The FMRS event in Sarajevo was well and truly booked out. The room was full of participants eager to hear about the drivers of economic success and discuss economic policy and practical entrepreneurial business advice.
Prof Gissurarson and Dr Kolm set the foundation of the forum with an account of the commonly shared attributes of successful small states, alongside the benefits a small state like Bosnia-Herzegovina has over its larger counterparts.
Prof Gissurarson pointed to the traditionally shared aspects, including a strong rule of law, property rights and strong social cohesion. Some examples include Switzerland and the Nordic countries. Small states have the benefit of a democratically elected body politic, communicating closely with its people, is able to develop policies and laws that consider and adapt to local conditions.
Dr Kolm cautioned against being tempted by commonly advertised financial incentives for small states to join the EU and Eurozone. By joining the EU and Eurozone, a country renders political decision-making power and autonomy over its currency to a centralised decision making body in Brussels. It gives up the opportunity to adjust to local needs and thus maintain its competitiveness in the region. The one currency system which works well is in the United States of America, as the culture, education, and language are the same. Dr Kolm highlighted that these factors enable social mobility and labour to move freely. However, this is not the case in the European Union.
Ultimately, competition is the essential ingredient to success. Competing regions, currencies and the free movement of people and goods are required to increase a state’s productivity and raise its living standard.
In light of the recent Russia-Ukraine war, Prof Gissurarson pointed to two core factors for small states to incentivise cooperation between countries instead of military domination. Firstly, free trade. In a mutually beneficial trading relationship, parties are aware of the negative consequences of shooting at one’s trading partner or, worse, intruding on their private property. Make trade, not war! Secondly, Prof Gissurarson suggests building strong defensive military power either through a powerful local defence force or through alliances such as NATO.
Mr Anker and Prof Lingle both pointed to the fact that protectionism and overregulation drive business away. Investors need system transparency to reduce corruption and create certainty. Mr Anker suggested that this is particularly the case in today’s day and age, where one can run a successful business from anywhere in the world. Mr Anker shared accounts from his own business ventures located in the United States with operations and staff in multiple European countries.
Prof Lingle cautioned attendees not to look to the government and politicians to make their life easier but instead, they should look to themselves, their business partners and the market.
Mr Anker encouraged people in the room not to attempt to invent the unthinkable but rather to find a task that the market is willing to pay them for and then focus on finding ways to improve the good or service.
Dr Kolm urged the young audience to believe in their own abilities to bring change. They need to believe in it and accept that implementing lasting reform takes time.
FMRS Sarajevo – Program
Vjekoslav Domljan, Economics Department of the Sarajevo Science and Technology School