Governments 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-subsidised mortgages but you have to have enough money to put down in the first place and the numbers of mortgages available and couples eligible are tiny compared with the scale of the problem.

Statistical Nightmare To begin to understand the impact of demographic decline, we need to know what questions to ask and how to interpret what data is available. 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, in the recent past, have worked in Germany too. She might also happen 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 per cent 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 per cent of its population between 2007 and 2018 and said that this was the sharpest decline in all Europe. All of these figures are wrong. There are no more than three million people in Moldova today and possibly 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 per cent. 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 analysing 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.

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 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 Wroclaw 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.

Labour crisis

Meanwhile, demography and emigration are leading to labour 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 labour force, meaning that foreign investment is discouraged or, in some cases, even leaving.

Logically, the answer to labour 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 pay more.

That 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 marginalised 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

Uncomfortable though it is to acknowledge, 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 labour market led to millions leaving. Now Germany and others have been opening up to skilled labour 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.

Electoral rolls everywhere are packed with those who have emigrated. 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.