Yugoslavia and the wider Balkans left in various waves during the 19th and 20th centuries. People from the Dalmatian islands and parts of Montenegro went to the United States. Greece, Turkey and Bulgaria exchanged populations. But in terms of numbers, this did not matter so much when women were having five or seven children. Emigration, in peacetime at least, both eased the pressure on land and resources and populations continued to increase. That is one of the reasons why what is happening today is so different from the past. Then, Balkan countries exhibited the classic demographic and emigration characteristics of poor countries. Today they exhibit the symptoms of both rich and poor countries simultaneously. This is unprecedented. People in the Balkans live long lives — not quite as long as in the richer countries of Europe, but much longer than in poorer countries. At the same time, just as in richer countries, fertility rates have collapsed. But while Western countries compensate for falling birth rates and emigration with immigration, relatively few people immigrate to Balkan countries. In Central and Eastern Europe, only Poland has managed to significantly compensate large-scale emigration and low birth rates with the fortuitous immigration of more than a million Ukrainians who have, at the same time, considerably blunted what would otherwise be critical labor shortages.

Governments are helpless

All governments are well aware of the situation but struggle to know what to do about it, or lack the means to do much. In Croatia, young couples can get government-subsidized mortgages but you need to have enough money to put down in the first place and the numbers of mortgages available and couples eligible are tiny compared to the scale of the problem. Where they can, countries give allowances to women and families with more children but there is no evidence, at least yet, that any of this can persuade them to have more children. In much wealthier Poland, which has given considerable fiscal advantages to lower income families, the money has both helped them and made them staunch supporters of the ruling Law and Justice party, but they don’t seem to be having more kids. When it comes to emigration, short of reverting to old communist-style travel restrictions, it also seems that there is little that can be done, except in targeted fields such as paying healthcare workers a lot more. Money, however, is not the only reason that people leave. In the past, those whose eyes were not focused on moving abroad migrated from village to town and town to capital. The difference between the Europe of the past and of today is that now it is easier to skip that phase than at any time in history. In fact, the Balkans and other former communist countries have themselves become the villages. If you come from rural Bulgaria or small-town Poland, why would you go to little Sofia or dreary Wrocław if you can go directly to London or Berlin? There is a whole wide world out there. No visas are needed for most Europeans for most Western countries and cheap airlines mean you can zoom back and forth from Austria or Italy in the way that a previous generation would have done by bus within their own country. Secondary airports like Stansted or Beauvais now play the same role as bus stations serving distant provinces did in the past.

Labor crisis

Meanwhile, demography and emigration are leading to labor shortages everywhere. Governments have a real problem. Migration hugely mitigates the issues and expense of unemployment and brings in remittances. But it is also hollowing out the labor force, meaning that foreign investment is discouraged or, in some cases, even leaving. Logically, the answer to labor shortages is to increase wages, but that is not happening, or at least not across the board. In the former Yugoslavia, bus companies do not have the cash to compete with the wages of German firms that need drivers. That is the same in Belgrade as it is in Rijeka in Croatia. Where the work is relatively uncomplicated and predicated on low wages, such as in the automotive parts industry in Moldova, it is cheaper for companies to move elsewhere than it is to pay more. This is not happening everywhere, of course, and some companies are upping salaries and retaining workers, especially in the most highly skilled sectors such as information technology. Their higher wages may not compete with London or California, but the cost of living is so much lower that for many, if not all, it makes it worthwhile to stay. Still, elsewhere it is not happening or economic structures makes it hard to compete. In Croatia, the dominance of seasonal tourism is hugely distorting.

In the past, it was always possible to find enough people from poorer parts of Croatia or the wider region to fill in for three months on the coast, but now they are increasingly reluctant to do so if they can work for the whole year or even half of it for a lot more money and with far better conditions in Germany. In July, the Croatian government bowed to pressure from desperate employers to grant more work permits to foreigners. Romania is doing the same. One way to solve the problem of a declining workforce is through immigration. That is what Poland has done by opening the doors to Ukrainians and increasingly to people from elsewhere too. Others will have to follow if they want to keep their economies growing, but in countries with no tradition of immigration, that is going to be a tough sell. One small plus, which has been noticed in Romania at least, is that previously marginalized Roma are getting jobs that they would have been excluded from in the past. Money from those abroad is also helping create a Roma middle class for the first time. If Poland is anything to go by, governments that succumb to the logic of immigration are going to have to walk political tightropes.

Poland’s government claims it is against immigration and refused to accept a few thousand refugees when asked to by the EU in the wake of the migrant and refugee crisis of 2015. At the same time, it has quietly let in large numbers of (albeit white and Christian) Ukrainians. This type of politics may be a prototype for others to follow, but it could also be, at least for the Balkans, difficult to replicate. Where is the Balkan Ukraine? Rural areas may be emptying everywhere but some places are growing.

Tirana, claims Erion Veliaj, its mayor, is growing by 25,000 a year while the country as a whole is losing people. Cluj in Transylvania is a boom town, to which people from other parts of Romania and abroad flock to. Its success is based on the knowledge economy and IT. There are examples in Romania where foreign investment, resulting in the building of modern factories, has arrested depopulation and even brought about some limited return. If cities like Cluj could be replicated a thousand times and work done everywhere to improve living standards, as in Tirana, the situation would be very different.

Exacerbated by the EU

It is uncomfortable to acknowledge that EU membership makes things worse, at least to begin with. But now the distinction in Europe between members and non-members is eroding. For Poland, Romania, Croatia and others, opening the labor market led to millions leaving. Now Germany and others have been opening up to skilled labor from non-EU countries too. A few years ago, the issue was illegal migration and people trying their luck as bogus asylum seekers. That is the story of the past. Now there are jams of people in front of consulates from Belgrade to Banja Luka and Pristina as people seek work permits, often sponsored by companies in EU Croatia and Slovenia. Migration leads to political consequences. Across the region, the demographic issue is becoming a political issue and not just in terms of governments promising to do something. In Serbia, the president has been contrasting the current numbers of Serbs and Albanians with future ones that show Serbs dramatically diminishing in proportion to Albanians. He is doing this because he seeks to build a consensus before any unpopular deal he might make with Kosovo. Electoral rolls everywhere remain packed with those who have emigrated. Politicians have an interest in doing this, and it is easier to steal elections if you have padded lists. But the 2018 referendum in North Macedonia on the name change failed, not just because of an opposition boycott, but also because the threshold could not easily be reached because so many people on the roll were abroad.

In June 2019, as one government was toppled and another took power in Moldova, one of its very first acts was to reverse a rule enacted for the last election that those in the diaspora could not vote with expired Moldovan passports or IDs. Why was that important? Because a large number of the supporters of Maia Sandu, the incoming Prime Minister, are in the diaspora in the West and travel and work there on Romanian passports and so have a higher rate than they would otherwise of expired Moldovan documents. In Albania, the opposition attacks the government, claiming that up to half a million people have left the country in recent years. It is fantasy politics though, because hundreds of thousands have also come back or are circular migrants who come and go. Migration also has effects in destination countries and it has helped fuel the rise of national-populist parties. There is no way to quantify to what extent the arrival of large numbers of Poles, Romanians, Bulgarians and so on tipped the balance in Britain’s 2016 Brexit referendum, but there can be no doubt that it played a role.

Lost cause?

How can countries solve these issues? Or is it a lost cause? These are the big questions of our time and sometimes governments may feel they are like people trying to run up a down escalator. Why do people migrate? It is not only money. It is education, healthcare and services too — and increasingly it is because people have lost hope that they will ever live in normal, democratic and as uncorrupted societies as possible. By the time countries get richer, large segments of the population have already lived abroad and want the same standards of life, including social services, as they have experienced in those Western countries. "For my father’s generation," says Majlinda, a 25-year-old Albanian student who has studied in Holland, "things have changed very fast, but that is not fast enough for me!" So, the expectation gap has increased as with no other generation in the past.

Logically you might think that if these countries are the villages of today, then fiscal transfers in a more federal Europe might be the answer, but we know that in the present climate that is not going to happen. Indeed, the Western Balkan countries, let alone Moldova, are not even in the EU and some have begun to doubt they ever will be. But what is the evidence from the one part of the former communist world which solved the problem of fiscal transfers? It is not encouraging. Eastern Germany continues to depopulate almost three decades after reunification. To slow and hopefully reverse the decline, governments need to make countries that people want to live in. This is not rocket science, but maybe it is too late. Countries cannot dwindle to nothing but they can just become old and that means remaining poorer than Western countries and that in turn means more emigration. If they had been very rich to start with, like Japan, there would be more opportunity to do something, but since they are not, and since the trends are unrelentingly gloomy, this is a subject that needs urgent attention. It needs action and ideas, not just from governments and thinkers in the countries whose populations are shrinking, but across Europe before the imbalance of what is happening becomes yet another issue threatening our liberal democratic foundations.

NB: Statistical Nightmare

To begin to understand the impact of demographic decline, we need to know what questions to ask and how to interpret available data. When it comes to emigration there are no accurate figures. We know about births and deaths because they are recorded. There is no room for ambiguity in being dead or alive. But where you live is another question entirely. If you are going abroad to work, you do not have to report this to anyone in your own country. Then, while there may be numbers for people registering in destination countries, there is little analysis of what they mean. The Croatian National Bank is one of the few institutions to have examined the figures and their work revealed just how hard it is to pin down numbers. For example, the same person can be a registered voter and taxpayer at home, while showing up in several more countries simultaneously.

Imagine a woman from eastern Croatia, where there is not much work, or at least not much well-paid work. She lives at home half the year but cares for elderly people abroad for the rest of it. She might have Irish and British social security numbers and might, in the recent past, have worked in Germany too. She might also happen to be a Serb and have a Serbian or Bosnian passport. If she has property in either of those countries, she might appear as a resident in their statistics as well. To complicate matters, many of those registered as Croatian citizens abroad are actually from Bosnia. We can make an educated guess that 20 percent of them are Bosnian but we cannot be sure. Bosnian Croats, and anyone else who can make a convincing claim to be one, are eligible for Croatian passports. Because Bosnia, unlike Croatia, is not in the EU, having Croatian citizenship makes it far easier to work there. Hungary gives out passports to Hungarians in Romania, Serbia and elsewhere and Romania gives its citizenship to a large proportion of Moldovans. Bulgaria gives passports to Macedonians. For these and other reasons, figures relating to population and demographics quoted in even reputable parts of the press are often completely wrong.

A few recent examples:

According to The Financial Times, there are 3.5 million people in Moldova. In 2018, the newspaper reported that 3.6 million — or 16 per cent — of Romania’s population had emigrated since 2007. The Guardian had a recent graphic highlighting the fact that Kosovo had lost 15.4 percent of its population between 2007 and 2018 and said that this was the sharpest decline in all of Europe. All of these figures are wrong.

There are no more than three million people in Moldova today and possibly even far less. The Romanian figure refers to the drop in population between 1990 (not 2007) and 2017 and includes factors other than emigration. And the real figure for the decline in Kosovo’s population from 1991, let alone 2007, is in the region of 4.3 percent. In the case of Kosovo, the reason for the giant error is that the country had no reliable figures before its 2011 census, which showed that its population was far smaller than previously believed. Thus comparisons were made between the updated figure and a high but completely inaccurate previous one. Journalists and academics may believe that because national statistical agencies are government agencies, the figures on their websites should be accurate. In this region, at least, that is not necessarily the case or figures are not explained properly. In 1991, the last Yugoslav census included around a million citizens who lived abroad. It is extremely rare for anyone analyzing pre- and post-war population figures to factor this in, so they usually compare apples with oranges — that is to say, an overall figure that includes people not in the country in 1991 versus only those people actually living in successor states after the wars.

The article gives the views of the author, not the position of the "Europe’s Futures–Ideas for Action" project or the Institute for Human Sciences (IWM).