Sep. 1, 2007 - A Complicated Country

Bosnia is a complicated country: three religions, three nations and those "others". Nationalism is strong in all three nations; in two of them there are a lot of racism, chauvinism, separatism; and now we are supposed to make a state out of that.
Alija Izetbegovic

It's time for another story of success-- this time in Sarajevo, Bosnia. 

Another vacation destination, I grumbled, when the Norm Flynn, CEO of the International Real Property Foundation, suggested that it was time to repeat our Georgian adventures in Bosnia. Bosnia was, to my mind, at the heart of violence and terror.

A quick and necessary trip to Google informed me that Bosnia is located on the Balkan Peninsula, and has about 4 million residents in a territory of approximately 20,000 square miles.  What I remembered most (though somewhat dimly, I must admit) was the bloody Three Year War of the early 1990's, during which Bosnia and Herzegovina gained independence from  the Socialist Federal Republic of Yugoslavia.

Currently, Bosnia and Herzegovina united under a common governmental structure, and are candidates for the EU and for NATO.  The government was formed under the Dayton Accord of 1995, and represents a complex and tangled compromise government which brought peace to the region but which is often unwieldy and complicated during this period of stability and growth.

Today, modern Bosnia faces the dual problem of rebuilding a war-torn country and introducing market reforms to its formerly centrally-planned economy. One legacy of the previous era is a greatly overstaffed military industry; under former leader Tito, military industries were promoted in the republic, resulting in the development of a large share of Yugoslavia's defense plants but fewer commercially viable firms. Agriculture has never been a mainstay of Bosnia, either; food has always been a net import, due to the small and inefficient farming operations in the country.

After the war, economic devastation was the norm.  However, there are signs everywhere of rebirth-new construction, investment by foreign developers, and a tourist economy which is growing at a rate of about 24% a year. In Sarajevo, commerce appeared healthy: there were street vendors, open air markets, stores and restaurants everywhere, and many people moving about the downtown area despite the 115 Degree heat we were experiencing. And, of course, we were never very far from a bullet hole waiting to be repaired , a burned-out building, or a Bosnian who still mourns the loss of loved ones just a few years ago.

I traveled there with past NAR President Norm Flynn and his wife Susan, who accompanies him on many of his trips for the International Real Property Foundation. She is, I discovered, a wonderful trip companion: she knows history, remembers names, enjoys solitary walking explorations, and gracefully accepts the limitations of air travel in the modern world. 

And it must be said that getting to Sarajevo is NOT half the fun.  I was particularly plagued by a bum right hip (soon to be replaced) and found myself in the land of no elevators, and plenty of steps and curbs.  The trip is long, and was made longer by weather delays, mechanical problems, and missing luggage--but the city we found, and its friendly and welcoming people, made it all worthwhile.

Figure Sarajevo, city nestled in the mountains.

Our contacts were four Bosnian real estate broker/developersyoung men committed to forming an association of real estate professionals in their country.  They had already made progress: they had registered an association, adopted a business plan, and elected officers.  Now they were in the first stages of planning for services for the soon-to-be members of the Bosnia Real Estate Association.

We explained to them that what we wanted to do was to form a management company which would offer staffing support to BREA and to other real estate business associations, allowing everyone efficiencies of scale in obtaining staff support.  Since BREA was projecting the possibility of only 30 brokers during the first year of membership recruitment, acquiring a staff person and funding an office seemed an unlikely goal for them.  However, during our time in Sarajevo we were able to interest the Property Managers Association and possibly the bankers group in participating in the management company we were forming.

And so, with only four and a half working days before us, Norm and I began a series of meetings, aided exceptionally well by our translator Melita, and our broker contact, Mirza Muhasilovic.  We were able to present a code of ethics to the BREA which the board adopted; we hired a skilled and competent executive director for our new company (The Professional Association Management Group of Bosnia); I completed the first round of training with our new director (Nina); and we began the lengthy process of incorporating our management company (PAMG-Bosnia) in the country with the idea that after two years  PAMG will become self-sustaining and ownership will revert to the client groups of the management company.

Our stay was highlighted by a very successful media event, a protocol signing agreement between BREA and the International Real Property Foundation, an action which was thoroughly reported in the media on the following day, and was attended by over 40 people (again, despite the heat and the warnings for Bosnians--and visiting US Citizens--to stay inside!)

Figure 2 Mirza Muhasilovic (second from left), Norm Flynn, and Judith Lindenau sign protocol agreement.

What lies next for the real estate community in Bosnia?  Norm and I are most optimistic.  At the center of it all are the young Bosnian businessmen who are so anxious to move ahead, and bring their country greater stability, peace, and prosperity. "Never", Norm explains to me, "have I encountered such a spirit of cooperation among competitors." I think he's absolutely right, and in addition, we are fortunate to have a USAID contingent who supported our press conference and offered their resources.  And I have to admire the elegance of Norm's idea to form this management compan, an idea which we knew and often embrace in the US but which is totally new in this part of the world.

And I look forward to returning to Bosnia, and to Georgia.  There are courageous and friendly people here, perched on the edge of an economic future which we Americans take all too much for granted.  Seeing the emerging world through their fresh eyes is a personal reward for me, one that I truly cherish.

And, by the way, if you'd like to help us as we bring the real estate business to these emerging economies in Eastern Europe, Asia, and South America, your donation will be gratefully accepted: just go to the IRPF website-- http://www.irpf.org.

Figure Norm and Susan Flynn and Judith Lindenau, strolling in a Sarajevo park.