MOSTAR, Bosnia, Jan 30 (Reuters) – The aluminium smelter in the Bosnian town of Mostar has fallen eerily silent since its electricity was cut in July. The only visitors to what was once a model factory in former Yugoslavia are staff filling in redundancy papers.
The closure of debt-laden Aluminij Mostar is symptomatic of the challenges facing countries across the Balkans as they try to keep loss-making state-owned businesses inherited from the communist era afloat in market economies.
The demise of the aluminium exporter also shows how 25 years after the end of the Bosnian war, everything from ethnic rifts to weak corporate governance to corruption are hindering growth, just as the world economy is slowing and European Union membership looks ever more remote.
While closure may be the only option for many Balkan firms propped up by state subsidies, local leaders are keen to salvage something from businesses that are big employers in a region where just 44 percent of the working-age population have jobs.
Besides its 900 staff, Aluminij provided work for some 10,000 people in its supply chain and was a mainstay for the local railway, power company and even the Croatian port of Ploce 60 km (40 miles) to the south.
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