Neo-Liberalism, the Islamic Revival, and Urban Development in Post-War, Post-Socialist Sarajevo By Zev Moses A thesis submitted in conformity with the requirements for the degree of Master of Arts in Geography Department of Geography and Program in Planning University of Toronto © Copyright by Zev Moses 2012 Neo-Liberalism, the Islamic Revival, and Urban Development in Post-War, Post-Socialist Sarajevo Zev Moses Master of Arts in Geography Department of Geography and Program in Planning University of Toronto 2012 Abstract This thesis examines the confluence between pan-Islamist politics, neo-liberalism and urban development in Sarajevo, Bosnia and Herzegovina. After tracing a history of the Islamic revival in Bosnia, I examine the results of neo-liberal policy in post-war Bosnia, particularly regarding the promises of neo-liberal institutions and think tanks that privatization and inflows of foreign direct investment (FDI) would de-politicize the economy and strip ethno-religious nationalist elites of their power over state-owned firms. By analyzing three prominent new urban developments in Sarajevo, all financed by FDI from the Islamic world and brought about by the privatization of urban real-estate, I show how neo-liberal policy has had unintended outcomes in Sarajevo that contradict the assertions of policy makers. In examining urban change, I bring out the role played by the city in mediating between both elites and citizens, and between the seemingly contradictory projects of pan-Islamism and neo- liberalism. ii Acknowledgements I would like to extend my gratitude to everyone who helped me in one way or another with this project. To my family, Art, Suzanne, Naomi and Miriam, thanks for making trips back home so enjoyable and for reading ill-prepared and typo ridden drafts on short notice. Thanks to my supervisors, Scott Prudham and Kanishka Goonewardena for doing the same, and for supporting me both financially and intellectually in carrying out my field work. I also benefited greatly from conversations with Andrew Gilbert and the opportunity to talk Bosnian politics with someone so knowledgeable about the region. Thank you to my peers in the Geography department at U of T for being awesome during my periodic bouts of writers block, and for reading over a draft chapter and providing some very helpful feedback. This research was also supported by a MA grant from the Social Sciences and Humanities Research Council. I am especially grateful for everyone in Sarajevo who made my time there so exciting even when I was frantically searching for more information and new interview subjects, and for showing me a side to the city not visible to the average tourist or outsider. To Dragana, thank you for putting up with me and for being so great even when I was at my wits end with this thesis. iii Table of Contents Abstract---------------------------------------------------------------------------------------------------------------ii Acknowledgements-------------------------------------------------------------------------------------------------iii Table of Contents--------------------------------------------------------------------------------------------------iv i. Introduction ------------------------------------------------------------------------------------------------------1 ii. Methodology -----------------------------------------------------------------------------------------------------5 iii. Genesis of the project-------------------------------------------------------------------------------------------8 iv. Outline------------------------------------------------------------------------------------------------------------10 Chapter 1: Islam in Bosnia-Herzegovina Since 1990: Local Elites and Global Networks---------12 1. Introduction-------------------------------------------------------------------------------------------------------12 1.1 Pan-Islamism in Bosnia-Herzegovina-----------------------------------------------------------------------14 1.1.2 Fissures within the SDA---------------------------------------------------------------------------20 1.1.3 The SDA and the pan-Islamists during the war years------------------------------------------24 1.1.4 The pan-Islamist project and Bosnian society---------------------------------------------------27 1.2 Foreign Islamic presence in BiH during the war years----------------------------------------------------30 1.3 Post-war aid donations and foreign Islamic influence-----------------------------------------------------34 1.3.1 Foreign Islamic networks and local Bosnian elites------------------------------------------------------38 1.4 Conclusion-------------------------------------------------------------------------------------------------------41 Chapter 2: Islamic Banking and FDI in Bosnia, Economic Necessity or Political Project?--------43 2. Introduction-------------------------------------------------------------------------------------------------------43 2.1 BBI: local and global preconditions for investment-------------------------------------------------------48 2.2 BBI's three pronged business strategy-----------------------------------------------------------------------52 2.3 BBI and connections with the Islamic World---------------------------------------------------------------53 2.3.1 Sarajevo Business Forum: the lobbying drive reborn-------------------------------------------56 2.4 BBI and the politics of de-politicization---------------------------------------------------------------------60 2.5 BBI and connections with the local Bosniak elite----------------------------------------------------------63 2.6 Conclusion-------------------------------------------------------------------------------------------------------67 Chapter 3: Islam and Urban Development in Sarajevo----------------------------------------------------70 3. Introduction-------------------------------------------------------------------------------------------------------70 3.1 The privatization of Sarajevo's prime real-estate-----------------------------------------------------------73 3.1.1 BBI turns to the built environment----------------------------------------------------------------73 3.1.2 BBI Centre: bureaucratic delays and social contestations--------------------------------------76 3.1.3 Architects vs. Investor-------------------------------------------------------------------------------77 3.1.4 The Al-Shiddi Group: a new player on the Bosnian business scene--------------------------79 3.1.5 Magros becomes Sarajevo City Centre-----------------------------------------------------------83 3.1.6 Al-Shiddi's local connections----------------------------------------------------------------------85 3.2 Sharia urban spaces in Sarajevo, a political reading-------------------------------------------------------86 3.2.1 Islam and urban space through Lefebvre's theory of socio-spatial mediation--------------87 3.2.2 Sharia urban space, a threat to multiculturalism in Sarajevo? --------------------------------91 3.2.3 Defending multiculturalism, or Islamophobia? -------------------------------------------------94 3.3 Conclusion-------------------------------------------------------------------------------------------------------96 4. Conclusion: Capital Flows, Urban Space and American power---------------------------------------98 4.1 Urban Space----------------------------------------------------------------------------------------------------100 4.2 Neo-liberalism and pan-Islamism, an unexpected alliance? --------------------------------------------102 Bibliography-------------------------------------------------------------------------------------------------------105 iv i. Introduction This thesis explores the Islamic revival in Bosnia and Herzegovina1 (BiH) as it unfolds in tandem with the country's post-war, post-socialist transitions, and the attempts of the World Bank and the International Monetary Fund to shift the country to a market economy. I focus on the connections between the resurgence of Islam, foreign investment in Bosnia from the Islamic world, and the new urban spaces that such investment has created. Three recent large scale redevelopments in Sarajevo, financed by capital from the Persian Gulf will provide my empirical focus: Bosnia Bank International Centre (BBI Centre), Sarajevo City Centre and the Bristol hotel. These developments, and the urban space they have produced, are intimately connected to the Islamic revival in Bosnia, as the investors decreed that all three facilities would be run according to sharia principles, meaning that no pork, alcohol, gambling or pornography is allowed to be sold or consumed on site. This fact has generated significant controversy amongst many secular Bosnian Muslims and much ink has been spilled in the Bosnian press on this aspect alone of these new developments. In order to understand why these new sharia urban spaces created such a furor, it will be necessary to chart the history of Islam in Bosnia in light of its revival and reappearance in the public and political spheres in the past three decades. These developments also open up a space to discuss the role of FDI in bringing Islamic norms into the urban fabric, and the consequences of the neo-liberal policy which advocated for rapid privatization and inflows of foreign capital. Nearly two decades after the end of the war in Bosnia, the city of Sarajevo is still struggling with the legacy left to it by three and a half years spent under continuous siege. The newly