Monday, May 19, 2008

Poison pill

I made some predictions in January about where Serbia was heading. There are few new factors since January:

  • It looks like exchange rate can be supported for some time by increasing percent of reserves held in local currency. Exchange rate is established in regulated daily inter bank trading and hence ability to control it. Serbia has thousands of Forex offices that were used to transform one black market activity into regulated one. I'm not sure if this equates to real market and whether any currency speculation can take place. Foreign reserves are at level 10 Bn EUR, hence there is some scope to support exchange rate in next 12 months. This means that eventual Radical government will have some grace period before temperature starts to rise.
  • Radical Party and DSS (Democratic Party of Serbia vs. now enemy Democratic Party- sounds like Palestine People's Front vs. Peoples Liberation Front from Life Of Brian) had 128 seats in previous parliament and now they have 108. This means that they lost majority (126 is a majority) and they need unreformed Socialist Party of Serbia (SPS) to form coalition. SPS might decide that their long term goals are better satisfied in coalition with Democratic Party. and hence support pro-EU block.
  • Serbia signed Stabilization and Association Agreement with EU on 29th April. Nationalists threatened that they will annul the agreement. This is the poison pill left by pro-EU block. If nationalists go ahead with annulling they will see macroeconomic stability being hurt very quickly. This will in turn get destroy their populist support base. If they do not annul the agreement (which is most likely) they will be proven hypocrites and this will not hurt them as much.
  • Socialist murmur about cost of social justice (increasing government pensions, new collective agreements etc.) and it is quite obvious that growth and investments will increase faster if country decisively pushes ahead with EU integration. I found amazing that nobody mentions progressive tax rates as solution (14% flat tax rate was introduced in 2003).
All in all, exhausting times are ahead.

There are strong interests of unreformed secret service BIA and tycoons to keep KoŇ°tunica in power.

At this point of time I see chances of pro-EU vs. nationalist government as 50%/50%.

Wednesday, May 7, 2008


I realized that all my recent blogs were about politics. My frustration is understandable, I left Bosnia when I was 20, in the middle of the war. I don’t think events here are leading to a war but as my friend wisely said: “Who gets burned by milk, blows into yoghurt”.

My younger daughter, Iva, now speaks fluent Serbian. Odd noun declination gets in the way from time to time but that is not a big issue. She will start primary school in September although she is 2 months younger than standard age cutoff. She was tested by her grandmother (clinical psychologist for kids) and scored quite well so we are hoping that she will be able to keep a pace with other kids.

Many parents are complaining on first grade curriculum being too demanding.

On 2006 PISA testing Serbia scored badly (40th out of 57 see and for more detail). What hurts is that former Yugoslav republic scored much better (Slovenia around 10th and Croatia around 25th).

My experience of schooling system here was that it doesn’t cater for individual needs of the students and that only strongest survive. This is especially reflected in math’s education and number of people I know claim that they are not good in math’s. This most likely means that they were left behind at some point of time and there was no one that would pay attention to their needs. With literacy nobody complains that they are illiterate but you would be shocked to see how badly worst 20% fare.

In some way, school is preparing them for life here. Some will join elite, most will be left behind.

On other hand, university education tends to be mindless memorizing drill with added difficulty of arbitrary subjective criteria of the examiners (most of the exams are oral).

All in all, their school is quite good. Kids tend to be from affluent families, class sizes are small (families with kids can’t afford to live here) and they have whole day tuition with 2 teachers.

This year, both Marina and Iva will go to week of summer school. It will be interesting experience for them being without parents and other family. Those experiences were quite frustrating for me, as I recall. My kids go on proving to me that they are not me and that I should let them have their own life.

We are expecting our 3rd daughter, Matija, to be born somewhere at end of July – beginning of August. Jelena is finding pregnancy surprising her with its whims. She has high blood pressure which is reason for some concern. On other hand, she has capable obstetrician who delivered Iva and this gives us reassurance.

I saw Marina and Iva growing to become amazing kids and I am excited watching third one on this journey.

I guess you doubt yourself less as a parent when you have another one. You do become aware of your own imperfections and hope they, in the end, will turn out OK.

So, there is lot to look forward to and enjoy. You do tend to forget this in the daily grind.