Expensive real estates in Banja Luka are pushing young people to emigrate

Young people are leaving B&H, it’s a fact. There are several economy related reasons. But there are also reasons not directly related to economy. One of them, in my city (Banja Luka), is price of real estates.

For example, in Paris you would need 1,3 average salaries to buy 1 square meter of a real estate, and in Vienna 1,5. In Banja Luka, you would need 2,86 average salaries. I’m not sure why is that so. Answer might be somewhere between investor urbanism and trend of Banja Luka’s diaspora buying large percent of those flats. For diaspora, 1150€ for 1 square meter is affordable (in Paris it’s 6500€ and in Vienna 3000€), but for domestic residents it is not.

I recently got a chance to read Eda’s publication First flat (2010), and in there I have found a scenario calculation for young couple planning to raise a credit for buying flat.

  • flat size: 50 square meters
  • price of square meter (cheaper one): 1050€
  • 2 average net salaries: 780€
  • maximal yearly annuity: 390€
  • interest rate: 7%
  • repayment period: 261 months
  • interest: 50 000€
  • principal and interest: 102 000€

This is not a realistic scenario IMO. It is more likely that young people will continue living with their parents and minimize their costs, delay forming a family, or rent cheap flat and wait for the opportunity to leave the country. Other alternatives I see are involving in criminal activities or leaving the country immediately. In any case, in all of these scenarios their bonds with this city and country are purely emotional, and therefor relatively weak. That means even less workforce in B&H in the future, and what is even more worrying for the society in general is lower birthrate.

I see this as some kind of a failure (market failure?) which needs intervention in order to make buying a flat feasible for young couples (using credit funds seems inevitably). It is not only society in general, represented by the government and local governments, that I believe should be very interested in solving this issue, but also enterprises. If these trends continue in the future, and if nothing changes they will, there almost won’t be any workers left.

There were some attempts to lower price of real estate for specific groups in some municipalities and I will analyze them in the next blog. I will also try to position where could enterprises be in that scheme, in a way that could be acceptable for them.

P.S. While writing this, I started thinking if bonding young people to this country is evil and if I should simply delete this post. I decided not to delete it, but it probably is evil, sorry.

Expert’s phrase diary is blurring the image

After few years of participating in and organizing workshops, it seems to me there is a problem with expert’s phrase diary in communication. A number of phrases, words and formulations that are often used to describe something by experts and consultants. There are plenty of those in, for example, strategic plans. The fact that experts have their own vocabulary is fine while they are using it in expert-to-expert communication, the problem appears when non-expert participants in workshops start using it: entrepreneurs, directors, workers, engineers, employees in the local administration, etc. And it seems to me they are using it because they see experts using it and they think that’s how they need to speak and formulate things they are about to say.

I’ve seen many times employees in the local administration being agonized while trying to formulate one simple thought. For example, in one small municipality in Republic of Srpska, result of that process was a goal “Solving a problem of floods on territory of the Municipality”. Seems legit, right? After asking them what that was about, we realized one small river was flooding in a specific location. When I asked why they formulated it that way if only one river was flooding one specific location, they laughed and said it sounds more professional. We re-formulated the goal and asked them not to use professional phrases anymore and just to say what is the problem using their own vocabulary. They did that, and it was much easier and faster from that moment. Later, we carefully reformulated it, so we don’t change the meaning.

Seems to me that, when non-experts are using experts’ vocabulary in workshops or elsewhere, valuable information is lost. Phrases tend to ‘swallow’ details, blur the image and fit statements around universal issues. I don’t think such waste of specific details is good during first phases of doing anything, and I find experts’ vocabulary to be a culprit of many superficial and too-generalized documents we have today.